You might not know the name Marina Kolesnik. She may not have an instantly recognisable face like the Samwer Brothers or Yuri Milner. But the 35-year-old heads up Russia’s biggest online travel company, Oktogo.ru – a business with a database of over 140,000 hotels worldwide, about to widen its lead in a potential multi billion-dollar market.
Kolesnik’s trajectory to one of the biggest incumbent internet players in Russia, and indeed Europe, reads like a How-to Get Ahead in Global Entrepreneurship. A Harvard Business School graduate and ex-McKinsey exec, Kolesnik cut her teeth by launching online travel and hospitality practice DataArt in the UK and US, before returning to Russia to found Mail.ru, the enterprise that Yuri Milner would eventually turn into a billion-dollar business through Digital Sky Technologies.
From there, she created the “Booking.com of Russia”, having attracted $15m international funding.
No, you might not know Marina Kolesnik’s name. But you should…
The Russian online market – it’s landgrab time
It’s gone midnight in St Petersburg when we Skype with Kolesnik, but she’s as sparky and talkative as if discussing a garage startup over a smoothie: “It’s still landgrab time in the Russian market – broadband penetration didn’t really reach tipping point until 2004/2005, and they say that it takes roughly five years before people relax into e-commerce. So it’s a massive growth area for us right now.
“Russia now has the highest number of internet users in Europe now [at 51m users over the age of 15, it has just surpassed Germany]. And it’s an affluent market – GDP per capita is about $17,000 an taxes are small [Russia has a 13% flat-rate tax], so there’s a lot of disposable income here. And a lot of opportunity.
“The Russian consumer market is estimated at $60bn, and that’s set to double in the next five to ten tears – but online accounts are still only at 10% of this, although this number is also set to double – at least – in the same time frame. So we need to be ready to have the infrastructure in place for this growth”.
Google, eBay, Amazon, Booking.com – global brands come second-best
Kolesnik’s laser-guided ambition may have led her to Harvard and McKinsey, but she always had her sights firmly on returning to her domestic market: “Russia and China are two examples where domestic brands have the major market share,” she enthuses. “Google, eBay and Amazon all lag behind the domestic versions. This market bias for local brands, plus the fact that there was a cultural stumbling block over online credit card payment in Russia (people are used to ordering online and then paying cash on delivery) has meant that international brands have stayed away.
“Booking.com has only just coming into our space, which meant that there was no big established online travel brand, we saw that there was room for a Russian market leader. We’ve been lucky in that we actually have strong international partners too – we were the first Russian site that TripAdvisor partnered with for example”.
Russian business, European funding?
But despite this feeling of frontiersmnanship, does Russian business still rely on European venture capital? Oktogo.ru’s first round closed its first round of funding a year ago with $5m from Mangrove Capital Partners and Ventech Capital as well as angel investors, including Javier Perez-Tenessa, founder and CEO of Odigeo, Fabrice Grinda, founder of OLX, and Jose Marin, founder of IG Expansion.
Kolesnik muses: “The situation is changing in Russia. We’re only just seeing the online market mature in 2009/10/11 and capital start to be generated for these type of ventures here.
“For our first round, we were looking for quality of investment – for us, it had to be a strong partnership – we had to think alike and work together in a really effective manner and there wasn’t anyone in Russia who fitted the bill at that time.”
“But we’ve just closed our second round and have brought in VTB Capital [$10m from the investment arm of Russia’s second-largest banking group]. We want to expand extensively in Russia, and VTB fitted our criteria – it has lots of international employees, but it’s also part of a major Russian banking institution with big pockets and extensive networks.”
Perhaps tellingly given her country’s Soviet past, the businesswoman is un-enthusiastic about government initiatives: “In my opinion, we don’t need government help in this respect. If they don’t interfere with our tiny, little businesses, that’s fine. Their area of expertise is multi-million oil companies, so let them concentrate on that.”
If you’re kicking ass, make sure you’re on stable ground
Kolesnik is also one of those women who seems to juggle motherhood (she has a four-year-old daughter, Maria) and entrepreneurship with minimum fuss. And, somehow unsurprisingly, she also knows kung-fu.
“Sometimes it’s difficult and I don’t get to see my daughter as much as we’d both like, but both my business and my family are unique opportunities, so you make it work.
“Kung-fu is my other love. I studied a very traditional Chinese form that also encompasses a lot of Chinese philosophy and a lot of it is very relevant to business practice, especially in Russia right now.
“In a fight, when you attack, you have to know what you’re doing; you have to be very calculated. And of course, you’re the most exposed when you attack. In business, when you’re stretching yourself and expanding aggressively, you are exposing yourself. When you preserve growth and take less risks, you’re more stable. There’s a constant balance between how stable you are and how exposed you can afford to be.”
And Kolesnik is a woman who knows exactly how to attack on a stable footing: “The key focus for us now is marketing and brand-building. we already have a super-solid technical team and a very effective hotel booking operation and the largest hotel inventory of domestic hotels, so the operation is running effectively – our focus is on scaling it up and winning a market share.
“It’s time to capture the hearts – and the wallets – of the Russian consumer.” And if anyone can do it, it’s Marina Kolesnik.