For young, hungry MBA grads, becoming an international entrepreneur evokes adventure, risk-taking, ridiculously high revenue potential… But thinking purely about the opportunities is a path to trouble. You have to actually like the place you’re in, Damian Doberstein pointed out during a conference at top business school WHU earlier this year.
He’s exceptionally well-qualified to speak. Before his current role as founding partner for e.ventures Russia, he co-founded leading Russian eCommerce player KupiVip and Fastlane Ventures, arguably the country’s most important company builder.
“What I watched personally during the last years with friends, people I know, people working in the Rocket [Internet] environment… You see a lot of former consultants, investment bankers, very smart guys but they have this kind of macro view,” he said. “They compare the annual growth rate of Russia against Indonesia, Brazil, Mexico and say, OK, here is the biggest growth rate… OK, 2015, spending power here, there, OK I decide to go to Nigeria or whatever. Nobody is thinking, what does it mean if I live five years in Nigeria?”
How he ended up in Russia, and why he stepped back from KupiVIP
Doberstein’s own path to Russia, where he’s spent the last four-and-a-half years, started back in Bremen, Germany. He learnt Russian at school then went to Moscow in 2003 for his civilian service, working with autistic children. There, he met fellow German Oskar Hartmann, who became his friend, classmate at WHU and then co-founder at KupiVIP.
The pair decided to give themselves three months to find a business idea. “We came across the shopping club model, came across the angels who started Brands4Friends in Germany. We met with them and very quickly decided to do it in Russia.”
So they moved over, with the initial vision of winning the market and selling the company. Now, five years on, Doberstein has decided it’s time to step out of KupiVIP’s operations, though he’s still a shareholder and strategic advisor.
“Now, with new investors coming in and a much broader vision, to build a billion [dollar] eCommerce company – I had to take the decision either to commit myself for another five years,” he said. “To stay and say, OK, I want to be operationally in Russia day and night. Or, I step out of operations. I’m German, all my friends are basically in Berlin or in Europe… I loved what I did but to operationally commit for another five years was a little bit too much.”
Moscow – the pros, the problems, the energy
There’s plenty to like about living and working in Moscow. A positive outlook, a certain magnetic energy… “In Germany, you complain if you stagnate at a very high level, everybody is scared about the future. Here, everybody – even if the levels are much lower… That’s what I’ll miss, this positive ‘we are growing’ thing,” Doberstein said.
It’s a big city – loud, fast, open 24/7. “At least once a month, I need to fly to Europe for just three days, to the Baltic Sea or whatever. Just to sit down and calm out a bit.”
Yes, the winters are cold. And the little things sometimes don’t work as well as they could. The last time he had to call his mobile phone provider in Germany about a problem was three years ago, Doberstein said. In Russia, “every day, something is not working”.
Tech is easier than eCommerce
Don’t underestimate the difficulties of setting up a major eCommerce company in Russia, Doberstein advised. “You have a lot of programmers, IT staff, so on. Without any problems, you can work in small teams and work on interesting tech. But to build the next KupiVIP, you have to manage hundreds of people, you have to build your own logistics network because you can’t outsource, you have to build your own warehouse, your own delivery fleet… It gets very tough to do all this, so be realistic.”
He counts KupiVIP’s second financing round – several million including from Pascal Clément’s Direct Group, also an investor in Fast Lane Ventures – as one of his biggest successes. “This was in May 2009. Actually, it was the hardest time in Russia ever,” he said. “The share index, the RTS, was down I think 83 per cent. In February we were close to the closing of the round, one investor stepped out. It was a really hard situation but we finally managed to close it. Because we knew, we were convinced the business model would work, we had the team in place, we just had to find a new investor…”
It’s during those times, the hard ones, that liking where you live is more important than ever. “In good times, of course you won’t complain about the downsides of a place, but there will be also hard times, crisis times. Then, every small thing… You can not have this endurance that you need to overcome all these things.”
FOR RELATED POSTS, CHECK OUT:
The Top 10 Russian internet startups – welcome to the wild web frontier
The Top 10 Russian internet entrepreneurs you need to know about
Exclusive interview – Marina Kolesnik, Russia’s visionary online entrepreneur talks money, motherhood and kung-fu philosophy