The founder of QIWI Andrey Romanenko: “the biggest problem of all startups — the dislike of Finance”

Among friends I meet quite a few people who make a lot of money in any successful project, resting on their laurels of previous successes and move forward, try new things and not risk. These are retired from the business. Andrei Romanenko is definitely not one of this breed of businessmen. After a successful big project QIWI, earning very good money, he doesnt become a “pensioner”, in fact — only now felt the freedom of enterprise and the taste of startups and is constantly trying something new.

About how does not going bronze and get pleasure from the business, the quality of our startups and startups the vision of how from a startup to become a successful company in “Slobodin+1” with Andrey Romanenko. Mikhail Slobodin. Andrew, thank you very much that you joined us in the Studio, “Slobodin+1”. The format of our dialogue is fairly easy, today we will discuss what people do, not burdened by operating activities. One of the biggest projects in your story as a businessman was QIWI.

What is this project and how you made it. A very short excursion into the history of success. Andrey Romanenko. Today this is the only public payment system, the market leader with a share of about 40%, all other payment system to the public not reached, and big players too much no. The story was born very simply.

The last many years many businesses were built with you as with mobile operators, and the story began with my buddy, one of your employees that was in 1999, some merchant. He got a job and called me with a question. “You recently sell something, distribution deal?” I then sold some bowls, packs — all that could. It was 17 years ago. “Weve made the card “B-plus”, dont know how and where to sell it?” I promised to think about it.

And then, if you remember, were already bibieski, fedeski.. Dont remember, Im not Telecom then worked. Then there was a modem called connects. Began to appear online.

The first one was “Russia online”, which then acquired. And was this a flea market in the Internet I there wrote. “Sell card “B-plus”. Ten minutes later, a call from a Jack from Savelovsky station and said.

“I have a salon, I want 1000 cards”. I took 5 thousand dollars, went to the office on the street of the 8th of March to you, I bought the first card, took himself Eugene, earned, in my opinion, $ 500 and realized that there business is. With this began the history. The company was called “Shop of plastic cards” and distributes scratch.

We have distributively across Moscow, Moscow region and Central Federal district. We had a market share of 60-70 %. To understand , we sold two “KAMAZ” cards a day. It was the Golden age of Telecom, when all snapped up like hot cakes. Now the situation is different.

Yes, especially when the pies made the packages “B-plus” (the phone together with the card), they went. Then denote the distribution business cards. We have all distributional. In life are often accidents.

In 2003, Kommersant one of the cellular operators calls me and says. “Look, there us some French came, offer vouchers to not sell cards, and pin codes on pieces of paper. Socialize, maybe it will be interesting, this plastic will cease to print, and youll only codes on floppy disks to give”. Came the French, it was famous world company Ingenico, which has another 30 or 40 years, she has around the world tens of millions of POS terminals. They made technology for the sale of vouchers — pin-code on the receipt through their POS terminal.

And I tell them. “Guys, lets do it the other way, so uncomfortable, because Russian people, it is one thing to take a card that can to put in a purse, in the hands hold. And then check, the seller sees the code. The history of the non-working. Make so that you can come up and say.

“Masha, telephone number so-and-so, 100 rubles”. They thought long and hard, thought and thought, and then sent a bill for 5 or 7 million euros to stage-processing. 5 thousand dollars a week for the work of the programmer. At that time it was crazy money.

And I worked as boy, five years already at that time, he was engaged in “1C”. I walked up to him. “Do you know anything about the payments?” He says. “I dont understand!”. “Come on, you go figure, what a load system, and Ill go with the operators to agree”.

It was the summer of 2003 and in February 2004 we start. The first idea was simple. We came to the point. The points used were baskets, there were cards in the “B-plus”.

$ 5, 10, 25. All this, of course, stole. We came, picked up the box and gave the POS terminal, which can be easy to choose the carrier phone number. And a year later had the idea in the form in which now the whole business lives, the idea of self — service. It turned out that Russian people do not really want to call someone your phone number, because it then will know, and just want to go, pressing.

Then we released the first terminals. It was the summer of 2005. We all have developed, bought all the parts. In November at the factory we made the first 100 terminals.

There was a large room, we stopped, looked at all this — where is it now to sell everything. It was scary and confusing. Helped Internet. Then came professional portal for kiosks and platnikov

We put up a sign — its been 26 hours and all of these terminals have been sold. This whole business went. I remember, December 31, dealers have fought to buy us terminal. They are like hot cakes left. And now, since 2005 has gone, today the network has over 100 thousand terminals, we are the market leaders.

The business model has changed. Started with a POS, came to the terminal. Now move to what is associated with online payments, wallet. How did the idea about changing the business model. Shes really changed much over the years.

I think everyone needs to experiment and do internal startups. In 2008 we bought one company. They were the guys-the developers of a certain — the app was named “Mobile wallet”, and they got. The first idea was to make a notebook, to all accounts for which it pays, kept in one place.

Was 2008, and only three years later this theme was transformed into a “e-wallet”, and thank God that we in 2008 in this thread invested. If we thinking about it in 2011, only a year ago would have run a normal solution, and there is a Golden rule first, and sneakers. Would this technology not come. You should always try to look forward, make small attempts. Tried, did not matter — then went.

Here with the “purse” turned out this way. Actually, in trying try-and-buy is not always successful history. Where what was bad, big or small?. We fail, we usually do not remember. But good to be forgotten too quickly.

Mostly when the products are not fly away — they were failures. And globally, it stumbled.. There is one story that did wrong. QIWI as a brand was formed in 2008 after the merger of the two companies. Earlier the company was called OSMP and E-port, in 2005 it included Yuri Milner and bought 75 %.

A year later, Yuri realized that he bought one of the market leader, and during this time appeared another. We met by chance, and there was a proposal to merge the company. In the summer of 2007 we joined them and decided that there will be one processing, one process solution. Then focusing more on B2C.

Now, five years later, I would have done differently. I would have left two brand B2B, two processing and would be shared by clients. Two teams always compete among themselves. How we did it when I bought QIWI contacts “Rapida” and “Rapida” is, essentially, the same thing that was E-port in 2008.

That was a big mistake that we made at that time such a decision. When you are developing, are market leaders that dryvit. You are already cool, youre already number one. What stimulates the management to move on?. In any business, every Manager wants to realize their ambitions and become the number one.

And then you have to maintain the first position. It is very expensive and difficult. Because if you suddenly become number two — then youre lost in this race. And you have gravity and run. A lot depends on the founder.

The main thing is that the one in charge, wasnt the Manager, and entrepreneur. Only around predprinimatelei history you can build and protiviti good business. Up to a certain period and you were able founders, and managers responsible for business. And youre not the only one, I understand. We at some point was IPO shareholders, physical persons, 12 persons.

There were a lot of mergers and acquisitions, someone gave the small share. We used the business was divided mainly into five people, five shareholders, each of which was responsible for its direction and everyone was able to agree to all this design worked. I sat in the middle, to realize the full activity of the partners. Probably, at some point, when there is money and interests, still the problems begin. How do you solve them — and solve?.

You know, we had two external investor. First, external shareholder Yuri Milner, who then transformed into Mail.Ru secondly, were Mitsui. We had a deal in 2011. The estimate was $ 650 million — it seemed like madness. With the current rate it is also a lot of money.

And they were like referees. We have always been people that were not in the “OSes” and could say, right or wrong. For example, when in 2007 came the Jura, he said. “So, all future on the Internet and in advertising, we definitely need a module on advertising, we need to sell ads everywhere.

On the web, in the application, in terminals”. And we long enough, five years, about 20% of revenue was from advertising — due to the fact solutions. Although no one believed. When youre already successful person, quite rich, and you should be responsible for “operating system” — how do you motivate yourself?. About wealth I always say to everyone.

“We are poor managers”. I think the main motivation for all of us is creating the best end product for the consumer. All around the consumer. No matter you have a B2C business or B2B, — and there, and there still is the ultimate client. And if you are doing something that “people hawala” — which, of course, this product will take a leading position.

Earlier, in Soviet times, there was such concept — the five-year plan. Each organization lived by five-year periods. The whole country lived for the five-year plans. The whole country. Under this aligned organization.

I drew the line our payment services since 2000-ies. Every five years, changed her. Were card were POS-terminals, terminals were, now the era of the “wallet”. And every subsequent five years — no, now the world is so technologically innovative that already every 2.5–3 years — everything changes much.

In the next six months to a year, you should receive something new, revolutionary, because major technological breakthroughs, products and ideas that are dominating the market, which we all use constantly, arose in 2011-2012. Sometimes say “ubersetze” or “platformization”. Now a lot of products around platforms solutions. And its real, they are so cheap and need to the consumer. I think in 2016 there will be a new breakthrough, something has to appear.

Well well talk a little later. Understand what is the problem. Why I asked the question, how do you personally motivate yourself, when you have financial health, you have everything you can afford, for some rather rare exceptions. There are people who make a million dollars — they no longer need, and they cant find the motive to move on. Some 10 million dollars, someone 100 thousand.

How are you motivated?. For me for the past ten years money is not a motivator. Money is only an estimate of your activity. How to calculate how well you did or bad. Through the assessment.

The company is the market leader and costs a lot of money. So you did a good job. If you go to any sphere or do some business — mainly want to show everyone and prove that you can quickly and easily create a market leader. All around leadership, and turns. You got away from the “OSes” from the point of view QIWI.

As I understand it, you dont have daily activities which are very loads. Most likely, you now see the world much wider. Finance startups, youre doing a startup session, you invest money, either alone or together with partners. This is a pretty serious change in focus. What interesting ideas appear on the market.

Comes, probably, a lot of any ideas. Per month 100 projects comes. The task is to find at least one that deserves attention. The most advanced, the most good — I found two themes that we are currently actively looking. The first is the analogue of oversale and platformization, as everything around these things, you need the consumer.

The most valuable thing we have in life is time. If the product saves time and cost, it will naturally be. Now Im an investor in three funds. For example, there is a project called Qlean.

Simple idea, full copy American and European counterparts. Platform solution, cleaning of apartments. With one hand cleaners, from the other consumers. As said Shahar waiser, supply and demand (supply and demand). Dock, stand in the middle and give all the necessary.

You example, you an active user of GetTaxi. My Uber example. Although I almost became an investor GetTaxi three years ago, was inexpensive.. I regret it. Now the Shahar more requests.

Then there were dozens, and now hundreds.So, first, it platform solutions, is an example Qlean. The second active model called “subscription model”. When a person has weekly or monthly consumption of the same, which he needs constantly. For example, our product “Supmarket”, it is a simple thing. Do you want for dinner meat and salad — you bring products.

The five steps any product is prepared. All laid out on jars, clear photo instruction. Summer on the website we have made the subscription model. You can place an order to you every three days brought a set of three dinners ahead. Four months have increased four times from what it was in early summer, with a large enough base that was already.

People are ready for such subscription models to live and constantly receive its consumption. These are the two main things. And, of course, the project must be global with the Russian founders big problem. Our always thinking only on a local level.

And at some point youre most of this market will be small — and for the Internet there is no such thing as a locality, it can work everywhere around the world. If the idea is good — who was the first on the market, and he will take it. The best ideas of a startup of recent times that have been, are copies of those that are in Europe and in America. Take “Vkontakte”, he still constantly reminds Facebook. So what.

But it was worth it.. I dont remember how they got there the transaction was last. There billions. And very often copy solutions. Now follow five different themes, there is also just platform solutions, which in America have long been working. Necessarily, the project must be mobile, because our whole life is percent, probably 80 in the phone, from paying a taxi or a restaurant bill.

It is only about 45 % of the population. Well you clearly know, you see all subscribers consume. The rest of the people are not there yet. And once it was 5%, and traffic were never used. If now 45%, just a little bit..

And a half years will be 60% off! And when you move the bar to 50%, then the schedule changes completely. Critical mass has already passed, I think things will quickly go. Mobility.

And the last is virality. Many projects look the business plans and first — a huge salary for the founder. Such a project could look. It is understandable that people want to get money, only interested in his salary. And the second 70% of the money they want to invest in marketing.

And marketing, especially mobile marketing, every quarter becomes more expensive at times. If you look at how Facebook grows the same speed — before the revenue was 4 billion, and now 14. And the number of banner locations and audience slightly increased. To build all the money in marketing, but if you at some point pass the point of no return and wont hook up with vitality — as a rule, the project has no future.

A lot of such examples, I will not mention the names of companies that have not reached this point and closed. And spent massive amounts of money. Clear. Where do you get the idea. How this process is organised.

As you can get with your ideas?. To me, all now are mainly from Facebook, because I think that any Manager, entrepreneur or investor, we all need to promote openness. Well, you can lock the box and with the outside world not to contact. So I always answer messages.

I am an investor three funds. The funds are broken down by the classification round, which they do. There is a Fund AddVentureIII, which basically makes the rounds And have the Fund Run Capital, which makes investments at the level of the seed, or angel (up to 300-500 thousand) and Itech Capital, hes on 120 million, we now have invested in 10 projects, an average of 5 to 15 million. Thats according to this classification, depending on which projects come. Everywhere there are managers, there are leaders.

I constantly, on a daily basis with these commands work. To me if someone comes, of course, give the managers, they looked analogues, looked at the market. Most importantly, many are very much mistaken in their ideas. No one wants to build as a result a small business you want something large, solid, worthy from the point of view of volume.

The most valuable thing we have is time. If you spend it on something big. Many do not even consider the market. Come up with a theme, and there is a market of only 50 million dollars, for example.

It is clear that market share more than 40% of you never will be. You can clearly calculate how much output will earn money. Moreover, there are analogues of any project, and you can always count, what in a similar project EBITDA at 30% or 50%, to give an increase of three years. Constantly work with teams, conduct calls, meet with the founders.

If we like someone — start to work. Competition in the funds and in the investment is basically a very large. Many funds and projects, in fact, little. All the founders have chosen people who are behind the funds, the important thing is not money, but expertise and assistance that you can bring to the project. What are you or your team bring to the Fund.

You bring people who come with a good idea?. The biggest problem of all startups — dislike Finance. No one knows how well and correctly account money. We always put to proper financial accounting. And take, as a rule, two more things.

Help to work with marketing, because in many projects, even within the group there are companies that are engaged in just promoting and marketing, and build a proper structure to further all flew, within large companies. Theres also a bunch of stupid ideas that have no relationship to reality. How do you struggle with it. Take your UberPITCH.

Sits guy. “I take pictures, want to earn money”. I say. “Dude, at least show pictures”. Showed.

The pictures are not very. This will not earn. And all at once the theme is gone because thats his desire — “I want money, thats what I can do”. What percentage of these stupid ideas and stupid suggestions?.

Actually, it all depends on the founder. He should be able to sell everything, and if he will make you believe in him and you will spark an idea, which is, by and large, on the sensations. Sensations then are supported by market numbers, is done a lot of work and you look. To go into this topic or not. Here you met the person that you “lit”, went through all the procedures, you helped him — what percentage of successful projects after this?.

Early — 1 out of 7 chance that people will have business at the level of more than $ 10 million. If it is to take from the early stages. In Russia there is a big problem. If you look at the transactions that occur at the companies, to draw a graph from $ 0 to $ 100 million — there are a lot of different deals. And then comes the failure.

Up to 500 million. Youre not a little, but still not great. And when you get in this niche is very hard for you, you cant attract investment, nothing, because the big companies you cant go. The first goal is to get to 100 million. And we must not forget that it is necessary to leave from history, constantly we should continue the process.

I used to regret about two things. Not invested in GetTaxi and in “Schoolmates”. And now I regret that we from one of the funds sold the project Delivery Club. We are in that year sold it to the Europeans, they made a simple, banal marketing ploy and the company for the six months increased by five times. I didnt saw.

And now regret it. Well, live and learn. All not make any money. And generally like the process. It is another thing, very different from what you did before.

You still apply your entrepreneurial skills. Ask. “Are you an investor or entrepreneur?” Of course, you are first an entrepreneur, because it is impossible to become an investor, not having been in another stage. Interesting because you have a lot of different teams, different founders, different shareholders, and the fourth different businesses.

I never go to businesses that do not understand a direction or category. Definitely need to understand the topic — then you can invest. With new partners come new businesses, same with managers, who work on projects, help with other projects to attract a team to help the founder. Only half of the founders may, after a certain stage, when a business becomes more than 100 people, to do business.

As a rule, need a good operationsin. Founder and R&D-shnik is not operationsthe. They come up with good ideas, but Im inclined to believe that the project without the founder at the stage from 500 million to a billion has no right to life. Founder — principal, who brings the trends of development in the company. Yes, its the ideas, drive, energy.

And the product — they invented it. All depends on the details. There is one company, which was formerly the founder, but not now. The product is not evolving.

You might as well not have done. I took the example “Vkontakte”. Clear. Of course, for the guys now rather complicated ideological history. Different periods.

It was good one — now you need to earn money. It is clear that the product may not be refined, but he was at least making money, because it is impossible years not to earn. Yes, and sit on outside funding. On the other hand, gained something, lost something. You should never be upset, you always have to forget as a bad dream.

The most difficult thing for many founders, and for investors — to understand that if a suitcase without a handle did not fly, just in time to leave him. To quit and not to waste time on it. Many people try to past here is a save, increase investment money.. But it either flew in a foreseeable period (in my understanding it 18 months, period 3 to 6 months, at each stage the product needs to get better), but if this does not happen, it is better to forget about the project, write it off, do not waste further time.

I understand you have already taken such difficult decisions — “more money,” when the story dies?. We had three projects in which we have invested, had great founders, global markets, at the pilot stage of the product showed a large rise. And then the guys were just blown away, dotracheal the money they were given, and nothing happened. They came, tried to speak. “We lacked a little bit of time, give more money”.

We closed those projects was written off investments, and all, go ahead. And finally, give five tips for people-startups with good, in their opinion, ideas, to they all took off. First, the startups will not fly the project, if they dont find the money. If you go to the investors — do not forget that they are entrepreneurs. The businesses are important not primarily a business model, and you as a founder and how you will sell this idea.

If coming up with a new project, look to mobile. Well, Im more about B2C than B2B, so always do these things. But mobile systems are the future. Everything will be built around that will cost a lot of money.

And be sure, of course, global. Without this in any way, because in any country you will be closely. These are the three main things I would advise. What would you advise. I have never worked in large companies like you.

You know, one of my projects, CASS, started from scratch, there was nothing. The idea was to build a great business leader in the modern electric power industry of the country. I think it is very important to believe in the product that youre doing and to fight to the end. And when you start growing, you need to very well to think about how to build the system. Because, as you said, there is a problem with the founders who are at the stage of take-off are doing very good things and launch the product — and then once the business starts to grow, it begins to break down.

The internal system is not built, due to the growth decreases the quality, start investing where you do not need.. Amorphous system in the beginning can turn into a big amorphous system. To invest in the construction of the system, to have the right people, at some point you start to structure it, not clamping entrepreneurial initiative and rapid growth, is quite a difficult process. Only then the company becomes more resilient and provides the Foundation for the next growth.

Thus it is necessary to keep a balance between the way the system works at some scale and business growth in the next step. Its always a complicated story. Very few people who can personally choose to evolve from the first part and the second part of the build. Yes, visionaries and operationsto is different people.

When a product is doing, the main thing is to look through the eyes of the consumer, from the history to draw on. Im more about the management of large systems, but I can see when the primary drive is over and you need to add other mechanisms, more control, to take the next step. This is the evolution of each system. Remember the feeling when you start to do a startup. Something new to do, to build, from scratch, little people, all know each other.

In General, it rocks. And when you walk down the hall and you dont say Hello, because not to.. Thats another stage of the process. And the feeling that youre doing a new thing and you can do that, I want to relive. But it applies more to the founders than to those who gives money.

Thank you very much for the invitation. Thank You, Andrew.


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