Eduard Shenderovich. About battles and battles

Eduard Shenderovich, founder of the venture capital company Kite Ventures, wrote a note on the KNote blog about why management meetings suck and how to live without them.

Eduard Shenderovich (Kite Ventures)

Eduard Shenderovich, founder of the venture capital company Kite Ventures, wrote a note in KNote about why management meetings suck and how to live without them.

In the five years we've been building Kite Ventures, there have been a few things we've failed at.

For example, we started out intending to create a major player in the venture capital space, but we never built a fund. We created an investment company rather than a more traditional structure with managing partners and investors. We have more than a dozen investment partners who join specific Kite trades and pay no commission to manage the invested capital. We only have a profit sharing agreement. Because we don't have these management committees, we don't have an expensive office, private jets (we fly economy), or a lot of assistants and consultants. I'm not complaining or bragging - I'm just stating the facts. We have invested over $250 million in highly successful European companies (including Delivery Hero, Auctionata, Tradeshift, Fyber and Made.com) as well as New York companies (Plated and Merchantry), built a strong reputation for ourselves, built a solid investor base and We are growing quite well with the help and support of our investment partners and the entrepreneurs we have financed (some of them have already become our investors). We expect the next five years to be more productive and impactful than the previous ones.

And although this is a successful outcome, we did not achieve the goals we originally set.

No meetings

Another failure was our inability to build a culture of weekly meetings. I've tried doing this in different ways. When we started sending out meeting invitations with a calendar mark, it worked for a week or two. But the meeting did not bring results, and all participants quickly began to come up with reasons not to go next time. After all, what do we do at these meetings? Are we reporting? Are we listening to reports? Kite has a small team, so all communications happen in real time. People are motivated and strive to achieve as much as possible. In the end, we realized that we didn't need weekly meetings and were unlikely to have them in the future.

But it was only recently that I realized that failing to build a “proper” fund and not having weekly meetings are just two sides of the same coin. For a long time I regretted that we did not have either one or the other structural solution, but it turned out that without them it was simply more effective.

A more efficient company

We truly trust both the investors and entrepreneurs we work with, both of which help us make better decisions and ultimately create a more transparent and successful investment company.

By not holding weekly meetings and allowing our small team to focus on the core tasks they are currently solving, we are also building a more efficient and productive organization. This is well expressed in my favorite quote from Peter Drucker:

In the knowledge economy, everyone is a volunteer, and we are trained to manage conscripts.

This is what management meetings are about: managing recruits. You come to the meeting because you have to. You came there to control, or to be controlled. But that's exactly what we don't want to do.

There is no advantage to treating employees like conscripts. Drucker also said: “Management is about doing things right; leadership is about doing the right thing.” For us, the right things are not management and reporting, but work and results.

Good communications

Since our company does not have limited partners (investors), we, accordingly, do not hold traditional meetings with LPs and communicate with our investment partners in a more open manner and more often in real time. We see everyone around us - entrepreneurs, employees and investors - as part of the same team. We're all about building great companies and seeing great people develop at work.

Of course, failing is not healthy, but sometimes failure in the details leads to success in some big things.

Eduard Shenderovich is a man of numerous and varied talents: poet, philosopher, philologist, entrepreneur. And on top of all this, he is a successful investor, founder and managing director of the management company Kite Ventures. It is quite possible that it is the combination of different and seemingly contradictory abilities that allows him to invest in the right projects, at the right time and in the right amounts. At his lecture for students specializing in “Management in the field of Internet technologies,” Eduard Shenderovich spoke about the basics of the difficult art of investing.

“Where can I get investments?” Eduard Shenderovich began his lecture with this question. To answer the question, he turned to the example of his own company: “In the fall, we launched the Kite Ventures venture fund and have already invested in two projects, a mobile service and a gaming one. And two more projects are currently under consideration. We have a medium-sized venture fund, so for me you can see what the average venture capitalist does. I am attracted by the opportunity to invest in projects of 1 million and above. At the same time, with a fund of 30 million, I cannot invest in more than 10-12 projects. Here it should be noted that any fund is built in such a way that there is a specific amount of money in the fund itself, part of which is spent on management. The investment strategy is also based on the size of the fund. Management costs, in general, are always being reduced to maximize available investment capital.”

Any investment fund selects projects for investment among many applications. In his lecture, the Managing Director of Kite Ventures touched upon the scheme of this process and the criteria for evaluating projects.

“A metaphor often used to describe the process of identifying projects for investment is the Draper rocket. This refers to Tim Draper, a significant venture capitalist, founder of the DFJ fund. For example, at first the fund receives 30,000 applications. Only 800 of them meet with the owners. Then further negotiations are conducted - with 100-150 projects. And only 10-12 of the total volume of projects considered are financed. Moreover, in the future, only one of the invested projects will bring significant income. Of course, this is an ideal picture. In Russia the situation is somewhat different from that described. There are not many projects here and it is difficult to find even 1000 to consider. For example, from November 1 to December 1, I met with representatives of only 20 companies. Of course, the reduction in the number of projects also depends on the crisis. By the way, it’s encouraging that the decrease in the number of projects is accompanied by an increase in their quality.

When making investment decisions, we consider projects based on three criteria.

1. People
2. Product
3. Market

In my opinion, the main criterion among those listed is the market. A company can only make money if it operates in a market where that money is available. Or it can receive money from other markets. Therefore, in any case, you need to be clear about how the product will make money in a certain market. To illustrate, I’ll tell you about two similar products: LJ and MySpace. When we founded SUP, the company's activities began with the purchase of part of LiveJournal from the Six Apart company. It was a good start from the point of view that we made ourselves known loudly. There may have been many different errors during the initial period of work. But the main thing was that blogs are very difficult to monetize. Not only LJ and not only in Russia, but in the market as a whole. There are, of course, exceptions, but most likely only in certain vertical segments. LJ was originally conceived by its creator as a non-profit project - it was a small handicraft business, not intended for the market, created for friends. And when it became uninteresting, the project was sold. Unlike LiveJournal, MySpace was originally conceived as a commercial project, a product whose purpose was to generate money. Now it has grown significantly and is quite a profitable business. Obviously, LiveJournal and MySpace had similar ideas, but their approach to the market was different. This determined the further development of these projects.”

In investing, not only the question of “who to invest in” is important, but also the question of “when to invest.” Therefore, Eduard Shenderovich spoke separately about the stages for investment.

“There are different stages of investment for companies and here, as Charlie Chaplin said, paraphrasing Shakespeare, “it’s the entrances and exits that matter.” When to invest? There is a classic graph of company development, which highlights the stages of project launch - when nothing is known, growth, stable existence and stagnation/decline. Most investors enter when the growth begins and exit when it ends. Yield is extremely important when investing. Now that access to an IPO is practically closed for companies, practically the only way to exit is to sell the company. A sale occurs when the investor sees that the company’s growth has slowed down and it is more profitable to invest in other projects.”

Having answered the question “where” and “when”, the investor answers the question “how much”.

“An equally important question is: how much to invest? The most popular way to determine this is contractual, when both interested companies jointly evaluate the project. However, conventional financial methods are not applicable here. Therefore, a special method was invented in Silicon Valley - venture capital. It is assessed as follows.

1. The exit value of the company is approximately predicted, that is, after the investment period has expired.

2. A certain “percentage of risk” x (in fractions of unity) is determined, which shows the probability that the project may “fail”.

3. The real value of the company is calculated as the ratio of the predicted value to the amount (1 + x) to the power of n, where n is the number of years in the investment period. Of course, this method is not accurate and subjective, but it allows us to have at least some kind of assessment.”

During the lecture, Eduard Shenderovich answered a number of questions.

- What do you think about the monetization of the Odnoklassniki project?
- An interesting situation has developed with them. At first it was a service made in the likeness of Classmates. Then they started using another scheme and technology developed by a Latvian company. When they realized they had a lot of traffic, they started trying to monetize it. And now they are doing this, admittedly, quite successfully. At the last KIB, Albert (Popkov) said that in 2008 they should earn 25 million. I can’t judge how accurate this figure is, but there is no doubt that they earn a lot at least from those paid services with which each account is covered.

- Is the ideal investor a pessimist or an optimist?
- Of course, an investor must be an optimist. Otherwise, he will not invest money in those projects that are just beginning to develop.

- What, in your opinion, is the main mistake startups make when trying to get investment?
- It seems to me that the main mistake here is to come too early. After all, a startup will only have one chance.

His parents fled from the USSR to the USA in 1990, fearing criminal prosecution of their son. However, after six years, Eduard Shenderovich returned to Russia, and in 2006 he became one of the co-founders of the company that bought LiveJournal. SUP company. Later, he did business with the son-in-law of Boris Berezovsky, and in the early 2010s he became an investor in the Internet startup Delivery Hero, which, with his help, is now worth $7 billion. Another project, the office rental service Knotel, was appreciated by investors at $500 million. And this is just the beginning, Shenderovich is sure, in his plans to create a company worth $5 billion. Elizaveta Osetinskaya managed to take Shenderovich’s first big interview and find out how the idea of ​​bringing LiveJournal to Russia was accidentally born and why it failed, what metaphysical questions tormented Berezovsky, what is the secret of Delivery Hero and what will turn Knotel into Uber in the real estate market? Find out all this and more in the new issue of the “Russian Norms!” project.

– Why and how did you end up in Russia in 1995? What lured you back?

– In 1995, I just went [from the USA] to look at Russia. With Dad. I was 19 years old. He went first. He decided that the Soviet Union had ended and Russia had begun. He still has a lot of acquaintances. Everyone suddenly started doing business. He decided that he could also do some business in Russia. I was in Russia in ’95, then came in ’96, spent the amazing summer of ’96 in St. Petersburg. Voted for Yeltsin. With homeless people and all other people without registration.

– I mean, you no longer had any registration...

– And I never had a residence permit, neither Soviet nor Russian, because I received a passport at the consulate in San Francisco, which has now closed.

“Now you won’t find any traces of him at all.”

- And now I don’t have a passport.

– Are you not a citizen of Russia?

– Theoretically, yes, but I physically do not have a passport.

– So you came on a visa?

- No. Then I arrived in 1996, while still studying at the university. I came to Russia next time, maybe in 2000. And I [already] had a company that had an office in Moscow and a development office in Novosibirsk. And then I came to Moscow in 2006, met [American entrepreneur] Andrew Paulson, then I met [businessman Alexander] Mamut, and the SUP company turned out.

– That is, he didn’t just meet, but brought him “Livejournal” (Livejournal.com service) in Russia.

– It was an incredible time. I think I'm just very lucky. I saw it all growing, and it was attractive. Especially from San Francisco. Otherwise, you’ve been living in the city for 14 years, it’s small, there’s no longer a boom, and it’s not very clear what will happen. It seems like everything is fine, but you see that people are leaving for Russia and living completely differently. In general, Moscow is an incredible city in terms of vital energy.

– I couldn’t agree more, I love Moscow very much. I was born in it, grew up and love this city very much. I think this is one of the coolest cities on the planet.

- Yes. I really miss Moscow.

Who came up with the idea of ​​bringing LiveJournal to Russia?

– Everyone knows Paulson and [Anton] Nosik, both are no longer alive. And both of them are considered, how to say, the ancestors of the zhesheshechka. But in fact, there was a third person, and, as far as I understand, it was you.

– There were other people.

– From partners, as I understand it.

– In fact, there was Sasha Mamut, who was Paulson’s real partner. I came [in 2006], met Paulson, and we had a great breakfast. Paulson became one of my closest friends. We decided that we could probably work together somehow. The next day he introduced me to Mamut. And I introduced him to my friend Mike Jones, who at that time had a small Internet company. He sold it to AOL a few months after I introduced him to Andrew. He somehow rose up the corporate ladder and then left AOL and became the CEO of MySpace. I introduced him to Andrew. After the meeting, Andrew calls me and says: “I talked to your friend Mike, he told me an amazing thing. He has some kind of endless amount of traffic that he cannot monetize. American company, and he cannot monetize this traffic. There's something to it. We can help him monetize his Russian traffic.” And I say, “Andrew, well, yeah, I guess. For example, LiveJournal has a lot of traffic.”

– From [LiveJournal founder Brad] Fitzpatrick?

– Fitzpatrick had already sold LiveJournal to Six Apart, which was a rising California star. Eventually she went bankrupt. Andrew and I met with the management of Six Apart in California, and they themselves said: “You know, we have a problem. These Russians pay, but they don't want our advertising. And we started monetizing LJ with advertising. They buy paid accounts from us and send these pennies in envelopes.”

- In what envelopes?

- They don't have credit cards. They send cash or even coins. And Andrew and I thought and said: “Okay, let’s somehow come to an agreement and take it away from you.”

– Do you mean we’ll pick it up for free?

- We'll buy it. Immediately after this, as we announced it, a wave against SUP immediately began...

– SUP is the company that actually bought it, in which there were Paulson, Mamut, probably Nosik?

– The nose appeared later. The nose was the most important part of it. We met Nosik probably in August 2006. Andrew called him to a meeting and said: “Since we have already agreed on a deal, I want to involve Nosik in this.” And Nose came, he dug around on the Internet, dug up some things about me that I had forgotten. He simply said: “Here is this company and that company. Well, you probably know about this, because you should have had such experience in this company.” Spout came with his Rothmans. And we agreed that we would somehow attract him. And he became what was called the head of the blogging service. And, naturally, Nosik knew much more about LiveJournal than everyone else...

– Because he was LJ.

– Yes, he was LJ.

“An acquaintance told me very well about you.” He described what was happening at your SUP company:“There was a breathtaking office on Smolenka. Glass ceiling, flickering darkness and light bulbs, among which was Paulson’s office, where on the floor lay a giant, 8 by 12 meter Persian rug.”

– It is very beautifully written.

- It was said. I recorded it by ear.

Paulson didn't have an office. There really was a carpet.

“I’m talking about the pathos with which everything [was done].

– Actually, it was all very beautiful. Paulson was a theater director. He was all about the scenery, about the process, about the theatrical approach. How will this meeting take place? How will the board of directors proceed? Here we meet, here you enter this moment, Nose enters this moment. He was all about the stage.

– As I understand it, the stage is needed so that at some point an investor will come in, get emotional and give money.

- Not only. It seems to me that we had an absolutely normal, working relationship with Mamut, who was the main investor. No one wanted to rent this office on Smolenka before SUP rented it; it was some kind of strange room in which no one had an office before.

– For me it was a metaphor for expenses, [an indicator] that the project was quite expensive. And my point is that, in the end, LiveJournal was not monetized either in the Russian segment, or when you bought it entirely from Fitzpatrick. Why?

– Because the market did not need this product.

- How interesting.

– For example, take money from the user?

– It was possible to take money from users...

– Try to take money from Russian users!

- And they paid, by the way. I think they were paying hundreds of thousands if not millions a year. I don't remember the numbers now, but they were significant. That is, when we looked at how many users were paying, how many users would be willing to pay... Theoretically, we could earn more from advertising, but practically the real money came from paid...

– Usually 5% pays from the total audience.

- It paid more. I think it paid more. Moreover, there are different audiences there. LJ is not a social network, there was an element of a social network.

– So this is a blogging platform first and foremost?

– This is, in principle, a blog platform, but it is also a media space. And in this media space there are people who produce content and people who consume it. And there were really 5% producing content. And naturally the concentration was in the top 1%. There is probably some kind of discrepancy between what the people writing want to convey... they are doing this absolutely not for commercial reasons. They want to deliver content, and they absolutely don't want anyone to monetize them. Successful companies are not created when a good product appears. A good product is an important part and a necessary part, but what is much more important is, as they say, product market fit - so that there is a demand for this product, no matter how good it is.

– Monetary demand, that is, not user demand...

– Market, market demand. That is, not a user request, but just market demand. For me, this story ended in August-September 2008. And for Nosik at the same time, and for Paulson.

– When a group of comrades sold [LJ] Mamut.

- Nobody bought anything from anyone. It was, in fact, basically Mamut's [project], and that's how it remained.

How to write poetry and build companies

– Let’s go back a little, because it’s not entirely clear what happened between the time you landed on the shores of California, then went to Berkeley University, studied philosophy there, and suddenly somehow went into business in Russia.

– I wanted to become a lawyer. Both after university and even before university, I worked for some time at Baker McKenzie, which was the largest law firm at that time. I was their summer associate in St. Petersburg in 1996.

– You write books in Russian, right?

– I write poems, children’s poems.

– They are very expressive.

– I really wanted to become a lawyer and deal with some interesting, complex legal issues. And I worked at Baker McKenzie for a while and realized that I didn’t want to be a lawyer.

- Boring?

– It’s just not about me. But I was very lucky because I worked with a partner who was basically without hands. He had two associates, two lawyers who worked with him, and they both left for different reasons. And he was left alone, with me, who had just graduated from university, to make a deal. And that deal was the sale of Power Computing to Apple.

- An important deal.

“It was a huge deal.” It was just after Steve Jobs returned [to the company], and he decided that he needed to consolidate ownership of Apple, and I generally gained phenomenal, tremendous work experience, an understanding of how the company was structured from the inside. And I thought: “Why am I sitting here, I’ll go build my own companies.”

– So, at the age of 22, you decided to immediately build your own companies?

- Yes.

How Shenderovich's parents left the USSR

– It seems to me that now is the time to talk about what connects you with Russia. Or rather, how did you end up in America?

– This was after all before the collapse of the Soviet Union. It seems to me that my parents became afraid. They were leaving for nowhere. I think that if my parents knew what they were doing and where they were going and what was ahead of them, they would have thought a thousand times. Because this, of course, was an absolutely heroic decision. In principle, we left, just as Syrian refugees are leaving now. That is, we really came as refugees.

– Which part of the Union did you leave?

– We were leaving Leningrad. I only recently started discussing this with my parents. It is very difficult to discuss with them, because it is still a painful topic for both me and them.

- Why?

– Because we really practically ran away. I was admitted to the hospital at the end of September 1990 and was on a drip. I needed to be treated urgently, so I was treated on an emergency basis. And there was only one boy in the hospital with whom I had a conflict. At some point he came up and started farting in the face, somehow he didn’t behave very nicely.

- Well, I would give him an IV.

- Well, I pushed him away. He fell down, cried, and then was discharged the next day. And he left the hospital.

- That is, without consequences?

- Without consequences. I was discharged from the hospital after another three days. And the next day I’m alone at home, my parents just left, the bell rings, a man from the police calls me and says that I got into a fight with this boy and now he’s in the hospital with a broken spine and that I need to come to the department with my parents to sort it out because they opened a case against me.

– A real criminal case?

– A real, absolutely real criminal case. I didn't understand anything at all

- He got up and left in front of you?

“I didn’t understand anything at all what was happening.” And my mother and I went to the police station, and they said that yes, eight years in prison, causing grievous bodily harm. The parents began to try to solve this through some of their connections. It turned out that this is an absolutely unsolvable question, that all this is at the level of some serious people with shoulder straps. It turned out that this boy’s father, a former KGB officer, was involved in such a story not for the first time. This is not the first time this boy has been in the hospital with a broken spine and not the first time a criminal case has been opened. And he came to my parents and said: “Well, you know, children, it happens that they fight. Of course, I can close this case and withdraw the statement from the police. I talked to the neighbors. The neighbor above said it would cost 30 thousand rubles, the neighbor below said it would cost three thousand rubles.”

– Who has the boy already fought with?

– When I heard this, I also did not understand at all what it meant. But he says this metaphorically, this is bargaining: “Well, give me some amount.” And his parents somehow agreed with him. They raised the ears of the whole city, they had some connections, a lot of acquaintances who told them: “You know, such a person.”

– Is this how you make a living?

- Apparently this is not the first time he has done this. I don't fully know all the details. I know that they came to the OVIR with this man, gave him an envelope of money and in return they were given passports.

– So they did pay some kind of ransom?

- They paid. And that day we flew away.

– I want to say that this story is how old? thirty?

- Well, yes, 27.

– It is painfully reminiscent of modern stories from Russian business.

“The parents said that they did not believe that they would be put on the plane. Even when they landed in New York, they did not believe that it was all over. They walked and looked around. They thought that maybe someone was watching them.

- GGB general for New York?

– Yes. [They thought] that this whole story didn’t end so easily.

– Did you have any fear associated with returning to Russia?

– When I returned to Russia in 95, that is, five years later, there was absolutely no fear, because there was no Soviet Union. The Soviet Union ended and some other country began. Other people came to power. And everything that was, was not. It seemed so.

– But as it turned out, in fact, it was not other people who [came to power].

- Yes.

How to go from tens of millions of dollars to hundreds of millions?

– When I left SUP and created the Kite company, I met the German entrepreneur Lukasz Gadowski, who at that time was creating his own company called Team Europe. She was supposed to be cloning other companies. If there is some model that works in America, then why not take and make the same model in Europe or Russia? That is, there was [for example] the Just Eat company, which did the same thing in Denmark and England.

– It’s the same thing - is it just delivery and ordering food?

– Delivery and ordering food via the Internet. The idea is that people do things one way, that is, they make a phone call and food is delivered to them.

- This is terribly inconvenient.

– This is still 80% of the market. And we saw, simply understood and someone explained that there is such an idea as a channel switch, that is, changing channels. The same people do the same thing, just not by talking on the phone, but by pressing buttons on the phone.

- It's the same as Uber. You can call a taxi, or you can press a button.

– Yes, when you press the button, it changes a lot. It takes much less time, it is much more efficient in various ways, it is even more effective for restaurants.

– Because it’s written exactly what they want.

- Yes, yes, because when you call a Chinese restaurant and there is a person who speaks English poorly and does not really understand what you are ordering, he wrote something down, maybe he even wrote it down correctly, and in the kitchen there is this piece of paper someone saw it differently. Well, this happens all the time.

– I didn’t hear the address.

– I didn’t hear the address. Well, in general, this happens all the time. Yes, there are a lot of such questions. There were already clear companies - Just Eat, which worked in Denmark and England, Seamless and Grubhub, which worked in America, and the guys decided that they could do the same thing in several countries, and do it in several countries at once. They started in Germany as a separate business called Lieferheld and made Delivery Hero (Lieferheld means delivery hero in German). We decided to launch in England by purchasing Hungry House, which was such a small player compared to Just Eat. Just Eat bought them recently from Delivery Hero already. They [launched] in Korea and in several other markets. And Russia, by the way, was one of them. And the company was headed by Niklas Ostberg, who is still its CEO, who previously ran the same company in Scandinavia.

– You seem to be listing the success factors that essentially predetermined why this company became successful. That is, a person who has already done this, has access to several markets...

– No, entering several markets is not exactly a success factor. The success factors of any company are that there are the right people who, in principle, know what they are doing, on the one hand. On the other hand, this is a market, a clear and understandable market, so that you don’t have to go and search and test. You just enter the market and immediately begin to monetize.

– And at that moment you raised $5 million.

– In fact, there was even more. I came to Leonid Boguslavsky and told him this story.

– This is a large Russian and international investor.

- Yes.

- How did you recognize him?

– Our mutual friend Jovan Marjanovic introduced me to him. And his situation also changed at that time, because Yandex went public and he found himself in a situation where he could expand his activities (after the Yandex IPO, Boguslavsky sold part of his stake in the search engine. - The Bell).

– Do you mean there are funds?

– Funds appeared, he began to look at the world and at investments differently. And he and I began to look at different companies and invested. It must have been 11 years already. And we invested in two different companies at that time - the German company Lieferheld and Delivery Hero as an international company. We invested in both companies, so they merged to create a larger company. And after that we started really getting into buying other markets. The first big purchase was the Online Pizza company, which is Online Pizza and Pizza Portal. They were in Finland and Sweden. And Niklas, who was the CEO of Delivery Hero, naturally knew them well, knew the founders well. He and I agreed on payments, installments, but of course there was no money for that. To buy this, we again started running around the market to look for money. And in principle, this is how the company turned out.

But in general, the company was constantly engaged in fundraising and constantly growing. We started buying different markets. And now, I think, Delivery Hero is in 47 markets.

– It’s actually important to say here. You are, so to speak, acting modestly. You have such an image of a modest person. But in fact, when the company went public after raising money in many, many ways, it was valued at 4.5 billion euros, if I'm not mistaken. She grew into some absolutely phenomenal story.

– It is now the largest Internet company in Europe. If you don't take into account Yandex.

– Now the company is worth seven [billion euros], because there are some rumors that it will merge with another European company - Takeaway, it seems. It's like you've moved to another league. That is, it’s one thing - you raised a million there, and another thing - a company that’s worth seven billion.

– What I’m doing now is no less interesting.

– I’m not talking about interest now. This brought you into the category of large people who may not think about money anymore, who have their own large portfolio of money. Or not? Your big capital.

- OK.

- Yes or no?

- Well, yes, there is.

– Are you worth more than 100 million [dollars] or less?

- I do not think.

-Aren't you checking?

– I don’t check the account.

- Well, approximately, how does it feel?

– I don’t understand why this is. I basically don’t understand these little bellies. It would be a disaster for me to be on the Forbes list.

How to work with Russian investors and oligarchs

– I will still return to the Delivery Hero company. After reading about its IPO in the Vedomosti newspaper, I discovered two interesting investors there. One you named is Leonid Boguslavsky, and another even more interesting investor is Gavriil Yushvaev, who is called, how can I say, a reputable entrepreneur. The last striking episode associated in the media with Gavriil Yushvaev was the episode when his guards at Moscow City fired shots and had some kind of incident with another guard. And he at one point owned up to a quarter of Delivery Hero.

– We met through a Moscow banker, to whom I told that Delivery Hero was looking for money, and he said that there was a portfolio investor with whom we could talk and he invested in different companies. Yes, he invested in Lyft, he invested in Domo, he invested in some medical companies, but he is a peculiar person, probably like many other peculiar people. I don't know, I learned a lot from him.

- For example?

- Decisions. I think I understood roughly how he makes decisions, how he works with people.

– Explain, you also make decisions. And I accepted it before.

– Yes, but [I learned to make decisions] faster, more clearly.

- More decisively.

- Yes.

– A person lives with security. In America, I think not many people drive like that.

– I didn’t see him with security. I meet him in Berlin or Los Angeles. And he is an absolutely normal person, he lives in a hotel. He has a wonderful family.

“It just seems a little surprising that people behave the same way at home.” They have the same reputation at home. However, they change their behavior when they are abroad. That is, they perceive the international market with its rules, foundations, and rules of conduct. As we know, communication in America is organized quite delicately in form, although it is quite rigid in content.

– Yes, I really like this solid content [communication].

– I mean that communication is different in Russia and in America.

– I read somewhere recently that in Russia people are hard on the outside and soft on the inside, but in America it’s the other way around.

– Are there any other famous investors from Russia whose money you are attracting and who have not been publicly disclosed?

– We worked quite closely and continue to work with the Invest AG group, this is the money of [Alexander] Frolov and [Alexander] Abramov, who are the founders of Evraz. Frolov Jr. created the Target Foundation, which is based in Berlin and Moscow. He has a great team, they invest in various technology companies. And Invest AG, one of their main partners, also directly invests in various businesses.

– And when Russian entrepreneurs, who are usually called openly oligarchs here, power authorities, power entrepreneurs, they are all Putin, more or less, one way or another “Putin’s hand.” One of them was in prison, the other did something else, but here the newspapers do not mince words in their expressions. They will say: “Criminal Russian something.” How do you explain that in reality it’s all different, more complicated, that’s all?

– If questions arise, we can explain them and provide some papers. It seems to me that this story of the persecution of Russians in America is extremely exaggerated.

– I want to go back for a second to the historical facts about the company that, as you say, you are no longer very involved in, Kite. I read Wikipedia, and it says that you did not create it alone, you created it with a man named Yegor Shuppe. And since he was Berezovsky’s son-in-law for some time, the question arises about Berezovsky’s money.

– No, he didn’t have any of Berezovsky’s money. There is generally very little money there.

– Why did you need Schuppe at all? And how did you become friends with him, met him, and then for some reason separated?

– Dema Kudryavtsev introduced me to him because they worked together. Together they created the Cityline company.

– What was his interest?

– He invested the money.

- Yours?

- Ours. And then we began to attract other investors.

- How do you know?

“I just think my father-in-law was completely uninterested.” At that time it was such a small [project]. Delivery Hero was something by the time he died. But I still think that Berezovsky, in principle, was not interested in money.

- I think, yes. As they wrote and said, he was interested in power.

- May be.

- Power over people. What do you think?

- I don't know.

– Do you even know him?

– I met him several times. He was undoubtedly interested in Russia. He was interested in some kind of metaphysical questions. For example, he defined progress absolutely amazingly. That is, the idea of ​​progress. He said that he thought about what progress was. And he said that for him this is the transition of energy into information. When you don't know how to play tennis, you rush around the court, sweat and expend too much energy to achieve a certain result. And the more you study, the better you play tennis, the more information you receive, the less energy you need.

- Interesting interpretation.

– Interesting, yes.

– Please tell us about your current affairs and why you are no longer involved in the company in which you have a partner, Schuppe. Or has he ceased to exist?

–. He was no longer a partner. We are friends and sometimes meet, but... I do what interests me.

A company that will be worth billions of dollars

– From the moment we met, it became clear that you are not at all the person you introduced yourself to the first time; you turned out to be the founder of a super-successful startup, which is now, as it turns out, worth half a billion dollars.

- May be.

– At least, that’s what investors assessed in April.

– This is what The Wall Street Journal wrote.

“And this company is called Knotel, and it positions itself as the Uber for renters. For those who are going to rent, so to speak, offices. Please tell us about this.

– More like Airbnb for office real estate. That is, it is a kind of marketplace that connects property owners and companies that need this property. And unlike Airbnb, where people stay for 2-3 nights, at Knotel they stay for a year, a year and a half, or two. Therefore, this is not a transactional marketplace, like many others, but what we call a managed marketplace, that is, a marketplace with some kind of management.

- Can not understand anything.

- This is very good. We have been trying to explain what Knotel does for the last two years. We're basically saying the same thing. The company has grown approximately a hundredfold in two years. And no one understands anything.

– And yet, do you own something or do you rent, do you rent to someone, re-rent, well, just tell ordinary people who are not involved in business or want to do business, what is it?

– I came to New York in 2012, at the end of 2012. And in 2013, my friend and I co-founded a company called Knotable, which did completely different things. And they rented an office that was five thousand feet (that's about 500 meters) because they decided that we would build a big company. But this company employed a maximum of four people. And there was too much space, so we found other companies that rented this space from us. Well, there was some company for 20 people, for 15, for another 10. About six months later, another floor appeared on the market. Companies constantly come to us and say: “Oh, how cool it is here! Let us take something from you too.” We rented another floor, and one company immediately rented it (the whole floor). They said that “we have received another round of funding and will be growing, so we need more space.” A year later, we looked at the numbers and it turned out that this strange real estate bullshit feeds this software company. I looked at the market and thought that there was such a concept in the market as coworking. There is a big company called WeWork.

– People need to explain what WeWork is. WeWork rents out coworking spaces.

– WeWork is the largest coworking company in the world. We looked at this market and thought coworking was interesting. But this is a very small part of the market. But maybe at that time it was less than a percent. But there is all the other real estate. And all other office real estate is just an office. And in this office people just work. They don't coo, they just coo. You and I started a company, and there are two or three or five of us, and we can fit into the small space that WeWork offers.

And we have a company of 15, 20, 50, 100 people, and this company does not want to sign a lease agreement, because this is a serious commitment, these are long-term contracts. Any company that grows cannot control the space in which it is located. That is, she cannot predict what space she will need in 5 or 10 years.

What happened in 2000, in 2008? These agreements simply killed the companies. And from this WeWork came out. They came out with a product that, after the crash of 2008, helped small companies somehow grow. But what next? Here's this company growing to 20 people, and WeWork didn't have a product, and now there's no particularly good product for a company larger than 20 people. And we made this product. And now Knotel employs maybe more than 5 thousand people. I can't even say for sure right now. More than 200 companies.

– What makes it technologically advanced?

– Basically, this is a marketplace, that is, it has a web interface and an application through which you can find real estate that you can register so that it becomes part of this marketplace (if you have one).

– If I have, roughly speaking, a floor in some skyscraper in New York, suppose that instead of renting it out myself, I can connect it, like Uber Car, to an application and rent it through you.

– We have created a system with which we partner with property owners. And they earn more than they could. And the market is so inefficient that we make it cheaper for companies. That is, if you are a small company of 20, 30, 50 people, on average it is 25-30% cheaper than renting your own office. It's cheaper because you don't have to plan ahead for the next five years. A deposit is not required, just cash that is eaten up by property owners. In general, all office real estate is about 30 trillion [dollars].

- Only in America?

-In the world. There is a lot of office real estate in Moscow, and we naturally think about Moscow from time to time. I just think about Moscow more often than the average American. And we still don’t understand how to work in a market where there is a very high level of vacancy, that is, a lot of real estate has been built, and a lot of real estate is empty. We are currently working in markets where demand exceeds supply.

– Here’s a question. Do you rent from these guys on a long-term basis and rent to others at retail?

- Not really. We negotiate with the owners. We rent from someone, and we rent if it is beneficial for us, or we agree with someone that we are engaged in property management. In principle, this is how the hotel industry, for example, is structured. We haven't come up with anything new. Marriott does not own its properties. Marriott has financial partners. They come and say: “We agree with you in a certain way. Your building will be a Marriott or a Hilton or some other hotel chain.”

– Your partner said that you can order toothpaste from Amazon and it will be delivered to you in an hour, and you will rent an office for a year. And with our help, he said, for propaganda purposes of course, the same thing can be done in a day.

– Theoretically, yes. You can fill out the forms online. Someone will immediately contact you, call you back, and give you several offers. We had cases when people needed to move in, but not tomorrow, well, in a week, in two weeks. And in the office world these are some kind of record speeds. Usually a company starts looking for an office a year in advance.

– Do you earn money or are you just spending it?

- We earn enough. Well, of course we make a lot of money.

-Where are the dots?

“It’s mostly Manhattan.” We have two [office centers] in San Francisco, one in London, and there will be [more] in a while. I think we'll end the year with about 10 [locations] in San Francisco, 10 in London and about 100 in New York. Well, there are a few other European cities that are interesting.

- Tell me, please, who is your boss? After all, the CEO, that is, as it were, the main leader, is not you.

– I have a partner. His name is Amol Sarva. He's such a serial entrepreneur.

– As I understand it, he comes from India?

– He comes from Queens, from the New York area. And he still lives in Queens. He built a building there opposite the PS1 Center for Contemporary Art. This is the only building he built. That is, he had some experience in real estate. So he's still a tech entrepreneur, but he has a lot more experience in real estate than I do. And I had experience in thinking about large markets. Now I have a role where I have no subordinates, but I am in the office every day. And I'm building a company.

– From subordinates, from ideas, from cubes of ideas.

– From idea cubes. No, well, I'm just building a new direction. For example, we recently announced that we have a large blockchain project.

– What is a modern company without a blockchain? If there is already agile.

– Bitcoin is, in fact, an interesting phenomenon, but blockchain as a platform is much more interesting. And for a company like Knotel, it seems to me incredibly important. Because this is a huge commercial real estate market where there is no clear information. There is information that there are buildings here. But the parameters of this building: the owner says one thing, one broker says another, some government, state papers say something else. And no one knows what’s going on inside. This mass of information is necessary in order to speed up the market, simply to make the market more transparent. Everyone wants it - brokers, owners, and people who rent real estate. Everyone wants information clarity. You have a lot of information about restaurants. Why isn't this true for office real estate? We decided to create a distributed system in which all owners of information can register this information and exchange this information. Based on this information, you can already conclude smart contracts.

– I see that you and Amol are already planning some kind of revolutionary change.

- Not what we had in mind. We're really just reacting to what we see in the market.

– That is, you want, roughly speaking, to digitize all real estate.

– We want to digitize all commercial real estate. And by digitizing it, we want to bring liquidity to this market.

- Do you mean money?

– Liquidity - in the sense of the ability to quickly sell a share. What is the difference between the stock exchange and investing in shares and investing in real estate? You bought a share and sold a share, you can do it on the same day. You can build derivative instruments.

- You can even do it in a minute.

– You can even in a second, even in a split second, if you are sitting on the New York Stock Exchange.

– If you accidentally press the wrong button, you could end up in a terrible place...

– Settlement happens in a split second, but this doesn’t happen with real estate. It’s generally surprising with real estate - a lease agreement is signed. In almost any American city, almost any lease agreement will cost at least $20 thousand to sign. Tenant, lawyers, in general, different verification. One side pays $10 thousand, the other side pays $10 thousand. Maybe it costs 50. We believe that we can replace the word rent with the word Knotel.

– You mean, like a photocopier?

– Yes, like Google.

– Knotel? Of course I expect it.

-So it will be $500 million, then $5 billion.

- Yes, I expect it.

"News"

Non-resource ambitions: why the son of the president of Evraz preferred venture investments to metals

Is it worth investing in internet projects?

Managing Director of the Kite Ventures venture fund Eduard Shenderovich believes that now is the time to invest in the Internet, and General Director of the Russian Venture Company Igor Agamirzyan believes that in Russia there has already been a shift in investment towards IT and the Internet. Igor Agamirzyan, General Director of the Russian Venture Company: — In Russia there are not enough projects formed to a stage that is understandable for venture investors. When they can calculate the risks and prospects of these projects and develop for themselves a reasonable and economically justified model of investment, development and exit from companies
link: http://newsaltay.ru/index.php? dn=article&to=art&id=7

Investgazeta found out what is needed to attract investment in IT projects

If you decipher the concept of “company”, it becomes clear that there are very clear components behind it: people, products and the market. Without the correct balance of these three elements, companies cannot exist,” says Eduard Shenderovich, managing director of the Kite Ventures venture fund, which over the two years of its existence has invested in a dozen companies, two of which are in Germany, one in England, and the rest in Russia. Most developers think only in terms of the product, missing such important points as the market in which they will have to operate, its size and growth rate, the competitive landscape, a full-fledged team that collectively has the competencies to create a business with a sustainable competitive advantage, a go-to-market strategy and a marketing strategy , business model and other important factors, says Pavel Levchuk, director of Vivex Invest, an investor in such projects as Mapia.ua, Address.ua, etc.
link: http://investgazeta.net/kompanii-i-rynki/investgazeta-uznavala-chto-nuzhno-dlja-togo-chtoby-privlech-investicii-v-it-proekty-160161/

Eduard Shenderovich: “An investor must be an optimist”

Eduard Shenderovich is a man of numerous and varied talents: poet, philosopher, philologist, entrepreneur. And on top of all this, he is a successful investor, founder and managing director of the management company Kite Ventures. It is quite possible that it is the combination of different and seemingly contradictory abilities that allows him to invest in the right projects, at the right time and in the right amounts. At his lecture for students specializing in “Management in the field of Internet technologies,” Eduard Shenderovich spoke about the basics of the difficult art of investing.
link: http://habrahabr.ru/company/rma/blog/50494/

Ukrainian IT entrepreneurs have found their investors

According to Eduard Shenderovich, managing director of the Kite Ventures venture fund and Forum speaker: “The task of a venture investor is to correctly identify people who can unlock the potential of the market. Such an event is unique in Ukraine, but necessary for the fruitful development of an innovative economy. I hope the tradition will continue and bear fruit soon.” Over the course of two days, the event was attended by about 1,500 IT specialists, investors, venture funds, top managers of leading Internet technology companies, business angels, experts, representatives of Ukrainian and international media.
link; http://newsukraine.com.ua/ news/232816-ukrainskie-it- predprinimateli-nashli-svoih- investorov/

The venture market lacks “early” money

Eduard Shenderovich, managing director of the venture fund Kite Ventures, told RBC daily that the activity of investors at the seed stages is low not only in Russia, but also in other countries where there is no “buyer’s market” for similar companies, for example in France or Italy. “Financing companies that not only do not understand how they will earn money, but also do not know what exactly their product will be, is an extremely risky business,” the investor believes. - In more developed markets (say, in the USA and Germany), money is received not so much by the seed companies themselves, but by their founders - most often if they already have success stories. Their colleagues, friends, and just people from the industry trust them. In Russia, there are still few serial entrepreneurs who could count on such trust.”
link: http://eford.msk.ru/venchurnomu-ryinku-ne-hvataet-rannih-deneg/

Eduard Shenderovich, Kite Ventures: “Entrepreneurs are revolutionaries by definition”

Eduard Shenderovich: I don’t think it’s particularly difficult, this activity has very clear components, but simply knowing them is not enough. Just as with revolution, its theory is described: there must be tops who cannot, bottoms who do not want, and a corresponding economic situation, but understanding this does not bring us closer to revolution. High technologies are interesting to me for their never-ending dynamics. This is a world that is constantly changing and therefore requires permanent study, quick reactions to what is happening, and continuous improvement of oneself. At the same time, there is no longer any doubt that the Internet is part of the overall business structure, and companies that develop Internet services do not operate in a vacuum, but in a common market.
link: http://inventure.com. ua/news/world/eduard-shenderovich-kite-ventures- abpredprinimateli-2013-po- opredeleniyu-revolyucionerybb

Global venture market: rise with revolution

This trend is directly related to globalization. “A larger market and lower risks is the general development line of any industry,” explains managing director of Kite Ventures Eduard Shenderovich. International experience shows that the larger a venture capital firm, the more it focuses on less risky investments in late-stage companies whose products have already been proven by the market. And according to Deloitte, from 8% (venture assets less than $50 million) to 2% (assets more than $1 billion) of venture top managers are ready to invest in companies at early stages.
link: http://www.sibai.ru/archive/index-149.htm

Forum “investment in Russia” - revival of an old brand

Managing Director of the Kite Ventures fund Eduard Shenderovich shared with conference participants his professional experience of investing in high-tech projects and the Internet, and also gave several valuable recommendations to aspiring entrepreneurs who want to attract financing.
link:

Russian children's literature is rich in poems for children. Children's poems are published by various publishing houses. But these, as a rule, are works of already well-known poets who have long existed in literature. Their style, their techniques, their themes are loved and recognizable. Maybe too familiar. And sometimes, as one of the heroines of the series about Dr. House said, “you really want curry”!

And here’s the “curry” for you: the “new guy,” not yet very famous, Eduard Shenderovich appears with his book “About Battles and Battles.”

And he
Bang-fuck!
And he
Fuck-bang!

These “fuck-bang” and “tan-tara-tan” drumbeats herald a new event in children's literature.

Moms and dads need to wake up.

Shenderovich's verse is elastic, laconic, rich in sound and rhythmic play. The rhymes are interesting and unexpected. The line is short, cutting. The dynamics are incredible: every two lines (or even every line) is a new action. That is, this is a verse that, in all respects, satisfies the “commandments of children’s poets”, which Korney Chukovsky once set out in his classic work “From Two to Five.”

But it's not only that. “About battles and battles” are not just high-quality poems. This is historical adventure literature in verse. Not a fairy tale or a poem, but something akin to knightly ballads, only in a “new language”. It’s as if you found yourself in a magical museum, among frozen figures: knights, gladiators, samurai, musketeers froze in the midst of some hot battle of bygone times, but suddenly, by the will of the poet, they suddenly, instantly come to life - and the battle continues before your eyes. However, this is not a panorama of a massive battle. There are no murders or rivers of blood here. If one of the characters dies, it is “behind the scenes.” And in the center of attention is a duel between two equal opponents, taking place according to all the laws of military art, the atmosphere of a dangerous, risky holiday. That is why I so want to call these poems “ballads.”

The characters in each plot belong to different eras and act - move and speak (this is the most amazing thing!) - in accordance with the spirit of their time. From “ballad” to “ballad” not only the costumes change, the rhythm and style of speech, the plasticity of the characters and the code of behavior change.

"Sorry, monsieur,
allow me, monsieur,

I'll poke a hole
in your underwear!” -

These are the musketeers.

And the knight before him
takes a knee

swears that
right
and self-
obliviously -

will last
four hundred
knightly years,

what's more loyal
there are no knights

what he
will win
and the enemy
and a dragon!

And a song
To the princess

will sing

by the balcony!

It's clear who it's about.

"...I will take revenge on you
instantly for this -

we will shoot
from pistol-
letov!

We will
Shoot, Bill!

These are cowboys.

Each fight has its own onomatopoeic set that conveys its character and atmosphere. All these “abra-kadabra, courage-boarding”, “zhik-zhik”, “chah-shchah - sneeze-shchik” are so expressive that they can cause auditory hallucinations. And the plasticity of the characters is conveyed in such a way that movements can be imitated if desired. That is, these poems are also scenic.

Gladiators are already
against each other -

like wild animals
walk in circles.

They're watching
into each other's eyes

and as if
growl...

On the title page of the book there is a dedication from the author: “To Date, Vasya and all the boys who have not yet grown up.” Finik and Vasya are the five-year-old sons of Eduard Shenderovich, who, according to his stories, enjoy reading these poems from memory. And the Samokat publishing house, which published the book, is proud that it has finally published a real “boy’s book.”

But we can hardly talk about the existence of any special “literature for boys.”

There are, of course, “girly” books. Among them there are both good and bad. But boys, as a rule, are not attracted to either one or the other: they simply have no one to identify with here. But there are simply good books for everyone - both girls and boys. Both of them read The Three Musketeers at one time. And "Treasure Island" and "The Headless Horseman".

“About Battles and Battles” is a book for boys too. This does not mean that girls will not be interested in Shenderovich’s poems. Moreover, the “female line” is drawn here gracefully and with humor: For example, in the short story “How Knights Fight” the princess,

...flushed

like a thousand
roses,

kisses
knight

And during a gladiatorial battle, the empress from time to time says to the emperor:

“My dear emperor!

Shouldn't we go
to the theatre?"

A very feminine attitude towards the public bloody entertainment of men.

Note that the illustrations for the book were made by the artist (not the artist) Sonya Utkina. It was she who painted all these “fuck-sharabs”, knights and cowboys - with taste and knowledge of the matter, so it turned out to be a real historical theater.

The book “About Battles and Battles” may well become an “introduction to history” for children - the characters of “past times”, their costumes, customs - and, most importantly, their attitude to the world are so accurately and vividly described in it. So we can recommend it to children seven or eight years old, who have already awakened an interest in historical events and, what is important, have accumulated sufficient experience in perceiving poetry.
It's better to read a book out loud together. For example, take turns, by role. But we must certainly let these verses be heard. Otherwise, you won’t be able to discover all their advantages.

Marina Aromstam