«Aaron, how did you hear about BayRu?»
«A good friend of mine was the first investor in BayRu, and it was who invited me to join the company. I had two rounds of investment, beginning at the end of 2010.»
«What were your first steps after joining BayRu?»
«We needed a superstar to head the business in Russia. And we needed a long-term development strategy. But before all that, I needed to understand the strengths and weaknesses of the business, the people who worked there and thereby the emerging opportunities. So the first step was a lot of listening.»
«What did you hear? What were the strengths and what were the weaknesses?»
«I heard that the customers really loved the service. I saw that the people working in the organization were devoted to their cause. And I also realized that BayRu was not growing as fast as other companies in the Russian e-commerce field.»
«What needed to be changed?»
«We made some decisions about staffing, we were joined by Maxim ANDRYUKHIN in Russia. And the co-founder of the business Gene GERMAN also joined up on a full-time basis. And we focused on how to create a new strategy. The first steps were a drop in prices and more active advertising of our product and services.»
The root cause of our growth is the service that we provide. And its quality is directly dependent on our employees.
«In sports there is the concept of ‘player-coach’. You are not a classic investor as you are both an investor and president of the company. Why did you choose this method of leading the company?»
«The first thing is probably the people. I always enjoy working with high-caliber people. The second reason was that it was very interesting to create a product that will meet the needs of the Russian e-commerce market. It is a market that is one of the most attractive in the world. And thirdly I also realized that the confluence of circumstances and my professional and life experience would allow me to do more for the business by joining it. If any of these three factors had not been present, I would have made a different decision.»
«Was doubling the number of customers in a year down to the team or down to the market?»
«That's a good question. The root cause of our growth is the service that we provide. And its quality is directly dependent on our employees. But we should not ignore the macroeconomic factors either and the growth of the e-commerce market in Russia. These also played a role.»
Each month, with the help of BayRu, several thousands of Russians make purchases on eBay and other internet stores throughout the world. The average bill is $500. Costs of purchases range from 600 rubles (about $20) for charms and small souvenirs, to tens of thousands of dollars. Not long ago, BayRu assisted one Russian citizen in obtaining collectible items with famous autographs to the value of $70,000. Incidentally, many collectors and antique dealers have long since appreciated the possibilities afforded by BayRu. But most of all, Russian internet users, as before, use this service to buy car parts from America.
«What proportion was down to this?»
«To answer this question we need to look at the average growth of e-commerce companies over the previous year, which is approximately 100%. In our case we have seen growth of 700%. Of course the market played a role here, but it was even more due to the people and the strategy.»
«When making an investment decision does it matter what the area of the project is? After all, this is not real estate...»
«Despite the fact that most of my career has been in real estate, e-commerce has always been one of my interests too (Aaron is the founder of the e-commerce group in the Young Presidents' Organization International. – Editor's note). And besides the product built by our partners before we came onboard looked very attractive for investment. In fact, the decision was fairly easy and logical.»
«How do you assess the risks of investing in Russian projects?»
«I can comfortably talk about the situation with real estate and BayRu.»
I expect the return on my investment at the end of the next 12 months.
«So you are saying that you cannot tell which areas in Russia are best to invest in?»
«Probably not. I consider myself more to be a manager who is developing the business, rather than an investor.»
«If it’s not a secret, what was the amount of your investment?»
«I have invested quite a lot, and still continue to invest when necessary.»
«And how quickly do you expect the return of your investment?
«At the end of the next 12 months.»
«When you answered one of the first questions you said that BayRu needed a superstar. Who were you thinking of?»
«I was talking about our director Maxim ANDRYUKHIN. We previously worked together in the company Cushman & Wakefield (Stiles & Riabokobylko). I could see how he worked and what results he achieved leading the company's regional projects. It was largely due to his excellent organizational skills that BayRu achieved such impressive results over the past year.