Автор: Олег Анисимов

В этом выпуске программы Бизнес-секреты Олег Тиньков беседует с Филипом Энгельбертом, сооснователем крупнейшего в России сервиса объявлений Avito.ru. Речь пойдет о том, почему шведские предприниматели решили строить бизнес в России, в чем заключается секрет успеха классифайда и как устроена его монетизация. Филип рассказывает о миллионных инвестициях в маркетинг, конкуренции с Yandex, Google и социальными сетями, а также делится своей личной историей, вспоминая, как закладывал собственный дом ради веры в стартап.

Oleg Tinkov: Well angelbert, yes angelbert, angelbert, angelbert, what the fuck, yes, what a different last name, yes, yeah and here is Philip Engelbert, the one of the owner and a founder of the company called av. Ru Avita toaru Philip Engelbert. Oh you start to speak Russian. Yes, I understand but don’t speak like like my dog, yes, like your dog, like your mean dog. Yeah, my dog chesar is he is the same beautiful K cor, even he he understands Italian because he grew up in Italy, so okay, anyway welcome to the uh bu bus secret Studio, it is a bit unal Studio as you can see. Yes, and uh I would like to bring Philip Engelbert to the audience, and actually I also would like to bring him together with his partner yonas, um uh but Yas is traveling, he is a entrepreneur, so he should travel and uh to kind of feel, here is the story. Uh a couple of days ago avitau uh invite me to talk um before the media agencies, right, have a speech, quick speech and the business breakfast, and I came there and I see very nice, very beautiful young uh people about 40 or 50 beautiful bodies and um smart eyes,. And uh where when I start my speech I kind of catch myself in my mind, what is the fuck, why those two swets are doing business in Russia in my own country, why? And and I basically I I said them why not all of you or one of you doing this business, why those seds came from all the way from Stockholm and doing this business in Russia when you supposed to do it, because why even inter preneur from Sweden should come to Russia to do the business but not the Russian enterpreneurs, where is the enterpreneur ENT ENT preneurs from Russia, that is kind of concern I had? And then then I decide to um talk about this with Phillip okay at business secrets. So here is this first question, what is the fuck, where are Russian entrepreneurs?

Filip Engelbert: It is a good question. I think uh when we got there 2007 there was the male group with mire and Yandex Google was not really here. I think both of those companies were actually started in 98 99 and grew. I mean they have grown into fantastic properties but out who started I don’t know,. I think mil I I thought you were involved. No no no no no but when we got there those were sort of the two big sites here.

Oleg Tinkov: Yeah of course but it is not here. I don’t know if you know that um two the most uh uh expensive uh uh internet businesses in Europe including UK are from Russia, it is a Yandex mail, there are the two biggest internet comp nobody knows that and and not many people knows that but that is matter of fact that if you take the whole Europe including UK because I don’t really want to consider UK as a part of Europe because Oliver will then will punch me.

Filip Engelbert: The number one and number two uh by capitalization at least companies will be from Russia which is a huge sign. I think this potential so this was opportunity that we saw. You have these two gigantic companies that were gigantic already four years ago that absorbed a lot of good people and young entrepreneurs or old for that matter who want to start their own online business. So needed you need good idea, you know lot of running but you also need cash. And I don’t think there was so much money going into young online projects or if there was money it was too little money, because you cannot I mean the reason why Yandex and Mail are Valu at so high valuations, it is a big market and it grows fast as hell. So I think there were a lot of good in in in in what do you say initiatives here but poorly funded. So I don’t think it is I think the Russians are as entrepreneur as anybody and we got here and uh we got here with something.

Oleg Tinkov: So would you say in contrast that uh in Sweden is easy to get funding for the startupers or easier?

Filip Engelbert: So it is easier but it requires less cash because it is such a small Market here and this is what is eye breaking for me to that is why I love being here. It is one more Ser for everything. I me in Sweden we always make fun of Americans it is like they come and always talks in tens of millions of dollars whereas in Sweden you know a Ruble or a crown is pretty much the same but here everything is so much bigger you have to think bigger you have to spend more to make more, it is much more Fierce,.

Oleg Tinkov: Different scale.

Filip Engelbert: I have a friend in Sweden he started sort of not Starbucks but a Starbucks of Sweden which was called Robert coffee and when he rabbish no Robert coffee and the way people done thinking s oh so this guy started a coffee chain now I cannot do that I will start a tea chain instead. Whereas here in Russian I think in much in these competitive markets like if people when people have saw the sort of success of a Vito everybody wants to kill us. I mean they want to they copy us they try to steal our content because that is Fierce competition. So in order sort of to compare the Swedish and and Russian entrepreneurial Market in Sweden you are a little bit more protected because we are not as as competitive we stick to one thing whereas here people are very competitive and then I think which is so we more entrepreneurial or we have no Crooks no I am no an entrepreneurs could be the say no not Crooks not absolutely not Crooks but then I think from this is only internet I don’t know about all the other sort of entrepreneurial stuff,. I think there has been a notion in Russia which I think has we have benefited from, it is like you should not do Marketing Online you should have very very smart SEO guys, it is sort of it is not it is not cool to spend money and that that has been very good for us because we think it is cool to spend money we not for the matter of spending but for the matter of making. So U all here never thinks we are going to make any money and I will prove you wrong not today but maybe in the future..

Oleg Tinkov: I never said that.

Filip Engelbert: No no okay okay but but no but the if you are in my opinion aita uh you could be more uh efficient than you are. I understand exactly the um um the point where you are coming from saying that I just can always um uh confirm this by my own businesses why all of my businesses were successful technoshck Daria beer Etc because I over invested there,. All of my competitors then they don’t like to buy a brand new Machinery from Europe to build the best Factory to spend into the advertisement or to hire the best possible people. I always did I always did. I always invest more than them then I get the price for this that is obvious for me what you are doing. However saying this I would start if I were you I would start to monetize it a bit more aggressively a bit more faster that is it and um you keep losing the money and when you send me the business plan two years ago and that is just not Russian type of investment when when you see the business plan where first four years you losing the money and then in the fifth years you got break even and the six you start to make a little bit of money believe me you just do not find the investor here in Russia it just does not happen..

Oleg Tinkov: So no so I agree so we like even TCS you know TCS very well and because we have the same investor was naft is investor of Avita naft is investor into the TCS business we lose money for two years huge money you know that,. But then we break even on the third that is kind of model I think more appropriate on this on the bricks Market at least maybe for Sweden it is good to lose money within 5 years when in Russia to lose money for 5 years it is a bit aggressive approach that is my opinion on Avita but saying that I am sure it is going to be successful.

Filip Engelbert: Now I mean on on on the positive side that business plan was know two years ago now I mean roughly speaking we make maybe 30 million rues in in revenues every month we we have all time high month on month our operating expenses maybe 30 million rubles so we make about so you break even on operation level. Yeah and then we spend marketing we like you.

Oleg Tinkov: How much marketing you spend now that was one of the question from so we spend so let’s answer that is how much you spent for the advertisement and how do they phrase here on ah how much you spend per month on advertisement and how how would you break it down on Direct Google media Etc and what is the conversion,?

Filip Engelbert: Okay so here is the question okay so so how much so if I if I answer all of that I give away a little bit of our trade secet but I will try to be as open as possible. So obviously uh we spend a lot on TV it is cheaper to buy TV in January because it is a poor month. It is a good month for us because people after drinking for one month and and you know getting all the gifts they don’t want they can sell it on avito. Yeah it is pretty cheap by TV on the other hand now we do so now we do TV here before school start now it is I mean it is it is not top top but it is almost top December is more expensive but this we do to to to to remind to get top in mind. So TV we spend a lot of money and then we do on online we have tried everything we done Facebook live Journal Google but we we mostly give you online 5050 or how do you wow it depends on the month because you don’t spend every month on TV right,. Exactly so but on on a on a yearly basis I would say I mean so online is our main Tool.

Oleg Tinkov: Yeah the guy ask actually how much per month but I would rephrase on the annual basis.

Filip Engelbert: Yeah let’s do on the so no but I I will not say on Ann basis it is millions of hundreds of millions of rubles in marketing. Yeah but TV online tv online this year I would say 6040 for online or 70 2030.

Oleg Tinkov: And how how you break down the the online advertisement?

Filip Engelbert: So for us this is almost like we are stock Traders so my partner yonas he is sort of responsible for that part it is really a thing we monitor every day. And so now now it is a lot of of Yandex and Google Andia contact a year ago there was or some bon in there there is maybe still some Bon so the media changes all the time and and really for us it is not context not by accident now it is a lot to context. We just look at the conversion as the question said and and it is it is not really the conversion it is actually what what we pay for us a key kpi is what we pay for a new listing cost per listing or cost per item and that it is that really that figure we look at..

Oleg Tinkov: Но how how do you track them because how do you know that that particular listing came from the context that we have tracked in Google analytics?

Filip Engelbert: Oh okay yeah so that is no problem for us to see that is absolutely yes and that is this is because he may come and look and and get away and then put the listing in two two two days later. Yeah yeah now this we can track this and this is not I mean I am not technicaly but this is not that is not high tech so you know that right. Yes but the way we look at conversion I think it is if you start a business to is like that is one key key metric the other one is for for over 100% traffic so how much converts to new listing how much converts to buyers because we track that too. So we see how many of these are sort of window Shoppers and the way we can see that is that we have different places on on on our site where we see if they click they they presumably interested in buying a good,. So we actually measure that we get both buyers and seller because it is to the essence all these is like if you are going to sell this table you need people that want to buy this table on a Vito and unless we have those people you will not put that table and the people will not come. So it is a little bit of a hand and egg situation so this is something we have to have in the back of our heads too. I mean one interesting thing is like when we started 3 years ago so we had a board meeting yesterday and we we looked a little bit of Technology platform in a category Tre you know you have real estate cars the iPad didn’t exist it is pretty cool now it is a big category did not exist. So I mean things change all the time and at one point in time when we have a lot of iPads we make that into separate categories.,.

Oleg Tinkov: And by the way another question from Twitter was um why you don’t have a category how we call it or um the um section i want to buy.

Filip Engelbert: Yeah yeah there is a demand from the internet I want to have a section where I can list what I want to buy we had it and we removed it. Doesn’t work. Yeah but we have so it is with everything you have to give it love and for us it was a little bit gener I mean because you it was like I want to buy in all categories so when you want to go into list i want to list this glass and said you want to buy or sell. I think in order to make it buy I think we should go for certain certain categories I think for services it is better you know like almost like recruitment I want somebody to fix my porch or I want somebody to come and paint my house that that is okay. But for to be sort of so if I want somebody to come and yes then don’t go toito you will be moderated away and blocked forever. So no I it is one of those things we discuss I think there are for us other things we will do before that but it is interesting.,.

Oleg Tinkov: I think for for some of um the um um our audience who watching the program and don’t really understand what we are talking about what is the Avita could you please explain your business model? What avitau is and actually how do you make money there because that was also one of the question from the Twitter where how do you how do you money? So start from the uh uh from the project what what does mean Avita thatu why should I go there?

Filip Engelbert: Okay so the first question what does Avo mean it means nothing. Yeah that was another question. So in 2007 or six when we started this it was booming on runet was booming so there were like no URLs. So this was a URL we could find that was I mean pretty neutral didn’t mean anything. It is actually not a good name because in Russian it is pronounced Avita so it is not even avito but that is how we came up with the name and I remember you wanted to change the name that I also remember I still believe you should have better name,. Yeah that is how it is. So what we do is is a service and the service is is when you come home or like with this with this table to your wife and you already have a table at home and she tells you you know all I love you you bought this table but you know you take out the old table and you are a very lazy guy. So suddenly this becomes a big problem for you what you just do you take a picture you load it on AV Vito you put a decent price not a high price and within a few hours you will get a call and if you are not being, you know, an asshole they will come pay you some money take the problem away from you and the guy who bought it get gets a table at a decent price and you get money. So you can, you know, buy something both happy win win and so where is your benefit of aita you you did that listing for free right? This is for free. So uh there are different number of revenue streams the most obvious and maybe most difficult one is sort of advertising pure advertising. We have maybe this month 1 billion page views so I mean of course that is something to monetize that was the event banners and stuff right? Pardon banners banners. Yeah different type of banners then we don’t charge for listings but we charge for if you want your table to come on top. Like on on Mamba you can go on top you can go on the right so these are additional servic this kind ofu and actually 5% or even more than 5% of all the listings that come to us and yesterday that was 110,000 items came to us yesterday 5% of them actually pay us something and the Avo is over 100 rubles it is I mean it is not fantastic but it is it is still some money and it is really good value for the for the people who use it because you sort of you stick out in the so that is one more and third Revenue stream is is the like entrepreneurs maybe people listen to this program. It is we have we have one client that sell watches for instance so he he is bought a shop in avito 25,000 rues per year shoping shop,. Yeah it is shoping shop but I mean if you manage this well you keep on sort of putting in new inventory sort of Internet magazine. Yeah but no fulfillment it is not as complicated as you know ozone Vicky Tu I mean I didn’t even know how those how those sites work. So here you simply here was the question wikim mar. has has a sell via internet shop why don’t you. No so we have so but you have so we have your shop window. Uh huh it is called aito magazine so far we but is it your soft they use your soft or they have to create their own they buy e CLE or whatever this kind of. So this is very unsophisticated they just they get their own window where they can describe they get a link to their to their real EOP but they can put their items and we don’t provide any sort of software to do shopping. No we just connect buyers and seller but you know at the end of the day if if you are starting a business for 25,000 rubles a year and you have to be a little bit active and then you I mean you use value added service you get access to no we are actually Russia’s biggest Marketplace,. I mean every day yesterday we had 1.6 million sessions or visits consisting of 1.1 million unique I mean it is a pretty massive amount. So you have 1 million unique users coming every day to your site it grows every week but now it is 1.2 if you look at on 100,000 it is quite a lot.

Oleg Tinkov: If you look at on a daily and how many sales transactions?

Filip Engelbert: I don’t know I think I know it is hard to track for you. Yeah it is hard to track but on in any given week say that we get sorry 6 700,000 new listings per week 40% disappear that they sold it means no no they probably sold because you only remove it if you sold. But it could be doesn’t mean nessess that it is the same people that listed that week that got removed could have been people that listed you know the week before. But in general it is not a problem I can guarantee that if you have the right price you will sell. Of course if you are selling you know a pair of water skis in January is going to take a little bit longer time than if you sell them in March or in in April to June but that that is sort of that is that is pretty logical. So liquidity is not a problem it is absolutely not a problem..

Oleg Tinkov: No my question was it is tens of thousands of of real trading transaction through Avita site right between the people?

Filip Engelbert: Yeah and you asked me so how come you started this and yes so we are Swedish and in Sweden there is an online classified as there is in in France Portugal China us they have different names. The one in Sweden is called blocket the one in China is called taba the one in UK is called gum tree. There was a question the Swedish one just to make to put in to put into perspective how big business this is generate 5% of the Swedish gross national product online huge. Yeah that is the question why it looks like blocket SE and where were you think the easier to do business for them block it there or for aita RI that is the question another from,. So I so I don’t so I never worked for Block yet I don’t know they make they make so much money now they make like $20 million plus each quarter they are fewer people than we are actually and it is a fantastic company. I think they they disc discovered a way to exhibit classified like but this we are not the only ones copying them and they public or they owned by a Norwegian media conglomerate. Okay they own like 25 of these now worldwide. Okay no it is just it is a very simple thing it it actually you know why why it looks like blocket it is a good concept why does fa contact look like Facebook you think so if contact looks like Facebook. Yeah I think the owner of V contact pav durov does not agree on that. Okay so he never admitted that that he kind of been inspired by Facebook not even say he he has stolen the concept I I didn’t say that either. Но to get great Inspirations is is good and I mean I think from a very good from from a perspective we very sort of look like block you are right guy to ask especially you are from outside of Russia,.

Oleg Tinkov: How do you feel and what do you think about that um the biggest by far biggest Russian social network called contati you having a video search and has all of those pirate videos and porno when Facebook never have something like that? What can you what can you say whose concept is more um appropriate? I know you buy advertisement from them. Yeah yeah but and you you you are probably trying to be politically correct but I like you to answer from the bottom of your heart what do you think is it good for Russian internet Market or for the positioning of Russian when the biggest social network of Russia have such a things?

Filip Engelbert: I don’t think it doesn’t change the perception of Russian internet. I mean pirate stuff exist everywhere. I am just thinking if you compare Facebook and and F and porn exist everywhere you can go to the pornub or you can go to the Tor so the concept but you cannot find this on Facebook and that is what I mean,. So in a as a competitive advantage I think to put it like this if if F contactor would remove all of this I am not saying Facebook will win them but it will be much tougher fight. But I mean most of the people in my office no so I have no clue I think they will lose one of the USPS they have. But if you work on if you are already on Fair contact you know if you are going to change I mean you have your friends you have your War I don’t know I don’t I I really don’t know. I am and I have to say working in the online business business I am very sort of not online is myself. I mean I read a lot I do a lot but I actually you know would be paid money not to be be able to be reached. I don’t have cell I have cell phone but I am I am very sort of but for me personally it is embarrassing to have um um biggest Russian social network competing in Russian great entrepreneur and actually a genius programmer himself and his brother they are genius programmers but they competing uh with um tuken and with the other entrepreneurs not uh uh through the context uh or like programming and they are much better programmers than Facebook because contati is programmed much much better than Facebook but by the uh the they are competing using this kind of harsh technique putting the porner in there uh and putting the uh P pirate videos,. I mean for me just embarrassing to see it, they deserve better, they deserve much more better they can that could be..

Oleg Tinkov: I mean for me it is not embarrassing but but they probably of course you are not Russian you are Swedish and I am Russian it is embarrassing to me when I go next week to uh San Francisco to web to zero conference and I know if I say to anybody that I am from Russia they would have this kind of perception. So it it is just a mess, it is a country of pirates.

Filip Engelbert: But I think one one cool thing that when we got here Google was not big and Google started to come and it was like oh and Google I mean I have to say they are just I mean it is a huge Oran I mean they are evil good people and I mean the concept was H they will take overtake Yandex and stuff and I really think Yandex has shaped up in all the aspects much more proficient to deal with,. I mean so that is one way of tackling just stepping up and becoming I think they have J has a fantastic footprint here. Well yeah yeah yeah is good example of of the uh of the right way to do the business because they are much better in morphology of course thank you to Russian language they are much more advanced. They have this Yandex Market when for example or Yandex Yandex Services which Google even don’t have etc etc Yandex is real high tech company and they are competing with Google using not the harsh or like this kind of weird technique but they using the technology and the program. No Yandex is better in Russia than than Google because they are just better it company and I believe that V contact is better it company they are much better than Facebook but maybe does the exactly right thing,. So they keep the porn for a few more years then they take it away. They have like 100% penetration in Russia they remove the porn and they they won the market that could be it too. I mean maybe it is a good strategy I have no clue I have no clue. But I mean they have huge reach at at the end of the day huge reach. I think they are like I have no clue but there is probably like 70% of all the page views on runet is fear contactor. Yeah I don’t know but I am because of this if the if if if the average uh uh if the average time spending time in any other social network in the world is what 8 to 12 minutes in B contact is 30 to 40 minutes it just gives you an idea what what are they doing there right? This is embarrassing number as well but I love that how how Western media gets that because Western media loves to hate Russia but they sort of love to hate Russian in Love. No they love to love Russian internet and there is always this so Russians are so more socially engaged it is like they are not more so much,. I mean they are very opinionated like with love Jour and all the BLS and I mean you express your feelings but I don’t think it is so me it is not overly opinionated but it is so people spend a lot of time doing the..

Oleg Tinkov: But by the way um V contct start to be blocked I heard that they blocked in they definitely Block in like in Dubai but they blocked already in a Hur in South Africa even for the whole country. Uh huh okay that is a good signal and I hope this is a signal to the to to owners of of contuct because they just cannot continue this way they should change they should change doing that. It is a for me personally being Russian it is embarrassing because you can compete using the other technique not this kind of shitty techniques that that is what it is. Okay let’s stop about contact because I am really pissed off about them and why I am pissed off because I really care because I believe they are great entrepreneurs and pav durov is great entrepreneur and they deserve better they deserve much more but he told me I am libertarian so now forget about the uh uh privacy forget about the uh uh forget about the copyrights it is over you like to all to understand that,. Okay I say yes of course I am 43 and you are 26 but come on you talk this way before it comes to you when you write write the book or or write the music or write the music or his next wife maybe is is a musician and when she will get nothing because everybody just copied then he would understand me. No there is copyright maybe it is a it is wrong way they ex execute it now but it should be copyright otherwise the just the most most of the art just will not evolve..

Filip Engelbert: I mean but what so come back then to avito and Russia and sort of so although yonas and I are are Swedish which we are sort of without a doubt everything I mean we not programs everything we done are done by Russians and by very very talented people. I mean it is we don’t I mean embarrass enough don’t speak the language so this is although we are sort of the phes of aito we are not the workers of Av this is 100% Russian product nothing’s done in Sweden,. I mean it is just mhm so to the so this blocket no this is this is made in Russia for Russians inspired by this. So I mean that I think that is really important to say and the people we work with they are very young and uh they like working for us we like working with them so it is a Russian company basically.

Oleg Tinkov: Tell us a little bit more about yourself so you born in Stockholm?

Filip Engelbert: I am born in Stockholm 1969 so I am a little bit younger than you are. Went to school there um in and in sort of 1990 I moved to Boston to take a Bachelor of Science wanted to start continue to work abroad. And then take a MERS but ended up in in Stockholm for it was a summer internship but I ended up staying there for 3 years as a economic controller for a company. I had I mean I was I think very childish I had no clue I was very good in school but I had no clue what to do,. So but it was a fun job and then I went over to banking worked for in corporate finance transaction there I met the NAFTA this is like mid 90s and then two and end of the 90s in the com era I started s of my first own company that never really s before you you were a manager right? You’ve been managing stuff but I always wanted to do my own thing both my parents are entrepreneurs. So although I always wanted to do something I didn’t want to become an entrepreneur directly because that live that life I’ve seen so I wanted you know to do my own thing. Но I always sort of had it in me and I hate PE people when to tell me you know what to do so that is not a good then then you are not a good sort of foot soldier. And then in 99 I started an own I want to start an online sort of luxury business and did that for one and a half year and the con the concept was not unique I spent a lot of time but I just came to Stu home. Pardon Stu home. Yeah but I was traveling a lot in Europe at that time but but but it just it came to point that this is not me and I was just I I will not succeed with this,. So I just I handed over it was only a project to to a friend of mine and I started doing Corporate Finance work transactions which was actually you know what I what I liked at that time. So I went back to the company I worked for before the crisis which was a bank head of the corporate finance and then I think now we are 2003 2004 no thanks okay. And then there was a small Bank in Sweden Investment Bank that looked for a CEO and I sort of knew the owners and I knew exactly what I wanted to do with that business. And so I called and said this is what I want to do and we did that and it it was small but very successful it still exists and but then so I was part owner of that but then the brothers that own the business they didn’t have so good chemistry between themselves and was and I just came to point you know I if I stay in one more year I stayed there for exactly two years that then I am going to be stuck in this sort of dilemma,. So I just had one after board meeting I say so guys this is it I mean I cannot I’ve done this you are not it doesn’t matter really. And at that point in time I had advice Wasa when they bought ran here in Russia from the Swedish Ro company and there was a deal I found and so and aolf and per they asked me so okay so buy some shares in this and I I mean since I advised I could really I couldn’t really say no either. So that is how it started and the plan was to to go listed raise some money to do what works in the west will work in the East internet investments into Russia and then I became CEO of that company we got listed and the Yellow Pages business doesn’t work in the west doesn’t work in the East either. And out of this in the crisis 2008 which what really came out as sort of the good thing was bankrupt right. No not bankrupt it is a small company I I mean I have nothing to do with it the changing the business model a bit to YP you are not involved now,. No no I haven’t been involved for 2 years have no ownership like nothing so that is who owns now and Sh still yes. And who runs it now a called K stardo guy I recruited so they now Break Even they. Yeah they break even but what they did which I think is the right thing they sort of just discontinued the business that maybe could make some little money now but doesn’t have any long term perspectives. So they are focusing on making online product I think they are sort of very by Yelp in San Francisco it is a it is like a review site you go to restaurant and you like a Zagat or something. So I wish wish them very good luck but it is not not what we do so then Jonas and I I mean we work together but really 2008 we really started to work very close together. And at at that point in time I think also the the owners that time was wanted to fire me which was sort of a painful period cuz I didn’t own any shares at that time and 2008,. Yeah and I said or I believe it is that would have been the wrong decision which I told them so and then you start with this business.

Oleg Tinkov: Yeah we start 2008 right?

Filip Engelbert: Yeah we started in 2007 but then that then we were both like a moloto and an isuki and the moloto model doesn’t work so well in Russ. Yeah one of the question here was what is your difference from is ruk vuki. So I mean from a company perspective I think it is R vook are 3,500 people we are 35 in Moscow then we have some moderation in Ukraine. So we are a pure online company they are a print and online company but I mean at the end of the day we we compete doing the same thing. If you want to sell your table fast um you can go toiu you go to avito and I what is their domain is rooki iru I IR r you but to me this I don’t know if it is good or bad but to me they are really not competitors. I mean in one way they are competitors but they have a print product I think it is a pretty profitable print product. It will continue to be profitable you know for many many years I mean you can see examples all around the world so but we don’t do that,. I mean we we get our peoples online we don’t have boots it is just different setup different setup.

Oleg Tinkov: And I think and how much did you and the shareholders has invested have invested into the avito what is the total investment?

Filip Engelbert: It is like $3 40 million.

Oleg Tinkov: 30 40 yeah not too bad startup.

Filip Engelbert: No no I mean we still have cash so it is not just that is what go into the account and the main investors are Ken V NAFTA and and and then you and Yas and who else North Zone and it is that is a Swedish van cap. And um so basically you brought lots of investors how much but but it is not we didn’t bring a lot of investors we we used to be public and then shinik and bostok they bought it out from the stock market. So I owned shares before and oh Yas had some warrants so that at that point in time we didn’t own anything it is all from yeah for contact East I would say. Oh from contact East we had to we did a restart so or Buy in or whatever,. So um so it has a history so me and Yas we only about 15%..

Oleg Tinkov: And how much did you invest your own money as entrepreneur?

Filip Engelbert: I have no clue some hundreds of dollars absolutely. So in the first sort of Conta e Journey was when we listed I invested a lot took morges on my house and everything. And then you see mortgagees his house. No but he was really all in and down. Every program when we put it on on YouTube the questions are oh why do you ask him where he get money why do you ask him how he put where his get his first capital here where he been working like crazy for 10 years then he mortgage his house and get the money from there and invest all of the money into the project he likes and he believes to and brought some more investors because would never put money because lot of I am receiving maybe I don’t know 50 emails per day I don’t even read them because they say basically give me the money give me the money give me the money I have the idea. If you have the idea first you put your own money there you prove the idea works then you come to me not like here is idea fund it,.

Filip Engelbert: No no but that is so so that phase I was through already in 2007 2008 then a Vito sort of merged out of of contact East and that was very different because then company was already founded. So then then was way of finding a way where Jonas and I sort of could could get rich doing this and get incentivized and it is not a perfect solution but it is good enough..

Oleg Tinkov: According to some studies Sweden is um I think there is always Norway Sweden and us some sometimes Switzerland and Singapore those five so you top five Sweden is always top five as a country where is um good to do business or where the most startupers are coming from or where is more entrepreneurs per capita? So you the Sweden is always top five tell me why why in Sweden such a good environment for startups for entrepreneurs and why uh in your culture in your culture entrepreneurship is very much developed,? I know your country also for the free ride and the for the h ski or for the skiers because always in Alps or elsewhere out of 10 I meet at least one sweet usually two sweets what now and why Sweden are also so good enterpreneurs tell me?

Filip Engelbert: I think it it comes back sort of hundred years ago. I think we live in a when you are wiing not no not all the way back there but I think we live in in a very remote place in the world which is dark most of the time so you have to work to keep warm. I mean and I think but in Russia we have a lot of remote places doesn’t help. No and by the fact that we have have I mean trees I mean some natural resources and a very long coastline which has made sort of export of of Natural Resources back down making Swedish a prosperous country. And then I think there has been some you know good funders of business then I think I don’t know if it is religion but it is you know lutter sweds or yeah in general and sound sweets. Like me and J always feel up wake up feel fuck I have to work more and it is just in our DNA,. And if if if a Russian subordinate is read is ready or is afraid of making a mistake is that if that is one driving thing which I think it is unfortunately a swed in general a good swed they are much more proactive trying to sort of overcome problems. I mean of course there are management Pro possib bit problems in Sweden but it is of a lesser nature. So that that is one thing on a sort of a DNA basis but then I think it is the trust thing. I mean Sweden we have a lot of red tape and lot of bureaucracy and the tax office I mean it is going to bit deficient. I have no problem with sort of bureaucracy in Russia you you have people to do that that goes to bugat or I mean you fix that. But the thing is if you and me even if we know each other are going to buy you know something for you the set documents I need to produce so that everybody will be happy so you cannot screw me and I cannot screw you that is where it that is where it ends and that is crazy that is crazy,. I think what you obviously the system the of all the do what is the main obstacle in Russia to do the business for the young entrepreneurs I am talking like midsize level or small small businesses would say entrepreneurs real true ENT startupers if you wish.

Filip Engelbert: The main or the biggest problem I think they are I mean this is my personal view when I hate your views won’t be aring. I think they are a bit too lazy. I mean you have to work hard to make hard. It is just there are no shortcuts not here not anywhere else. You have to work hard so you have to move move your eyes. Yeah as I tell as I always tell our sales manager you cannot do sit business sitting on your ass. It is leg work and here it is much more harder. It is difficult to reach a general director because you have you know so many assistants and L people but you you need to reach that person if you are going to make a deal. You cannot give up and and not try to find shortcuts there are no shortcuts,. I mean you have to work people in our office you know they come nine to stay there until 11 12 Russian people it is just it is not s have to ate them that is it. Yeah you have to work hard and but here the rewards what is the difference you’ve been working in Sweden and here what is the difference between Russian workers as a worker and seden worker are they quite the same?

Filip Engelbert: No but I think so so but no Russians have talent that is not the problem but Russians are I think from the DNA so afraid of making an error so it is ridiculous. You had Stalin you didn’t no exactly and Jonas and I we love to make decisions because we think that is sort of a value thing. And we make a lot of wrong decisions too but then you just change it is not such a big problem. But here is it is you are very afraid to make the wrong uh decision and that it is confidence it is a DNA thing. Но just go for it I mean you can always always change that that is okay..

Oleg Tinkov: And our final section is where my my host my guest sorry and watching directly into the camera and talking directly to the potential and next enterpreneur who is young think of you 20 years ago and any suggestion to that guy talk to to him tell him something yes what you should say but something encouraging something inspiring yes just do it that it is a simple it is not M advertisement come on no no,.

Filip Engelbert: But it is you can find one million ways of not doing it just do it and then if it does not work you do something else. I think that is that is where that is where 99% of the people fail, you find so many reason not to do it and it is unfortunate to say it is not about the idea it is how you do the idea. Yeah I contact the started us you know as a Yellow Pages business in Russia now we are a pretty successful online classified. I mean I I don’t I don’t think any like Ika I don’t think they are sort of started out knowing they would conquer the world H&M think of credits I mean it is I mean it is development over time if you have the right people the right mindset are ready to work hard I mean then really only.

Oleg Tinkov: Yeah and you know why if I may add Sweden the Swedish people having uh much more higher I was going to say life expectancy which is true but which is absolutely true quality of life and why why they living the very very high standards of life because out there in Sweden something like 40% are like Philip Engelbert my guest. And unfortunately in Russia those kind of people are only like half of the percent and when in Russia will be more entrepreneurs more guys like philli let’s say 20 even per so Russia will be living the same quality of life and same standards of living as a seden agree thank you thank you.

Filip Engelbert, the founder of Avito, speaks with Russian entrepreneur Oleg Tinkov in the internet-TV-program «Business Secrets». In English

Филип Энгельберт, исполнительный директор и соучредитель Avito.ru, в программе «Бизнес-секреты с Олегом Тиньковым» (16.10.2011).

Filip Engelbert, the founder of Avito, speaks with Russian entrepreneur Oleg Tinkov in the internet-TV-program «Business Secrets». In English

Филип Энгельберт, исполнительный директор и соучредитель Avito.ru, в программе «Бизнес-секреты с Олегом Тиньковым» (16.10.2011).