What is your business and how does it work?

My company's mission was to provide alternative asset management services to small pension funds and small insurance companies. I started my business with help of my three partners. One partner and I were primarily responsible for business development. Two other partners executed trades and managed the operational side of the business.

Back in 2001, before the initiation of the pension fund reform and purging of small insurance companies in Russia, small pension funds and small insurance companies found it very hard to invest their assets in traditional investment vehicles like mutual funds, bonds, or stocks. By law, pension funds and insurance companies could only invest their assets in Russian-denominated instruments, traded mostly on Russian exchanges. However, due to their small size, they could not work with larger asset management firms/broker-dealers in Russia and were forced to keep their assets in low-interest paying notes/bank accounts. My firm, then operating under the name of TechsTrade, using certain loopholes in then-active Russian laws, was able to provide to its target market with opportunities in foreign investment instruments, mostly foreign exchange and foreign stocks.

Ironically, the small size of these firms (in addition to the forced segregation of these firms by the reforming Russian authorities into larger pulls of assets) became the major reason my business was not able to reach critical mass. After six-seven months of actively pursuing this business opportunity, it became clear to me that with the pension fund/insurance company reform under way in Russia, my business' model would not be able to survive in the long term. As a result, I decided to pursue employment opportunities rather than working for myself, and in the beginning of second quarter of 2002 passed the responsibility of running the business to my partners.

Did you find it hard to be taken seriously as a young entrepreneur?

I think it is not your age that matters the most. I found that a neat suit and a well-made tie always add a couple of years to your age. However, your level of confidence and knowledge of your product and service and thorough understanding of your client's business is a guarantee of success. Without these qualities, regardless of whether you look 21 or 45, your effort to establish a contact and then develop a relationship is likely to fail. And as mentioned above, two-thirds of business is about relationships.

Do you employ other youth?

No. Partnership relations only.

What are the advantages of being an entrepreneur rather than working for someone else?

Being entrepreneur has a lot of advantages: Power, control, decision-making capabilities, independence, unlimited profit potential (if you succeed). There are a few disadvantages as well, i.e., risk of losing investment or hurting your reputation. Working for someone else involves limited downside, but also has limited upside potential. In addition to that, being an employee you typically lose independence and freedom to a degree. For many it is a matter of choice or whatever they would like to achieve in their lives.

Where did you get your idea from?

Like many other organizational ideas, it came up in one of many market intelligence conversations. Back in 2001, I wanted to start my own financial services practice and I was researching what was on the market in Moscow and what was missing. In one interview with a trader, I was suggested that pension funds and insurance companies may be interested in some sort of foreign/alternative investment vehicles for they had funds to invest but their options were limited in Russia. Then, I was thinking about it for awhile and one day, I simply said lets try to make some phone calls and let us see what the reception is going to be. After a week or so of phone calls, I set up an appointment in one pension fund and spend good four hours discussing what the fund's director would be interested in. After that conversation, the business idea was more or less shaped, so I said to myself that it was time to get to work. Quickly, I found three partners to join me in this initiative.

What advice would you give to young entrepreneurs?

When starting a business, always consider if there is a market for your product/service. When running a business, always think of customers first and how you can satisfy their needs, not how the product/service that you have developed can be used by your potential customer. In short, the customers needs create business opportunities, not product/service. For example, if in 2001 there were no such class of business as small pension funds and insurance companies, seeking alternative investment vehicles, my pitch to them to invest in foreign instruments would fall on deaf ears. If those customers did not require personal attention and customized approaches when dealing with their assets or designing a cash flow projection over the next 12 months, my company would not be able to operate over the period of even six months. Additionally, when analyzing business opportunity, it is important to undertake a political and legal environment analysis, otherwise a reform or unexpected change in a political climate can hinder the business growth.

Another thing that I would like to emphasize as my acquired business skills is a commitment to long term relationship development. Regardless of whether they are your business partners or clients, the people you have relationships with should have something positive to say about you. If you do not have anyone to rely on, or you do not have anyone who trusts you, your business is going to have a hard time growing, and your potential employers will be reluctant to hire you without a good positive recommendation.

Have you or your ideas been discouraged by anyone? How did you overcome that?

I did not have anyone who discouraged me. On the contrary, I had such a strong confidence that there was market for what I was to sell, that I do not think any one had any chances of discouraging me (well, except for the Russian government with their untimely reform). So the way to overcome discouragements is to do marketing. At the end of the day, it is yourself who you have to persuade to commit to something—no one else matters since it is you who will be running the business!