Sramana: What did you do after spending a summer in the remote regions of Russia selling various goods?
Serguei Beloussov: When I returned to Moscow, I occupied a small room in an office space that my friends gave me. I had done some computer networking and telephone network installations for them, and in exchange they gave me access to that room. While I was there trying to sell random things, the company in the main portion of that office was trying to build a computer business, and they started asking me for help with various tasks. They would ask for assistance with the assembly of 100 personal computers or assistance with delivery of computers to a remote city. I did this work because I was in the same office and the company was built by people I knew. The office space was within the university campus so it was convenient. The reality was that I was involved in their business operations even though I did not realize it.
In September when the school year started, I told them that I had to stop helping them because I had to get back to school. In turn they invited me to become a partner in the business. By the end of 1994 we had close to $150 million in revenue. We were one of the top computer manufacturers in the former Soviet Union. Ultimately I had a minor dispute with the founders, so I ended up selling my shares in that business.
By the end of 1994, I had essentially converted from being a scientist to being a businessperson. It was not really an intentional thought process; rather, it was a gradual conversion. I still pressed ahead with my education.
When I started my second company with a business partner, we made a decision that I would focus on overall strategy. I did the strategy for supply, logistics, and financing and overall management. My business partner focused on the business operations while I was based out of Singapore. This company was a manufacturer of consumer electronics, and it manufactured on behalf of LG and Samsung and also manufactured its own designs as well.
This company still exists and does about $500 million in revenue. The majority of the manufacturing was occurring in Russia although there was a little bit in China. All of the sales of were done in Russia, and at one point we were the largest TV manufacturer in Europe. There are some advantages to manufacturing consumer electronics in Russia. One very clear advantage is that Russia is remote from China. TVs are large items. Shipping manufactured TVs is very expensive and time-consuming. It is a three-week shipping process. It is cheaper to bring in major parts, source local parts, and save on freight. At that time labor in Russia was inexpensive. Today labor is much more expensive because Russia is developed. The company is still making TVs today and is still profitable.