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ALEXANDER KRAVTSOV

BUSINESS AS

AN EXPEDITION TRUE TALES FOR HEROES AND ENCHANTRESSES

Characters and Cast

Kravtsova Arina (1) Babin Mihail (2) Gazizulin Vasil (3) Volkov Sergey (4) Davydov Alexander (5) Kato Alexander (6) Kalinichenko Evgeny (7) Kapustina Oxana (8) Kravtsov Konstantin (9) Kravtsov Alexander (10) Kulik Anatoly (11) Larina Elena (12) Makshanov Sergey Ivanovich (13) Nacharov Sergey Pavlovich (14) Nikonenko Oxana (15) Sergeev Sergey (16) Skrynnik Anatoly (17) Sharyga Taras (18) Sharipov Marat (19) Chekurda Vladimir (20)

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Alexander Kravtsov

BUSINESS AS AN EXPEDITION TRUE TALES FOR HEROES AND ENCHANTRESSES

Translated from Russian by Mark Berelekhis and edited by Rachel Douglas for Interchallenge Translation, Interpreting and Localization (Atlanta and New York) The following people worked on the book: Natalya Olentsova, Yelena Krasnova, Vadim Lobov, Natalya Perepechina, Konstantin Kravtsov, Irina Kravtsova, Kirill Kucherov, Arina Kravtsova, Taras Sharyga, Yelena Biryukova, Inga Safonova Photographs by: Tatyana Parfishina, Marina Gornostayeva, Andrei Kamenev, Taras Sharyga Alexander Pavlovich Kravtsov

To my sons Ivan and Georgi

GREETINGS, READER! Introductions come first. My name is Alexander Kravtsov. In the six years it took to nurse this book into existence, I have tried to imagine it through your eyes, so that it would become easier to tell the story of how my friends and I have turned our lifestyle into work, and our work into a lifestyle.

I want to begin by thanking the people whose great intellect and energy have pushed us ahead for many years and supported us in difficult times.

Some of them were kind enough to offer written comments about me and our endeavors.

I doubt there could be any better way to recommend myself to new acquaintances than by these comments, which may double as an extended epigraph to our journey through the pages.

SERGEI IVANOVICH MAKSHANOV, Manager of the ARB Pro Training Institute “Alexander Pavlovich Kravtsov would not have set out to write this book on his own. Its existence can be attributed to many factors. Brimming with life and originality, Kravtsov is not a surrogate creator. He is much bigger than a book. A conservative estimate of the number of jobs he and his team have generated in Russia, Ukraine, Kazakhstan, Belarus, China, Latvia, and other countries is at least seventy or eighty thousand, with six or seven thousand successful entrepreneurs becoming involved in the work. All of his Russian and multinational brands are either the absolute leaders or among the leaders in their fields. Alexander has invented and successfully implemented the concept of creating businesses at the junction of market niches, a set of techniques with which to scour tirelessly for capable entrepreneurs, and his own concepts of ‘the magic of controlled chaos’ and network- and swarm-based business management. I have the utmost confidence that Ruyan and Expedition will continue to pave the way toward Russia’s prosperity with their remarkable and inspiring ventures.”

VADIM LOBOV, Executive Director, Moscow Academy of Industry and Finance “Expedition is more than just a company. It is a separate world of vibrant and unique individuals. They create their world, and protect it. Sometimes outsiders are allowed in on the basis of operational need or for personal 6

reasons, but the guardians keep a watchful eye on them to make sure they don’t leave messy tracks. Expedition is founded on a strong system of rules and values. This asset enables the company to mobilize the creative potential of its employees not by a carrot-and-stick approach, but by sparking their inner energy for self-actualization, achieving their goals, conquering new heights, traversing new horizons, and getting through the lows. I think that the people who work at Expedition are bored with merely existing in this world. This shared attitude has brought them together in the organization, and together they are pushing the known frontiers, in search of uncharted lands. These days such lands are hard to come by, so when space exploration becomes more accessible, they will buy themselves a spaceship, paint it orange, and fly off somewhere far away from our earthly complexes and limitations.”

MIkhail Babin, owner of Taxi Gorod (Taxi City), Yekaterinburg “The entire science of business says that it is impossible to achieve what Kravtsov has achieved, by doing what he does. Expedition is living proof that life really can be different.”

sergeI edidovich gutsait, founder and head of the Gutsait Group holding company “Alexander Kravtsov belongs to a rare breed of people which, though not yet extinct, is certainly dwindling in numbers. As a representative of this breed, he often evokes bewilderment, delight, shock, or even aversion.

Personally, I find him fascinating and identify with him in many ways.

His and his team’s projects merit attention, study, and, to an extent, replication.”

grigori danskoy, singer-songwriter “Expedition resonates with noble despair…”

igor shestakov, executive producer of the Moya Planeta (My Planet) TV channel “We were sitting on the roof of his restaurant with its incredible view of Moscow, talking. Suddenly there were shouts, ‘Fire! Fire!’ The place filled up with acrid smoke almost instantly. We saw tongues of flame beside our table and instinctively rushed to put them out, using anything close 7

at hand: kvass, red wine, mineral water. We fought the fire with mugs, shot glasses, and wineglasses… And then a man appeared with a hose and swiftly neutralized everything. But for those few minutes, we were alone with the elements. Fear lagged behind our other emotions; it was exciting, it was an adventure. After the roof was cleaned up, we stayed sitting there and chatting as if nothing had happened, jesting from time to time about our fire-fighting equipment. That’s the kind of person he is.

Things are always happening to him and around him. He lives in some kind of different, more romantic reality, and those who get sucked into this vibrant world readily immerse themselves in the exhilarating life of his ‘expedition’. He has a knack for transforming the mundane, and, with remarkable ease, he grabs his friends by the scruff of the neck and lifts them up to the clouds. And what could be better than that? So, I have just one piece of advice for everyone reading this book: join him!”

IGOR GANZHA, member of the Russian academy of advertising, vice president of the Russian branch of the International Advertising Association (IAA) “Let’s take pity on the author and spare him praises and commendations that would be as long-winded as the toasts people deliver in the Caucasus Mountains and as useless as the President’s annual Message to the Federal Assembly. Simply imagine for a moment the market without Ruyan and Expedition, and the business community without Kravtsov. How much more boring, dismal, and uniform the already bleak Russian business landscape would be! For that alone, we ought to be grateful. To Kravtsov, of course, not to Russian business.”

Igor Severgin, editor in chief of Neizvestnaya Sibir (Unknown Siberia) magazine “Kravtsov is a firecracker of a man. He knows how to make life vivid and varicolored. Everybody who is not color-blind knows that.”

Yelena bocherova, head of the Ty Predprinimatel (You’re an Entrepreneur) federal program “Expedition. Long ago, when I was still a child, I heard this word several times. National TV newscasters pronounced it in breathless tones, and I was always envious of those who were out there on an ice floe! Because the newscasters were talking about them breathlessly, and they were out 8

on an ice floe, on an Expedition. But the ice floe is far away, and I’m scared of the cold, so an Expedition isn’t for me, I used to think sadly. A few years ago I met some guys in bright orange Expedition T-shirts, and Alexander Kravtsov himself, and it turned out that an Expedition was closer than I had thought. This is not simply a successful business; it’s a way of life. A way of thinking, if you will. A way to approach any venture, any project.

We determine a destination point on the map (our goal), put together the Expedition team, gather our equipment (resources), and set out to conquer another summit. And we keep doing it every day, every hour, every minute… I am going to read this book many times over, and give it to kindred spirits on this one grand expedition called Life.”

gennadI konstantinov, Doctor of Physics and Mathematics, professor of the Higher School of Management, director of the Corporate Management Center at the National Research University, Higher School of Economics “Alexander Kravtsov and his Ruyan companions provide us with the opportunity to learn to play peculiar musical instruments, savor exotic foods, take part in an exhilarating expedition, purchase an orange catamaran and personally sail it out to sea, and join forces with unconventional people in building the city of Ruyan. They strive to create a world that is warm, cozy, romantic, and fun. They are part magician, and they need like-minded people to turn this dream into reality. And on top of all that, the Ruyan group stands for serious and successful business.”

lina Kalyanina, business section editor at Expert magazine “If only some portion of our country’s population said to themselves, as Kravtsov does, ‘I can do anything!’ and followed this path with confidence, we would not have to worry about saving our territory from the Chinese, forcing businesses to innovate, or raising people’s standard of living. Sadly, in the era of marketing and the Internet, people like Kravtsov are all too rare. Setting impossible goals and achieving them is not our priority in life. But it’s precisely people like that who have always made the world go round. Where did Kravtsov get such confidence and audacity? I think that only nature can give a person these powers. Siberia’s rivers and the taiga are stern teachers, but generous with their rewards to a student who learns to best himself and overcome his circumstances. A graduate of their 9

school has no fears or difficulties in human society. What’s important now is for the beacons set out by Kravtsov and Expedition to draw other people and ships, and for travelers and caravans to follow the pioneers. When we begin to see more and more people who are not afraid of embarking on a warrior’s path, who believe in themselves and the people alongside them, and are ready to build cities, we’ll know for certain that an era of genuine values has returned.”

sergeI pereslegin, futurologist, essayist, instructor at the Moscow Higher School of Social and Economic Sciences, Academy of National Economy under the Government of Russia “Have Space Suit—Will Travel is the title of a Robert Heinlein novel, which serves as a comprehensive manual on raising little boys. In the postmodern age, it’s important for young men not to let go of their dreams or trade in their resolve. That’s what this book is about. Expedition is a coiled spring of experience, borrowed from the past and carried into the future, ruffled beyond recognition, and returned to our present day. Chasing after what lies beyond, the grown men of the Expedition team have remained boys, in the sense that you want to salute them for their boyish, pioneering drive. And the city of Ruyan? Cities are like babies, in that they are born as a result of their parents’ union. The city’s youthful spirit selects these parents itself, at the right time. Another way of saying it would be, ‘The city is an assembly of noble men.’ And I was fortunate to have made their acquaintance recently.”

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IN LIEU OF AN INTRODUCTION Stories from treasure chests One day I found out I was going to be a father. Knowing that this was serious business, I read several books on rearing and caring for children. I concluded that the only effective method was personal example.

As for child care, I found some priceless advice from Dr. Spock: love your child, and intuition will tell you what to do and how to do it right.

It is obvious that people and companies ought to be judged not by their words, but by the trail they leave behind. All the brands created by the Ruyan Company, before Expedition, remain in leading positions in their product categories, even though we haven’t handled their affairs for many years.

A few years and another son later, I decided what inheritance to leave them: two fireproof chests containing books and films that had been a revelation for me at a certain age or in a certain situation. These would be case studies of a sort, one for every scenario and every period in life. I hope that the book you’re holding in your hands will serve in the same way.

The stories that comprise this book were lived firsthand, and are like the contents of those chests. And since time has now become fast-moving and fragmented, they resemble watching YouTube clips: you read for three minutes, exit, and move on. And now a word about this book’s intended audience.

I have spent a lot of time speaking with famous brand-makers who argue that marketing does not exist without a formalized target demographic.

You’ve probably heard the categories: age twenty-five and up, income fifty thousand rubles or more per month, college-educated, and so on.

I decided for myself that we could interest people who have non-surrogate values in life. Those who feel the fire of life burning within. We named them heroes and enchantresses.

Heroes are passionate and self-aware men. Typically they are young, no matter what their actual age. We were able to identify only one unsatisfied need that they have, one thing that bothers them: that every day is like the one before it. (Granted, malicious tongues claim that the same applies to nights.) It’s simpler with enchantresses. These are women capable of making miracles, if only there were someone to make them for. Enchantresses are 11

upset about the low percentage of heroes among the males around them.

Expedition people are often confused with thrill-seekers or tourists, whereas what we’re really doing is simply building a community, business projects, “meadows,” or rafts, which bring together real people who are trying to change something for the better.

For me, entrepreneurs are people who manage projects. Some have experience, others are novices. I’d like to apologize in advance to the former for stating truisms they’ve known for a long time, and to the latter for some passages that may be hard to follow.

The book has three parts.

The first part deals with how I became the person I am today.

The second part concerns method, with a focus on human capital, responsible investing, and marketing. It includes chapters on our future prospects. The formation of a shared business community, and new cities.

The future which may await us and the reader. Or the direction in which those who keep waiting for us to break our necks need to look, in order to finally stop being so bothered by the very fact of our existence.

The third part is a lyrical documentary, like a nighttime chat around a bonfire. It contains things that, at first glance, are not connected with business, but they are things about ourselves that we would want to share with someone we found interesting. As in figure skating, when the compulsories are finished you can move on to the free skate.

Throughout the text you will find sayings taken from our orange T-shirts.

For many years, these T-shirts have been the required uniform for everybody living and working at Expedition. Most of these sayings came to us during our journey. I hope that these metaphors will help you maintain a special, authentic frame of mind as you travel through the pages of the book, the first sections of which were written six years before publication.

Here I need to add a few words.

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Not a “memorial”, but a manual No fame is lasting until blood has been spilled.

—Bulat Okudzhava1 On October 16, 2005, I and four other people were celebrating another rebirth (I’ve lost count of which one). We were roughly four hundred kilometers north of St. Petersburg, filming points of interest for the Expedition brand’s Cultural Navigation project. We had just left the village of Upper Mandrogi, a minor capital of Russian cuisine, built on the bank of the Svir River by one of our kindred spirits, Sergei Edidovich Gutzait.

It was Sunday afternoon. Everything was in perfect order: our Land Cruiser was fully functional, our driver was rested, and we were on a paved road.

That year it was fashionable to sleep in the back area, with your sleeping bag laid out diagonally. I was napping sweetly, when suddenly the vehicle decided it was a plane, and went airborne…

It soared, spinning in midair, and periodically hitting the ground with either the roof or the wheels.

Not yet quite awake, I curled up in the fetal position and spun around inside the auto like in a centrifuge. The final blow was the worst, and I couldn’t help thinking that I would probably be the only survivor out of our whole team. I climbed out of the smoking SUV. The doors began to open, and people tumbled out, one by one. To our shared surprise, everyone was alive and apparently well, at least at first glance. The roof rack had prevented the passenger compartment from collapsing. The windshield had been knocked out and the tires had come off the rims. Oddly enough, the music was still playing.

Out of the corner of my eye I saw Oksana Nikonenko, our company’s very first employee and my colleague for over sixteen years, take a few steps and then lie down on the ground. Whiplash, I thought to myself. There were a few bottles of medicinal drinks in the Land Cruiser, bought only an hour before in Upper Mandrogi. To ease the psychological shock for the whole group, I poured a glass into each person’s mouth. Of course, we immediately called Moscow, and a rescue team was soon on its way to the airport. Also, the 1 Bulat Okudzhava (1924–1997) was a Soviet poet, writer, and singer-songwriter.

He was one of the founders of the Russian genre called avtorskaya pesnya (author’s songs).

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St. Petersburg doctors were alerted, including friends of Vasiliy Mozhukhin, who was a surgeon as well as our irreplaceable film director. And Moscow quickly phoned the Podporozhye regional office, which in turn deployed an ambulance to our location.

In situations like this it’s important for the team to stay positive and composed, allowing a sensible assessment of what’s happening. Looking at Nikonenko lying on the ground with what we already thought was, and in fact did turn out to be, the most serious injury, I took the following action.

(This story figures in so many of my lectures and interviews that Nikonenko no longer gets mad at me for telling it.)

I unbuttoned her jeans and said, «Nikonenko, listen up, I’m going to finger you right now. If you come, that means the signal has reached your brain, and how could it reach your brain except through your spine? Therefore, if it happens, your spine is intact.”

What a scene! Someone who just broke her back ten minutes earlier is lying there and cracking up.

Half an hour later the ambulance arrived, and we bounced along the bumpy road to the Podporozhye district hospital. We were met at reception by a female heavyweight, who demanded our documents without even attempting to hide her scorn. I was feeling woozy, not yet aware of the flattened vessels in my neck, tailbone, and middle back, several broken ribs, and an injured hand—petty details that didn’t warrant immediate attention.

I gave the woman’s hand a hard squeeze and said, “Have you sworn the Hippocratic Oath? Then give these people the medical care they need, or I’ll be forced to strangle you.”

Subsequent events unfolded almost by the book. The hospital personnel split into two camps: those who were trying to help us, and those who were trying to fight us. In three hours a mobile ICU arrived from St. Petersburg.

Several days later, as I tried to fall asleep on a custom-cut piece of plywood half the width of a double bed, I was ruminating about how a road may come to a sudden end, and about the experience that the Ruyan Company and the Expedition brand had accumulated over the years. These thoughts prompted me to start writing, if only because I was bedridden for a long time, save for infrequent trips to work. Besides, writing is not a bad tool for self-administered psychotherapy.

I kept writing for about two months, and at some point I mentioned 14

my labors to Sergei Ivanovich Makshanov. His reaction was, “Alexander Pavlovich, if you’re writing a manual, then God bless and keep going. But if you’re writing a ‘memorial,’ drop it right away.”

Rereading what I had written so far, I was forced to conclude that it was, in fact, more of a “memorial.” And so I dropped the project right away. When we came back to work on the book several years later, we did everything we could to make sure it would be a forward-looking manual.

In closing, I would like to offer a practical example, which could serve as the happy ending of a film about a broken spine.

Not long before the accident, I had begged Oksana Nikonenko to take over the management of Expedition’s first, and at that time only, mall-based store.

It was located inside a Ramstore supermarket on Sheremetyevskaya Street in Moscow. Oksana had already distinguished herself as the Expedition Restaurant’s gift shop manager, though, to be fair, it’s hard to go wrong when your customers are generally affluent and pleasantly buzzed.

Relative to the whole company, one store’s revenue was microscopic.

But when the other employees found out the nature of her injury (keeping in mind that Nikonenko is generally beloved by all), something happened that seemed downright supernatural. The store’s merchandising, sales team selection and morale, product range, and logistics—basically, all the elements that go into a successful retail outlet—went sky-high thanks to collective effort and energy. I was still recovering at the time. Nikonenko called me and said, “Sasha,2 I have a salesperson from Ramstore on the line.

A customer accidentally broke an oil lamp. They’re asking me what to do.”

“Tell them to wish the customer a good day,” I replied. The next day, the customer came back and purchased a couple thousand dollars’ worth of corporate gifts. In short, revenue from this store increased by an order of magnitude in only two months. The Ramstore results were astonishing, and they gave us the moral right to launch a wave of Expedition stores as mall franchises. Both Nikonenko and I recovered, and one year later there were close to seventy such stores.

2 Sasha, Shurik, and Sanya are Russian diminutive forms of Alexander.

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Part I

spatial orientation

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Chapter 1

WHO WE are AND WHERE WE came FROM We named our ship Ruyan after the Russian for Rügen Island in the Baltic Sea, which was immortalized by Pushkin as Buyan.3 It’s doubtful if he knew that it was really possible to visit that magical place, as German intellectuals often did, coming to find inspiration amid the island’s pine forests. The name Ruyan resounded proudly in the days when it was home to the magnificent city of Arkona, known throughout the Baltic as the capital of the westernmost and mightiest Slav civilization at the time. The Ruyanians, as the citizens of that realm called themselves, engaged in maritime trade with all of Europe.

True, German merchants visiting the island were often robbed by Slavic bandits, or so I was told once over dinner by Mr. Nix, the managing director of Salamander.

We began to write the business history of our company, Ruyan—remaining proud of its Russian origin, even as operations expanded worldwide—on January 23, 1995. (Our “company”: it’s striking, how closely the words for a company and a military campaign are related.) And then, from 1996 on, we began to roll out the brands. First, in the field of mosquito repellents: Raptor, Mosquitall, and Gardex; and in shoe care: Salton, Twist, and Patisson. Later came Forester (picnic products) and Norvek high-end thermal underwear.

Finally, in 2002, Expedition (Russian Expeditsiya) appeared—a small creature, but an audaciously distinctive one from its inception. All the brands our company created (without exception!) attained leading positions in the former Soviet zone.

For its first ten years, the young Ruyan company, lacking experience or resources, battled for the Russian market against such international giants as Sara Lee (owner of Kiwi, the world’s top shoe care brand) and SC Johnson (makers of the foremost brands in its fields: Raid insecticides and OFF! insect repellents). Each of these companies had thousands of times more resources than we did. By the time we made our move into the magical, competitionfree world of Expedition, both of those US companies had seen their market 3 The island of Buyan in Slavic folklore was further popularized through Pushkin’s “The Tale of Tsar Saltan” (1831). Some link the mythical Buyan with Ruyan, the Russian name of the island of Rügen, off Germany’s Baltic Sea coast.

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shares shrink substantially.

For those who care about numbers, it ought to be mentioned that for sixteen years, our company sustained average annual tangible and intangible asset growth of roughly 40 percent. The internal rate of return shows our liquid capital doubling every year.

It would be immodest to attribute these accomplishments exclusively to myself and my team. It would be even more preposterous to presume that the efforts of those who gave birth to us, raised us, educated us at our schools and universities, or simply loved us and believed in our future, had nothing to do with our success. To avoid misleading the reader, we’ll have to start from the very beginning.

Music and permafrost The North is freedom, hope, a land without borders.

Where the snow is spotless, like a long life without lies.

—V. S. Vysotsky4 I was born in the Far North on January 18, 1968. As an amusing side note, this date is also celebrated as International Lighthouse Day. My father’s ancestors were Volga Cossacks, and my mother’s were peasants from the Ural region. Both my parents were music teachers at a cultural school in Salekhard. My father taught wind instruments, and my mother, piano.

Before the revolution, my city was called Oborsk, but in the 1930s it was renamed Salekhard, meaning city on a cape in the Nenets language. The cape was Cape Angalsky (evidently, it had been a layover stop for angels), washed by the Ob River and its tributary, the Poluy River. In winter we used to see the Northern Lights. In particular, according to family legend, they heralded the birth of my older brother, Konstantin, as well as mine. The two of us are four years apart.

We differed greatly from early on. Kostya was a scrawny, restless kid with 4 Vladimir Vysotsky (1938–1980) was a singer, songwriter, poet, and actor of enormous popularity in the Soviet Union, whose career made an enduring impact on Russian culture.

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glasses, almost an albino. From the age of one and a half, he would draw anywhere his hands could reach—on walls, on books, and on our mother’s piano scores. I was the opposite, a chubby and agreeable little fellow who never caused problems. On workdays when my mother had no time for chores at home, she would get her students to babysit me; they were Nenets girls, indigenous people of the North. But one fine early spring day, when I was five years old, I encountered a true northern passion.

Open season I would eat, drink, and sleep just one thing: hunting. Right up until graduating from high school, I was sure I was going to be a hunter. I had access to weapons and ammunition from the age of seven. I used to go into the woods, knowing full well that if I lost my way, no one would come to my aid. I kept hunting journals, sketched ducks, and could distinguish them by their calls. I made maps of my hunting grounds, naming every lake, every trail, and every river bend. It was glorious. I didn’t want to be an astronaut or a sailor. My dream was that when I grew up, I would finally be able to hunt to my heart’s content.

Hunting is a special time and space, a kind of stalker’s zone where only men are allowed, and not all of them, not by a long shot. It is an escape from the world: a chance to stop being the person you have become, and return to the primeval, to the beginning of time.

I reveled in late autumn, when only seasoned fishermen and hunters remained on the rivers. They lived by their own laws—simple, unambiguous, and humane. Refusing to help somebody on the river was unthinkable; if the motor on your boat conked out, or you ran out of gas, or some part went haywire, all you had to do was go up to any fisherman and borrow what you needed. There, on the river, I learned to see the world not exactly as “us and them,” but as people who are like me, and all the others.

Looking back, I see that the first stones of Ruyan’s future ideological foundation were laid there.

To this day, I love visiting those parts, where I used to test my endurance, where I roved far and wide, and often froze my nose and cheeks. These days I don’t go shooting as much; I go there for peace and quiet, just to listen to the cries of the migratory birds. They travel from afar and erupt in joyous calls, and those moments make you feel as if you’ve been born again. At a certain 20

point, a large flock disperses into pairs, and its story comes to an end. It is all very similar to Expedition: we traverse the world as a single team, then return home, and the flock is no more‌ Several years after hunting, my second passion appeared. It was chess.

I lingered for a long time in that black-and-white realm of logic. As a teenager, I was champion of the Tyumen Region.

Around this time, I made a crucial discovery about myself, without yet suspecting its significance. I found that, besides my hunting and chess skills, I had the ability to adapt to any environment, making it my own.

Among hunters, I took after their ways and manner; among chess players dressed in suits and ties, I would wear a tie, too; finding myself on the street, I spoke the language of the streets with the local boys.

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Chapter 2

MY FATHER Let’s drink to our parents.

Because everything good in us comes from them.

And everything bad comes from ourselves.

—Traditional toast at Expedition meadows

The most important person The greatest authority in my life has always been, and still is, my father.

Although he hasn’t been physically present with me for eighteen years now, I can easily reconstruct a mental image of him and consult him in difficult situations.

Pavel Vasilyevich Kravtsov was an Educator with a capital E. For his students he was a god, for the simple reason that he saw divinity in them as well.

It seems to me that I have surpassed my father in almost every way, and I know he would be proud of that. But there is one domain in which my achievements will never equal his. As an outstanding teacher, he could always recognize what potential his pupils had, yet he would never ration his efforts in proportion to their talents. He invested equally in everyone.

Many years later, after my father was gone, I would often run into his students during trips back to my native city. They all treated me like family, because I was Pavel Vasilyevich’s son.

We connected most often when the two of us were out hunting. That was when I had developed an important habit: always, no matter what state I was in, whether asleep or awake, drunk or sober, to keep my rifle on safety and never point it at another person, even if it wasn’t loaded.

I can only remember two or three times when my father punished me severely. The reason was always the same—careless handling of a firearm.

A store of trust as start-up capital Starting at the age of six, I used to spend every spring and autumn in the woods with my rifle. Hunting was my favorite pastime, as well as my teacher. Along with the gun came the burden of responsibility for myself and those around me.

I learned to plan my own solitary outings, taking precautions not to get lost; out in the taiga, not even rescue helicopters could find you. Years down the line, I realized how lucky I was to have had an upbringing based on trust, so 22

that my father was able to instill in me the simple truth that you must always be responsible for your actions.

I never did ask my father what it was like for him to let me, his child, go off into the forest alone.

Of course, things weren’t always smooth. There is a Hindu saying, “Wise parents allow their children to get burned.”

One time I went on a fishing trip with my friends, promising to return by nightfall. There was a dangerous spot along the road, where timber was being rafted downriver, and you had to balance your way across. Some of the more rotted logs could give way, and plenty of people had already drowned there. My parents knew this and were worried about me. I was eleven years old, and we decided to stay out fishing all night.

When I got home at six in the morning, my parents were still up. Not a word was spoken and nobody punished me, but that in itself was the scariest thing. If they had scolded me, I would have felt better.

I have been putting my trust in people for many years. Of course, sometimes my trust is betrayed, and that’s when I ask, “Have I ever given you cause to treat me this way?”

Now a bit about mistrust. In my school years, I kept a suitcase under my bed, stuffed with my hunting journals, a graph paper notebook, and gunpowder.

All the kids in the neighborhood would pester me for ammunition. They wanted to experiment, and I knew that. Kids at that age always want to fiddle around like amateur chemists, but my suitcase was strictly taboo. And if I found myself wavering over whether or not to give them something from its contents, I would immediately think about those terrible incidents when someone playing with gunpowder had lost an eye or had his fingers blown off. One second was more than enough for me to remember the danger and flatly refuse: “No! Out of the question!”

One more thing about the betrayal of trust. The hunting adventures of my childhood, and the subsequent army and field experience of my youth, led me to the following conclusion: someone who has betrayed you once will betray you again. So I always smile when I say to my employees that they can shoot me in the back if they wish, but only once.

Russian folk tales are all expeditions Reading was important for me in school. Once, in an interview for Russian 23

Reporter magazine, I was asked which books I had read as a child. I really liked Mikhail Lermontov’s A Hero of Our Time and Alexander Kuprin’s The Duel. I still remember the words, “No, even if I were to fall under the railway train, and were left lying on the line with broken and bleeding limbs, and anyone were to ask me if life was beautiful, I should none the less, and even by summoning my last remains of strength, answer enthusiastically, ‘Ah, yes, even now life is glorious.’”5 Going back even earlier, I was particularly enamored with a book about famous captains, which featured Huck Finn, Gulliver, Baron Munchausen, and Robinson Crusoe.

“Those sure are characters in the spirit of Expedition,” the reporter commented.

“All the heroes of children’s stories are in the spirit of Expedition,” I replied.

“Any story that captures your imagination is an expedition. Russian folk tales are all expeditions.”

Not for me to judge My father died after heart surgery in Krasnodar. His death was caused by the negligence of a Tyumen surgeon who, during the first operation he had, several years before, had left a swab in his rib cage. Calm and collected, I contemplated how I would finish off the doctor who had killed my father. I was absolutely certain that no one would find out the nature of the crime, and that the doctor deserved retribution. Several days passed; I cooled down, and reasoned that no man should decide the fate of another. Leave it to God to punish him.

Not long afterward, talking with some other doctors, I learned that surgeons are not the ones who leave swabs and instruments behind, but it’s their assistants, who are supposed to account for all the items used during surgery. So, the error that cost my father his life was most likely made not by the surgeon, but by his assistants…

The skua’s cry This happened in 1984. It was final exam time at school, and I was taking my tests between hunting trips. My father and I had an agreement: if I aced 5 Excerpted from W. F. Harvey’s translation of the novel by Alexander Kuprin, published first as In Honour’s Name (London: Everett & Coy, 1907), and then as The Duel (New York: The Macmillan Company, 1916).

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an exam, he and I would head into the tundra and not come back until the morning of the next one. And so, out hunting two days before my last exam, we climbed out of the boat and constructed a blind in a snowbank. A few hours later, when my father had gone to sleep, I witnessed highly unusual behavior by a bird. A skua stopped in midair, directly above my head, and let out a series of piercing squawks. It hung there for a long time, and then landed on the snow near our blind, where it remained till morning.

After we returned to town, I told my father what had happened, and he told Gena Kolchin, his workmate from the Young Sailors Club, who is an ethnic Khanty. Gena advised us not to kill the creature, because this kind of behavior by a bird was a sure omen of death.

But I wasn’t into omens back then.

We set out hunting once more, and when the time came to head back, a bad storm erupted. We tried to wait it out, but my father was worried that I would miss my exam, and decided to cross the Ob River despite the foul weather.

Roughly two hundred meters from shore, we realized how risky our venture was; we still had time to turn back, but just then the roped anchor was swept off the bow. By the time I had pulled the anchor back into the boat, we could only avoid being caught broadside by heading into the wind. As a result, we had no choice but to cross the river. About twenty minutes later, we realized that we weren’t going to make it out of the maelstrom, because the waves weren’t just big, they were gigantic. All our river know-how was useless in this situation.

At the place we were crossing, the width of the Ob in flood was around four kilometers. Crossing the river required great care, with a small heading angle, or the boat would capsize.

Before we were halfway across the river, I found myself praying for the first time in my life. I didn’t even wear a cross in those days; I was baptized much later. When we had three hundred or four hundred meters to go, I tried to wrest the rudder away from my father, wanting to steer perpendicular to the shore. If we did capsize, at least we’d have a shot at swimming to safety. My father didn’t react at all, but just gripped the rudder even harder. When we finally docked, surviving against all odds, I leaped out of the boat, plunged into the snow and rolled around, squealing like a puppy.

Upon returning to town we became even more convinced that there was something miraculous about our escape: it turned out that not even ships were sailing on the Ob that day, because of the strong wind.

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Chapter 3

ADAPTING TO RUSSIAN REALITY How the army maps onto life After passing my exams and graduating from high school, I was quickly accepted at the Gubkin Russian State University of Oil and Gas, in Moscow.

After two years there, I joined the army.

The most shocking lesson I took away from boot camp was how barracks life transforms students from Moscow universities. Arriving in fine shape, they were swiftly dehumanized and started stealing from one another. When an artillery unit or a company was ordered to the cafeteria, where common plates of bread, meat, and sugar lined the long tables, chaos would erupt, with everyone snatching food off the plates like animals. Of course, some of us couldn’t stand it. Eventually we banded together at one table and dined in peace, without anyone snatching anything. So, people can behave differently under different conditions. In my opinion, the ability to survive, and even to stay alive at all, intimately involves adaptability—how quickly and effectively you can orient yourself in any given situation. Not only your success, but even your life, may depend on it.

The most positive thing I learned in the army was how to adapt to Russian reality, because adhering to army regulations and complying with the law in our country are identical processes. We all know that the law is a given that must be reckoned with. Laws have to be obeyed. And we also all know how things really stand with obedience to the law here.

When you join the army, you see a similar picture right away: the rules are one thing, and life is quite another. Then, if you happen to go into business after getting out of the army, you realize that official bookkeeping is one thing, and real business issues are quite another. Trying to connect the two is as futile as trying to live by army regulations. I can’t speak for other countries, but in the Russian army this is utterly impossible for officers and soldiers alike. And yet we do need regulations. For instance, the garrison guard duty regulations include guidelines for proper conduct when on guard duty. Following this document may save human lives.

In the 730 days I wore military boots, the thing that made the biggest impression on me was the suicide of a young soldier who was drafted at the same time I was. He went through boot camp and came to our unit with 26

me. It happened because of vicious hazing, so, when my turn came to train the rookies, I tried to use exclusively humane methods. Circumstances favored that, since my colleague Pasha Baranov from Lyubertsy6 had a very different approach to combat training. The trainees naturally flocked to me, and I would tell them, “Here are fifteen codes, learn them by tomorrow.” If the trainee failed to memorize them the first time, he had to do push-ups; the second time, he would be reassigned to Pasha Baranov. And that was right. If you’re supervising a radio communications squad with five radio networks and five code operators, you’d better make sure they can receive the radiograms.

Soon I was promoted to radio supervisor, which meant that my peace of mind partially depended on the warrant officers who managed all communications. Jam made from berries picked in the neighboring woods, wine from the same ingredients, and army scrapbooks were prohibited, so we were always looking for places to keep them. Virtually all the officers closed their eyes to this, caring only that we stayed awake all night and received the radiograms correctly. The one exception was Warrant Officer Lyubarets, a nasty fellow who was constantly looking for some evil way to hound us.

He would discover a jar of jam and smash it, or rip up someone’s personal letters and photographs. We were sick and tired of this, and since Lyubarets was responsible for equipment maintenance, we would periodically commit sabotage. For instance, we would replace the good fuse on a set with a blown one, and then complain to the commander that the equipment had broken.

The commander would demand over the intercom, “Who’s in charge of maintenance?” And we would answer, “Warrant Officer Lyubarets!”

The officers lived four kilometers from our unit, on the other side of the woods. Lyubarets would get an emergency wake-up call and come running through the woods at night to fix the equipment, and then he would see our grinning mugs.

After three or four nights like that, there would typically be a truce until his next provocation. One time he pushed us over the brink, so we stole his service revolver and gave it to the cryptographers. No one was allowed into the cryptographers’ room except for the regiment commander and the political officer. That scared the daylights out of our Lyubarets, since he could be court-martialed. We let him sweat it out for two hours, and then told him 6

Lyubertsy is a Moscow suburb known as a rough neighborhood.

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where the gun was.

We were pranksters all right, but our officers could also hold their own in that regard. One time our telegraph operator brought a radiogram to the duty officer. The usual drill was to knock on the window and hand it over; we decided to complicate the task. We tied the radiogram to a mouse we had caught, knocked on the duty officer’s window, and tossed him the “package.”

The next morning the jovial commander came out, lined everyone up, and said, “I have a sense of humor, too. Let’s give your mouse a proper burial.”

We had just finished our shift, and were supposed to be able to sleep till lunchtime. Instead, we had to dig a two-meter-by-two-meter hole, in the dead of winter. Ultimately no one was hurt or offended. There was no malice to it.

On occasion our pranks were on the excessive side, and sometimes they were even broadcast on the air. Periodically a special type of punitive detention-equivalent would be meted out to us: rooting up tree stumps. Pine trees had been felled on our base, and the uprooting of one stump equaled one day of detention.

The army teaches you to laugh. That may be the best thing it teaches. You either learn to laugh, or you’re done for; often it’s that simple. Perhaps my army buddy wouldn’t have hanged himself if he could have found a way to laugh at the nuthouse we were in. At our comical military. And at himself within it.

On the regular army, guerillas, and sabotage units The enemy advances, we retreat; The enemy encamps, we get busy; The enemy tires, we attack; The enemy flees, we pursue.

—Mao Zedong I have always felt that large, structured systems were silly and ineffective.

Ever since I was a child, I liked guerilla fighters, because they were similar to hunters. Oddly enough, this childhood worldview of mine was reflected in the Soviet army’s war doctrine of the late 1980s, according to which the only possible threat to our strategic missile forces might come from sabotagereconnaissance groups of commandos.

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For instance, it was believed that half an hour was enough time for a welltrained enemy commando unit of six men to neutralize a thousand-person regiment stationed in, let’s say, the forest. This was taken as a postulate, following which our own special forces and sabotage-reconnaissance units practiced taking out our own regiments.

For me, this was a revelation. Why, how could this be possible? After all, a regiment was a large unit. It could be likened to a large, thoroughly organized company with various departments being responsible for different tasks, but nonetheless functioning as one system.

A sabotage-reconnaissance group also has its assigned jobs and functions, but the person performing each one of them is an all-round highly qualified individual. You have a sniper, you have a radio operator, and both of them are also fast runners and know how to administer medical aid, even though the group may include a physician.

This topic occupied my thoughts for a long time. The efficiency of sabotagereconnaissance groups in action against relatively large regular military units got me thinking about the idea that a truly sensational type of business would consist of small, highly effective mobile teams, always in shape to compete with corporations.

I was really dreaming of becoming a guerilla fighter, and my image of the guerrilla was that nobody can see him, but he can do anything.

What was my vision of life as a guerilla? Picture World War II: you’re hiding in the forest, keeping warm with moonshine, meeting secretly with the local village women, and scheming how to derail an enemy train. And there it is, already on the bridge across the river. You blow up the bridge along with the train, and you know that your personal effectiveness, in demolishing dozens of tanks and all the people who were on the train, is equivalent to the number of soldiers in the regular Soviet army, who were supposed to destroy these adversaries by fighting them head-on! With a feeling of satisfaction, you go back to the village girls.

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Chapter 4

initiation When you know you can do anything In July 2009, a big orange Expedition raft moored off the shore of Lake Seliger for the first time.

We had come to the famous youth forum to recruit a new generation. I lectured on my own, as well as together with my “idea brothers,” the highly successful Russian entrepreneurs who had accepted my invitation to join us on the raft. Because there were roughly eight thousand people at the camp, we had to compete for an audience with other lecturers, as well as with the politicians who would be flown in from Moscow by helicopter from time to time. According to the forum participants, the only instructor whose presentation was on par with ours was one Yevgeni Yevgenyevich Sokolov, a lean man with a military bearing and the tenacious gaze of a seasoned special forces officer. He and I got to know each other better toward the end of the session.

It was hot. Clearly tired, Sokolov sank into a comfortable seat inside a tent we had pitched right there on the raft, his Afghan boonie hat still on his head. He looked me in the eye and asked, “So, when did you realize you could do anything?”

I can’t say that I had never heard such a question before then. It was more that I had never heard it phrased that way. I gave it some thought, recalling a number of complicated projects or episodes that had gradually consolidated my self-confidence. Before I went into business, most of them had to do with organizing excursions, something I got into at school, after my military service. Then my mind jumped to a project unconnected with tourism, and this was what I shared with Sokolov.

Hunting mammoths In 1991, I was a university senior and already married, meaning that I was responsible for “bringing home the mammoth meat” to the family hearth.

At the time, not too many mammoths roamed the country, and there were a lot of experienced mammoth hunters who had heavier clubs than I did. But a student is an educated person, whose main tool is not a club: it’s his mind.

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One day Vladislav Listyev, host of the Russian version of Wheel of Fortune, which was the most popular national game show of the 1990s, announced a crossword puzzle competition. Contestants had one week to find the answers, and the prize was fifty thousand rubles, equal to exactly five hundred onehundred-ruble stipends. A giant mammoth!

The prize money was a huge sum, and not only for students. Mines and factories were months behind on paying wages; the whole country was coming apart at the seams. Everyone wanted money.

The show was on a nationally popular network, and the main national TV channel advertised the contest nonstop, touching off a nationwide craze.

The questions were not exactly easy. For example, one asked for the name of the sculptor of a monument in the town square of some Bashkir village which was so obscure you couldn’t even find it on the map in broad daylight with a flashlight.

Nobody had even heard of the Internet back then, so people who wanted to solve the crossword puzzle flocked to libraries.

Looking at the pros and cons, I realized that one person couldn’t do it alone within one week. I found five collaborators, worked out how we would split the winnings, and together we started searching for the information.

Cramming for exams is like quiet time at a day-care center, compared with our program during the next seven days and nights. We combed through libraries and archives at a blazing pace, barely sleeping, our eyes running from stress and book dust…

The day before the deadline, we had only five words left to solve. The empty boxes needed to be filled in with the last names of men named Yuri, little-known figures from the worlds of art and science.

I spent the whole day in the Polytechnic Museum library, but was able to rescue only one of the five names from oblivion.

I was sitting on the stoop, gazing into the looming twilight and smoking a low-grade cigarette, unshaven and haggard, wearing a windbreaker that had seen better days. Crowds of people passed me by. Suddenly I had an insight.

(This was my first encounter with the “everything’s already there” principle, so crucial in our company today.) If hundreds, maybe thousands of people in Moscow were searching for the same answers I was, all I needed to do was to trade information with them!

It took less than an hour to get the four missing words, in exchange for 31

ones my friends and I had solved.

I returned to my dorm in a state of total bliss.

The only thing left was to get the money. We reread the rules and discovered that, in the event there were several potential claimants for the prize, the winner would be determined by lot. According to probability theory, the more Wheel of Fortune contestants were from our camp, the greater our chances of winning would be.

We spent the day sending in the answers from all of us, as well as from our friends. Ultimately only eight people in all of Russia made the finals. Three of those invited to the Ostankino TV station were our people.

Prior to the festivities, we had decided to show respect for our competition.

Those of us who ended up at the broadcast made the following proposal to the host: the lottery winner would receive fifteen thousand rubles in prize money, while the other seven got five thousand each. Listyev agreed.

My friend left the studio that day with fifteen thousand rubles in his pocket. Each of the five students who had participated in the project received a sum greater than three years’ worth of our university stipend.

That was when I realized it: if I could do this, I could do anything.

Our first business school: the Luzhniki street market Six months later my friends and I graduated from the university. Our plan for after graduation was to go to the Far North as geologists and geophysicists, prospecting for oil and gas. It turned out, however, that in 1992 most of the expeditions were no longer active. It wouldn’t be fair to say that we had no options. We could have gone abroad to work, for instance. We came to realize that our homeland had first mistreated our grandparents, and then abandoned our parents, and that if we didn’t build a new world around us with our own hands, it would most likely do the same to us. So we decided to try our hand at business.

The Luzhniki street market became the first business school in Russia. As we strolled through the stalls, we noticed that everyone was selling down jackets. Our group has never suffered from low self-esteem, so we weren’t about to deal in the same products as everybody else. This was when we first tested the method known as the junction of market niches, which persists in being ascribed to me at various business workshops. We monopolized 32

the children’s down jacket market, and earned our first fifteen thousand dollars pretty fast. The next step was to realize that there was no future in being an independent market vendor. It was a tough time in 1992, and there wasn’t a lot of trust between vendors. Two hundred and fifty thousand people went through the Luzhniki market daily: everyone from doctors to farmers to academics carrying tote bags. I liked to stand at the base of the Lenin Monument and watch the passersby. Faces, faces, faces…intellectuals, middle-aged women, gangsters…backs, backs, backs. People would walk for four hours from the subway to the market, and then another four hours the other way. I stood there and felt such great misery in the air, such great suffering, and, at the same time, such great power!

I decided that people actually wanted to be honest. And that they could be trusted, just the way my father had trusted me as a child. Then I convinced my partner to give me a few days to walk around the market and look into the eyes of the vendors, and the ones I thought were trustworthy, we’d offer our merchandise to sell. At the time nobody had cell phones, so they couldn’t be tracked down through their cell service providers, and yet not a single person cheated us. Our turnover increased by an order of magnitude. Three years later we registered the Ruyan Company.

Modesty doesn’t suit us

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Part II

A how-to guide for business surfers

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“Lie down and get up” is but the existence of new recruits.

“Die and rise again!” – now that is life!

—Stanisław Jerzy Lec Ask me about the nature of my business and how I go about it, and I’ll answer that I work in only three fields: people (more precisely, effective teams of people), marketing, and financial analysis leading to investment decisions.

The first field occupies roughly 60 percent of my time, effort, and energy; the second about 30 percent (I often wish it were the other way around), and the third about 10 percent. This section of the book will cover all three, in approximately the same proportions.

We find pearls in piles of crap

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Chapter 5

THE primitive accumulation of human capital “Do you believe in gnomes?”

“Nope.”

“Well, they believe in you.

Please don’t let them down.”

—A poetic joke about the relationship of a leader and his team

Finding captains Total personal responsibility for the crew of an airplane, a ship, or a race car lies with the captain. The success of a business project lies with the team leader. It is always extremely difficult, and extremely important, to figure out where to find such leaders or how to cultivate them.

Piece goods are not mass-produced. One thing I know for sure: these people do exist, and that alone is reason for optimism.

Once an old fisherman was teaching a buddy of mine how to catch a pike.

“It’s simple,” he said. “You cast your spinning reel three hundred times, and the fish is yours. If you cast it eighty times and the fish doesn’t bite, don’t worry, you’ve still got two hundred and twenty tries left.”

When you’re hunting a big fish, puny or artificial lures don’t work. First you need to catch their curiosity, then their interest, and then win over their sympathy. I have conducted tens of thousands of interviews, and, naturally, there were cases when I misjudged people. That isn’t necessarily bad (being wrong more than 20 percent of the time is bad), but I recommend conducting an interview with one or even two of your partners taking part, especially if you’re unsure of your ability to read people.

The first hint from my “idea brothers” I have two “idea brothers” in the Ural Region: Mikhail (Misha) Babin and Sergei Andreyev. Occasionally they delve into intellectual pursuits, leading to paradoxical conclusions.

One day they decided to study pattern variations in tree leaves. After 37

lengthy mathematical calculations, they concluded that the totality of the information contained in the leaf patterns could not possibly be encoded in the seed that eventually produces the tree. Accordingly, they advised me: “Sasha, never spend too much of your own time interviewing potential employees. It’s a seed that can’t tell you what will come of it, because there’s a powerful fractal function which preserves the identity of its members across any distance. Strictly speaking, an apple never falls far from the tree.”

A twenty-two-year-old doesn’t know what he may become, just as a seed doesn’t know what its tree leaves will look like twenty-five years from now.

The only thing that makes sense in such a situation is to interview the “trees”; i.e., the parents. For better or worse, people’s destiny is to some degree inherited. Since the parents aren’t always available to be questioned, the interviewer can ask the following questions: “What would your mother and father say about you and your future? What would your grandpa and grandma say?”

How to save time and money When a potential candidate appears, the challenge is to make sure fairly quickly that you haven’t misjudged the person, or vice versa. The best way is to live together for some period of time. At Expedition we most frequently do this during our meadows sessions, which are essentially mobile offices out in the country, or on rafts. Taking an ordinary business trip together also works.

One of the elements of our crafty staffing technique is that you see the person day and night, sober and not so sober, through your own eyes and those of your associates. Two or three days together on such a trip could save a year of unfounded expectations and prevent wasted investments.

Not to mention that it fosters collective responsibility: “Hey, you sized him up, too!”

Not so much the people, as how they combine Once a captain has been appointed, whether yourself or someone else, the interesting part begins: forming and customizing the team (though I prefer the word group). The argument over whether it’s better to choose 38

professionals or the “right” people is moot. I would say the most important thing is not so much the people, as how they combine. Of course, narrow niche professionals are a necessity, but they’re not usually the ones who set the tone.

Cross-pollination fan club On the question of group size, my personal preference is six. Also, you need at least one representative of each gender. Of the various numbers and combinations we have tried, six-person groups deliver the most consistently positive results.

A critical element in this formula is the relationship established between the leader and the team. This is what determines the viability and potential “star power” of their future ventures.

We don’t play democracy The first thing you need to learn is not to play democracy with your group.

This is no simple task: when dealing with friends who are also experienced professionals, the last thing you feel like doing is managing them. In an ideal situation, the group is unconditionally willing to accept any decision the leader makes, no matter how strange or paradoxical it might appear.

Oksana Kapustina, formerly a Ruyan senior executive and shareholder, and one of the creators of the Expedition brand, expressed the principle very well: “Let’s support Kravtsov without reservation. He may be right, or he may be wrong. But if we don’t support him, he won’t be able to make decisions.

And that will surely spell the end of our team.”

Here’s an illustration.

We were preparing a group to test out a race route between Moscow and Vladivostok. At the time of the project, the situation in the area between Chita and Khabarovsk was unstable in all respects, so we practiced between Moscow and St. Petersburg.

We had two freshly painted SUVs and six people to man them. The team members had known each other a long time, and had gone through a lot together. One day and about a thousand kilometers into the race, the team had to find a place to sleep, since the Expedition Trophy race rules prohibit 39

contestants from spending the night in any city, town, or village.

The group had experience with overnight camping in snowy weather. Our method was as follows: clear away snow until you reach the ground, pitch a chum7 tent, fire up a heater in the tent, lay out sleeping bags while cooking a hearty dinner, and then go to sleep, with one person staying up to keep the fire or the heater going.

We were driving along a country road in the Valdai Hills region, and were clearly the first car to pass through there in several days. As an advocate of the least possible waste of human resources, I decided to save some of the team’s energy, and proposed that we park the vehicles right on the road, pitch our chum between them, and spend the night, skipping the snow-shoveling part. My proposal was met not with support, but with objections along the lines of, “What if a fire engine, or an ambulance, or somebody, needs to get through?” I responded that the probability of that happening was low, since it was 3:00 a.m., but that if they did show up, we’d let them by.

As the objections continued, I conceded, “OK, since we have a democracy here, do what you want, there’s plenty of snow around…”

When my companions began to clear a space on the shoulder, one of the SUVs promptly got stuck in the snow. Of course they had to haul it out, break out the winches, and so on. In the meantime, I explored the perimeter of the forest in search of dry pinewood for a fire. When I came back, they were still digging. To their mute question, I answered, “No dry pinewood, but, thanks to your democracy, we don’t have time to sleep anyway.”

Soon enough, the second SUV was stuck as well. In the end my colleagues gave me their word: no more democracy from here on out.

In the event of mutiny on the ship

Right or wrong… I’m still the captain Mr. Nix was the head of the shoe care division of the German company Salamander. The rigidity of our respective positions whenever we met was 7 The chum (pronounced “choom”) is a tent of conical design used by nomadic reindeer hunters in northern Siberia.

40

something like negotiations between Soviet Marshal Georgi Zhukov and German Field Marshal Friedrich Paulus.

At one point we reached agreement that Ruyan would start selling Salamander insoles in Russia, in exchange for which Nix would move the manufacture of shoe shine sponges to our company Orlenga, located right outside Moscow.

Three months went by. Then Nix asked, “Why aren’t you selling our insoles?” We answered, “Because you haven’t started manufacturing those sponges.” Nix wrote, “First, do your homework.” To which I replied that Ruyan’s turnover in the shoe care market was already greater than Salamander’s, and yet we still spoke politely to our German partners. I also hinted that I was prepared to pour big money into advertising our other shoe care brands, effectively demolishing the Salamander brand in the Russian market.

At the time our business with the Germans was bringing in five million euros clear profit annually. Alexei Belevtsev, another founding shareholder in our company, informed me that we had no right to write such risky letters.

I summoned the other shareholders and said, “Look, there are five of us here. I have a fifty percent share, and the four of you have twelve-point-five percent each. One of you thinks I do not have the right to make decisions on this ship. Please advise, what should I do in this specific situation?”

Belevtsev didn’t show up at the office for the next two weeks. The mutiny had been put down, for the moment.

The ideal decision This is a story I often tell in my lectures to exemplify the kind of problem where the only correct solution was not an obvious one.

A team of six people was flying from Beijing to Moscow with a trove of valuable information. I was going through a complicated period in my personal life, and the woman at the center of it all had just moved from Moscow to Novosibirsk.

On the seat-back monitor in front of me, I could see the dotted line of our flight path passing directly over Novosibirsk.

Half an hour before the plane would be over the city, I turned to my team and said, “In twenty minutes we’re going to force the plane to make an emergency landing. I have two plans. Plan A: we go to the cockpit and bribe 41

the pilots to disable some minor part, announce a technical malfunction, and land. I get off, you stay on. Plan B: if the crew doesn’t go for it, we get rowdy and start rocking the aircraft, forcing them to land in Novosibirsk anyway.

The cops arrive, you take the blame and get arrested, while I get off the plane. Then you pay off the cops and hop the next flight. Any questions?”

On a tight team, the leader’s authority is beyond reproach, and our team was stellar. At this point in my lectures, I pose the following question: what did they do? There was only one way out of the situation, and my team figured it out in ten minutes.

The most assertive member of the group was Volodya8 Chekurda, an army buddy of mine. He came over to me and said, “Sasha, we have unbounded respect for you. But we’re your team, and you have to respect us, too. We think that your head may not be in the right place. Take a seat and think carefully about what you’re going to do if we leave you in Novosibirsk. We’re giving you ten minutes. Then, if you still want to force the plane down, we’ll do it. Plan A, plan B or plan X, it doesn’t matter, we’ll make it happen. But if you decide you don’t know what you’re going to do in Novosibirsk once we land, then don’t put us and yourself at risk. You’ve got ten minutes.”

I sat and thought about it, and realized that getting off in Novosibirsk wouldn’t solve anything. I then went back to them and said, “Screw it, let’s keep going.”

If Chekurda had said, “Sasha, if you try anything we’ll tie you down,” I would have grounded the plane on my own. If he had said, “OK, let’s do it,” that would have been a solution, but not the optimal one.

This is a magnificent pedagogical example for business! It’s about having total trust in the team leader, when the group can say, “Whatever you say, we’ll do it. Only you have to respect us, and yourself, too. Then you’ll have our full support.”

Never let go of the helm I met Sergei Pavlovich Nacharov during the Expedition Trophy race in 2008.

We became friends a bit later. He is a remarkable man. He’s now sixty-three years old, but he’s younger than most people half his age. He’s a Builder with a capital B. Toward the end of the Soviet era, he ran the largest construction trust in the country. He spent several years building heavy industrial facilities 8 Volodya is a diminutive of Vladimir.

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in India, followed by the largest metals plant in Africa.

Everything of any interest in Novosibirsk was built by him, including the first luxury home and the first townhouses. I have special respect for the church he built on Krasny Prospect, which I think is the city’s most outstanding landmark.

During the Expedition Trophy 2010 race, we were sitting in a round-theclock bar in the Tomsk Hotel, talking about the role of a ship captain. At the time Sergei Pavlovich’s company was in financial straits; like many other builders, he had put up a lot of houses on borrowed money going into the financial crisis, and was having a hard time finding buyers.

“The key to being a captain is to never let go of the helm,” Sergei said. “You can run your business even from prison, if need be. Just look at our history: Nicholas II abdicated, and the country was in turmoil for twenty years, until Stalin announced, ‘I’m the only one allowed to shoot people in this country.’

Fast-forward to Gorbachev: he let go of the rudder, and we had another twenty years of turmoil, until Putin took the helm of our gigantic ship with one hundred forty million people on board. When most of the construction companies in Novosibirsk got caught between a rock (their loan payments) and a hard place (no solvent demand), they let go of the helm, which means they’re gone from the market for good. But I’ll still be here.”

Machiavelli and downhill skiing Speaking of management challenges, I would like to mention Machiavelli’s The Prince. When asked if a prince should keep his word, Machiavelli replies that a prince is “often forced, in order to maintain the state, to act contrary to his word.” To clarify, when the prince’s promise coincides with the country’s interests, he certainly ought to keep it. But when a promise or obligation starts to contradict the national interest, there’s nothing wrong with changing his position. Otherwise, the prince would be an irresponsible ruler, hampering his own kingdom’s ability to compete.

But there’s another side to that coin, because higher ethical principles and mandates do exist. If a leader breaks those, he may quickly destroy himself.

In his book Rabbits and Boa Constrictors, Fazil Iskander writes, “A sailor cannot get his bearings from falling stars.”

Throughout the first five to seven years of our company’s existence, I felt that, as its leader, I had to look for a compromise between the type of 43

intricate manipulation Machiavelli described so well, and the kind of Love that lives on the pages of Antoine de Saint-Exupéry’s last book, The Wisdom of the Sands.

Once, my older brother Konstantin and I had a conversation on this topic.

He had considerable experience as a Russian Orthodox priest by that time.

“You’ll lose either way, Alexander,” he told me. “If you manipulate people and exploit their talents, burning through them like logs to fuel your business, you’ll lose for two reasons: first, you’re not that kind of person, and, secondly, it will burn you out in return. But if you trust people, relying on what is decent in their souls, and selflessly do the good, you’ll also lose, because your company will quickly go bankrupt, and the Ruyan crew will go down with the ship.”

Right around that time I was learning to ski downhill. The ability to turn on my toes, shifting my entire weight from one leg to the other, came with experience.

Not long after my conversation with Konstantin, I realized that a compromise between Manipulation and Love was not only impossible, but also unnecessary, just as you don’t compromise between your right leg and your left when executing a turn on a downhill slope.

I subscribe to the notion that like attracts like. If people, partners, or organizations try to manipulate us, or feed off our ship like suckerfish, we deal with them accordingly. But when there are people who give the company, its people, and the world all their energy and all the warmth of their souls, we match their contribution, and then some. We compete with them, to see who can give more.

Back to Machiavelli. I agree that there are princes who, like lions, meet challenges head-on, sweeping everything from their path. There are also foxes, who are constantly covering their tracks and sniffing out the benefit to be had in any situation. But truly great princes can be either foxes or lions, depending on the circumstances.

The propeller: axle and blades In the wake of Ruyan’s rapid surge past all conventional business indicators, I have asked myself many times: how did we do it? And why, out of the seven former co-owners of the company, all with serious money and many years of Ruyan experience under their belts, was no one able to create anything 44

fundamentally new, the one exception being Oksana Kapustina, who independently built several factories and captured a sizeable share of the knitted goods market?

I think that the answer can be seen in the image of a propeller. A propeller has an axle (the company’s owner or CEO), and it has blades (co-owners) rotating synchronously in different planes: marketing, production, various forms of distribution, logistics, finance, human resources, and so on.

At Ruyan, each plane had its own leader and its own team. The only thing connecting the planes was their intersection with the axle, and also our corporate philosophy. The whole structure was highly successful, until the different planes were brought together and placed around one table as a board of directors.

At that point I had little experience of fighting against democracy and bureaucrats within. When we started to look for solutions that everyone would share and support, that was what tore us apart.

Then I had to resume my function as axle, but for a new set of propellers, and I hope this process will continue for a long time. The rest of my former partners, however, apparently either thought it took too much energy, or they just were unable to build their own flying machines.

Dodging the ice floes: full speed ahead!

We’re on the Ob River in the spring of 2000. My former classmate Oleg Mameyev is driving one motorboat, and I’m behind him in another. He knows this river channel well. We see ice drifting our way. Mameyev slows down; I try to do the same, but to no avail: the cable is frozen stiff.

I overtake Oleg and begin to maneuver through the ice floes at full speed.

It occurs to me that running a rapidly growing business in Russia is a lot like handling a boat in my situation. You’re afraid of the speed, but you can’t brake.

There’s another metaphor, one related to sailing and to birds that ride air currents.

What is business surfing? Well, there’s a method of sailing called “by the wind,” when you sail at an extremely small angle to the wind.

The nature of modern business is such that you constantly feel resistance from your external environment. But this environment also provides upflows, or trends.

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I know a Tu-154 airplane pilot who once claimed to have seen geese at seven thousand meters. He figured they had lain belly-down on currents of air, which propelled them forward and upward to such dizzying heights. Diving ducks, and especially loons, can only take off from the water into the wind. The resistance is what pushes them skyward.

Business surfing may be likened to sailing, or taking off into the wind. The crises never end; they surface in one place on another. You’re always going against the flow, feeling resistance from the external environment, and catching the updraft.

Chapter 6

motivation and INVOLVEMENT I will either find a way, or make one.

—Hannibal

Not for money People in Russia don’t work for money. At best they go to work and pretend to be busy. So what do they work for?

They work to be respected by others, or for a company management that trusts and cares about them, or if they feel that they’re part of some grand cause, such as building the first new city in this millennium. Other things people will work for include a community of associates who are like them, and their own enhanced development or improved competitive strengths. In our case, there is also the chance to see the world, and, last but not least, a flirtatious atmosphere at our offices and meadows.

Of course, money is always a factor, but I think it’s probably fourth or fifth on the list.

The proper distribution of financial proceeds is essential to maintaining the right atmosphere in the group. Remember the old pirate rule that half the booty goes to the captain, and the other half to the crew? Beyond that, there are other priorities to keep in mind.

The most important one is that the distribution must be perceived by all participants in the process as absolutely fair. This is no easy task, since people tend to overestimate their own individual contribution. Then again, I never promised it would be easy!

In my view, a company should give part of its profits to its employees, because they give the company part of their lives. At the very least, this applies to people you don’t foresee letting go in the immediate future.

All crew members need to know that if the ship lands a profit, they’ll get their share. Obviously, the smaller the crew, the greater each member’s share.

For this reason, net profit per employee has been Ruyan’s core economic indicator for many years.

I think that the optimal ratio of an employee’s fixed salary to his or her share of the profits, paid out as bonuses, is 1:1. Bonuses are paid monthly. I have experimented with paying them annually, semiannually, and quarterly, but nothing works better than a monthly bonus (when there is a profit, of 47

course).

Lastly, I believe that the highest salary on any given team should not exceed the lowest by more than a factor of five. For example, if the lowest earner makes forty thousand rubles9 a month, the highest earner should be capped at two hundred.10 We borrowed this coefficient from the norms in Finland, Switzerland, and New Zealand, which boast some of the world’s most competitive economies. We have been practicing this principle for many years, and are satisfied with the outcome.

The German military recently conducted a study on what would motivate modern-day German soldiers to place themselves in the line of fire. There were two projected answers: a lot of money, or German patriotism. Neither was confirmed. Instead, the strongest motive identified was that the soldiers felt they would have to support their buddies who had gotten up out of the foxhole.

One more thing, which is not related to money. Now, how do I put this so as to sneak it past my editor? (J) During the years I have headed Ruyan, my bed (which was a sleeping bag for most of that time) has been visited by many women. Virtually all of them were beyond reach for men without charisma. Ninety times out of a hundred, my time and effort were spent in vain. But those ten times when it was not “in vain” gave me more inspiration for my work than all the other motivational methods combined.

When a person is in love, working miracles becomes as natural as walking.

The positive charge in the Ruyan atmosphere and the shocking orange of the Expedition brand would never have been so wonderful, if we were a bunch of uptight prudes.

Don’t underrate the attraction between members of the sexes. They won’t forgive you for that (J).

Three green lights In one instance, implementation of a marvelous idea was delayed by seven years out of an excess of tact. I thought up the plan of having a computer in a separate office space, which would not be connected to the company network. Only one person, somebody respected and trusted by all, would have access to it. Under no circumstances would the keeper be allowed to 9 Approximately fourteen hundred dollars in 2011.

10 Approximately seven thousand dollars.

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share the secret information, stored in that computer, with anyone else.

The plan was to let every single employee log on to this computer once a month. Each man could turn on a green light next to the names of up to three women he liked, and women could do the same for men. No one would know the results except those pairs who picked each other. This information would be relayed to them tactfully by the keeper of the computer.

What stopped me from implementing the idea was that I was married at the time to Oksana Kapustina, who was then one of the company’s shareholders and senior executives. Therefore, the idea was discussed exclusively among the males at the company, who greeted it with general approval. Several years later, when Oksana was no longer my wife, the idea came up again and was discussed in the open. I remember her saying, “And what if I turn on the green light next to all the men?”

Seven years went by, and we invented a game that was later dubbed Three Green Lights. It was first tested out at a meadows session near the Polomet River in the Valdai Hills. Escaping the smoke that blanketed central Russia in August 2010, forty-six people attended, with equal numbers of men and women.

The event was conducted in a lively and jovial fashion. Crude or vulgar behavior was not tolerated, but an unequivocal message was sent that prudishness and false modesty are not Expedition’s style.

It was early evening on the Polomet, with mist rising from the dew. We formed a circle of forty-six people. Participants each received a piece of paper, at the top of which they wrote their first and last name. At the end of the game, the bottom part of the sheet would either be left blank, or they could write the names of members of the opposite sex (up to three) with whom they would like to have “close contact.” The precise meaning of “close contact” was up to the participants. Then, each person had two minutes to make a self-presentation. When we had gone all the way around the circle, everyone stood up once more and repeated their names.

After the master of ceremonies collected the sheets of paper, it took an hour and a half to tally the results. The only thing announced publicly was the number of matching “green lights,” while the rest of the data stayed in the organizers’ hands. I would like to emphasize again, that if you wrote down the name of somebody who didn’t pick you, that person would never know about it.

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I was particularly amused to observe Lena Larina, one of our senior executives who had been the most consistently and vocally opposed to instituting this game. An hour into the waiting period, Larina came up to me and said, “You know, Sasha, at first I was really against this, but now I’m walking around all moony-eyed, thinking, what if somebody picks me? Who could it be? I’m so curious!”

We had ten “green lights” (twenty people out of forty-six). I’m not sure what to make of this number. Over the following months we tried the game several more times. Some instances were better than others, but statistically the percentage of matches never dipped below 25 percent or rose above 40 percent of the participants. We suppose that about 30 percent of these matches ended up in bed. We are confident that least 20 percent of those people would have ended up in bed even without our help. But the important lesson is this: the meadows or camps where we use this game have a completely altered level of electricity, creativity, and bursts of laughter. People’s faces are much happier. We also anticipate that Three Green Lights is destined to become a weapon of mass destruction in international marketing.

When heroes are with their wives, and enchantresses with their husbands So many handsome men around, and I’m only attracted to women...

To continue this delicate topic, I can’t avoid mentioning one problem that comes up.

Our entrepreneurial trade includes an area people talk about rarely and reluctantly: when heroes work alongside their wives or enchantresses alongside their husbands, in the same company. I myself have run into this pitfall more than once, which is why I want to share the lessons I learned the hard way.

There are several common reasons a husband and wife may end up working together in the same company. The first is that when two people are together, they want to share everything and give each other the world. And that is a wonderful thing. I even think that when they’re working together during the initial, brief romantic period, a couple can infuse the whole team 50

with romanticism and energy.

The second reason is far more serious, and is probably the chief one. I always say that a good business is like a street fight, in the sense that all means are justified if they lead to victory: a board torn out of a fence, an empty bottle underfoot, or anything else you can lay hands on. All is fair, when only victory can deliver you from the jaws of death. That’s when you make use of absolutely all the resources at your disposal, and having a wife or a husband to back you up is one of the most accessible resources.

The third reason is a tricky one. Let’s call it distrust. There is a hidden trap here, which often catches people who think they can trust only their parents and their spouse. This is the saddest delusion of all.

The fourth reason is simple. If two people meet at work and get married, why should one of them have to quit? Especially if both consider themselves extremely fortunate, and believe their job is the best place on Earth for selffulfillment.

I have my own basis for thinking that couples should not work together, especially if one of them is the boss. The reason is that the energy and power of the attraction between the sexes is the most powerful human nuclear generator, and a talented business leader simply cannot afford to neglect it.

The issue is not only jealousy, which, admittedly, is a poison that eats away at every living thing. The real issue is mutual respect and consideration.

Picture a strong leader taking the stage, picking up the microphone, or just entering a room where there are many members of the opposite sex, and saying something like this: “Girls! If you like me—and I know that you like me, and you can’t even imagine how much I like all of you!—let’s work together to pull off this miracle or achieve that great feat, and we’ll all be happy together!”

If, at that moment, the speaker’s spouse is present, his tone will be “off,” and the eyes of his listeners will be a little “off,” accordingly. Gradually it will become more and more difficult to switch the nuclear generator on, until finally it shuts down altogether. Soon enough, the girls will just hitch up their pantyhose and button their blouses when the boss enters the room, relating to him like some sexless creature.

Oranges don’t grow on aspen trees

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A boat trip for employees’ parents Everyone knows there are different ways to achieve motivation. I’ve already mentioned how important it is for employees to know that management cares about them, and especially about their loved ones.

For a decade, we organized two corporate boat trips a year: in spring and fall, just at the changeover from the winter season to the summer, and vice versa. Over time the event naturally became routine, and lost its spark. That’s when I dreamed up our Boat Trip for Parents. We decided to pay the way to Moscow for 100 percent of our employees’ moms and dads. No sooner said than done. Some of them flew in from as far away as America. In the end we had about 150 people of the older generation, and I took with us on the ship only ten of our most exciting, and reliable, employees.

When I came aboard, the tables were already set and the music was playing, but our unconventional guests were sitting as if they were at a parent-teacher conference: nice and neat with their hands folded, and ever so slightly sulky, just in case. It was as if they were afraid of being reprimanded in public, but also hopeful that I would praise their offspring, who were surely the best, in front of everybody.

It had been a long time since I felt uneasy in front of a large audience, but I realized that I had an impulse to talk to them the way I speak with my mother. And that would be no way to set an audience on fire. My emotional appeal produced surprising results. The parents relaxed and loosened up, and the rest of the evening was something hard to describe. I can’t say they were really dancing, but they were singing chastushkas11 with abandon. In fact, the singing of chastushkas, accompanied by my staff of ten, fired the parents up so much that they started chasing me around the ship.

At our own events, I can fend off a drunken employee’s attempts to drag me into a heart-to-heart just about every time, but against the parents I was powerless. I dodged them as best I could, but they kept finding me, even on the upper decks.

The party ended on an intense emotional high. It was one of the most heartfelt, warm, and unusual celebrations in our entire history.

I think that every person has these critical touchstones—their parents and their children. That’s why it means so much to employees if the company 11 A chastushka is a traditional Russian or Ukrainian folk poem which uses a simple rhyming scheme to convey humorous or ironic content.

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cares about their children and their parents. It reinforces their feeling of involvement in the company much more effectively than if the company showed concern only for them.

And now, one more story for the “fathers and sons” section.

The son of Plotnikov, the director of our Samara branch, was drafted into the army. The Chechen War was raging. While the son was in boot camp outside Moscow, his dad had found out that his unit was going to be dispatched to Grozny, the capital of Chechnya. The father called and asked us to use our Moscow connections to help. We made inquiries, and learned that the favor would cost ten thousand dollars.

We called Plotnikov and said simply, “Ten thousand.” He agreed.

The boy was kept out of the war. Not long after this, Plotnikov showed up with money for us, exactly ten thousand…rubles. At that time, ten thousand rubles meant around three hundred dollars. He put the money on the table.

Krasilnikov and I exchanged glances, wondering if we should say anything at all. We didn’t.

Almost an anti-retreat unit And now a few words about another incentive.

As the German army questionnaire revealed, a soldier goes on the attack out of solidarity. The Red Army used a backup system known as anti-retreat units. Granted, these probably would not make people perform feats of bravery, but you can’t discount the effectiveness of fear as a stimulus for energy and initiative. The fear of ending up a loser, for example.

For the first Expedition Trophy race between Murmansk and Vladivostok, we invented a unique rule. At each of the seven stages of the race (a stage lasting two days), we eliminated one to three of the teams that came in last.

Most racing competitions identify only the leaders after the intermediate stages, but we always march to the beat of our own drum. This rule made the lagging teams compete much more fiercely than the leaders. As for the leading teams, they don’t usually even need incentives.

The acting scapegoat One time, in the midst of the worst July heat, we organized a training session for Expedition store sales teams. It took place on the Volga River near 53

Samara. Just over a hundred people attended. The plan was to build a raft together and launch it on the river, then start the training program when we were under way. Lugging logs in 40˚ C12 weather wasn’t particularly pleasant, so it was no surprise that the raft only got finished by lunchtime, two hours behind schedule. Toward evening, we evacuated the laziest and most unruly of the trainees, who happened also to be a heavy drinker. As night fell over the Volga, and our heads cooled off, we realized that if we had announced the “emergency evacuation” of the outsider earlier, the event’s whole atmosphere would have been fundamentally different.

The problem is that one outsider is invariably replaced by another.

A common illusion within a group is that one individual is to blame for all their problems and difficulties. It’s the person who is chronically late, ruins everybody’s mood, and just doesn’t get what we’re doing here! In virtually every case, the group wants to do an “immediate evacuation” of this person, and be done with it.

And people tend to suffer from a parallel illusion, namely that getting rid of the troublemaker will make everything wonderful. I call this phenomenon the “scapegoat effect.” I became aware of it after weeding out a lot of such scapegoats, i.e., firing them. As soon as they left, the proverbial arrow would start spinning, until it stopped, pointing to a new candidate for the role of scapegoat, even if there had been no reason to suspect him of anything, before the position became available. What can be done about this? After lengthy deliberations and experiments, we concluded that this pattern is not accidental, and ought to be manageable. We have found two ways to handle it.

The first method is based on the fact that people always shape up under scrutiny: security checks, mandatory financial reports, audits to verify legal propriety, etc. For a person who attracts negative emotions, especially if he seems to enjoy it, cultivating and keeping him in this position is a good solution.

The second method requires highly developed skills. On a flawlessly operating team, the role of scapegoat is assigned by mutual consent to one person for a fixed period of time. When that time is up, it rotates to another member of the team.

12 40˚ C = 104˚ F. All temperatures are given on the Celsius scale, where the freezing point of water is zero (32˚ F).

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One more thing. It is written, “Judge not that ye be not judged.” Neither I nor my associates have received any official right to call anyone a scapegoat or any other kind of “goat.” Also, it needs to be understood that such an evaluation has nothing to do with these employees as people, but only whether or not they match the DNA of our organization.

A heart-sized stone Following a hard workday, my army buddy Volodya Chekurda (now a former Ruyan shareholder) and I were sitting in a huge restaurant at a Chinese bathhouse in Canton, sporting bright blue disposable boys’ clothing. The female part of the team, wearing pink, was on their way. Our feet throbbed from the miles we had walked around the exhibition center. Giant frosty mugs of beer created an atmosphere conducive to philosophizing.

At the time, Ruyan was resting on its laurels in the shoe care and mosquito repellent markets. The Expedition brand was still in its embryonic stage.

“Well, Chekurda, what do you suppose should be our ultimate goal?” I asked.

“Easy: build our own state,” Chekurda answered with perfect calm, sipping his beer.

This turned into a lively discussion that lasted several hours. No sooner said than done. The third member to join our corporate state organizing committee was Vladimir Monich, whose business card read: “Ruyan Company, Vice President of Interpersonal Relations.”

Over the next year we studied the constitutions of modern monarchies and exceptionally advanced countries, as well as the initiation rituals of indigenous tribes, the statutes of the chivalric orders and Masonic lodges, the history of the Jesuits, and many other things I’d be hard-pressed to remember now. The one question we couldn’t answer was a natural one: how to transfer power to a new top dog. We decided to disregard this detail and swing into action (as it turned out, this was the right move).

I was sent on a solo business trip to Rügen Island, the one of which Ruyan is the namesake. It was a three-hour train ride from Berlin, on a cold and windy December day. Despite heavy snow, flocks of migrating geese, swans, and other birds could be seen high above the straits between the island and the coast. I roamed the deserted, icy sand banks in search of a stone—the future conceptual center of power for our corporate state. The idea was that 55

I would simply sense which stone was the right one.

It ended up being a stone the shape and size of a heart, sparkling with large quartz crystals. It was to play a key role in the initiation ritual, which went like this. On the night of the winter solstice (and then again at the summer solstice), we would gather in the forest. The future citizens received the text of the oath of allegiance, and a headlamp. They went off into the woods, read the text to themselves, and decided whether or not to take it. Then they came back to the bonfire. The stone was heated in water to human body temperature. The initiate put his hand on the stone and read the text aloud, and then we congratulated him. Each new citizen became a shareholder in the company. The figures were as follows: no matter what his or her job was, no citizen would make less in a year than the average salary in the world’s richest countries, and no citizen (except for already existing shareholders) would make more than five times the lowest salary among the citizens. Citizenship extended to children, but not spouses. In addition to his/her personal income, the state allocated ten thousand dollars per year for each citizen, to pay for health, education, and other necessities.

The project lasted about three years. It had to be terminated due to a fundamental error in our vision, made at the very beginning. We had assumed that if all the citizens became shareholders, they would take greater responsibility for the material outcome of our operations. What we didn’t anticipate was the emergence of the mutual guarantee phenomenon. The expression of this was that everyone would defend the two out of twentythree citizens who consistently caused the company to lose money. The others would say, “Yes, Sasha, we know they’re hurting the company, but they’re our guys.”

Throughout the state’s existence, I didn’t expel a single citizen, though I had the complete right to do so under the constitution. (And I regret having never made use of it!) When the consistent losses began to threaten the balance sheet of the entire company, the stone was taken back to Rügen Island, to the same sand bank where it had been found. A significant portion of what was invented and developed within the corporate state would later be used in the city of Ruyan. The experience also prompted the company to adopt a new principle: immediate evacuation.

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The second hint from my “idea brothers” Immediate evacuation is what we call one of the most important bits of knowhow, which is always available as an option, but is very difficult to execute. It means that as soon as it becomes apparent that a person has no future with a team, he must leave the team.

The typical management excuse for not taking such action right away is that they want to find a replacement before firing somebody. First of all, the opposite is typically true: until you fire the person, you won’t find a replacement. Secondly, delay may result in the cancer afflicting the entire organization. Here it is appropriate to report another piece of research by my “idea brothers” from the Urals, pertaining to cancer cells.

To prevent cancer, the body must perform two actions. The first is to identify the cancer cell, and the second is to reject it. The conclusion reached by my “idea brothers” is that the body nearly always identifies the cancer cell, but in many cases does not decide on its immediate evacuation. Since the cancer cell has its own corporate philosophy, it quickly metastasizes throughout the healthy parts of the body.

Unfortunately, unhealthy things always spread faster than healthy ones, which develop according to fundamentally different principles. Just as any viable organism with a strong immune system must reject a cancer cell immediately to prevent disease, so a viable, young, talented, and promising organization must immediately reject a person with an alien ideology, no matter how pleasant he or she may be on the outside. This brings us to matters of philosophy.

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Chapter 7

Our ship – for our people An oasis is a daily victory over the desert.

—Antoine de Saint-Exupéry

Choosing a banner to raise Perhaps the main competitive advantage of modern-day companies, as well as sports and military teams and project groups in general, is their shared philosophy. Everything else can be outsourced. But a group always has a set of beliefs, whether clearly formulated and officially adopted, or merely implicit but still underlying their daily activity. And the closer the official and unofficial philosophies are, the more viable the team becomes. This principle probably applies to nations as well.

The coincidence of a group’s explicit and implicit systems of coordinates can produce extraordinary capabilities. For instance, you don’t need to spend resources on anti-embezzlement measures: either people don’t steal, or those who do steal are blocked by peer-group pressure within the company.

The group may also acquire a collective consciousness, a sense of where the flock should fly and where it shouldn’t. This self-awareness is greater than that of any one individual, including the leader.

People often say about Ruyan: “You guys are great, you’re truly priceless.

Your only shortcoming is that you’re too radical, the way you attempt to divide the whole world into black and white.” Admittedly, we are radical in matters concerning our inner circle. In relations with people on the outside, however—with partners, counterparties, and so on—we are fairly liberal.

In my opinion, this is a virtue rather than a shortcoming. I don’t see our “dividing” as a bad thing; after all, there are people with blood type A, or B, or O, and no one can claim that one blood group is better than another.

Once you achieve a certain level of management skill, it becomes increasingly difficult to find mentors. Yet it’s never a waste of time to look for them. Consider that Genghis Khan really only did two things: he united a group of revolutionaries called “the people of long will,” who weren’t happy with the rigid, heredity-based Mongol hierarchy, and he created the Yassa—a code of conduct for the future Golden Horde to live by. (Curiously 58

enough, under the Yassa, having sex on the territory of a Mongol field camp was punishable by death.)

A guiding set of beliefs includes a mission, a system of values, and a core philosophy. The mission is your banner, and the system of values is your tool kit. It took me time to realize that you shouldn’t be in a rush as you create them. At one time I was of the opinion that if a company’s board of directors thought they needed a whole week of living off in a hotel somewhere, in order to conceptualize their mission, then what the company needed was not a mission, but rather a new board of directors. Nowadays I consider this creative process to be of the utmost importance.

The essence of Ruyan’s philosophy Our tribe has two banners: Ruyan and Expedition.

Ruyan’s mission, “Our Ship – for Our People,” was formulated in 2000, when the company was five years old. It hasn’t been changed since.

The essence of Ruyan’s philosophy is that we rely on people who share responsibility for the company’s future, as they would for their own child.

To illustrate this, I will relate two stories.

Two kilos of cash In the first year of the company’s existence, all cash proceeds were taken by one of the shareholders—either me or Ilya Krasilnikov—to a currency conversion location with whose staff we were on friendly terms.

Since the company was initially built on trust in its core people, we are predisposed to trust everyone who works for us. But, while this group of core personnel is a circle of trust within which we don’t supervise one another, we do scrutinize new members closely. After some time either we let them go, or they join us as part of the core. Although he was barely twenty years of age, Yevgeni Kalinichenko became part of our core fairly quickly, and was entrusted with handling the cash.

The money was carried in a plain plastic bag containing another bag, and, as a rule, the courier didn’t know how much it contained. He only had a sense of how heavy the bag was. The exchange office was near the Baumanskaya subway station, about a hundred meters off the highway. The cash proceeds that day weighed around two kilos. The alleyway through which we usually 59

drove up to the exchange office was under repair, so Kalinichenko got out of the cab and continued on foot. He was attacked by two thugs, who put a knife to his throat and demanded that he hand over the bundle.

We would have considered it quite appropriate for him to hand over the money. Kalinichenko knew that we trusted him, and that he wouldn’t be reprimanded. I’m sure he understood that we wouldn’t have thought the worse of him. Yet he decided not to do that, and instead threw the bag over the fence they had pinned him against. The attackers sprayed some filth in his face and took off. Zhenya13 made it to the exchange office, roused the guards, and together they quickly climbed over the fence, recovered the package, and deposited it.

Kalinichenko was also involved in another incident. Our company had several offices at a Moscow shipyard, one of which was on the third floor.

One day a fire broke out in the stairwell and spread to the cables, and the acrid smell of smoke began to waft through building. The place was full of adult males, many of whom were not our employees, but the first person to start putting out the fire was none other than Kalinichenko. He rushed over from another building and began to fight the fire with such gusto and spirit, that Marat Sharipov and I had to intervene and practically drag him out, so that he wouldn’t be poisoned by the gases exuding from the burning cables.

All steamed up Here’s another story. From opening day, one of the bathhouse attendants employed at the Expedition bathhouse-restaurant complex was Sasha Kato, or Hirosi Kato, according to his passport. He was half Japanese and half Korean, born in Sakhalin and raised in the North Caucasus, where he had to fight every day up through sixth grade, because, for some reason, people in the North Caucasus disliked Japanese. In August 2002, I organized a trip up North with twelve waiters, cooks, and bathhouse attendants from the Expedition complex. On that trip, Kato immediately stood out as a dependable person with a highly developed sense of fairness and an ability to read people. It was obvious he had led a rough life, but he was able to cope.

An average bathhouse session lasted two and a half hours. Guests typically arrived in pairs. A person would use the sauna three times, then lie back in a special lounge chair to get scrubbed. When the place was busy, it took several 13

Zhenya is the diminutive of Yevgeni (Eugene).

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attendants to service the clientele. One day Kato’s partner didn’t show up, and he ended up working alone. He covered four sessions and cleaned up the bathhouse, before collapsing and nearly dying from dehydration. We had to call an ambulance and get him on a drip. Naturally, Kato pulled through, and then we gave him an earful about how the last thing Expedition needed was overblown displays of commitment.

People like that don’t become single-function cogs in a wheel. Rather, they are what we call “human orchestras.” More on that later.

A system of coordinates Our definition of “development” is to advance in a direction where we achieve success, relying on people who share this worldview. If you achieve success without such people, you’d better watch out. More than likely this is an iffy achievement, both short-lived and unpredictable.

Conversely, 100 percent of our failures and losses (which could fill an entire book themselves!) occurred in the absence of such people, or when there were too few of them, or the commanding executives were below a critical level of competence.

In seven years, Expedition’s mission has evolved in the following way: We awaken people’s hopes for a real life (2002–2005) We awaken people’s hopes (2006–2008) We awaken faith in what is vital and real (2008–present) The wording can and occasionally should be updated, but not too often.

We do this during strategic planning sessions, typically once a year.

Values as a diagnostic tool Of our four main values—leadership, mobility, adaptability, and humanity— the most recently adopted one is adaptability. It was introduced three years ago to replace competence, because we noticed that competent but maladaptive people were a threat to the company. What’s more, one cannot even function without adaptability to the big system of government in Russia.

At the 2010 strategic planning session, the value of leadership fought off attempts to replace it with uniqueness.

It isn’t always clear whether or not a particular project, potential product, or team member is right for the company. But if you approach the subject 61

with these values in hand, as though they were medical diagnostic tools, you’ll have the answer in five minutes.

Metaphors instead of a Goebbels-style hammer Once the basic formulation is confirmed, you need a way to broadcast it easily to your core personnel. No one likes to have a philosophy beaten into his/her head with a hammer a la Goebbels. Instead, metaphors like the following can communicate the essential concepts: Rubik’s cube: multifaceted interests, their mutual support, and the ideological connections between them.

An Old Believers’ village: preservation of certain immutable inner values.

A mafia clan: 100 percent adherence to clan values.

A wolf pack: mobility and self-regulating team play.

An apiary: horizontal development, structural growth within limits.

The mythical creature Push-Pull: a tandem combining two functions, serving as a basic working model for any business.

The Straw Islands confederation: creation of a habitable environment.

Kovpak’s14 partisan brigade: autonomy and the ability to improvise.

Hollywood: “We were born to turn fable into fact!”

A British rock band’s barge in the 1960s: a mobile business community and the ability to deal with external factors.

Another important factor is knowing the prototypes, i.e., which companies and brands are comparable to yours. Ruyan and Expedition, for example, can be correlated with the following brands: Harley Davidson, Camel Trophy: legendary lifestyle brands with exceptionally loyal followings.

Oakley, Diesel: vivid brands with a unique public image and marketing methods.

3M, Google: comparable employee motivation systems, degree of employee involvement in the business, innovative and unconventional methods of working with people, investment in intellectual and attitude factors.

Etnomir (the “Ethnoworld” cultural project): horizontal business development, business unit cooperation and mutual promotion, primacy of 14 Sydor Artemievych Kovpak (1887–1967) was a Soviet partisan leader in Ukraine.

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one grand idea, founded on universal nonmaterial values.

And that is our take on values.

How we built trust in others…

In 1996–1997 we were opening branches at a terrific clip, and also trying to manage and oversee them. It wasn’t long before we realized that this took more time, energy, and joy out of us than we could afford, if we wanted to keep on working as easily and happily as before. To rectify the situation we came up with a new method: Oksana Kapustina, who was only twenty-four years old at the time and already an executive, would arrive in a city, register the company, rent a space, and search tirelessly for a candidate to manage it.

Naturally, we sought to open branches in the most populated cities, which would bring in the highest revenue. In Russia that means the fifteen cities with a population of over one million. The candidate selected by Oksana would come to Moscow for an extended interview with yours truly. If, after speaking with the person for several hours, I had a sense of his or her trustworthiness, he or she would be told: “You are going to be the owner of this business. The markup margin and profit cleared by the branch are yours.

We’ll teach you everything. The only control lever we are going to keep in our hands is the amount of your monthly revenue, multiplied by 150 percent, which will become your goods credit for the following month. Also, you are not allowed to sell similar shoe care products and mosquito repellents.”

If we reached agreement, the next day a delivery truck would drive up to the company’s address with a load of goods worth fifty thousand dollars to one hundred thousand dollars. No advance payment was required; everything was based on trust. Undoubtedly, the terms were fantastic for any candidate, and I’m proud to say that three of them went on to become millionaires. The strategy, as such, left plenty of room to cheat us and steal money, and of course that did happen, sometimes in very large amounts.

The first deliberate and carefully planned swindle took place in St. Petersburg, and cost us about two hundred thousand dollars. Literally a couple of months later, we were faced with a critical situation in Krasnodar.

The Krasnodar branch manager, named Korneyev, was a strong and honest person with a military background and emergency rescue experience. His commercial director was an elegant and beautiful woman, who, it later turned out, had devised and organized five different theft schemes. In the 63

most intricate of them, she would sell our merchandise at the branch, take the money, and have an accomplice carry it to Moscow. There, the accomplice would purchase our products at wholesale markets, bring them back to their city, and unload them at our warehouse. They pocketed the difference and doctored the paperwork.

For a long time we watched the branch sustain losses, unable to figure out what was happening. A time came when Korneyev could no longer pay back his monthly goods credit. He threw up his hands, saying, “I don’t get it.” All the while his commercial director purred, “What do you expect from a branch run by an army vet?” Thankfully, we had enough patience and intuition to figure out which of them had a hand in the till. Even after bidding farewell to the scamming director, Korneyev was left saddled with a sixty-thousanddollar debt to the company. Repaying the debt and saving the branch looked to be quite a difficult task for him.

We gave him a year, but he paid us back in just five months. When he came to Moscow with the envelope of cash in hand, there was such great joy that we went out and got plastered. Not because of the sixty thousand dollars, but because Korneyev had essentially saved our faith in the method.

If he had not, it’s likely that this incident, coupled with the still-fresh St. Petersburg swindle, would have forced us to give up on trusting people without micromanaging them. And then we wouldn’t have been able to crush all our Moscow competitors as fast as we did. As it was, when we entered a region and set up a branch there, the market was essentially closed to our competitors. They didn’t stand a chance against us, because they couldn’t afford to set up branches without their oversight, and yet monitoring just two or three branches already had them stretched thin. We, on the other hand, didn’t overload ourselves, and we still don’t.

And how others came to trust us “Like calls to like” is a well-known principle. When you are inclined to trust people, they are inclined to trust you back.

There was a period when Ruyan had grown very fast, and an organizational bureaucracy began to take shape. I was responsible for personnel and marketing, and Ilya Krasilnikov, the most senior shareholder, with whom I had built the company from the ground up, was in charge of security, logistics, cash flow, and all the other operations.

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At the time our security contractor was a company called Grand-93, headed

by Valeri Petrovich Litvinov. In the orbit of his company were several security units staffed by former and current special services officers. Our director of security was their operative as well, in addition to working under Krasilnikov.

For two years he diligently presented Litvinov and his people with a distorted picture of how the wise, restrained, and responsible Krasilnikov acted as a counterbalance to that rowdy and boorish Kravtsov, who was sloppy in his choice of partners. Since Litvinov and I had spoken for only a few minutes at our contract signing, he had no reason to doubt this information. Obviously, I didn’t know any of this.

As the bureaucracy matured, it began to wage war against all vitality and talent within the company. Suddenly we had financial directors, IT managers, and a director of logistics—in short, a horde of internal bureaucrats who created nothing, but considered it their duty to assert themselves. And their self-assertion had to happen at the expense of the people who were actually creating something. Our director of security was one of the foremost bureaucrats. Actually, it was a lot like what often happens in governments.

The branch managers sorted out into two types: those who plied the security service with bottles of cognac, but were incapable of working effectively; and those who did know how to work and achieve results fast, but couldn’t care less about our Moscow bureaucracy. Our director of security was annoyed by this situation. Both the security officers and the bureaucrats began to whine to Krasilnikov, and then to their bosses, “Kravtsov is not the same. Sure, he’s a genius, but he’s unpredictable. The company is in danger. We have to do something, we have to save something out of it.”

Long story short, the situation was out of control, and nobody could make any decisions with full authority. The overall economic conditions meant that without good security, and with Krasilnikov and myself at odds, Ruyan had no prospects for survival. In the wake of the crisis, we were carrying a heavy debt burden. The responsibility was ours, and no one was about to relieve us of it.

At a certain point, I managed to arrange a meeting with Valeri Petrovich Litvinov. We talked for about three hours. Then he summoned his subordinates and informed them of a radical change in his position.

They said to him, “Valeri, you’ve known us for decades; hell, we’ve been in combat together. We’ve been watching Kravtsov through a magnifying glass 65

for several years. Are you trying to tell us that after talking with him for three hours, you get the situation better than we do?”

“That is exactly what I’m telling you,” Litvinov replied.

Thanks to our conversation, the situation was swiftly resolved in the most civilized way. That is, if you don’t count the holes burned with cigarette butts in the Ruyan flag on the desk in the office formerly occupied by Krasilnikov.

Not crossing the line Ruyan had several wars with gangsters, and every time I would ask myself, “How is it, given that we have more money, and we are smarter and better in every way, that gangsters can just grab us by the throat and defeat us?

Not only us, but thousands of other Russian entrepreneurs?” Eventually the answer came to me, plain and simple: the gangsters were stronger because they were willing to die, and we weren’t. But if you matched their willingness to die, and you still had more resources and more money, they would always lose.

What happened on October 26, 2002 in the Nord-Ost siege15—that the hostages were freed, even with casualties (otherwise many more could have died)—was a defining moment for anyone who hadn’t made up his or her mind whether or not to respect the government. Until that incident, the government’s position on hostage-taking and other demonstrative acts of violence had been fundamentally different—to negotiate with criminals and terrorists.

The criminals, however, always used the same tactics, regardless of whether they were operating internationally, or in some small region. They came to you and said, “You will pay us money because you’re afraid for your life, and we’re not.” But then my answer became, “I am not afraid, either, and I will not pay, and I will use all of my resources to fight you.” This was treading a fine line, to be sure, but I didn’t see any other way out of the situation. In fact, this approach has proven successful every time. We put together what we needed, and we have won every war.

15 In the October 2002 hostage taking, guerrillas (including females) identifying themselves as Chechen separatists and apparently armed with suicide-belt bombs seized over eight hundred cast and audience members at a performance of the hit musical Nord-Ost in Moscow’s Dubrovka district. On the third day of the incident, Russian special forces used a gas to disable the terrorists and end the siege. Thirtynine terrorists and at least 129 hostages died.

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We have never hired the services of criminals, but I do want to share one story from the world of crime.

The year was 1997. One of our employees had joined a criminal gang, and together they had decided to kill us and take over the company. We got hold of recorded telephone conversations in which they were discussing what they would do to us. We convened an emergency meeting of the board of directors, which comprised eight shareholders: six men and two women.

One of the women suggested, “If we get rid of the man, we get rid of the problem. He’s giving us no choice.” She was suggesting a preemptive strike.

Krasilnikov and I, the top two shareholders, said nothing.

Marat Sharipov broke the silence, “We cannot strike first. Once we cross that line, we can never go back.”

In the end we decided to go underground for a while. And we never crossed that line.

Cultivating a winning tradition I think there comes a point when a powerful boss, or any other powerful individual, realizes that he can do practically anything. Really believing it, however, takes going through the experience of completing impossible projects. Better yet, completing a lot of them.

Our company’s history was heavily influenced by two books: Vladimir Tarasov’s The Technology of Life: A Book for Heroes and Jim Collins’s Good to Great. Tarasov believes that soldiers should regularly be placed in proximity to death, writing: “This is the territory, from which the only road to life is through victory, and you can’t see it.”

Many years later, Marat Sharipov, a twelve-year Ruyan veteran as a shareholder and senior executive, said, “Keeping his team in proximity to death is where Kravtsov is at his most productive.” And here I thought I was at my most productive when working with women (J)!

Thankfully, we are all alive and, in most cases, physically well. If some of the people, project groups, and individual companies from our past no longer figure in our business, that really isn’t so bad.

When I first started giving lectures to young entrepreneurs, a historical illustration came to me. Alexander the Great and his army of forty thousand men are marching across the desert. Marching to meet them is Darius with his Persian army, three hundred thousand strong and with war elephants.

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On the face of it, the outcome seems predictable. Every Macedonian warrior, however, despite his fear, knows that Alexander is undefeated. And because every Persian warrior knows this as well, the battle is already over.

And now a word about Collins’s Good to Great. The book found its way into our circle around 2001, when we had already established a firm philosophy and knew the right and wrong ways to build an organization. But we saw ourselves as an exception in the worldwide history of business. When we found out that what we had achieved independently was the very same sequence of steps Collins outlines for great companies, it was a positive shock for us. Collins compares the process of cultivating a winning tradition with cranking up a flywheel.

Picture a huge, heavy flywheel—a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and long as possible.

Pushing with great effort, you get the flywheel an inch forward, moving almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn.

You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation.

You keep pushing in a consistent direction. Three turns…four… five…six…the flywheel builds up speed…seven…eight…you keep pushing…nine…ten…it builds momentum…eleven…twelve… moving faster with each turn…twenty…thirty…fifty…a hundred.

Then, at some point—breakthrough! The momentum of the thing kicks in in your favor, hurling the flywheel forward, turn after turn…

Now suppose someone came along and asked, “What was the one big push that caused this thing to go this fast?”

You wouldn’t be able to answer; it’s just a nonsensical question. Was it the first push? The second? The fifth? The hundredth? No! It was all of them added together in an overall accumulation of effort applied in a consistent direction. Some pushes may have been bigger than others, but any single heave—no matter how large—reflects a small

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fraction of the entire cumulative effect upon the flywheel.16 Remember the propeller metaphor? Sometimes I think that extraordinary companies are like a plane gaining altitude. The risky takeoff is followed by turbulence through the cloud layer, but then the boundless blue skies open up. Suddenly, new horizons are in sight, the engines purr happily, and your hands have a firm grip on the yoke.

Cultivate your own winning tradition, and in a few years your senior executives will view anyone who tries to compete with you as kooky potential business-suicides. When that happens, you can say good-bye to chopping vegetation in the Russian taiga, as if you were stuck in an utterly peripheral area of global business. Launch your eagles far abroad, because they’re ready to take on the challenges that await them.

Outer space is only partially settled

16 Jim Collins, Good to Great: Why Some Companies Make the Leap…and Others Don’t (New York: HarperCollins Publishers Inc., 2001).

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Chapter 8

Human orchestras and uncovering potential Revolutions are conceived by geniuses, carried out by heroes, and their fruits are enjoyed by rascals.

—Bismarck

An aircraft carrier made of rafts The entire history of Ruyan has been a search for the optimal combination of the advantages offered by a single large organization and those offered by a group of many smaller ones (or, conversely, for ways to level the drawbacks of either form of organization). Figuratively speaking, we are an aircraft carrier made of rafts, capable of either breaking up, when it suits our strategic aims, or merging into one enormous vessel, when that is to our advantage.

Expedition brand products can be purchased in every corner of the Earth: from the USA to South Africa, from New Zealand to Kyrgyzstan, and from China to Latvia. In the past decade we have personally visited over fifty countries to conduct market research. Our projects are divided into two broad groups: commercial and humanitarian. Those, in turn, are divided into “completed” and “still under development.”

Here is a partial list of them.

THE SHIPS IN OUR FLOTILLA The Ruyan Company Owns all our intellectual property rights.

Expedition: Land of Vivid Impressions retail chain Approximately 350 new stores opened since 2006. Roughly two hundred new products launched every season under our brands.

Expedition: Parlor of Rare Treasures gift shops Seven shops in all, selling luxury items such as gold nuggets, artistic bone carvings, fine furs, meteorites, and rare musical instruments.

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Expedition: Northern Cuisine restaurants Operating in Moscow, Novosibirsk, and Minsk. The menu includes classic dishes from the Russian North and Far East. All ingredients (fish, meat, and vegetables) are shipped in from the areas where they are naturally caught or gathered.

Siberian-themed Expedition bathhouses within bathhouserestaurant complexes or as stand-alone facilities Every bathhouse attendant has a medical education. Drinking alcohol, having sex, and swearing are prohibited on the premises. Generally operated as health clubs.

Expedition: Beautiful Siberia A friendly and compact hotel-bathhouse-restaurant complex with native Siberian remedies and recipes.

Distribution Trading companies operating in Moscow, Kiev, Almaty, Hong Kong, and New York.

Expedition – Shanghai A manufacturing office established in China in 2000 to produce goods and perform quality assurance.

Internet stores selling 100 percent of our product range Russia: www.e‑xpedition.ru USA: www.expedition­store.com China: www.expedition.cn Ukraine: www.expedition.ua Kazakhstan: www.expeditionshop.kz

Expetro One of the most dynamic business trends: a retail chain dealing in stress relief products such as toys, pillows, puzzles, and other goods designed to improve your mood.

Expedition Trophy Race Held once every two years since 2005 on a route from Murmansk to Vladivostok. Each team of six (with at least one female) drives two SUVs. Race duration: February 23 to March 8.

Expedition: Around the World A world tour in several phases on different continents. One of the project’s objectives is to identify all forms of positive impact made by our compatriots throughout the world: the influence of Russian culture on the history of other countries and peoples, scientific and geographical discoveries, and Russian architectural monuments, as well as to find people who have retained Russian traditions.

The Northern Sea Route and other regular expeditions under orange sails The Green Theater Event Agency Expedition’s event agency, tasked with organizing and holding field events: celebrations, picnics, meadows, and our own special festivals.

The Expedition Academy of Entrepreneurship and the Business Surfing School Projects in business education as an alternative to contemporary forms of university education, training workshops, and MBA programs.

Expedition magazine A glossy coffee-table magazine containing firsthand stories of travel and other happenings, along with articles on popular science and history.

Construction and maintenance of the first church in Antarctica Restoration of the Church of Transfiguration in the Tver Region Cultural Navigation Expedition’s humanitarian project, uniting people who wish to find and publicize forgotten or unknown people and places in Russia.

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Expedition: Live Music Releasing music albums in various genres from distinguished musicians we’ve met on our journeys.

Expedition: Live Film Documentary and feature films about the most vivid events and routes.

Ruyan City The company’s primary spiritual super-project. Launched November 2, 2010, in the Kozhevnikovo District, Tomsk Region.

Ruyan Investment Club Ruyan City’s backbone enterprise. A social business network promoting a portfolio of our top franchising brands. Its objective is to connect young entrepreneurs with experts and investors.

Alexander Kravtsov’s book, Business as an Expedition A brand-new ship, about to leave the shipyard.

Intentionally limiting rates of growth Once I became intrigued by bees. Specifically, why they didn’t build their hives ten meters high and three meters wide. How were new apiaries created, and who managed the swarm?

After I had studied two textbooks on beekeeping, a new maxim was added to our strategic development handbook: we must be twice as good as the bees. This meant that the old queen bee must have the freedom to fly away and build a new hive, and the new queen bee must be able to take some of the swarm and leave the hive when it becomes too small.

The other thing bees taught us was to limit a company’s rate of growth intentionally.

Don’t become a flabby broiler Groups of people live by different laws, and can be managed in numbers up to fifteen, forty, or even one hundred fifty. Beyond that point size doesn’t matter, because you won’t be able to remember everyone anyway. Of course, 73

efficiency and creative energy levels are highest in groups of fifteen or fewer. Our primary economic indicator, “net profit per employee,” and the booty-splitting principles we borrowed from the pirates encourage a leader to choose deliberately to limit the number of his subordinates. From 1995 to 1998, the Ruyan Company quadrupled in size annually. By the spring of 1998, we had six hundred employees in Moscow, plus seventeen branches with thirty employees each throughout Russia and the Commonwealth of Independent States. I was only thirty years old, and I believed the fairy tale that was constantly being spun for me by consultants and our rapidly growing internal bureaucracy of specialists in finance, security, and HR. These were many voices, all singing one tune: “When you were a small firm in your sandbox, you could afford to work this way. But now you must…,” and so on.

Figure 1 shows the three systemic components of a company in terms borrowed from the military.

[Fig. 1] Zone 2 can devour any budget, be it for marketing, information systems development, establishing an official credit history, etc. If you let them, they’ll take on loans to their hearts’ content. Many entrepreneurial toy ships have been dragged under by that kind of freight. What’s the solution?

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See Figure 2.

[Fig. 2] 1. A small, well-budgeted management company with a robust internal financial analysis function.

2. General support functions provided either through outsourcing or in a strictly limited form within profitable business units.

3. Powerful business units generating profit.

To avoid becoming a flabby broiler, you must limit the growth of the company as a whole, as well as of its parts. More precisely, you need to ensure that the rate of growth does not exceed the rate of expansion of the number of executives sharing your philosophy. Most important of all for high efficiency is that neither the central company nor any business unit should have any autonomous subdivision with more than fifteen people on staff.

Wipe away internal bureaucrats with wet rags, if you have to! Unfortunately, there are plenty of places for them to go, what with Russia’s abundance of public corporations and raw materials monopolies. There is always a chance that some of them might become entrepreneurs. But if Russia realizes that labor-saving techniques are no less important for us than energy-saving ones, we may yet find ourselves in a completely different country one day.

Which brings us to my favorite topic.

Be the master of your own destiny Imagine you’re the mother of a hungry child. The child needs to be fed, and it’s up to you to make that happen. If it doesn’t happen, you’ll be concocting excuses for a long time, about how you’re not an electrician and therefore can’t turn on the stove or fix it. Or how you’re not a chef and therefore you don’t know how to cook the food. Or that you’re not a businessperson and 75

therefore don’t know how to earn money to buy food, a stove, or kitchenware.

Or that you’re not a psychologist and therefore can’t persuade the child to eat the food (prepared by you, and not by a chef), and so on, and so forth.

If you’re responsible for a child being fed, you will easily grasp the concept of a human orchestra.

If you’ve ever run a business, you will recall such phrases as, “Sure, I can do sales, but I’m not an accountant (lawyer, logistics specialist, advertising expert, etc.).”

The crux of the matter is really that monotonous work burns people out.

Monotony and predictability kill every sign of life. Of course it’s hard to work all day as an accountant, a cook, an air traffic controller, or a nurse.

The beauty of entrepreneurship is that your job changes a dozen times a day. The result is that first you stop getting tired, then you stop getting sick, and finally you stop drawing a clear line between work and rest (which is defined as a change in activity and scenery).

And if you have that entrepreneurial spark inside you, then all limits disappear. I have personally watched dozens of people—drivers, salespeople, and even the aforementioned accountants—become grade-A entrepreneurs, once they began to play like human orchestras. Discovering their inner potential elevated them above the people around them. They became conductors of their own destinies.

Just like the spetsnaz17 A company where every employee is a human orchestra is not so much a corporation as it is a guerilla unit. In a corporation you have departments; in a guerilla band you have people.

Later on, in Vladimir Tarasov’s book about heroes, I came across the notion of a “one-man army.” He writes: A one-man army is a commander and a diplomat, an officer and a soldier, a spy and an escort, all in one.

There are armies you don’t want to battle.

They are allowed to pass, left alone, or avoided.

The cost of victory is too high to bring joy.

17 Spetsnaz, from the Russian for “special purpose,” is an umbrella term for Russian special forces under various agencies.

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Here are the armies you don’t want to battle: • Elite troops where one man equals ten. Where each member at every minute senses death’s proximity. Where dying in battle is deemed an honor. Where the soldiers are the fingers on a single hand.

• Troops descending a mountain like a freshet, sweeping away everything in their path. Once the downward hurtle has begun, it’s too late to erect obstacles. It will sweep away both the barriers and their builders.

• Troops on the way home. Super-strong desires make people superstrong.

• Troops in proximity to death.

A one-man army possesses all these qualities.

Here’s a piece of advice in the form of a joke for young officers undertaking their first big project. The place is Kamchatka. An experienced bear hunter is training young hunters how to hunt bears in winter. “W-w-when you’re approaching the d-d-den, the k-k-key is not to be s-s-scared! You t-t-take a stick, poke it around the d-d-den, and the k-k-key is not to be s-s-scared! Then you s-s-start running toward a h-hole you have d-dug beforehand, and the k-k-key is not to look back or be s-s-scared! W-when you reach the h-hole, quickly p-pull d-down your p-pants, m-make a p-pile of shit and j-jump aside! The b-b-bear slips on the sh-sh-shit and f-falls into the hole onto the stakes!” A young hunter raises his hand and asks, “What if there isn’t any shit?” “The k-k-key is not to be s-s-scared,” the instructor answers, “there’ll be p-p-plenty of sh-sh-shit!”

The k-key is not to be s-scared In the Expedition Trophy 2008 race, we had a team of Kazakh oligarchs. They had their own vehicle equipped with three TV channels; clearly, these guys meant business. President Nursultan Nazarbayev himself was keeping an eye on their progress. The team captain was named Nurlan. As the saying goes, “A Kazakh who doesn’t show off is a poor show.” He was a classic nobility type with a London education in finance. The team’s official slogan was, “No pants-pissers and no bullshitters!”

Six months after the race, we met up in Almaty. I asked him, “So, tell me, Nurlan, which are worse?” He scratched his head in a leisurely way, like a 77

true Kazakh, and said, “Sasha, I have to say, the pants-pissers are the worst!”

If you happen to share the Kazakh team slogan, let’s talk about what every aspiring commander ought to know.

Relishing uncertainty This was described astutely by the Prussian military theoretician Carl von Clausewitz in On War: It…often happens that the correction of one premise, and the knowledge of chance events which have arisen, are not sufficient to overthrow our plans completely, but only suffice to produce hesitation. Our knowledge of circumstances has increased, but our uncertainty, instead of having diminished, has only increased. The reason of this is, that we do not gain our experience all at once, but by degrees; thus our determinations continue to be assailed incessantly by fresh experience; and the mind, if we may use the expression, must always be “under arms.”

Now, if it is to get safely through this perpetual conflict with the unexpected, two qualities are indispensable: in the first place an intellect which, even in the midst of this intense obscurity, is not without some traces of inner light, which lead to the truth, and then the courage to follow this faint light. The first is figuratively expressed by the French phrase coup d’oeil. The other is resolution…

We have assigned to resolution the office of removing the torments of doubt, and the dangers of delay, when there are no sufficient motives for guidance.18

Measure thrice… and you’ll have no time for cutting When a celebrated Russian sports coach was asked what the most difficult part of his job was, he replied, “Cutting the fat.” He meant ridding the team of highly decorated athletes who were too old, mentally fatigued, or low on competitive spirit to endure the workload on an elite team that was going for a championship. Remember the film They Shoot Horses, Don’t They? Once 18 General Carl Von Clausewitz, On War, tr. Colonel J. J. Graham (London: N. Trübner & Co., 1873).

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I was talking about this with Igor Shestakov, one of Russia’s top television producers. With great sorrow, he agreed with the coach’s musings. Let me try to paraphrase him: “Someone comes to me and says, ‘Let’s create an awesome show. The kind we used to make back in the nineties, remember?’ I reply, ‘I remember. But our business is like the Olympics. A dozen years ago they were high-jumping 1.90 meters, but now it’s 2.05 meters, back first. But if you are willing and able, let’s do it.”

When it comes to “cutting the fat,” it’s easy to provoke a conflict between the values of leadership and humanity. Still, there’s a solution, and it’s connected with point A and point B: entering a project, and exiting from it.

None of us wants to live our whole life the way we run the Murmansk-toVladivostok race, traversing seventeen thousand kilometers in the span of two weeks between February 23 and March 8. But I’ve seen thousands of people who were ready and willing to live that way for two weeks.

Even if point A, which is the entry point of a project, is behind you, you should plot point B right now, being the time at which any member of your team, including the captain, may go ashore or modify the rules, which will have remained unchanged prior to arriving at point B.

An alternative solution is depicted in Figure 3, which represents the life cycles of a project.

[Caption: Fig. 3] Passionate start-up specialists, people who are brands unto themselves, bursting into the market on segment AB and conquering it on BC, start to get bored to tears, and even become dangerous, at the “cow-milking” stage on segment CD. The problem is that this stage is precisely when you make 79

the most profit. This stage requires skill, patience, and the ability to agree on profit-sharing, ideally beforehand.

The Ruyan Company has often been reproached for getting too bored to take advantage of its own success. We’re still learning to leave the tilled land for those people who have grown weary, but remain loyal to our worldview, and to separate them from the units that are still able and willing to keep up the pace, if not accelerate.

Here’s a joke about that. Two old school pals meet. One of them is handsome, energetic, bubbling with life, and driving a fancy car. The other is wearing shabby shoes, a threadbare jacket, walking lopsided with a grouchy wife at his side, and nothing is going right in his life. The first guy asks the second, “Hey, why are you so glum?” The other replies, “See, ever since I finished college, I can’t seem to figure out my job situation.” The happy guy grins, “No problem!

Just this morning I thought of a new business idea. You’ll have a car, a secretary, and your own office. I can set up the whole thing, and I only need you to do one thing. There will be two buttons on your desk: a red one and a blue one. If I call you and tell you to push the red button, you push the red. If I call and say to push the blue button, you push the blue. And we’ll split the profits fifty-fifty. Deal?”

“Deal.” Three years go by. The “button pusher” comes home from work. He’s had a great new house for a while, his wife is happy, and the business is thriving, with 40 percent annual growth and a 200 percent return on investment. He’s famous, respected, and journalists interview him. Everything’s great! Yet he’s still walking around the house looking glum. His wife asks him, “What’s the matter, why are you so glum? Look at how wonderful everything is!” And he answers, “I’m the one pushing the buttons, but the profits are split between the two of us!”

The golden envelope He who wins the silver, loses the gold.

—Expedition Trophy saying The notion of resolution, so highly praised by Clausewitz, was really put to the test during the 2006 Expedition Trophy race by a new invention called the Golden Envelope. In a nutshell, the rules were as follows. At each of the seven stages of the race, the organizers handed each team a plain orange envelope, containing the objective for that stage. But for the final stretch between 80

Khabarovsk and Vladivostok, we also handed them a golden envelope.

The instructions read: 1. You’ll be better off not opening this envelope.

2. If you decide to open it anyway, you must inform the organizers beforehand.

3. The envelope contains a difficult problem. If you fail to solve it, all the points you have accumulated over the past thirteen days and fifteen thousand kilometers will be lost, and you will lose the race.

4. However! If you do manage to achieve the objective, your chances of winning the gold will increase many times over.

The task was a puzzle, and one not for the faint of heart. It contained only numbers: encoded GPS coordinates for Palace Square in St. Petersburg, with a date and a time, which denoted how long the vehicles would be at the square. It also contained the GPS coordinates of Olkhon Island on Lake Baikal, which was along the route, as well as the date and time when the race would cross the island. The task was to decipher the coordinates of the point at which the envelope was issued, along with the working hours of the control point at which the teams could receive a stamp, certifying that they had solved the problem.

After receiving their golden envelopes, many teams kept on moving, wavering about whether or not to open them. Hence, their chance of winning the jackpot became significantly lower than for the ones who took the risk of opening the envelope right away and attempting to solve the problems on the spot. Out of twelve teams, two turned out to be the most daring. Ultimately both of them solved the puzzle, only it happened minutes after the timelimited control point had closed.

In all, ten teams opened their envelopes, with six achieving the objective.

That is how people react to the opportunities offers them.

Just as in life, the rules of each successive Expedition Trophy race become increasingly intricate. For instance, in the third Expedition Trophy race (Murmansk to Vladivostok), the envelope contained the encoded schedule of a train coming in the opposite direction, from Vladivostok to Khabarovsk, as well as certain train car and compartment numbers.

Inside the cozy compartment, a man in an orange T-shirt reposed in his berth. He didn’t come out for smoking breaks at station stops, but waited patiently to meet the teams which, on the last night before the finish, contrary 81

to any linear logic, would be racing after a train going in the opposite direction from Vladivostok. All in all, it is a beautiful thing for the Golden Fleece to be captured by those who are prepared to move faster than the rest, and not in the direction everybody else is taking.

Night alarm In 2004 we launched a spectacular project called the Academy of Entrepreneurship. For six months prior to its opening date, we searched for instructors, who had to be CEOs or owners of some of Russia’s best businesses.

We reasoned that only leaders can cultivate other leaders. Outsiders will train other outsiders, and consultants who read other people’s textbooks cannot train anybody. Our entrance exam sessions took place at two five-day meadows events: one in the Valdai Hills, and the other in Siberia.

Toward the end of the second day, the applicants already had defined their own business projects and were preparing presentations on them. We provided laptops, satellite communications, flip charts, drawing paper, and all the consultations they needed, right there in the camps. It should be mentioned that during the first few days we sifted out the psychologically unstable participants, evacuating them from the meadow.

On the third night we threw a dance party that lasted till about 1:00 a.m., and then forced everybody to turn in, pretending that we were sleeping as well. At 4:00 a.m., the following events occurred: we turned on an earsplitting night alarm, tossed smoke bombs into the chum tents, and kicked out the poles holding them up. While the applicants floundered about, trying to wriggle out of their sleeping bags, the examiners gently patted the collapsed chums with large tree branches. While this was happening, five or six orange SUVs pulled up to the entrance and blinded everyone with their headlights. (At the second meadow, we further perfected the method by lighting a fire behind the chums, after carefully dousing the area with diesel fuel beforehand.)

As the alarm music blared and firecrackers exploded under their feet, we announced that there had been an abrupt change in the situation. As a result, they wouldn’t be returning to the camp that day, and they had two minutes to collect their vital necessities to take with them. Then they set out running down the night road, holding hands. Each group of six runners was urged on by the bumper of an SUV, following closely behind. (At the first meadow they ran for one kilometer, but at the second the distance was increased to 82

three kilometers.)

Finally they came to a river, across which they had to lay a temporary bridge. Our terms were very simple: the women had to remain dry, since humanity is one of our basic values.

Meanwhile, we were fixing up our own rope bridge, using climbing gear, and going to the women and saying, “Look at those chumps, arguing over how to secure the ropes. If you think they’ll get you across the river dry, you’re dreaming. Look, our bridge is ready. Let’s get you across to the other shore, and you can wait for them there. Remember, girls, it’s just a game.”

The women who accepted our proposal were immediately evacuated to the nearest town. The Academy of Entrepreneurship had no further use for them.

Eventually the guys made it to the other bank of the river. We had picked a rough crossing area: riddled with gullies, overgrown with weeds, and cluttered with timber. Once on the other side, each team hurried to put up its chum. By this time, it was usually daybreak.

Because we at Expedition like to play fair, our camps always provide free access to alcohol and condoms. This fact makes the list of necessities people grab when leaving the camp all the more interesting: sleeping bags, cosmetics bags, and other random things. I gathered everyone in a circle and said, “As usual, I have to do everything myself, including doing your thinking for you.

None of you remembered to take sausage or vodka.” Lest they consider us cruel, I rationed a stick of sausage and a bottle of vodka for each tent. The organizers then headed back across the river on our mountaineer’s bridge, dismantled it, and departed without saying a word. The group left behind naturally mingled and met the sunrise together, wondering what would come next.

In about five hours, as they were falling back asleep, we returned and, standing up to our chests in weeds and nettles, solemnly declared, “So, you SOBs, do you think business is all about sleek, shiny cars with tinted windows pulling up to big office buildings? Do you think a presentation is when you have a laser pointer, a nice tie, and an air-conditioned office? Well, guess what: your presentations start now! Who’s up first?”

All the materials prepared by the applicants had been left in the camp on the other side of the river. They had no choice but to mount their defense right there in front of us, scoring the points that would determine the top twenty, who would be accepted as students at the Academy of Entrepreneurship.

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Now when they get together, this is their favorite topic of conversation. Of all the vivid and interesting memories they took away from that meadow, the night mobilization was burned into their memory for life.

This is a clear illustration of how the knack of being an entrepreneur is identical to the ability to be effective at moments of great uncertainty, and even to relish the challenge. Now, for another illustration, let’s travel to another meadow.

The “dry fanny” exercise The command staff of the Expedition Trophy races includes certain people who are privately known to be maniacs, capable of creating incredible difficulties for the race participants in any weather, on any terrain, and at any time of day. Once we organized a meadow for future partners who were going to open stores. We held it in the Lower Volga region near Astrakhan.

It was early spring, and approximately fifty people gathered at the meadow.

At a certain point we, meaning the command staff, got bored.

In half an hour, everyone was split up into teams of three: two men and one woman. Over the next two hours the teams had a lake fishing competition to see who could catch the most fish.

Not far from the lake was a river with a slimy and steep bank, almost vertical. While the groups were competing, the Expedition Trophy staff marked off a line with a tightly stretched string, one meter from shore, where the muck was mostly waist-deep, though sometimes it only came up to your knees.

The rules were as follows. With the female member of the team holding the spinning reels and the fish they had caught, the men had to transport her from point A (the start of the rope) to point B (the end of it) while keeping her fanny dry.

We tested the dryness of each woman’s fanny at the start and finish points.

If her fanny was wet at the finish, the lady changed her clothes, and the team had to start over.

None of us had ever seen anything so erotic in our lives. The most common position had the woman with her arms around the neck of the man in front, while her legs balanced on the shoulders of the one coming behind. The contestants’ competitive spirit was responsible for about two dozen more elaborate positions, which they assumed to the accompaniment of tears or 84

laughter.

Among the participants was a strapping manager named Stas Smirnov. He crept along on all fours, lunging with his head, while the woman was perched on his back, also on all fours, and their partner was literally “bringing up the rear”—holding her fanny with both hands.

Once they had traversed that distance, the teams ran about three kilometers through dry reeds along the riverbank until they reached a rusty abandoned barge, where the Expedition Restaurant’s head chef had laid out a royal spread for them, with fine china, live violin music, candlelight (we’re big fans of contrast), and cold champagne.

Of course the organizers were there, too, awaiting the participants.

Each team had the exact coordinates of the finish point entered in their GPS, but as soon as they spotted the barge, for some reason they unanimously decided that that was it. The first teams were already climbing aboard, showering, and popping champagne corks. The other teams kept arriving, one after another, shortening the distance.

But the finish point was a hundred meters from the barge, chest-deep in the muck.

Enjoying the show with us was Vadim Uskov, head attorney of the Expedition Trophy race. When virtually all the teams had gathered on the barge, he remarked innocently, “Looks like you guys didn’t read the rules very well, once again. And you didn’t bother to check the finish coordinates against those of the barge.”

The whole “exercise” culminated in fifty freshly showered people leaping overboard into the muddy water. Covered in dirt once again, women’s fannies were no longer on their minds.

And this brings us to the topic of corporate celebrations.

New Year’s Eve twice a year Every year at the beginning of December we throw a big and fun-filled corporate event for the best salespeople and managers working in the Expedition chain of stores. But in 2009 the stars aligned differently.

It so happened that we had a young and vivacious team, which included myself, Taras Sharyga, and Vasil Gazizulin—the masterminds behind our sailing trips and the architects of the upcoming Northern Sea Route project.

Other members of the team included a film director from Samara named 85

Sasha Fedotov, with whom, after the Seliger 2009 youth camp, we had already founded a Film and Animation School in Samara, his girlfriend Alena, and Arina, my future fiancée, whom I was just beginning to court.

We liked hanging out together, watching movies, and tossing around script ideas. Thinking ahead to the next corporate event for the sales staff, which was one week away, I threw out the following idea, “New Year’s twice a year!”

And why not? We rarely have a chance to celebrate the New Year all together, on account of business trips to other cities or even countries, but we had the means in our hands to rectify the situation.

Greatly inspired by the idea, we wasted no time in deciding that a proper New Year absolutely required a New Year’s presidential address. I composed the text, and then: lights, camera, action! I recited my address to the nation, with only my upper body on camera, dressed in jacket, shirt, and tie, while my lower half was in shorts and slippers. Taras and Vasil were slicing carrots in the background, wearing orange T-shirts and green berets; Vasil was also smoking. It should be mentioned that Vasil Gazizulin is a devout Muslim who never drinks or smokes, and almost never swears. Once the address was recorded, we began to brainstorm on script ideas. During this process it became clear that the New Year would be celebrated on an island in the Volga River.

The Volga was partially, but not yet entirely, frozen over. The action unfolded like in the old refrain: “River crossing, river crossing, left bank, right bank…” It’s night. A hundred and fifty people, a hundred of whom are women (the majority of them in high heels), are pushing across the Volga in iced-over boats at around minus 12˚ C. There were already several dozen chum tents on the island and bonfires had been built. Another thing we had planned was a Grandfather Frost19 show, since on my last birthday I had given all my guests red down parkas, and now we had plenty of them. The performance was shot for music video clip. We divided the salespeople into three teams, which had to search the island using GPS coordinates for the spots where their sets of ingredients were buried. There were three sets: “Everything you need for pelmeni,”20 “Everything you need for Salad Olivier,” 19 Grandfather Frost (Russian Ded Moroz) in Slavic cultures plays a role similar to that of Santa Claus. He brings presents to children in person at New Year’s Eve parties.

20 Pelmeni are dumplings originally from Siberia, made of a filling wrapped in thin, unleavened dough.

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and “Everything you need for layered herring salad.” In the meantime, the organizers built the stage.

One of the essential obligations of guests at our New Year’s party was to give each other presents. For Arina I had made a CD with a slide show and an incredibly romantic song; her gift for me was a painting she had done.

The rest of the evening followed a typical New Year’s script: Grandfather Frost and Snegurochka (Snow Maiden), a circle dance, and general partying.

By 1:00 a.m. it was clear that the festivities were a smashing success. Even clearer was the fact that, as the technical organizers, we were not about to risk leaving 150 inebriated people on the island overnight in freezing temperatures. Consequently, between 1:00 and 2:00 a.m., 110 people crossed the Volga again in those same ice-coated boats. These evacuees spent the night at a hotel on the other shore. Another forty remained on the island, primarily the organizers.

In a noble gesture, I ensconced Arina and the film people in the most comfortable chum, put some firewood in the heater, and went for a walk around the camp, feeling poetic and philosophical. I sat down by a bonfire with the technical team, where a couple of tired wizards, Sasha Kato and Sergei Volkov (aka Sabertooth), were cooking shrimp in a bucket. Over mugs of whisky, the conversation flowed easily. They answered to Lena Biryukova, a mega-reliable gal who was an indispensable member of the Expedition Trophy staff. Because of how much responsibility she carried, there was a certain amount of testiness in her communications with a lot of people. I sat back in a folding chair, poured myself some whisky, sampled the shrimp, and proceeded to tell my associates another funny store about our work.

Out of respect for the reader, I’ll tell the story here without the obscenities, though, in my humble opinion, that will take away from the experience.

Picture a circus tent. The master of ceremonies enters the arena and proclaims, “Ladies and gentlemen, welcome! We will begin our evening of entertainment with our star act—the Flying Crocs!”

The trainer leaps into the arena and snaps his whip, at which a family of crocodiles runs out: a papa croc, a mama croc, and a baby croc. The trainer gives another demonstrative snap of his whip, the crocs run around and around, and…take flight! Suddenly the baby croc lands softly on the shoulder of a redheaded girl in the front row and says, “Man, if you only knew what they do to us!”

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The trainer cracks his whip again, the crocodiles take a bow and quickly scamper backstage. The master of ceremonies reappears and says, “Ladies and gentlemen, we will continue our program with our new star act—the Flying Hippos! Only I must warn you, in the thirty years we’ve been trying this act, it’s never succeeded.”

The trainer leaps out and snaps his whip, at which a family of hippopotamuses runs out: a papa hippo, a mama hippo, and a baby hippo. The whip swooshes through the air, the hippos run around and around in a circle, looking like they’re about to take flight, just a little bit more, they’re almost there…failure!

The trainer cracks his whip and the hippos leave the arena. The MC addresses the audience, “Ladies and gentlemen, the act failed once again! But, so you won’t go away from our circus disappointed, we’ll do an encore of our star act— the Flying Crocs!”

To applause from the audience, the trainer lashes in every direction, and the family of crocodiles runs out again: the papa croc, the mama croc, and the baby croc. The trainer keeps cracking the whip with rising vigor, with whistles and flourishes, and the crocs run around in a circle and take off! The papa croc, the mama croc, and the baby croc are all airborne! Cautiously, the baby croc again glides onto the shoulder of the redheaded girl in the first row and quickly whispers in her ear, “Man, if you only knew what they do to us! But that’s nothing compared to what they’re doing to the hippos backstage right now…”

No one laughed much at the punch line.

“Man, Sasha, if you only knew what Biryukova does to us!” Sabertooth said through clenched teeth.

After sitting for a while with my buddies, I went for a stroll through the nighttime woods. The camp was a sight to behold, illuminated by the glowing tents, with snow on the pine trees and smoke rising from the bonfires.

Then I noticed a commotion. We were the only ones on the island, so nothing bad could have happened. Nonetheless, I heard screams and saw people running toward the chum where I had put my charges to bed. I’m no stranger to sleeping in tents, and I know the fire safety rules very well. I swear to God, the heater I had loaded with wood was over a meter away from any of my friends’ sleeping bags. And yet, eyewitnesses reported that when they awoke, all the sleeping bags around the edge of the chum were already on fire. Even more improbable, they said that my sleeping bag, which was farthest away from the heater, was the first one to catch fire.

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These were professional-class down sleeping bags, which meant that a blizzard of snow-white down soon filled the chum and the air outside it. No one was burned and everyone was cheerful, though my friends seemed to have gotten quite a scare. We laid out new sleeping bags under the sky by the bonfire (the way real men always sleep on my birthday), and poured some whisky for the “survivors” to calm their nerves. I nestled in my own bag nearby.

Business is always a show Come morning on the island, we filmed a music video for the song “About Grandfather Frost” by Grigori Danskoy, a friend of ours. Our main props would be those brand-new red Expedition down parkas I had given my winter birthday guests the year before. We also had fake white beards. According to the script, when we got to the third verse the Grandfather Frosts would climb into Dyrchik, our favorite amphibious vehicle,21 and ride down a steep slope onto the thin, easily breaking ice.

“But, Sasha, we’re gonna drown,” said Kato.

“Hey, Richard Branson says that all business is show business. You know perfectly well that the water’s only up to your chest there in the summer. You won’t drown, don’t worry,” I replied.

Three weeks later we continued filming the music video on Kamchatka.

The mother of Expedition’s senior officer Taras Sharyga had procured an accordion, a violin, and a drum from the local orchestra. The film crew that had not burned up in the chum tent, along with Taras Sharyga, Vasil Gazizulin, and myself in our Grandfather Frost outfits, boarded an orange helicopter and were off to the Khodutka hot springs, where my old buddy Victor lived in his hut.

According to the script, each Grandfather Frost would play an instrument while sitting in a snowdrift at thirty below, and Arina, in a mermaid costume, would swim in the hot springs, where the water temperature was plus 40˚ C. After the filming, we went swimming.

What I love about the Khodutka in winter is watching the steam eddy up from the water and, despite the clear sky, turn into a steady snowfall before your very eyes.

21 “Little Hole”; the story of the ATV’s amphibious transformation is told in Chapter 13.

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Suddenly, on the other shore, out of the frost-covered forest came the hermit monk we had heard about from Victor. Those of us who were already dressed walked over to our visitor and struck up a conversation. I continued skinny-dipping, while listening in on their exchange. When it became clear that they were discussing important things, I climbed out into the snow, covered myself with my hand, went over to my associates, and introduced myself. “I understand everything,” the hermit said, “but only about fifteen percent of what you do in your life is important, and the rest is merely excess fuss.” He put on his skis and went off into the forest, leaving me to ponder how to increase precisely this 15 percent figure, rather than Expedition’s millions of dollars in current assets. I’m still pondering.

Concerning orange and black underwear One day Taras Sharyga and I were returning from Ruyan City on a NovosibirskMoscow flight. Naturally, we were in uniform: orange T-shirts and jackets with logo patches. Unlike me, Taras is not afraid of flying, so he was sober.

Sitting in front of us was a cheerful group of Siberians: two girls and a guy.

One of the girls turned around and asked Taras playfully, “Can you promise me a discount at your Novosibirsk stores?” She added a provocative comment about our orange T-shirts.

Unruffled, Taras responded that true Expedition warriors wore not only orange T-shirts, but also orange underwear. To prove it, he unzipped his jeans and flashed a pair of orange briefs.

At this point I couldn’t help butting in with, “Expedition’s younger officers may wear orange underwear, but the senior commanders wear all black.” My black underwear bore the slogan, “If I can’t remember it, it didn’t happen.”

That’s when their male companion turned around and said, “The slogan I really like is, ‘People don’t leave us, they fall behind.’”

We had flown from Moscow to Novosibirsk to attend the grand opening of a restaurant. There were thirty of us in all, including the musicians. When the plane was boarding, everyone was sober and merry, but civil. A woman and her husband sat down next to me.

“How much does it cost to join your club?” she asked.

I didn’t know what to answer. The plane took off. We got our supplies and wet our whistles, then the musicians broke out their instruments and delivered a performance that would have put a symphony orchestra to shame.

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“Stop that racket at once!” my neighbor protested indignantly.

Oksana Nikonenko replied to her, “Now, don’t you want to know how much it costs to quit our club?”

Budgeting energy In 2001 we formed our first internal investment committee. It happened like this. A circle of six shareholders and senior executives was listening to presentations by the chief execs of individual business units on their financial plans for the coming year.

The idea was to combine the approved budgets of each group into a consolidated budget for the whole company. This would enable us to assess the state of the world and predict the future.

Of course, “the magic of controlled chaos” (that indispensable formula from our strategy) needed to be at least partially regulated, seeing as how our company was growing rather fast at the time. But the more I listened to the speakers’ formal tone and surveyed the pious faces of the experts, one thought pounded louder and louder in my head: Our organization doesn’t need a financial budget.

Here’s where the idea came from. Anyone with a technical education will tell you that the derivative controls the function. For liberal arts grads, let’s say that speed is controlled through acceleration. When a business yields a profit, that’s a consequence of how effective the group leaders and their teams are.

That’s when I decided that we needed to budget not money, but rather the work time of our top executives.

We took the annual profit plans and divided them into weeks, days, and working hours. A side effect of this exercise was the answer to the question of what is the minimum return for which a CEO has the right to spend his time. But the main result was our realization of the value of our work year, past ones as well as current. This allowed us to draft individual plans in accordance with the future growth rate of this value.

(For example, say I make twelve hundred rubles per year, i.e., one hundred rubles per month. If I work twenty-five days per month and ten hours per day, I make four rubles per day or forty kopecks per hour. It follows that if somebody gets me to spend three hours on an issue that’s worth ten kopecks, it will make me work at an efficiency rate that is a loss-maker both for me and 91

for the company, and I have no right to do that.)

To put it more plainly, you need to determine a minimum value for an issue you can afford to work on. Then life will suddenly become easier and more fun. Afterward we came to the conclusion that budgeting work time also flows from budgeting energies. That’s because a joyful and inspired person can do ten times as much work as the same person could do if he were sick and discontented. And since energy budgeting couldn’t be accomplished via simple, traditional methods, we decided that we needed to improve our working environment.

This decision was one of the contributing factors in the creation and development of the Expedition brand as a lifestyle. But that came later. In the meantime, I want to sum up the outcome of our long-term planning and time-budgeting discussion with a story.

My roommate in the second year of college was Ilya Friedman—a peculiar blend of a Jewish mathematical genius and a Siberian boxer, with a fiery and slightly smug temperament. We became friends. Our room was probably one of the wildest in the entire sixteen-floor dormitory, but this story isn’t about that. After graduating from college, Ilya launched a brilliant career at SRI International’s Artificial Intelligence Center in Pereslavl-Zalessky, and our paths parted.

Sometimes, watching the rapid evolution of digital technologies, I would remember him, and I supposed that Friedman was somewhere out there in the West, masterminding a big project like Google or Oracle.

In the summer of 2009 (eighteen years later), a customer came into the Expedition Restaurant in Moscow. Films of our journeys run constantly on the second floor of the restaurant, and they often feature footage of me.

“Does Shurik Kravtsov work here or something?” Friedman asked a dumbfounded waitress, and left his phone number.

I don’t like being called Shurik. As a matter of fact, Ilya Friedman was the only one who ever called me that.

We met up. It turned out that when scientists fell out of favor with the Motherland, Ilya had returned to Omsk. Here is our conversation, verbatim: “Hello, business,” Friedman said.

“Hello, Ilya,” business replied.

Friedman was quiet for a moment, then added, “Afterward, some were killed, and some left town. Soon I was the only one left in the city.”

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The years hadn’t contributed modesty to either of us. I briefed him on everything I’d done in the past fifteen years: tank farms, gas stations, cell phone stores, auto dealerships, entertainment and commerce facilities, hotels and resorts. I didn’t remember everything, and I don’t think he did, either. The most memorable moment in Friedman’s story was when he had sold so many Scania trucks in Siberia, that the president of that multinational had flown to Omsk by private jet, with a refueling stop in Volgograd, just to meet him.

We chatted for several hours, hoping to enrich ourselves with each other’s wisdom. I took my time in giving him a synopsis of what this book was going to cover.

“Myself, I don’t have much to share,” Ilya said pensively. “Except that several years ago I took a sheet of paper and, on the left side, listed all the partners and subordinates with whom I had something to discuss on the subject of business. And then, like someone trying to break a bad habit, I forced myself to adhere strictly to this list.”

Open sesame!

This is the third story from my “idea brothers.” For a long time it was believed that, once released into the vaginal canal, the quickest sperm is the one that gets to fertilize the egg. But modern science has demonstrated that this is not the case. First of all, there are two Fallopian tubes. So we can forget about those quick, agile, clever, and promising sperm that pick the wrong tube.

That leaves the quick and agile sperm that picked the right tube. But the right tube is uneven, and they’re in for a bumpy ride. Most of the quick, agile, and clever sperm bang their heads against the ridges, arguing their positions, their corporate philosophy, the essence of their worldview, and so on. Their chances of making it aren’t any better than those of the sperm that picked the wrong tube to begin with. Now we’re left with the sperm that picked the right Fallopian tube, and didn’t bang their heads against the ridges, but took the main route straight to the egg. The belief that the quickest, smartest, bravest, and most agile sperm, the one that reached the egg first, would also be the one to fertilize it, has been disproved by modern science. The fact is that a large number of sperm reach the egg simultaneously. They surround the egg on all sides, and the egg then scratches its little egg-head about which one to open the doors to. Ultimately the egg admits only the one that suits it. As for 93

the other quick, agile, and clever sperm that picked the right tube, avoided the ridges, took the main route, and reached the egg all together, they’re left just as free as the ones that didn’t.

As usual, the idea brothers drew two paradoxical conclusions. The first conclusion was quite lovely. “Sasha,” they said, “just like us, you have spent the last ten years broadcasting your personal and corporate values to one hundred employees. But the egg in this scenario is far smarter. It admits only those which are compatible, whereas those who aren’t a perfect match have no chance of getting in.”

The second conclusion was even more interesting. “Sasha, you’re trying to rule the world by male violence, just as we’ve been doing. But you’ve heard from your friends many times that the whole world wants to surrender to you out of love.” This is a widespread stereotype of business owners, general directors, and other CEOs. But the right way is to rule the world the way that egg does, by making use of temptation. Then all the cleverest and most talented sperm will work as hard as possible.

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Chapter 9

Partnerships and responsible investing Greed begets poverty.

—Folk wisdom

Find out what he likes Partnerships may be external, internal, or mixed. External partnerships with other organizations are especially important for a company just starting out.

Ideally, the captain of a friendly vessel (or his representative in your market) should like and trust you. If the two companies’ interests match, that will be the best foundation for a formal relationship.

Some examples will illustrate the point. One March we were sailing the stormy Aegean Sea. Our captain was Sergei Sergeyev, an experienced Siberian seafarer and a psychologist. One night when we were both on watch, we got to talking.

At the time my relationship with my oldest son, Ivan, was in rough waters, as he went through the turbulence of his teenage years.

“You should find out what he likes, and force yourself to like it, too,” Sergei said.

Here’s another example. After we had met several times, an old Italian restaurateur by the name of Enrico Pegan became a believer in the Expedition Restaurant concept. Once he professed to me, “Sasha, for you I would be willing to put my hand into a fire.”

Sometimes it’s possible to establish mutual fondness between large teams of people. This kind of mutual sympathy led to two international soccer matches between the employees of the Zobele Group (the Italian manufacturer of the world’s top-selling mosquito repellent) and the staff of Ruyan, which was selling their product under the Raptor brand.

Once a partnership has been built, you shouldn’t rest content, or it will crumble before you even realize it. With some sorrow, I must add that this statement also applies to family life ().

I reckon that external partnerships have no expiration date, as long as they are built on mutual interest and respect.

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A souvenir from Red Square On a chilly November day in 1996, a young Italian named David Gaspari came to Russia for the first time. He had just been promoted to a top position, and had been invited by the management of a young Russian company called Ruyan, which had bought five hundred thousand dollars’ worth of Italian Speera brand products the previous summer. The Zobele Group owned the brand.

Our negotiations went on round the clock for three days. During the day we held them in the office, moving on to restaurants in the evening. On the next to last night, we ended up in Red Square. The paving was dug up in one area where repairs were under way, and we even managed to give David a Red Square cobblestone as a keepsake.

Our conversation went as follows. We offered to purchase one and a half to two times more of their product than the previous year, if the payment and shipping terms remained the same. (In 1996 we had paid for the merchandise up front.) For an additional 10 percent discount and a two-month payment deferral, we would order four to five times more than the previous year, register the Raptor brand, invest in TV advertising, and become the undisputed leaders in this market.

“Do you realize the risk I’d be taking?” David said. “You want me to lay my head on the block! You guys are young, this is Russia, and I haven’t even been working at Zobele all that long.”

“You have a good sense of people,” I said, looking him in the eye. “We are not going to cheat you. For us, that would really be laying our head on the block.”

The upshot was that our sales grew from five hundred thousand dollars that year, to over two million in 1997, and then five million in 1998. Within three years we became Zobele’s fourth-largest partner. The top three were American-based multinationals which controlled the entire global mosquito repellent market. In Russia, however, they fell by the wayside.

A fur coat for Gabriele When you and your partner have taken a liking to each other and have developed a measure of trust, it’s important to keep strengthening the relationship. If you must part ways, do so gracefully.

There was one particular lady from Germany who had done quite a 96

lot to help us establish a working partnership with the management of Salamander. Her name was Gabriele. Our friendship had made it possible to get a dialogue going between Germans and Russians, which was no simple task. This, in turn, boosted Salamander’s sales in Russia by an order of magnitude. When Gabriele was leaving the company, I did the following.

She and I were driving along Kutuzovsky Prospect. We stopped at the most expensive fur salon in Moscow, which I had visited beforehand to pick out a fur coat for her. I said, “Gabriele, you look like you’re the same size as my wife. Would you go in with me for a few minutes and try on the coat I’m getting her?” We walked in, she tried on the coat, and then I said, “I was fibbing, you know. This coat isn’t for my wife, it’s for you.”

And I left. She stayed in the car, crying.

Controlling the tempo, and the art of coordination Now let’s turn to internal partnerships. They differ from external ones chiefly by the fact that they exist and develop inside the territory controlled by the head of the company. For this reason, any changes in the life priorities or the rate of development of the parties to such partnerships need to be coordinated.

Sometimes the person who was your most ardent and tenacious companion only yesterday becomes a weary veteran, weighted down by the decorations he or she has received for conquering new markets, and far more comfortable exploiting those than conquering new ones.

Conversely, sometimes yesterday’s greenhorn will mature and acquire enough internal fortitude to lead his own flock.

In one of his lectures, the distinguished St. Petersburg thinker Sergei Borisovich Pereslegin advanced the idea that Ruyan City would become a “special place for controlling the tempo.” I think that the art of preserving fruitful internal partnerships for the long term is the art of patiently interweaving different tempos and reconciling worldviews that are shifting, while preserving certain basic shared values.

Here is where the advice I mentioned above may come in handy: that if you are at point A, now is the time to plot point B on the time horizon, as the point at which your partnership terms may be renegotiated. (One idea currently under intense debate in the inner circles of Ruyan City is three97

year marriages with an option of extension.)

The promise of interlocking ownership In my opinion, the most promising partnerships today are mixed partnerships. I’m talking about joint ventures with interlocking ownership.

The idea as such isn’t new. Cross-shareholding arrangements involving small stakes are widespread among family-owned businesses in Italy, as well as Japanese companies.

One time in Tokyo, our partners from Sumitomo decided to show our exhibition team their national style of striptease. It was too physical for our taste, so we decided to head to our hotel. Out on the street in Tokyo at night, taxicabs were passing us, one after another, but our Japanese colleagues didn’t hail them. When we asked them why not, they explained that Sumitomo had a corporate relationship with a company whose cabs were white, but all the ones that had passed us so far were yellow and black.

Mixed partnerships allow you to find solutions to predicaments which arise in internal partnerships. If one team moves out ahead, taking up new projects, then the ones who stayed back to “hold down the fort” should get an ownership stake in the fort. Or if some entrepreneur extraordinaire starts up his own corporation, it is reasonable for his partners to expect a percentage of its future profits, in exchange for support and the experience of upholding common interests.

It is a given that active shareholders, which is to say nonpassive shareholders, bear the greatest responsibility for a company’s future.

I feel that God himself has commanded us to share this responsibility, just as we share dividends. On the one hand, we share with our employees, cultivating them as partners. On the other hand, rapid development allows us to share with new partners who possess various resources or control certain territories. I think that Genghis Khan, like the Roman emperors before him, made masterful use of the institution of mixed partnerships to conquer new markets and maintain control over the old ones.

I envision the Ruyan Investment Club, Ruyan City’s backbone enterprise, as just such an institution, hosting the broad development of interlocking ownership. I find myself wanting to proclaim, “Entrepreneurs of the world, unite around joint ownership and fundamental human values!”

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Deep personal communication Let’s go back to Japan. As a rule, looking at performance indicators, or making the acquaintance of companies quickly and formally by attending presentations or meeting their management, is like examining the tip of an iceberg.

Once, a Ruyan delegation set out to study the Japanese market. Our Japanese partner at the time was the giant firm Sumitomo, which had a subdivision producing chemical ingredients for mosquito repellents. As a leader in the Russian market, we were important customers for Sumitomo.

The Japanese readily responded to our request to come, and said they would meet us at the boarding ramp of our plane, escort us everywhere we went, and take us back to the ramp when it was time to leave. When we proposed that they arrange a meeting at their offices at a specific time, but otherwise allow us freedom of action, they suddenly responded, “Then don’t bother coming!”

After a correspondence that dragged on for six months, agreement was finally reached and we flew off to the Land of the Rising Sun. We were indeed escorted everywhere we went. Even at our hotel, they would come and meet us at the door of our rooms, rather than downstairs in the lobby.

Our trip was planned for a week, and by the third or fourth day we were worn out by this hospitality. Our hosts were also tired. Nightly restaurant outings vividly exposed our Eastern neighbors’ inability to keep up with us in the alcohol department.

Toward the end of the trip, when we had already rehashed every business and personal issue a hundred times, we happened to touch on the topic of sticks: little green incense wands that repel insects when they burn. We had not known that Sumitomo made them, but they turned out to have a whole plant in Malaysia. At the time, Ruyan was manufacturing the same product in Indonesia. In less than five minutes, agreement was reached on shifting production to our bigger and more important Japanese partner. We bought around one million dollars’ worth of sticks over the next three years.

The point of this story is to illustrate the importance of feeling out the submerged part of the iceberg. Whether through long talks on train rides or around a bonfire, or hanging out at hotel bars, you are sure to acquire far more important information than anything you’ll get from a presentation or an exhibition booth. In addition, these occasions are an opportunity to build 99

a relationship in which people begin to have a personal commitment to each other.

Remember that German military study? I would say that the technique of deep personal communication was the major lesson we took away from our trip.

Three principles and kicking under the table Now I would like to share an illuminating and sad story about a partnership that was lost.

Throughout our history, one of the most exemplary Ruyanites, in both spirit and action, was Marat Sharipov. We worked together starting in 1995. He rose from warehouse manager (at the very outset) to the position of head of our trading company, and became a stellar brand-maker. He and his team at Ruyan created the Forester brand, which to this day is one of Russia’s leaders in the category “Everything for picnics and barbecues.”

There were three shareholders: Oksana Kapustina, Marat Sharipov, and myself. We were more like a family than business partners. It felt awkward and uncomfortable to establish rules, set objectives, and dot our i’s and cross our t’s in contentious situations.

At the time, the main distributor of Forester in the Far East was a large company based in Khabarovsk, which went and replicated all the Expedition and Forester products under its own label. I saw this as both a slap in the face and a threat to our long-term plans in the Far East region. In Marat’s opinion, however, its sales volume was so high that we couldn’t afford to react based on principle. Expedition was already developing rapidly at the time, and I felt that we were strong enough to conquer any regional market without relying on local players.

In November 2008, Marat and I spent several hours discussing the situation, while sipping dry white wine with a group of long-time employees who were citizens of the Ruyan corporate state. At a certain point, when we weren’t exactly sober, I said what I hadn’t been able to bring myself to say before.

“Marat, imagine that I’m your wife. I’ve been slapped in the face. And you, my husband, respond by saying, ‘So what? This guy is selling a container and a half for us every month!’ That’s how you’re handling the situation in the Far East.”

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Marat himself is a man from the East and a man of principle, which means he has a hot temper. He blew up, and we took the quarrel outside.

It was night, and the first snow was falling. We nearly came to blows.

Marat shouted at me that I was still treating him like a child, but he was an adult, and no one had the right to speak to him like that, no matter what authority I had. In short, it ended in an explosion, with the shrapnel wounding everyone who was there. It became clear that Marat and I were parting ways.

I thought about what had happened for a day or two and then consulted our attorneys. They advised me that in a “divorce,” the Golden Share rule would apply, whereby the one who names the highest price for buying out the company gets to buy out the other’s stake.

I knew that Marat didn’t have the money to buy out my stake in Ruyan, while I did have enough to buy him out, which meant that I could dictate the price—and that was absolutely justified from the standpoint of business, or of any power struggle.

I called Marat and said, “You say you’re a big boy, so I won’t speak to you like a child. I’ll speak to you like an adult. At this moment I estimate your share in the Ruyan Company, including all the brands it owns, at seven million dollars.” This was a lowball offer. I added, “Marat, I strongly suggest that you agree, because my time is precious. This time tomorrow your share will be worth six million dollars.”

At the same time the next day, I called him back and repeated what I had warned of, word for word. “In the past twenty-four hours the price of your share in the Ruyan Company has fallen by exactly one million dollars.

I advise you to agree. We’re big boys now, right? Excellent! I’ll call again tomorrow at the exact same time, when your share will be worth another million dollars less. Otherwise, you can always buy out my share.”

My share was four times bigger than Marat’s, and I knew that, try as he might, he would never scrape together enough to buy me out. Another day went by. I sat there, looking at the telephone. It was almost time to make the call. I knew it was in my power to bankrupt Marat, but something wouldn’t let me do it. I remembered the words he had spoken twelve years before: “Once we cross that line, we can never go back.”

I took a sheet of paper and wrote down three principles to guide further negotiations with Marat. The first principle: don’t go against your 101

conscience. The second principle: don’t drag this thing out. The third principle: don’t compromise Ruyan’s economic interests.

Negotiations of this nature usually take place at legal offices. The next day we ended up in the office of Vadim Uskov, the irreplaceable chief judge of the Expedition Trophy race, whom we all trusted. Marat had two financial consultants with him. I had only Anatoli Skrynnik, my former personal chauffeur and presently the leader of Orlenga, our company in Nakhabino.

Skrynnik had precise instructions. He had memorized the three principles, and his job was to kick me under the table every time he thought I was violating one of them. I’ll repeat them: don’t go against your conscience, don’t drag out the negotiations, and don’t compromise Ruyan’s economic interests.

It was all over within half an hour. Marat was not damaged financially, but I had to calculate his share myself, because he was in no condition to do it.

A snapshot as reliable as a Kalashnikov The great investor Warren Buffet says that the overly complex financial reporting system often distracts investors and managers, and that all you really need to know is your actual return on investment. I consider this a brilliant insight.

Back in the mid-1990s we developed our own format of management accounting, which has remained essentially intact to this day. In our corporate lingo we call it a “snapshot,” and it comes in two varieties: actual and estimated. In essence, the actual snapshot is an instant digital picture of the company’s overall economic state at the end of the last business day of the month. It includes “pluses,” such as merchandise in warehouses, all forms of money, fixed assets, and so on; and “minuses,” meaning all types of financial liabilities. If you subtract the minuses from the pluses, you get what we refer to as “internal resources for running the company.” And if we subtract from this total as of October 31 the total as of September 30 (provided both were business days), we get net real operating profit/loss.

It’s a profit if the business unit has had a good month, or a loss if not.

For the estimated snapshot, things are simpler. You take the turnover data, calculate the profit margin, and deduct from it all recorded expenditures.

The resulting number is the estimated operating profit/loss for that period.

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If we were living and working in a vacuum and 100 percent of our data were accurate, the actual and estimated performance would match.

In reality, however, the two sums never match. The genius of snapshot calculations lies in explaining the nature of the discrepancy.

It is very important for the head of the business unit not to delegate responsibility for preparing and assessing the snapshots to the accounting department. In fifteen years, out of the hundreds of bookkeepers I have seen involved in the process, I can recall only two or three who actually grasped it. Such exceptions only prove the rule. I can also recall seven or eight chief executives who failed miserably in managing projects, for the sole reason that they couldn’t get beyond their stereotypical belief that only financial specialists could get the concept of variance between the snapshots.

Another potential subtopic might be the issue of how to appraise tangible and intangible assets (brand, reputation, patents, exclusive contracts, etc.), but that would take us into the domain of “higher art,” especially in Russia (J). And again, I cannot recommend anything better than an expert estimation.

A game of Russian whist22 in the Moscow– Dnepropetrovsk train Our lives in summer are carefree. We work at our meadows, putting up chum tents at campsites near the water. What about winter? Well, there’s a solution for winter. At the very outset of our Expedition path, we learned to use trains as mobile learning centers (it should be noted that trains are for Russia, what ships are in Europe). Now, because of the Ruyan Investment Club’s pivotal role in Ruyan City, we urgently needed to implement a single format for administrative financial reporting, instituting the snapshot system for all our current and potential business partners with whom we have mutual equity participation.

For a long time I had been hearing about a magnificent new bathhouse complex in Dnepropetrovsk called Tsunami. For several years I had 22 Russian whist is one name in English for the card game Russians call preferans, a plain-trick game with bidding, played by three players with a thirtytwo-card piquet deck. Popular in Eastern Europe, it is a version of preference, which descended from other eighteenth-century card games, including the Spanish game ombre, the French ones called quadrille, and Boston whist.

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wanted to see it, but never could get there. Finally, one day we rented a compartment car and hitched it to the Moscow-Nikolayev train. There were twenty-five of us in the railcar. We decided to study snapshot variance via the game of Russian whist, since tallying up the pool in that card game closely resembles clearing accounts between shareholders.

We even invited a professional whist player-instructor to come along.

We had seventeen hours of training on the way, then four hours at the bathhouse, followed by another seventeen hours of review on the way back. As a result, the concept of a single reporting standard quite naturally settled into our heads. The expression “Don’t get all steamed up!” was definitely not relevant to this case.

It’s better not to be in a hurry when reviewing and trying to digest the results of a snapshot comparison. You may drink a cup of coffee or a glass of wine, sit by a bonfire or lounge on the beach, listen to your inner voice and reflect on your life strategy. What is the current value of your work hour and how do you view that? Ultimately, who’s hunting whom: are you after work, or is work after you?

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Chapter 10

Marketing?

He who knows, does not speak.

He who speaks, does not know.

—Lao Tzu I have never accepted the meaning of the word marketing. I think it serves to mask the attempts of consultants and those who proudly call themselves “marketing specialists” to shirk responsibility for end results, while pocketing a great portion of the actual budget along the way. I also greatly dislike the word producer, for two reasons: a) it expresses nothing, and b) it is not Russian.

However, it gives you the essentials. Basically it means a concentration of activity in one project with a clear and quantifiable outcome. This is why our company has had no marketing specialists (to say nothing of a marketing department!) for the past ten years. On the other hand, we have people with expertise in creating and developing new products.

Competition is not what defines skillful business practice; in fact, a skillfully run business tends to be a monopoly, even if only temporarily. When we scope out a new market, whether new by virtue of geography or a new type of activity, then, following the classification given by Jack Trout in Marketing Warfare, we attempt to identify three types of player in that market: the leader, the challengers, and the guerillas.

Just like in geology At the dawn of our company, we used geological prospecting methods to determine market niches, a task not unlike actual prospecting. Charles Lyell’s principle of actualism postulates that the geological forces operating today have always operated in the universe. James Hutton formulated this concept with the phrase “The present is the key to the past.” In other words, the method of analogy must be utilized.

When surveying and prospecting for oil and gas, geophysicists-seismologists and gravimeter and magnetometer operators lead the way. They chart the contours of potential zones using different methods, and then overlay them on one map. Finally, an exploratory hole is drilled at the convergence point of all potential zones.

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We tried different methods of gathering information on potential market niches, and wherever we saw potential, we would secure factual information on sales. We used Lyell’s principle to extrapolate statistics from foreign markets to Russia.

This method was later supplemented with Jim Collins’s Hedgehog Concept, presented in Good to Great. Its essence is as follows: Draw three circles. The first encompasses whatever yields the maximum profit, the second includes everything the company does better than its competitors, and the third is what the company’s key people like to do most. Overlay the circles, and concentrate your activity on where they intersect. It took us a long time to combine the overlaying of circles from the Hedgehog Concept with the overlaying of potential market niches, determined on the basis of our philosophy. This exercise should be done regularly for purposes of selfmonitoring.

High-speed product development In 2000–2001, the Ruyan Company constructed a new product development method that significantly outperformed those used internationally. In Russia, it was absolutely unique. Concurrently, we opened an office in Shanghai, dedicated to quality assurance for the products manufactured for our brands.

We had several project teams, headed by our exhibition specialists. Each team was working independently on brand development, as well as product development for the brands. High speed was achieved as follows: 1. We had global information about the ingredients for each item of merchandise; 2. We all knew how to utilize the “everything’s already there” principle, according to which the reason you may be lacking a needed resource is that you simply haven’t yet noticed where it is (quite often, right under your feet); 3. Cost of goods sold was defined not only as purchase price + customs duties + delivery costs, but primarily in terms of transaction volume and time spent on developing a particular product; 4. Developing brands and products became fashionable in the company. Our independent groups with powerful leaders essentially began to compete with one another; 5. Our price-quality ratio was the best on the planet.

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This resulted in the emergence of brands such as Gardex in the mosquito repellent market; Salton and Patisson in the shoe care market; Forester in the picnic and barbecue market; and Norveg in the premium thermal underwear market. For better or for worse, no monopoly in the world is permanent. Two market factors prevented us from resting on our laurels. And I’m happier for that. One was that other companies were following us to China, and they were willing to make do with a smaller markup. The other was that mass consumer goods required television advertising, which was becoming more expensive and less effective at the same time.

Furthermore, the portfolios of the brands were getting so heavy that a single, shared distribution system could no longer handle promoting them in the relevant markets with equal consistency and intensity. In short, we had grown very rapidly once again, and changes were in the offing.

Don’t bother with remedial training When you talk about introducing a new product, the first thing to ascertain is who is its actual maker or developer?

Until 1999, I was a believer in Russian material production. Then, for the next eight years, I became a believer in Chinese material production. Here’s a vivid example. Before 1998, the Ruyan Company purchased tubes of shoe care with sponges (under our own Twist and Salton brand names) in Europe for about seventy cents per tube. Then we bought automated assembly lines and manufacturing floor space, and invested plenty of nerves and energy into retraining our workers to stop ruining the top-notch European semimanufactures and turning them into inferior products. This was when I reached the conclusion that remedial training for people whose parents hadn’t given them sufficient natural energy was pointless.

Nonetheless, before long we were able to lower the prime cost of a single tube to forty-two cents. Two years later, now in Shanghai, we managed to bring it down to just twenty cents. That number was all the more impressive, considering that the tube cap was made in Italy, the wax came from Germany, the tubes were filled in China, and the product-creation was Russian. Within the next two years, we had the world’s best shoe care and accessories product lines. The products requiring serious automation, such as aerosols, or fundamental scientific development, such as chemical raw materials, were purchased in the developed countries. Products that require more manual 107

labor, like shoehorns, brushes, laces, and insoles, we produced in Southeast Asia.

The design and logistics work for all products was done in Russia.

Create the right environment, and record the details Expedition employees are often confused with extreme thrill-seekers, while we are dubbed a creative company. For our part, we try to shirk either label. Extreme situations and emergencies most often result from sloppy preparation, whereas achieving mastery means avoiding extremes unless absolutely necessary. Extreme behavior can lead to drowning in a Moscow puddle, while I’d much rather enjoy five-star comfort, camped out on the ice of Lake Baikal. The same goes for creativity. If one of our people needs to put a lot of effort into developing creative solutions, that’s because he or she doesn’t know how to utilize the “everything’s already there” principle on a professional level—that is, how to shape the kind of environment (or thrive in an already formed one), where creative outcomes materialize as if of their own accord.

The issue here isn’t only benchmarketing as a means of commercial espionage (needless to say, there’s nothing shameful about spying within a market; it’s only shameful if you do it badly J). I’ll illustrate this point with a technique we call “the dump.” But first, a brief digression to tell a relevant story.

The first T-shirts and jackets we made were intended for ourselves, and as gifts for people we liked. Once, at the water tourism festival on the Vuoksi River, we gave a T-shirt to a guy and he burst into tears. He explained, “I’m a mountain climber. I fell eight months ago and barely survived. I just got out of the hospital, and came here because I was starving to see real live people. And you give me a T-shirt that says, ‘It’s not how often you fall that matters; it’s how often you get up.’”

So, here’s our technique. When a well-prepared group is together (and being together is part of the know-how), whether in an office, a car, a restaurant, or on a catamaran, everyone is always yakking it up and having a laugh. Sailors call this “shooting the breeze.” Many of the phrases that fly back and forth are essentially semi-manufactures for orange T-shirt slogans. The trick is to grab the phrase by the tail and text it to a special 108

number, for storage in “the dump.” Once every three months, this cocktail of phrases is distilled and refined by specialists—a brewing process that yields the finished product.

The same technique of tossing files into a dump is applied when we come across an interesting design, a curious product, or simply an idea.

The object is photographed or otherwise digitally recorded, and the data is pooled in one place. Once every cycle, we check out the “haul,” and construct something “new” out of the “old” ingredients we have there. The more diverse the markets that supplied the ingredients, the better.

I should make special mention of another process, which we at first dubbed “multinaming,” but later registered both the noun “expetro” and the verb “expetrify.” It all started when we took a plain, Russian-made slingshot, called it Malchish Plokhish,23 knocked together a design, slapped on a 400 percent markup, and watched it become a best seller. The same fate awaited Otvazhny (Valiant)—a kit for commandos and bear hunters, which included camouflage toilet paper, a whistle, and a butt plug to use for radical treatment of diarrhea. Then there were several types of leggings: Glamour with a portrait of Lieutenant Rzhevsky,24 Guardsman with Alexander Suvorov,25 and Euroleggings with Stirlitz.26 Not to mention our Lover’s Mitten (worn on the male genitalia in cold weather). And the list goes on.

Another technique for contributing to “the common pot” of product synthesis is characterized by the rule “Either a new product out of ordinary components, or an old and famous product out of unusual ones.” A case in point would be Belarusian potato pancakes made with Kamchatka crabmeat.

I want to conclude this section with the story of the press conference we had organized for the start of the first Expedition Trophy race. The briefing 23 Malchish Plokhish, or the “Little Bad Boy,” is a villainous character in a classic children’s story by Arkadi Gaidar.

24 Lieutenant Rzhevsky is the lead character in a play by Alexander Gladkov.

25 Alexander Suvorov (1729–1800), the fourth and last generalissimo of the Russian Empire, never lost a battle.

26 Max Otto von Stirlitz is the hero in a popular Russian series of books written in the 1960s by Julian Semyonov, and in the television adaptation of Semyonov’s Seventeen Moments of Spring. Stirlitz has become a stereotypical spy in Soviet and post-Soviet culture, similar to James Bond in Western culture.

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was scheduled for September 11, 2004. We wanted to build two tall towers out of orange boxes, with our T-shirt aphorisms imprinted on the sides, and conduct an experiment called “Expedition blows journalists’ minds off.”

And then came the Beslan school massacre…

An aura of death and despair hung over the nation. In our gut we felt we had to do something. A few days later a barge appeared on the river in the center of Moscow. It was the very largest that could fit through the sluice gates at the city limits. Over the port side hung a hundred-meter banner that read: “Expedition: mobilizing the forces of life”; to starboard, the slogan: “Don’t be afraid life will end, be afraid it will never begin.”

Supermobility In today’s world, famous proverbs like “The legs feed the wolf” or “A rolling stone gathers no moss” are more relevant than ever. Sometimes I think our official value of mobility ought to be upgraded to supermobility.

In the winter of 2010 we completed a full round of global espionage, taking a firsthand look at the US, Japanese, and European markets. Next, in April, I headed to Australia, Taras Sharyga and Oksana Nikonenko to Brazil, and Vasil Gazizulin to India.

On the way back, I changed planes with a three-hour layover in Dubai, United Arab Emirates. It was early morning. Outside, a red sun was rising over the desert. I spent two and a half out of the three hours on the phone, including calls to my associates in Brazil and India, who were also calling one another when not talking with me. Two and a half hours of pumping fresh commercial data around this triangle gave rise to about ten new products and a whole new format: the Expetro shops.

Subsequently, Taras and Nikonenko were captured by some indigenous tribesmen, dragged into the jungle and given tattoos (the temporary kind, thankfully). And when Vasil returned to Moscow from India, he said to me, “Until now I’ve never appreciated what a wonderful country we live in. I want to live here for several lifetimes.”

Looking back, our travels were directly responsible for generating hundreds of thousands of dollars of profit within six months. Sasha Davydov, the chief commissar of the Expedition Trophy, said, “Everybody thinks they want to work for Expedition, but not everybody can work for Expedition. If anybody wants to compete with us, let them bounce around the continents with our 110

crew.”

And now, a few examples of gathering factual data and exploiting the junction of niches.

A tale told by empty boxes At the Luzhniki market, most of the wholesale trading used to be conducted out the back of trucks which arrived in the morning and departed at night.

Wholesalers from all over the country purchased shoes and took them away in their shoe boxes, stacked in checkered bags that became famous. The big shoe boxes, the ones that originally had contained the small shoe boxes, were left at the end of the day wherever the trucks had been parked.

Andrei Kazyuchits and I spent several consecutive evenings copying company names and stock numbers off the big boxes whose contents had been sold out, and calculating the proportions among them. Then we visited the offices of the wholesale shoe companies that owned the trucks, and purchased only those products which the real-life statistics had identified as the most profitable. When the sales managers would suggest that we consider investing in heels, laces, or other accessories from some new collection, we replied politely, “We’ll think about it.”

Pith helmets

It’s easier to fly fast than to fly slow We opened our first Expedition retail store in 2002 in the Extreme mall. One of the salespeople there was Sasha Kato, who, in addition to his job as a bathhouse attendant, also worked part-time at the store. My days off were spent exploring the mall to refresh my understanding of how the market for various types of gear functioned. At the Extreme mall, sports gear was sold on the second level, while the third had clothes, shoes, and headgear.

I said hello to Kato, and proceeded on up to the third level, where an unusual product caught my eye: a pith helmet. I used my usual tactic of promising the salesperson I would buy several of them, if he told me how well they were selling. The reason is that actual retail sales data are the main 111

indicator for approximating volume in any type of network. I bought several helmets and took them downstairs to Kato, instructing him to sell them at a 30 percent markup. Then I continued my stroll around the mall.

A few hours later, it turned out that Kato had sold two helmets to people who were looking for headgear, but didn’t feel like going up to the third level.

Not being quite that lazy, I went back upstairs and asked, “Hey, guys, where did you get these helmets? And, who are you?” They told me that they were shuttle traders27 dealing mainly in Vietnamese hats, and that the helmets were a sideline. Without delay I bought all their helmets at a bulk discount.

Kato was commissioned to sell them at a 50 percent markup, and also to report to me how many helmets had been sold within a week.

In no time, we tracked down the helmet manufacturer in Vietnam. That in itself is amusing, because the place people generally look for the best price-quality ratio is at exhibitions in mainland China. This incident took place eight years ago, and today we have certificates of gratitude from the Vietnamese government as the largest importer of helmets from Vietnam. In point of fact, this type of helmet was used by English colonialists in Africa as protection from the heat, since pith is a thermal insulator. But the real point is that we have here a classic example of the junction of niches, because in most cases people buy the helmets as presents for charismatic men. I was especially delighted to hear about one particular transaction that took place in December, when a gas company in Urengoy bought fifty helmets for its employees.

New Year’s tree28 jewelry Here’s a fresh illustration, from literally a few days ago. The Expedition Restaurant in Moscow has a gift shop called the Trading Post,29 one in the chain managed by Oksana Nikonenko. As the New Year’s holiday approached, these shops received a new item: little silver bells shaped like angels. They 27 In the shuttle trade, individuals buy goods abroad and import them for resale in street markets or small shops. At its height in the late 1990s, as many as a million people were shuttling between Russia and foreign countries to bring the goods in person. By not making full declaration of their goods as commercial cargo, they could avoid import duties.

28 The Russian yolka, or New Year’s tree, is customarily trimmed like Christmas trees in the West.

29 Its Russian name is Faktoriya.

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came from a Moscow jewelry company. The little angels sold fairly well at all the Trading Posts, but in one specific shop, the one at the restaurant on Solyanka Street, the salesgirls used them to trim a miniature New Year’s tree by the checkout counter.

When I came in and saw two bells hanging on the tree, I asked, “What’s this?”

They replied, “Sasha, there were twenty of them, but they all sold in the past few days.”

Since the average cost of a bell was three thousand rubles, I immediately decided that the junction of New Year’s seasonal decorations and women’s jewelry was a guaranteed competition-free area for the foreseeable future.

Another product quickly came to mind: little ivory bears from Indonesia, attached to a silver chain as a pendant. Today I can report that the formal research on this market niche has been completed. In the span of two days, we handwrote a business plan titled New Year’s Tree Jewelry.

Orthodoxy, cookery, and seasonal business In the 1990s, when the Ruyan Company was already a recognized leader in the shoe care and mosquito repellent markets, I used to like to stroll around large markets, particularly the nonfood wholesale sections. The following happened at Luzhniki. One spring, not long before Easter, I was standing there drinking tea by a stall which was selling both retail and wholesale, as did the rest of the market. This stall was selling kits for dyeing Easter eggs, packaged in cardboard boxes.

In the ten minutes it took me to drink my tea, I could see that business was booming, with three or four people each buying one box, and one wholesaler who bought ten kits after a bit of haggling, obviously intending to resell them. At that point, I recognized a classic junction of niches between specific religious holidays and food products (the packets contained regular table salt with a dye). I bought several samples, returned to the office, and showed my find to our senior executives. They rolled their eyes and said, “Sasha, this is not our market, it’s not our business. Let’s stick to what we do, huh?”

Luckily, by then Ruyan was already decentralized. We had several production units and independent trading firms. It didn’t take much effort to reach agreement with the Orlenga manufacturing company’s department for regional sales, that the next year we would produce and start selling 113

this product. The first year we simply added Easter egg dye as an available wholesale item, and our regular market clients bought around one hundred thousand kits. We earned fifty thousand dollars with hardly any effort. The next year we gave the project a special status in the company, and sold a million kits, making approximately four hundred thousand dollars.

Since we’re a unique company, others naturally spy on us. In the third year, a lot of companies started cranking out the same kind of kits and offering them at dumping prices. We decided to exit that market and look for something new, because, as my “idea brother” Misha Babin likes to say, “You can steal a pail of water, but you can’t steal the spring.”

Don’t hunt for other people’s treasures, bury your own instead Olga Zhukova is a fur designer who lives and works outside Moscow. A fan of our company for many years, she follows our news closely and collects our interviews. Olga sews spectacular fur products for Oksana Nikonenko’s group. After working with us for five years, one day she remarked casually, “I’ve finally realized that you guys go after things nobody else bothers with.”

She was right. We don’t sell regular fur coats or sew regular fur hats;

in fact, we don’t make anything out of fur that resembles a typical fur product. And this principle applies not only to our work.

One day we realized that if everybody is always hunting for other people’s treasures, it would make sense to bury some of ours. We have buried plenty of them since then, but I want to share one of the most memorable.

At the time, the Ruyan Company had just those initial three shareholders: Sharipov, Kapustina, and myself. Oksana’s birthday is April Fools’ Day, and we always celebrated it in silly and flamboyant ways. One year Marat and I decided to give her a corkscrew as a birthday present. It was a regular steel corkscrew, not too expensive, with engraved numbers on it that stood for GPS coordinates. Where did the numbers come from? Sasha Kato was given a special task: fly to Cuba, find an uninhabited island, locate the most beautiful spot on it, and bury a bottle there. Affixed to the bottle was a little note: “Oksana, we knew you’d love Cuba.”

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Chapter 11

the CREATION AND NURTURE of brands Impossible is a word found only in the dictionaries of fools.

—Napoleon Bonaparte A properly created and well-developed brand is destined to catch on. Its emergence and growth is remarkably similar to the birth and rearing of a child.

I once had an interesting talk in Kamchatka with the famous bone and metal artist Vladimir Sushko. In his previous life as a helicopter pilot, he’d had a lot of dealings with Kamchatka’s native Koryak people, including with their shamans. Here is a fragment of his worldview: “People often delay conceiving and rearing children out of rational considerations, which seem valid to them. They haven’t completed their education, or don’t have a place of their own, or lack a marriage stamp in their passport. But the shamans know that the healthiest and happiest child is the one born to a couple at the peak of their love.”

We began to work without any money, experience, or business reputation.

Yet the Raptor brand, born in 1996, remains the leader in the mosquito repellent market to this day. Needless to say, we cared for our growing child the way good parents do. We stayed on top of product quality, consumer relations, a robust distribution system, and everything else you can read about in myriad business textbooks, hear from consultants, or entrust to your own marketing managers (I’ve already mentioned that, thankfully, our company has done without that particular managerial position for a decade).

Granted, all of the above factors are important (just as education and sports are for a child), but they don’t explain the special dynamism of the picnic-product brand Forester, which, more rapidly than other brands born at Ruyan before Expedition, became the de facto national leader in its category.

The secret to its success was that it was the first branding project of the autonomous team led by Marat Sharipov, and they put all their energy into it.

This chapter will outline how the Ruyan Company evolved from creating trademarks and brands in the household chemical products sector; to creating Expedition, a brand based on faith and lifestyle; and onward toward 115

the future creation of a community and fellowship brand in Ruyan City.

The consequences of a pilot’s error In the summer of 2000, I set out to lose weight in an extravagant fashion, and one that was also fairly devious with respect to my associates. The plan was to fly by helicopter to a location in the Urals above the Arctic Circle, and make our way back without any food supplies. The route was designed so that we would first drop off the catamarans and heavy gear, then land in the mountains, trek to our supplies on foot, and go by water from that point on.

Not only did the pilots miscalculate the landing point by forty kilometers, but they also dropped us off on the wrong side of the watershed. We ended up in Europe instead of Asia. Of course, we had weapons and fishing gear, but it takes time to hunt and fish, never mind the fact that three graylings or a lone duck will hardly feed a starving mob.

I have always believed that a positive attitude is the most important thing for a group, a team, or a company. So, I began to spin a tale about the incredible restaurant we were going to open when we got home. Its entire staff, including the chefs and waiters, would travel in search of delicacies throughout the uninhabited expanses of Siberia and the North.

No sooner said than done. We reached Salekhard and treated ourselves to the freshest delicacies: Siberian white salmon and whitefish. As soon as we landed back in Moscow, we set out for Italy to visit our friend, the restaurateur Enrico Pegan.

With over forty years of experience in starting up restaurants, Enrico owns several of them in Villa Boselli near Verona. We went to him and said, “Enrico, we have a great idea!”

The initial plan was to open a small deli in a rented space. But, as the Siberian wood artist Ivan Bazhenov has characterized Ruyan, “For you the main thing is not traversing the path, but really getting into what you’re doing.”

We ended up buying a mansion on Solyanka Street in central Moscow.

In the process, we changed construction companies three times, spending several times more time and money than originally intended.

On July 14, 2002, the Expedition Restaurant opened its doors to the public.

That day marked the birth of our new brand—a brand that expresses faith and an entire lifestyle. The first page of the menu provides a bit of insight into what it stands for.

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Greetings, dear Heroes and Enchantresses!

My name is Alexander Kravtsov, and fate has brought me the joy of creating Expedition. Eight years ago my friends and I hardly believed it would be possible to combine our lifestyle with business and youthful romanticism… But we kept at it. Today, Expedition shops and restaurants are operating throughout our Motherland. We have traveled hundreds of roads, seeking and gathering the best products and recipes, legends, and songs. We strike up friendships with the people who either catch these treasures, or create them with their own hands. We are proud to have created an authentic Russian brand.

If this is your first visit, we welcome you to the world of Expedition!

If you are a regular guest or a friend, we have much to reflect on in silence, or to sing about together. If you like it here, spread the word: There’s plenty of room on the road! If something isn’t to your liking, please give us the chance to take care of it personally!

With respect and hope, Alexander Kravtsov It was an expensive restaurant, intended for a target audience that would rarely happen upon it on Solyanka Street on foot. What’s more, it wasn’t the right season. Following a high-profile grand opening, the restaurant sat there empty. The three people who had built it—Vladimir Chekurda, Oksana Kapustina, and myself—were morally responsible before Ruyan’s other shareholders and executives for a project that had eaten up so much time, effort, and money. (Approximately three million dollars, which was quite a large sum for us, had been invested in the restaurant before it even opened.)

We were doing everything we could, though we didn’t really know what to do. Still, the situation wasn’t improving.

In retrospect, I know that it takes several months for a restaurant to get going, that the season starts in September, and many other details. But back then it was literally painful for us to look at the empty dining area. At the same time, it was important to keep the wait staff’s spirits high; we had decided that at our restaurant the staff would speak to customers “horizontally,” rather than looking up to or down on them, regardless of their status.

This is an appropriate time to recall the words of Winston Churchill, whom 117

I consider one of my teachers: “I like pigs. Dogs look up to us. Cats look down on us. Pigs treat us as equals.” The wait staff cowered whenever we talked to them, while we were trying to get them to look at us, and at the customers, as equals.

After a couple of weeks, we decided to throw a party and pack the place.

Each Ruyan shareholder and senior executive, including the three of us, invited friends and acquaintances who could pay for their own dinner. One of the drawing factors was that we announced we would personally wait on our guests. Truth be told, the assignment was a shock to me: never could I have imagined that a waiter’s job was so difficult and full of technical challenges.

The place really was packed. In fact, there weren’t enough seats, since walk-in customers took up two tables, in addition to all the invited guests.

I found myself rushing into the kitchen and yelling, “If that main course I ordered still isn’t ready, I will personally murder the chef!” In addition to waiting tables, we sang, with Chekurda accompanying us on guitar. For the second time, the first being opening day, we created exactly the atmosphere we had envisioned for the restaurant.

At the end of the evening, when Volodya Chekurda brought the check to one of the tables of walk-ins, they challenged him: “How much do we tip, if your watch is worth more than our cars?”

I believe that no action ever remains without result. The important thing is not to lose hope, no matter how tough the circumstances, but to keep plugging away in the right direction, and sooner or later success will come.

Not long after our table-waiting gig, the restaurant had some customers who turned out to be Australian journalists working for the Moscow Times.

They were so impressed by the concept of our restaurant, our Northern cuisine, and the quality of the service, that a few days later the Moscow Times ran a full-page article with a photo of a helicopter and a glowing review.

From that point on, word began to spread at an incredible speed.

And then disaster struck: the restaurant ran out of northern fish. Expedition was originally conceived as a restaurant serving dishes made of products that could be obtained, found, or caught exclusively in hard-to-reach corners of the Russian North and Far East. The implication was that every waiter and cook would participate in those journeys, so they could give an honest and captivating account of what we do (in this regard we were and still are absolutely unique among Moscow restaurants).

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Of course, we could easily have bought salmon in Moscow, even Atlantic salmon, but that would have meant betraying the idea. The restaurant staff was responsible for ensuring that we always had the right fish in stock, so when I arrived with two assistants, I fired 100 percent of the staff. Every last one of them. After that, we announced that we would be willing to do a rehiring interview with anyone who could explain why the fish had run out, when they knew perfectly well that the restaurant could not operate without northern fish. We were also willing to entertain their solutions for procuring such fish right away.

The fish appeared the next day, despite earlier assurances that anything less than ten days was a pipe dream. Eighty percent of the staff was rehired, and the restaurant resumed its rapid growth.

There are always certain details, however, that cannot be tolerated. One day I walked into the staff changing room and saw a notice stating that employees who failed to provide their medical records by the first of the month would either be fined or have their wages withheld; I don’t remember precisely which it was. What really got me was how the notice was signed: “The Management.”

In such cases, I prefer to act without delay. I ripped the notice off the wall and asked anyone who considered themselves “management” to come forward and line up.

Eight years have passed since that incident, and the word management has not been heard in our restaurant again. Such are the essential, subtle, invisible building blocks of great success stories, which amaze everyone. As the saying goes, “The devil is in the details,” and I’m inclined to agree.

From lighthouse to lighthouse The Expedition Trophy is a series of superb staff exercises on a national scale.

—A Federal Security Service general of our acquaintance What sets Expedition apart from other brands is its authenticity. We use no genetically modified ingredients at our restaurants. Our journeys have been lived firsthand, with no one but ourselves there to test our gear. Expedition 119

also provides every person the opportunity to live a legend, personally.

The idea and the organization process for the world’s most complex race, the Expedition Trophy, are the quintessence of the above statement. It has become one of the greatest adventures of my friends’ lives and mine. It has also given us the priceless experience of creating something no one had ever done before.

Realizing that the project was more than our team could handle alone, I began to seek out people who had either the right kind of experience, or enormous potential. The first one was the famous entertainer and race car driver Nikolai Fomenko. When we met, he told me that our idea was impossible to pull off, supporting this claim with valid and indisputable arguments. The race command staff was formed immediately after we made our pre-scouting run to Vladivostok. Its members were Alexander Davydov, a kayaking legend and ex-marshal of the Camel Trophy competition; Vadim Uskov, our brilliant attorney; Igor Ganzha, one of the top brand-makers ever, on my own personal scale; and myself. At the same time, we brought in a number of experienced specialists to oversee the details of the project.

Because our goal was to create an auto competition, the likes of which the world had never seen, our plan of action was as follows.

First, we outlined the general idea and features of the contest. Out of this process came the time frame, as well as the start and finish points. The race would last two weeks, starting on the men’s holiday of February 2330 in heroic Murmansk, located in the unforgiving environment above the Arctic Circle, and ending in Vladivostok on March 8, International Women’s Day, which is associated with the beginning of spring. Freshets from thawing ice are common in the landscape there at that time of year. It was also decided that the start and finish points would be at lighthouses, and that each participating team would include at least one female. The route was specifically designed to offer a rally race for off-road drivers, and a ruggedterrain race for rally racers.

We decided to launch an orange train, running parallel to the race. On board would be journalists, the command staff, and some of the most respected people in Russia, with classy cultural events happening daily in the club car. The prize was set at fifteen kilos of gold, which added a wild, 30 February 23 is Defender of the Fatherland Day in Russia, honoring those who presently serve or have served in the Russian Armed Forces.

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Klondike sort of charm to the whole venture.

Charting out the above conditions took about three months, at the end of which we had to exclude Igor Ganzha from the command staff for systemic tardiness. Then we took two months to write the rules and regulations, which contained many innovations, compared with traditional sports. I would like to cite one particular provision, called the Captains’ Council. It is activated in the event that the command staff is unable to reach agreement with one of the teams on an interpretation of the rules. All team captains then convene as a council and hold a vote, resulting in a decision that is binding on both the command staff and the dissenting captain. (I believe this is an important managerial practice, which comes in handy in other situations, as well.)

At the same time, we launched the Expedition Academy of Entrepreneurship project, and the academy’s top twenty students immediately started pouring their energy into making the idea of the race become reality.

After a press conference, which we prepared for six months, and the publication of announcements in the media, four months were left till the start of the race. At that point, only two teams had applied!

Just about then, I received a phone call from my old friend Andrei Kazyuchits. When he asked what he could do to help, I told him we needed more teams. Also, I wanted to know why he was interested in the event. “I know that organizing this race is an impossible task, and yet you’re doing it. I want to be there to see with my own eyes how you do it.” Incidentally, Andrei went on to organize two teams. In the meantime, I was forced to declare an emergency in the company due to the shortage of future participants. It was too late to turn back, which meant that the whole future of the Expedition brand was at risk.

To make it onto the starting list, the teams had to be thoroughly vetted or they had to pay a participation fee, though everyone was reviewed by the tech committee anyway. At the time, not a single race in Russia cost even one thousand dollars to enter. Our Academy students sold starting tickets to ten teams at thirty thousand dollars per team, and another two tickets for the Murmansk–Vladivostok train at twenty thousand dollars a ticket (I believe this is a record that stands to this day J).

As usual, when you go for a breakthrough, the utterly unexpected can happen.

Two of Ruyan’s three shareholders (whose combined share amounted to 25 121

percent of the company) decided they would rather milk mature cows from our business in the shoe care and mosquito repellent industries. This brings to mind certain mutinies which had been put down only temporarily (J).

They preferred to avoid the risks associated with organizing the Expedition Trophy.

There was no time for long deliberations, and the point of no return was already behind us. Afterward, observers assessed my decision to sell off our household chemicals brands as a show of unprecedented generosity.31 In the short term, that may have been true. And it’s not even all that important, that today the Expedition brand is worth a lot more than any of the brands left to my former partners. Far more important is the fact that it would have been much more difficult to earn the first couple of million dollars in the new market, had I had the household chemicals “cash cow” in my pocket. Besides, everyone knows that history abhors the subjunctive mood.

At last, February 23, 2005, was upon us. At dawn a freshly painted white train of fourteen cars stood at the Murmansk railroad station (the Kremlin wouldn’t let us paint the train orange, in light of the events in Ukraine). We were there, too, standing next to the orange lighthouse and wiping away tears. There were sixty-eight participating vehicles and six brand-new SUVs for the support staff lined up at the starting line.

The 2005 Expedition Trophy race set five world records: • Longest route in a winter auto competition: 15,800 kilometers • World’s longest train route: Moscow–Murmansk–Vladivostok– Moscow • Greatest number of female participants in a winter auto competition • Largest concert event ever held on the ice of Lake Baikal • Fastest completion of the longest route in a winter auto competition The collective hardships endured by the organizers and participants of this and subsequent races (2006, 2008, and 2010, and I believe the list will continue) warrant a separate chronicle.

For now I’ll limit myself to a few stories.

31 A “show of unprecedented generosity” is a slightly ironical catchphrase, popularized by the 1972 TV series The Big Change.

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Yo-ho-ho and four liters of champagne Outside the train window the night was rushing by. It was March 7 going on March 8, 2005, the night before the finish of the race. I was on duty in the command staff car. The other staff members, Davydov and Uskov, were asleep. We had three or four hours to go before we reached to Vladivostok.

Our display panel showed a map on which dots, each designating a team, were edging toward the finish. Leading the way was the team Black on White, though the Sea Wolves were right on their tail. I had been watching the latter closely, all the way from Murmansk. Unlike the other teams, they were pursuing something more than merely a sports goal. At the start the commanding admiral of the Northern Fleet had given them a soil-filled shell casing from the war years, and told them, “We doused this land with our blood and didn’t give the Germans even an inch. Give this shell to the admiral of the Pacific Fleet. Tell them not to give the Japanese even an inch, either!”

The hours of my watch stretched out slowly. The accumulated fatigue from the burden of responsibilities over the past weeks made it difficult to rejoice over the imminent finish of the race. My assistant handed me a satellite phone. It was the captain of the Sea Wolves. “Ten minutes ago on a country road we sustained enemy automatic weapons fire. We’re sitting here, wondering what to do. What are your orders?”

I weighed my words carefully. How could I know whether they really had been fired upon? What if their car had broken down? Then a command staff directive to stop the race would be appealed later. On the other hand, fifteen kilos of gold was worth around two hundred thousand dollars, so who knows… (Of course, I couldn’t have known at that moment that the Sea Wolves had already returned fire, or that a piece of metal that flew out from under the wheels of their SUV, roaring down the road at blazing speed, had shattered the window of a car belonging to some Far East gangsters.)

Gripping the phone firmly, I said, enunciating every word, “Unfortunately, the Expedition Trophy rules do not specify what to do in such circumstances.

On behalf of the command staff, I want to remind you that you are now responsible for your life and the lives of your companions. Good luck!” And I hung up.

By 7:00 a.m. the Sea Wolves had won the race. At the lighthouse we awarded their gold medals and a five-liter bottle of champagne, four liters of which were promptly emptied over our and their jubilant heads.

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Chapter 12

ROUGH AND TUMBLE Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree.

—Martin Luther King

Regulate less – live more!

According to my plan, this chapter was supposed to conclude the topic of marketing. As already mentioned, Ruyan’s evolution in brand creation has moved from specific products to lifestyle, and from that lifestyle to building a new habitat. All my efforts to maintain a single narrative style throughout this book were in vain. What was I to do? (After all, we haven’t yet managed to harmonize the construction of Ruyan City with our present business operations, either. Yet that’s no reason not to build the city.) With that in mind, I’ve decided to take a risk, hoping that the reader will understand.

But first, as usual, a joke.

Einstein dies. God greets him in heaven and says, “Albert! I’m so glad to see you! Your theory of relativity is so poetic that in gratitude I’m prepared to grant any wish you have. Geniuses from throughout history and from all the nations of the world have gathered at a dinner in your honor. Come, I’ll introduce you.”

“Oh, Lord, I’m not hungry. Please just fulfill my most sacred wish: reveal to me the formula for the creation of the world.”

“Very well, Albert, dinner will wait,” God smiles, takes a piece of chalk, and writes a long string of equations on a blackboard.

“Oh my God, you’ve made a mistake! Here! And here, too!” the scientist exclaims, pointing at various values.

“I know, Albert,” God replies, opening another set of parentheses, “but look how beautiful it gets from here on!”

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Escape from Moscow Business for the sake of money withers the soul.

—From a Ruyan Company brochure, 2001 It was the summer strategic planning session for 2010–2011. For us, every phrase that makes it into the final document defines a serious target for the coming year. Over the following twelve months, life is simple: if it’s in the plan, we do it; if it isn’t, we don’t (J). I and two other conspirators lobbied to include the phrase “The company can build concept-based cities.” Sergei Makshanov, Lena Larina, Oksana Nikonenko, and Kirill Sokolov maintained that we were so lost in the stars, we had forgotten about routine things. It was a heated discussion.

A few months earlier, Vasil Gazizulin had grown troubled by the fact that no new cities have sprung up in our country for a long time. For me, the defense of Siberia against Chinese expansion has been an issue for a long time. The third member of our conspiratorial cell was Taras Sharyga. It’s not that we were able to convince our strategy-planning colleagues; rather, we managed to convince ourselves, at which point we took a command decision. Later on we found out from historian and futurologist S. B. Pereslegin that unless a CEO takes the initiative, founding a new city is downright impossible.

So, the decision was made. First we outlined the following site selection criteria: • a major water transport artery • relative proximity to modern airports • proximity to high-quality human resources • local power supply • ecological purity • an open-minded local government Then we began to plan an expedition to scout locations.

Many people remember August 2010 for the major fires that blanketed central Russia with smoke. We evacuated from our Moscow offices to our meadows, where we went swimming a lot. A week before the Siberia trip, I got into a water bloom and contracted an ear infection, with swelling and acute pain. I started out the expedition on antibiotics. At the time the working version of a name for the city was Dobrosibirsk (a fusion of “Dobro,” meaning 125

“good,” and “Siberia”).

Early on the morning of August 12, we set out eastward. Two orange SUVs made their way on roads paralleling the Trans-Siberian Railway, keeping pace with the train that carried the command staff. We developed this mode of travel a long time ago for the Expedition Trophy race. Vasil and Taras fell asleep.

Dawn had just broken and the weather was gorgeous. According to the schedule, in twenty minutes we would arrive at the city of Kamyshlov, where I had spent a significant part of my childhood. At the age of twenty-seven I had been baptized there, too, in the beautiful old cathedral. I went out onto the platform for a smoke, and just as the cathedral appeared on the horizon it hit me: the city had to be called Ruyan.

The task of finding the right location was awfully difficult.

We scouted three regions: Altay, Tomsk, and Novosibirsk. We were sure we would find some encoded clues. For example, when Nicholas Roerich visited the village of Ust-Koksa in Altay, he predicted that in a hundred years a talented crop of youth would found a city there. But when we arrived there, we knew this wasn’t it. Another clue came from Pushkin’s “The Tale of Tsar Saltan,” which mentions the mythical Alatyr stone. We looked for related place names, but didn’t find any. But on August 19, when from the water we spotted a white cliff identical to Cape Arkona on Rügen Island, we knew immediately that our city would stand right there.

Approximately one month later…

A lovely September day was drawing to an end. Autumn had already painted the Siberian taiga with strokes of orange and yellow, standing out amid the dark green cedars. Two men were fishing on the bank of the Ob River. Their tackle was homemade: a weight was dropped into the river from a boat, with a length of elastic cord attached, to which, in turn, were attached lengths of strong fishing line with hook links and baited hooks.

They were local men from the village of Urtam. One of them, Sergei, was constantly cracking jokes. The other, called Sanya, was an ethnic German and an incorrigible skeptic, who occasionally interjected acrid remarks into Sergei’s jabber. A young husky named Mist lounged nearby, yawning.

Suddenly the dog pricked up its ears, sniffing restlessly to catch an unfamiliar scent. A large raft came around the nearest island. Nothing like it had ever 126

been seen here before. Over a dozen people in chic blue uniforms were sitting in a circle on folding chairs, right there on the raft, and talking. One of them was standing in the middle next to a flip chart (a word the two locals had likely never heard). To the left and right of the circle, fires were burning in sawedoff two-hundred-liter metal barrels. The vessel was guided by a front steering pole, while a second steersman worked the tiller of a boat engine, perched on the stern side.

“Must be the fellas that put up those yurts in Solontsy,” Sergei said, breaking the silence. “Word is they’re going to build some kind of city.”

“Vova delivered a barrel of water to them on his tractor,” Sanya replied.

“They’ve got a collapsible sauna there. Young guys, kind of crazy, too.”

The mirror-like surface of the river, like what you see in Altay, lazily carried the ark-like raft around the next bend. Very soon the first foundation-stone of Ruyan City would be laid.

Aboard the raft, as it rounded the bend, the conspiratorial cell was deep in discussion with the “idea brothers” council of experts, led by Sergei Makshanov, Vadim Lobov, and Ruslan Bayramov. They delivered a unanimous verdict: this was an awesome idea! They wanted to do exactly what we had planned, except in the Central Federal District rather than here.

Ten days later I brought my associates from the Expedition Trophy command staff to the site of our future city. Their diagnosis was identical. In fairness, it should be noted that both groups were shocked by the emotional charm of the location. Our expert friends departed with the understanding that our team was going to build a city in a place where natural power is concentrated, which would be found in Siberia, no matter what. Just because we really wanted to.

Once, long ago, I taught rookie executives Kapustina and Sharipov always to answer the question “Why?” with “Because I said so.”

Now we were faced with the urgent issues of determining a philosophy and a crest, and the laying of the first stone. One month earlier, at a meadow held in a sacred place on the Polomet River, twelve zealous supporters of the future construction had a nighttime debate. We didn’t have a clear idea as to what the first building would be like. Ivan Bazhenov, the talented Siberian artist and architect, was one of the participants in this meadow session. He remarked, “Our guiding star should be the city’s philosophy. What are we going to do in this city? Once we dispense with the inessentials, the design of the building will emerge on its own.”

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On the day when we found the right place, it so happened that literally within the very same hour two of our colleagues, Vasil and Ivan, who were in different cities at the time, had the same thought: that the building would be a lighthouse. But not just any lighthouse. Its second floor would house a round table, at which all critical decisions on the city’s future would be made. The lighthouse tower would become a tourist landmark, where people would go to take pictures, since it overlooks a breathtaking panorama. On the first floor we would set up our main hall, with a fireplace.

In order to obtain that first foundation stone, we planned and executed an expedition to Rügen Island in record time. Sailing on two inflatable catamarans, the group was led by our old friend and experienced captain, Sergei Sergeyev from Omsk.

The Baltic Sea in autumn is a forbidding and stormy place. For four days we didn’t take our boots off, and we would drop from exhaustion at the end of each watch, without even bothering to unroll our sleeping bags. When we returned to Russian soil with our trophy, the joyful feeling of a mission accomplished was dampened by the condition of our weary and chilled bodies. By then the Manifesto had already been written, and the future city’s crest was being designed.

Manifesto of the Free Citizens of Ruyan City We live in an amazing world. A world full of harmony. A world full of opportunity. To conform to it and enjoy life to the fullest means creating your own world. It means building that world within and around yourself, your loved ones, and your co-thinkers and friends. No one besides ourselves can bring harmony to our world. No one besides ourselves can hinder us from building our own world.

People have been building their own worlds throughout history. A city is a closed model of the world. A city lives by its own rules, providing its citizens with a place to exist in both body and spirit. No city has ever come into being by accident. Its birth is the fruit of collective energy.

Our city has ripened. That is why we are building our own city. “We” are people united by faith in ourselves, the ability and desire to create, and the skill to utilize new technologies and world experience.

The Founders of Ruyan City 128

A floating flame There are two kinds of lighthouses. The first type signals ships about danger: “Don’t come any closer, or you will crash!” The second sends a very different message: “Sail by my light, and you will live!” And, until now, no lighthouse was ever free to choose which signal to transmit; they all operated strictly as programmed. That is why lighthouses always have to work in pairs. In ancient times, the role of the lighthouse was played by huge bonfires on the shore.

The crest of Ruyan City features exactly such an original bonfire beacon, which looks less like a lighthouse than a torch or the Olympic Cauldron.

The crown of flames shooting out of a wooden construction complies with the standards of European heraldry. This “naturalism,” coupled with gorgeous artwork and the realistic correspondence to Ruyan City’s location on a riverbank, not the seacoast, also demonstrates that Ruyan seeks to be understood by everybody, and not only by our compatriots.

Our initial plan was to portray the lighthouse as a brick tower sending out two beams of light—the aforementioned two types of signal, never before broadcast from one lighthouse. But brick towers are reserved for lighthouses on the seacoast, so we quickly dropped that idea, along with the idea of the two beams—one inviting and promising safety, the other deterring and warning of danger.

The two beams on the first draft of the crest totally failed to capture that idea. Then we had a boat with a cauldron above it, containing an enormous blazing fire. But it would be too scary to be on such a boat, so we scrapped that idea, too. Thinking it over, however, we changed our minds, because Ruyan’s fire is dangerous, like all fire. We are summoning those who are alive to come and get warm, and keep the fire going with us. Anybody else will get burned.

The naked truth of life Of course, we were plagued by doubts. Throughout my work on this book, I have been pressured by certain spectators to “smooth out” the text. Yet I will allow myself to present an unfiltered transcript of an exchange that took place at 5:00 a.m. during a meadow session in Belarus.

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I have taken more out of alcohol than alcohol has taken out of me.

—Winston Churchill I have this instrument I call the Columbus Criterion, which I share with people who are close to me. Imagine that I am Christopher Columbus, getting set to sail to some distant land. Maybe tomorrow I’ll discover America, or maybe we’ll all die, or there will be a mutiny, etc. I’m looking at a person and trying to decide whether or not to take him on my ship. It’s not that I’ve got some psychic intuition, but maybe he’s an expert sailor or an astro-navigator, or something-or-other. Or maybe he’s a nobody, a total dumbass, but someone who… Take Sergei Rubikon.

We kept him out because, as it later turned out, he’s an ex-con, and all that criminal stuff was coming through in him. In that situation, it was easier for me to cut him off than to keep wondering if he was going to stay straight. So, back to criteria: if I’m commanding a whole fleet, then I don’t take him on, but if I’m commanding one private boat, then I do take him, and keep an eye on him. If I see that he’s back to his old tricks, I shoot him myself or throw him overboard. If I make a mistake, then, too bad…but I would give him a chance.

Say I’m looking at someone who’s alive. “Great! You’re alive, you’re awesome, welcome aboard!” If I see someone who’s dead, I don’t say anything, or at most I tell him, “You had some good dry wine, good-bye now.” And then I leave. That’s not the point. We are building a city with people who are alive and for people who are alive, and when dead people come along, we’ll split. And then they will own this town. That’s the problem: when the first city-builders arrive, they’ll be happy for a winter or two, digging around in the mud, working their shifts, putting up crystal bridges. We’ll dig a creative underground passage two hundred meters long, with a labyrinth of mirrors inside it, and everything will be awesome. And then the hamsters will come and hamsterize everything, taking money from tourists, and we’ll go off and build something else. So, here’s a question: what the hell do we need all that for? Should we just leave now?

About Ruyan and suckerfish. Ruyan was originally a brilliant company. A brilliant bunch of people. But when it started growing, the suckerfish began to show up. We told them, “Here you go, suckerfish, all yours. We’ll build something new. Take this chunk and choke on it.”

And now I’m tormented by the fact that I don’t want to build a city where two years from now some suckerfish will show up and say, “We were here, too, lugging logs for the chum tents, and freezing our asses off! And we’re not mere trembling 130

creatures,32 we’ve got a right to this, too, damn it!” And what are going to do?

We’re about to build this city with people who are alive and for people who are alive, but then the suckerfish will show up, wanting to take over our city, and we’ll want to split. But I don’t want to build a city that will be run by hamsters.

What’s happening now? Nikonenko says, “Sasha, you can’t force anyone to love the city.”

I often feel like a fascist. Vasil and I talked about it at one point. Talked about it, in the sense that we don’t know what fascism is, but we do know what it is to divide people into “us” and “them.” For me, there are people who are living, and there are people who are dead, even if they are biologically alive. The living are those who continue being alive and believing that tomorrow will be better than today. And it doesn’t matter how old they are: twenty, seventy, whatever. And then there are people who say, “I used to be a hot young chick, with great tits and nice hair and a great ass, but then some asshole got me pregnant, I had a baby, and now I have to break my back feeding the kid, and I’ll never be as hot as I used to be.” Men can be like that, too. They say, “I used to piss so hard I tore stones out of the pavement, but now I can’t even melt snow. But, you know, we had our time of glory, now it’s the kids’ turn. Kravtsov, that’s another story, he’s got money to piss away, so he’s showing off with that city of his!”

My opponents (I’ve been having this discussion for the last twenty years with some pretty smart people) talk about humanism—especially women with a liberal arts education. They say, “If you really invest a lot in cultivating living people out of the dead, at least two percent of them will make it!” I reply, “In the time it will take those two percent out of a one hundred percent dung-heap to make it, I can raise a whole division of people who are alive. What the hell do we need the dung-heap for?” Of course, it’s good that we have different opinions.

I believe that one of the most vivid examples of Russia’s managerial mastery is the relocation of industry from the occupation zone at the beginning of World War II, when it was moved to the east and far inland. Imagine a factory that doesn’t even have a roof yet, but it’s churning out artillery shells to secure victory.

How cool is that? And that’s exactly how we need to build Ruyan City.

32 In Fyodor Dostoevsky’s novel Crime and Punishment, the expression “trembling creatures” (deriving from Alexander Pushkin’s verses “In Imitation of the Koran”) denotes people to be treated with contempt.

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A young community, impassioned activists, and bureaucrats At the beginning of the book I talked about the difference between me and my father. My father believed in investing equally in everyone, whereas I believe in investing only in those with potential. This circumstance compels me to ponder the path we’ll take in the future.

Ruyan City is located in the Kozhevnikovo District of the Tomsk Region, near the village of Urtam. One of our employees popped into a store in Urtam.

A local resident came up to him, totally sober, and asked, “So, you’re building a city?”

“Yep.” “And nobody’s wasted you yet?”

“Not yet,” our employee replied cheerily.

“Won’t be long,” the native Siberian remarked in a melancholy tone, and exited the shop.

Warming up the Taymyr Peninsula with one’s breath is possible, to be sure.

But one mustn’t forget that the principle of limited resources is a key one for sober-minded and farsighted captains.

In Kolpashevo, the center of another district in the Tomsk Region, a group of young and progressive politically active businessmen has come to power. But Ruyan City is located 250 kilometers south of Kolpashevo, because we couldn’t afford to settle that far away from areas serviced by the airlines.

In the town of Kozhevnikovo, veteran administrators from the past maintain an administrative tradition which was effective in the Soviet yesteryears, and continues to work to a certain extent today. This antiquated kind of efficiency, however, may be what drains the district of any competitive ability. The same goes for the entire region, and for Russia as a whole.

On the other hand, there are actively growing communities of young people in the Tomsk Region, as there are throughout Russia. Our hopes lie with them.

We’ve been working with young people for three years now, witnessing their growth, which gives us great joy. They don’t talk too much and they don’t beg for grants; they are a completely different breed. When you ask how many of them have a profitable business, 80 percent raise their hands. We see our mission as cultivating precisely this kind of person.

Our strategy mentions that we are becoming Russia’s leading company in the field of youth entrepreneurship, through the development of franchising.

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Time and energy resources are finite, and for us there is no clear-cut answer to the question of which is better: to focus on how elite groups of young Russian entrepreneurs can conquer distant foreign markets, or to spend those same precious man-days on making a fundamental change in the Kozhevnikovo District. Why here, of all places?

Another thing about building a community. There is definitely a growing worldwide standoff between large bureaucratized systemic (systemically limited) institutions, and young and audacious communities of dazzling, passionate activists. Needless to say, we’re on the side of the latter!

That autumn we passed Ruyan City’s first laws: • Swearing in the presence of women is prohibited • Castrating animals is prohibited • Outward expressions of jealousy are prohibited • A moratorium on hard liquor

The city is already here!

When the eyes are afraid, the hands do the work.

—Russian proverb We laid the foundation stone on a clear autumn day, November 2, 2010. A yellow helicopter buzzed like a tireless dragonfly over the meadow and over the cool Ob-like surface of photographers, filmmakers, and distinguished guests. Children were playing on five-meter swings delivered from Moscow, the kind where if you fasten your belt and try hard enough, you can do a full 360˚. German artists, who had flown in from Rügen Island, were building the first objet d’art over the cliff—a nest made of branches. A wind turbine hummed, supplying power to the webcams. The brass instruments of the wind band reflected the sun’s brilliant rays. To the roll of a drum, the first stone of Ruyan was laid in the wooden pyramid of the temporary lighthouse, painted in the colors of the Russian flag. The signal flame was ceremoniously lit in a brass kerosene lamp, and the first ten citizens swore a solemn oath. Everyone had fun, but the group of three founders (myself, Vasil Gazizulin, and Taras Sharyga) couldn’t shake the feeling that the affair was somehow heavy on spectacle and short on certainty.

This feeling was driven by the burden of responsibility, a shortage of every 133

sort of resources, and difficulties that had arisen in our relations with the district government. In the three weeks that followed, thanks to the heroic efforts of a squad of Ural Tatars, headed by an old friend of Expedition, Rifat Galimyanov, a two-story heated timber blockhouse was erected and put into operation, without a building permit or land rights, and under ceaseless attack from all sorts of regulatory agencies. In an odd twist of fate, our defense was aided by snow-blocked roads, although this circumstance also caused the builders to run out of food and fuel rather quickly. As this was happening, our attorneys in Moscow were working on demarcation of the territory, and we reached agreement in principle with the local authorities regarding the land.

All of the above made it possible to hold an event in December, which had a huge impact on our vision of Ruyan City.

Inside the timber blockhouse, which still smelled of fresh-cut wood, historian and futurologist Sergei Pereslegin gave a lecture. Its full content can be found on this book’s website; here I will briefly mention several of the points he made.

What constitutes a city: • Any harmonious biosocial system must perform four functions: acquisition of knowledge, administration, education, and industry.

• A city (as distinct from a village) is the greatest such system created by mankind.

• Insofar as humanity has reached a dead end, progressive folk are currently seeking possible solutions. This pertains to Ruyan City as well.

• It is obvious that the great cities of the modern world will yield their primacy to new ones, but nobody knows which cities will become these new capitals of the future.

• It’s possible that such settlements will not have permanent residents.

They may even lack most of the attributes of the stereotypical modern city.

• According to one hypothesis, the residents of the postmodern city will think collectively, whereas in cities of the previous phase people engaged in collective production. It follows that the city’s population will not be very large.

• The postmodern city must compete in the market of new meanings.

(I cannot help but mention that during several years of strategic planning, we defined the business of Expedition as a road to the 134

marketplace of basic life values and meaning.)

• Perhaps Ruyan City will become a special place for controlling the tempo, or, rather, the overall speed of our group.

The main thing that I and the other founders of Ruyan City took away from the lecture could be summarized as follows: we had thought that a new city would come into existence when we built it. But it already exists, because the basic functions are fully operational. Now we only need to get them working with greater power and in greater harmony.

Everything I have said here, of course, is very serious (perhaps even overly so). Ruyan City is a fairy tale. It’s a fairy tale about our future. Now I would like to discharge the tension of the preceding pages with a fairy tale from the past.

True leaders are brilliant storytellers

An expedition into a fairy tale We were selecting candidates for the Academy of Entrepreneurship, at a meadows session on the banks of the Irtysh River. There were six examiners, twelve organizers, and forty applicants.

At the time I was divorced and living alone; in other words, my status was “available.” Not that it mattered, until one evening a young woman walked into the organizers’ camp, asking for some kind of medicine for a cold that was bothering her. It felt as if I had been hit by an electric current. Meanwhile, life in the camp went on. Applicants were selecting mentors for the projects they would be working on during the remaining time. She chose me as her mentor, informing me that her project was titled Expedition into a Fairy Tale. I replied, “Excellent.”

The meadow was scheduled for five days, and my state of “electroshock” persisted throughout that time. My student was working diligently on her project, but it was a struggle. As her mentor, I told her that an Expedition into a Fairy Tale had to start with herself. When the morning of the fifth day arrived, the applicants were mustering their courage to defend their projects.

Morning came, and we were eating breakfast. I went up to her and said, “Look here, you’re an applicant. You’ve signed paperwork saying you cannot 135

leave the confines of this camp, where it’s safe, because we’re responsible for all of you. I have even less right to leave, because I’m supposed to be the main examiner when the rest of the students present their projects. But, in order to begin your Expedition into a Fairy Tale with yourself, I propose the following: when all eyes are on us, we get up and walk out of the camp. We come back in six hours, when the camp is wrapping up. I’ll give you fifteen minutes to think it over.”

She agreed.

Our host, Damir, was already working the mike, pumping up the general energy. “Dear applicants, mentors, and organizers, please gather at the center of the camp in two minutes! I repeat: in two minutes!” By the fifth day it wasn’t even necessary to repeat the orders. Over fifty people gathered at the center in no time. Except for the two of us, who stood off to the side, at a distance of about thirty meters. Damir saw us and used the mike again, a note of caution in his tone, “De-a-r mentors, organizers, and applicants, please gather at the center of the camp right away.” In response, the two of us turned our backs on the assembled participants and walked out of the camp.

We don’t know what happened next. Of course, we understood that the camp was in shock and that the examiners were left with no boss, having to issue judgments and rate projects for the rest of the day without me. For me, it was a shot at many targets at once, but the main one was a principle I hold dear: I am not a slave to my work. If I deem it appropriate to drop it on a whim and leave, then that’s exactly what I’ll do. And when I come back later, the work will be all the healthier for it.

We didn’t say anything to anyone, but Expedition has a kind of secret internal organization, and thus our samurai Sasha Kato knew that we would return five minutes before the camp closed. In the bushes on the riverbank Kato had stashed a backpack with two rugs, a sleeping bag, a thermos, and some other things. I picked up the backpack and we hiked along the Irtysh, talking the whole way. In about six kilometers we came to a lake and watched several ducks take flight off the water. I have a special relationship with ducks, so I said to them, “Hey, ducks! I order you to fly around the lake three times.

Go on now!” So help me, the ducks went and made three circles around the lake. “Now land!” I said—and the ducks landed.

Then the author of the Expedition into a Fairy Tale project began to believe in it for real, so we continued walking and collecting miracles. At some point I 136

realized that she was tired, so I unrolled a mat, and a sleeping bag over it, and she fell asleep. I settled on the ground about fifteen meters away from her, admiring her beauty as she slept, and drifted off myself. When I woke up, I looked at my watch and realized that the camp was closing in half an hour. We jumped up and ran as fast as we could through the shrubs and brush and fallen branches (I’ve always hated running)! And I ran, and she ran, and we both ran, until we came to the meadow with two minutes to spare. She even managed to pick a bouquet of flowers along the way.

Everyone in the camp was completely petrified. With the presentations concluded, the crowd was waiting to see how the intrigue would turn out. As we were running, we hatched a plan to present the Expedition into a Fairy Tale project together. We got there, they gave us the mike, and we started, taking turns. She began with something, and I supported her, saying, “For example, she had her reasons why she couldn’t leave the camp, and I had mine. But crossing the border into a fairy tale means crossing into the realm of the impossible.”

Everybody was listening. Then a voice piped up: “May I ask a question?

You went off with him because he’s the president of Ruyan and makes a lot of money, didn’t you? So what’s all this about an Expedition into a Fairy Tale?”

That was one rotten kid from Novosibirsk.

The girl got upset and didn’t know what to say. So I responded, “I can answer that for you, if you like, but I’m afraid that if you ask another question like that, you won’t have the legs to carry the answer home with you.” We went on with the presentation.

But the kid couldn’t hold his tongue, so he asked again.

“I warned you, didn’t I?” And that was the last thing he heard from me.

“Kato, Sabertooth, throw him in the trunk and get him out of here.”

Kato and Sabertooth packed him into the trunk of a car and drove away.

Meanwhile, the Expedition into a Fairy Tale presentation was picking up steam, as we alternated speaking. We got lost in the moment, and suddenly I realized that something like 30 percent of the meadow participants were in tears. With the camp ending and everybody getting set to depart, a wave of sentimentality washed over the crowd, leaving quite an emotional impression.

All in all, that meadow was highly intense and a smashing success. (At our recruitment meadow in Europe the students shone from day one; the Siberian meadow only got going on the third day, but once it did it was one hell of a 137

ride!)

My student was on the verge of weeping herself. She took her bouquet and gave it to Andrei Kazyuchits, with Icefox shooting the whole thing on video.

We told them about the rest of our adventure: the walk along the riverbank, the ducks, how we fell asleep, and then ran to make it back in time. By the end 80 percent of the audience was crying. Even Skrynnik, a bear of a man and forty-seven years old, was weeping like a baby.

In the camp we had big helium balloons emblazoned with slogans like “Wanted: Heroes and Enchantresses” and “Expedition,” and their strings were tied to flags. During the presentation someone untied one balloon and brought it to me. Then (of course, it was planned beforehand) we blasted beautiful nostalgic music at full volume. I handed the balloon to her, she let go of the string, and the balloon floated up into the sky, accompanied by music and fifty people weeping. The emotional charge was so powerful that our veterans still share the story of the Expedition into a Fairy Tale with new recruits, sitting around the bonfire at night.

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Part III Outside reading

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Let’s drink to those not with us here, at home, Who are out at sea, on the road, or in a dangerous battle Who are so lonely they’d forfeit their soul For a loyal friend.

May they feel at this moment some respite, Even a little, so that the next time, When we’re the ones treading the dangerous road Our unknown friends may drink to us.

—Traditional toast at Expedition feasts

Chapter 13

EPIPHANY EVE and the free skate If you have made it to this chapter, then we’ve already gotten to know each other. Now I want to invite the reader to my birthday party for a casual heartto-heart. For the past fifteen years it has been celebrated like this. On the night of January 17 a group of men head into the woods (my invitation here, however, does not discriminate by gender), regardless of the weather, which can vary from plus 3˚ to minus 40˚ C. Typically there are fifteen or twenty of us. First we briskly pitch camp, clear away snow, fell dry pine, build a long, stretched-out Siberian-style bonfire called a nodya,33 and, of course, lay out a festive table. Then I receive my presents. My friends are quite resourceful: I’ve gotten everything from an upright piano carted in by truck, to a set of water skis, to a custom studio recording by one of my favorite musicians. Then they offer toasts to my health, in a preplanned order. Once the compulsory program is finished, the free skate begins. Within half an hour my guests and I are feeling quite mellow.

People break up into circles of three or four and talk quietly. The crackling fire punctuates the discussion. Surrounded by majestic snow-covered firs, 33 From the Finnish nuotio, meaning bonfire.

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some people begin to drift off in their sleeping bags right there by the fire (we don’t pitch tents in winter because it’s too cold), while the ones who fell asleep earlier start waking up. January nights are long.

As daybreak nears most of my birthday guests are sound asleep in sleeping bags by the fire. As the saying goes, “The opponent is down, with ammo to spare.” A number, traced by candles in the snow, burns down. Next year it will be forty-four. Over the sweet snoring of those who didn’t make it till dawn, you can hear the voices of those who either did, or who have already gotten up. They are cooking the traditional breakfast of steamed kasha in a pot. Everyone is sober, but the level of honesty is off the scale.

There are plenty of things to share before the sun comes up. Things that we have neither time nor inspiration to share in the daily routine. So sit back, pour your favorite drink into your Expedition thermos cup, and watch out that your toes don’t catch fire or get frostbitten.

On beauty Anyway, let me tell you a joke. A company joke. About the CEO’s vacation.

So, Kravtsov is going on vacation. Bocharov drops everything and flies to the French Riviera (or some coast on the Indian Ocean, it doesn’t matter). He looks around and says, “What a mess! The beach is dirty, the sand is rough, and the broken shells are stinging my feet.”

Two hours later the beach looks pristine, with not a shell in sight. Deck chairs and umbrellas line the beach.

“Now that won’t do,” Bocharov adds. “The waves are not breaking perpendicular to the shore. They’re undisciplined, not how we like them. And the seagulls are flying chaotically, like they’re disoriented.”

By evening complex hydraulic structures have been installed to force the waves to crash perpendicularly onto the shore, and the seagulls are flying in flawless formation: wing to wing, flap after flap, each individual staying in place. A solitary sail gleams white, exactly where it was ordered to be.34 Bocharov wipes his glasses and gazes out at the horizon.

“The color separation is all wrong. The sun needs to set behind that mountain over there, not this one!”

Another half hour, and the sun is going down behind the correct mountain, 34 The “solitary sail gleams white” in the opening line of Mikhail Lermontov’s famous poem “The Sail.”

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and every rock glows with its proper part of the color spectrum. The harmony is complete.

The next morning Kravtsov arrives. He drops into a deck chair and says, “Well, I’ll be! You just can’t buy this kind of beauty!”

On the leader of an elite group and its final campaign The rafting trip on the headwaters of the Kuban River (that’s in the Karachay-Cherkess Republic) began near the village of Elbrussky. It was the spring of 1990, and we had a team of twelve outstanding individuals with two catamarans. The guys were graduates of several Moscow universities: the Gubkin Russian State University of Oil and Gas, Moscow State University, and the Bauman Moscow State Technical University. Everyone was experienced, and well aware of what executive authority means. Our group’s admiral was named Konstantin Tabakov.

On May 1 we were scheduled to disassemble our catamarans in Karachayevsk and proceed to the area around the village of Arkhyz on the upper Bolshoy Zelenchuk River. We came ashore in a large meadow, which bordered up against an almost vertical slope. To the right and left of us were two groups of locals from Karachayevsk.

One of them walked over and threw a mugful of beer in the face of one of our guys. And here’s the interesting thing: the average age of our team was twenty-two to twenty-four years old, and none of them moved a muscle.

They all looked at Tabakov, awaiting orders. He said, “Continue packing up our boats, quietly.”

Catamarans are held together with ropes, so as long as the ropes are intact, you can easily jump in and head downstream. But the moment we cut the ropes, we had cut off our only retreat option.

Seeing that we weren’t retaliating, the locals kicked it up a notch. They blocked both paths out, forcing us to climb the steep slope.

We had two guys covering our rear: Gleb, a kung fu master, and Ilya, the Russian national Slavic-hill wrestling champion. When the locals realized we were escaping up the slope, they flew into a rage. But our two men held their ground, defending themselves as they were hit, but not striking back.

Once we were up the hill, we entered a dark bus terminal and decided that if anyone followed us, we’d fight to the end. And whatever happened 143

would happen.

Nobody came.

The group was a psychological wreck. Our spirits were shattered. Everyone thought that the admiral was wrong to have ordered us to behave the way we did.

That was the last campaign of that star team.

I’ve thought about it for many years. Probably everyone else who was there has, too. I don’t know what Tabakov was thinking, but I figure that he felt he was doing the right thing. All things considered, it came out better than standing over fresh graves and explaining to people’s parents how the situation got out of hand.

In any case, the incident clearly demonstrated what an outstanding group it was. Not a single member did anything. Everyone looked to the admiral and supported him: if you tell us to wipe the floor with them, we’ll wipe the floor with them; if you tell us not to touch anyone, we won’t touch anyone.

You are our leader, and your word is our command.

On Dyrchik Once I arrived at a water tourism festival on the Vuoksi River, where Expedition had set up camp. The Vuoksi is essentially a mountain river running between two lakes. Everyone there was either in kayaks or on catamarans.

When the races began, I declared that I was bored to tears. ”Tomorrow we’re racing Dyrchik,” I said.

My entire team said, “Sasha, are you crazy? He’ll sink!”

I replied, “Hey, it’s my Dyrchik. If he drowns, so be it.”

The whole camp was up in arms: the women were crying, the men walking around grim-faced. Everyone loved Dyrchik.

“Why so morose?” I said. “At five p.m. we’ll celebrate the drowning of Dyrchik as an offering to the Vuoksi River! Buy some black face paint, put diagonal streaks on your face, and go do some PR. There are thirty thousand people here!”

Soon the cops paid us a visit.

“Fellas, we’ll give you two police motorcycles. Sink them, but give us the buggy.”

“No, we’re drowning Dyrchik!”

One hour before the announced time, I said, “Are you all retarded, or what?

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Did you really think I was going to drown him? Now get to work on saving our Dyrchik! Pressurize the engine, secure some canisters underneath. Do something, quick! What are you just standing there for?”

At five o’clock a crowd of twenty thousand people had gathered on both banks of the river. Kato and I shot the rapids on Dyrchik.

The outlet into the lake after the rapids went under a railway bridge. As we passed under it, ten female volunteers in orange T-shirts dove into the water from a height of eight meters. An orange motorized hang glider soared into the air and a salute thundered.

Nothing happened to Dyrchik. He immigrated to Siberia not long ago, and lives on the banks of the Ob River, in Ruyan City.

On the power of argument I have a favorite table in the lobby bar at the Nakhabino Country Club, which is a hotel outside Moscow. It was at this table that I came up with the idea of the Expedition Trophy race from Murmansk to Vladivostok. Oksana Kapustina was the first to support the idea. We used our own money to buy two SUVs, painted them orange, and named them Mastodon and Discothèque (Kato crashed Mastodon in the very first race, and we crashed Disco the next year).

We decided to drive the cars to Vladivostok so that we could work out the rules. We had already completed our training and drawn up the staff schedule, when I pulled everyone together and said, “Folks, we’re not going anywhere. Three reasons. The first is that we’re good at advertising, but we know zip about PR, and that’s a recipe for disaster. The second is that each of my workdays at Ruyan is worth tens of thousands of dollars. The project budget won’t cover two weeks of my time, so that’s a no-go. The third is that we’ll never be able to get this thing off the ground, because it’s just plain impossible.”

Everyone sat there and said nothing. Among them was Anatoli Skrynnik, my former personal driver. When we were warring with gangsters and my life was in danger, I said to him once, in an effort to keep him out of harm’s way, “Skrynnik, I’m going to take a cab. You stay here and watch your ass.”

He replied, “My ass is none of your business, Sasha, let’s roll.”

That was way back in 1997.

And this time, it was Skrynnik who spoke up. “So what? We know all that.

But we still have to go.”

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I didn’t know what to say. If any one of them, or all of them together, had stood up and contested each argument separately, they would have had absolutely no chance. But I had no retort to the argument, “We still have to go!”

And so we went…

When you turn off the gas, the light and the iron, don’t forget to leave the house

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Chapter 14

expedition trophy: causes, outcomes, long-term consequences Journal entries from our pre-scouting run On March 4, 2004, two SUVs set out from Moscow to Vladivostok, kicking off a major project called the international Expedition Trophy race. They carried five men and one woman, the standard makeup of the teams that would battle for the main prize, fifteen kilos of gold, in February of the following year. The objective of the dry run was to formulate rules for the future race, and to experience firsthand the hardships of the world’s longest snow-covered route. In addition to highways, a substantial part of the track runs over adverse terrain, including the ice of Lake Baikal.

March 5, 2004 Seventy kilometers short of Kazan we were stopped by traffic cops for the first time. The officer, a young Tatar, checked everything and wished us a safe journey. In light of this, we decided that we wouldn’t pay off the cops under any circumstances until we reached Vladivostok. With 835 kilometers of road behind us, we made it to Kazan. By accident, we stopped underneath a billboard showing two cars emblazoned with the Marlboro logo. In the center of Kazan is the White Kremlin, nearly a thousand years old. Just outside its walls a new mosque and an Orthodox church stand side by side. This is all on the shores of the Volga. Looks beautiful, majestic even.

1254 If future Trophy racers were given a creativity test at a control point (failing to solve it within ten minutes earns a hundred-kilometer penalty lap), this would really level the playing field in terms of teams using different types of vehicles. Building on the idea: ten thousand kilometers, ten off-road stages. Ten different tests. If you complete each successfully, you can keep going. If not, you have to repeat the stage.

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1442 Thanks to the Tatar traffic cops, ultimately we lost our “immunity.” We paid fifty rubles for two cars, for not having our seat belts fastened.

Our dialogue with the cop: “This is your first lesson. Police authority must be respected. Shall I write you a ticket, or can we reach agreement, as usual?”

“Officer, we’re testing out a route. We’ve got barely enough cash for gas.

Can we give you a magazine to read that tells about our expedition?”

“We don’t have time to read. Look at the road: the cars just keep coming and coming.”

We hand over a fifty.

“So, what was that about a magazine?”

“All out,” we answer curtly, closing the doors and taking off.

1502 1,000 kilometers We’re at a crossroads between Elabuga and Izhevsk. The road is blocked by a Ural police car. We go around it. Two kilometers later we pass a very recently burned-out Icarus bus, which was carrying shuttle traders from Moscow. Some of their merchandise has been salvaged and piled up by the side of the road in typical Chinese striped bags. People are standing around in a circle. We can’t quite make out their faces at high speed. This explains the Ural car. As usual, we sweep past the seared fates of other people.

1646 “An encounter with a wonderful family” is how Skrynnik referred to what happened five minutes ago. I spotted a baby moose standing by the road.

We made a sharp U-turn with both cars, and Seldemirov popped out the window with a camera. We drove up to the little moose at low speed, filming all the way. When I conveyed to him my regards on behalf of all the participants in the Expedition project, he decided to go back through the bushes and into the forest, where it turned out Mama Moose and Papa Moose, with his huge antlers, were waiting for him.

1656 With Russia’s first corporate radio network now operational, I used a satellite phone to recite an awesome Kipling poem. Half my audience 148

cried, the other half thought it was a recording. It was replayed several times at all our offices.

2118 (local time) We’re on a beautiful, heavily snowed-in road. We’ve passed through Izhevsk and Chaykovsky. There are few cars on the road, and the wind is blowing hard into our faces, i.e., into the windshield. Both vehicles are barely handling the road, despite the fact that they’re 4x4s. Ours is doing a bit better because it has studs.

March 6, 2004 0317 (local time) It took us three hours of driving in circles to find the way to our old friend Rifat. How come? A hairy situation getting stuck in a youth café. We barely managed to work it out. Two lessons: Lesson 1: All cars must work with identical maps. Our car’s map had a road that the other car’s map didn’t, and vice versa.

Lesson 2: If you want to get where you’re going faster, stick to highways and avoid taking shortcuts on country roads. Statement of the night: “We’re not driving in circles, we’re charting future off-road race routes.”

1504 (local time) We’re at the stele marking the division between Europe and Asia. It’s a geographical sign, erected in 1837 on an arm of Berezovaya Mountain at the highest elevation of the Siberian tract, which crosses the Ural Mountains ridge from west to east. The end of last night was very taxing for everyone, because none of us has slept for nearly two days and two nights. Still, it was a shame to rush past that place in the dark, leaving behind the beauty of the Ural Mountains, clad in their coniferous forest, without even getting to enjoy it. We made it to Rifat’s around 6:00 a.m. and immediately “shut down,” as if someone had unplugged us from a power outlet. In our collective opinion, waking up became the first serious challenge of our run, considering that we got less than four hours of sleep.

We drove down a winter trail—a future off-road stage. Along the track we met a horse pulling a load of hay, and fed it some rolls. We liked this stage, and it’s good that our friendship with Rifat enabled us to organize everything in the best possible way.

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1515 (local time) 2,000 kilometers The fish pie that Oksana’s relatives had delivered to us right on the road was incredible. Entering the city, we drop by a car wash. Two thousand kilometers on wet roads has changed the exterior of the cars so much that the Expedition logo is completely invisible, and you can barely see the orange through the dirt.

1700 (local time) A small press conference for the Ural media in a tavern called Podkova (Horseshoe). We’re happy with the reporters, and they’re happy with us.

They enjoy asking us questions, and we enjoy answering them. Half an hour later two shiny orange cars take off, escorted by a TV crew from the Yekaterinburg TV channel ATN. We make a brief stop at the former Ipatyev House, where the tsar and his family were murdered.

1850 (local time) 320 kilometers from Yekaterinburg We set out from Yekaterinburg toward Tyumen. In the process of debating the schedule, a conceptual discussion heats up. Some propose to keep driving into the night for as long as we can, and sleep in the woods if we get tired. Others want to spend the night at a hotel in Tyumen, which is only 320 kilometers from Yekaterinburg. The issue is that the preliminary plan calls for the Expedition Trophy participants to be prohibited from spending the night in towns. Since we’re supposed to be in their position now, we need to follow the rules of the future race. On the other hand, it’s already clear that it will be impossible to enforce this rule: there are too many motels along the roads, plus the trophy racers will spend most nights driving anyway. Another argument against driving through the night is that it’s a pity to miss out on the beautiful vistas and local sights.

Ultimately we reach a unanimous judgment of Solomon: to alternate one night in the car, one night in a hotel, and one night in the woods. So, tonight we spend the night in Tyumen. Yesterday I forgot to note that we spotted a hare, an owl, and two kinds of weasels: common and least.

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March 7, 2004 1100 (local time) We’re in Siberia! We crossed the border between the Sverdlovsk and Tyumen Regions. There’s a full moon. The skies are clear, and you can tell it’s cold, even through the car window. An hour ago we popped into the town of Kamyshlov. My grandma and aunt live there. They’ve already received the second subscription issue of Expedition magazine by mail. Grandma’s Uralstyle belyashes35 and shangas36 are warming our bellies. The deeper into the woods, the fatter the guerillas!

1120 (local time) 200 kilometers from Tyumen We’ve driven two hundred kilometers from Tyumen. We’re pondering how to structure the trophy race. The algorithm: ten thousand kilometers in ten off-road stages between major cities. A control point at the entrance to a segment, another at the exit. In each city, set up the control point at the best hotel. This allows: a) the race participants to wash up; b) holding press conferences; c) utilizing the hotel business centers for communications; d) creating comfortable conditions for fans following the race by either train or bus; and e) somewhat urbanizing a heavily off-road race.

1256 (local time) 2,602 kilometers Grabbed a bite to eat at a roadside café. Lovely, simple women make their own pelmeni and bake pancakes. A taciturn man heats up a wood stove. One hundred fifty kilometers from Novo-Chulym, three to five kilometers to go to a long-haul truck stop. Our lunch cost not even three hundred rubles for six people, that’s less than fifty rubles a person. In the café there’s a stand with goods for the road. Skrynnik bought himself a bottle of hard-to-find Troynoy (Triple) brand cologne.

1355 (local time) Steppe, everywhere you look; the Kazakh border is clearly nearby. We stop at a huge haystack, climb on top and frolic like puppies for the camera. Such 35 Belyash is a round fried meat pie.

36 Shanga is a curd roll.

is show business.

1612 (local time) Seventy-five kilometers to Omsk. We tried to set an off-road stage. The map showed a regular country road, not just a winter trail. Drove into a snowdrift next to the highway as soon as we were out of the village, and had to turn back. At least we drank water to our heart’s content from a real well.

1623 (local time) A second attempt, seven hundred meters further on.

The first car gets stuck. Sabertooth’s voice comes over the walkie-talkie, “And that’s that!” We characterize the situation with a somewhat different word in the Russian language, radio back to him, and turn around.

The villages have beautiful frames on the windows, and sometimes on the gates.

1724 (local time) We cross a snow-covered field that’s almost infeasible. Caught in a snowstorm, we decide to turn back, so as not to get stuck for good. And then Yarosh does a full arc on the virgin land, as if skiing downhill. What a show-off! “If he gets bogged down, he’s not getting our winch!” says Skrynnik. As a tactic for charting off-road routes, it’s so-so. Besides, even an existing road (or rather track) may not be there a year from now. Maybe what we need to do is right before the race have a group of two to three people come to a city, rent a UAZ off-roader, and plot the stage one to two days before the first team gets there. Another idea: give out the key to the next control point only when you pass the last one. Anyway, when we get to Vladivostok we’ll review everything and think about it some more. The storm is picking up, but we’ll spend the night on the snow no matter what.

1800 (local time) What a blizzard! We’re driving at thirty kilometers per hour max.

Sometimes we can’t even see the car ten meters ahead of us. We’re shooting everything on film through the window. Everybody’s having fun. At least it’s not your typical bumpy but boring ride over bad asphalt.

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2113 (local time) 3,000 kilometers from the restaurant We’re eighty kilometers out of Omsk. We had dinner there at Patio Pizza.

Our only Ukrainian is Skrynnik, so I ordered pizza with lard for him.37 They didn’t have lard, so the cook had to customize the order by cutting strips out of a fillet of sturgeon. The people of Omsk are very lively and direct. Everyone keeps asking about our expedition.

From those exchanges: “Murmansk to Vladivostok. Ten thousand kilometers. Ten off-road stages.

The prize—fifteen kilos of gold.”

“Oh, I don’t care about that. I want to know if I can follow you to Novosibirsk in my car!”

March 8, 2004 0223 (local time) 3,412 kilometers We celebrate International Women’s Day at a roadside café. As the guys rightly noted, everything is going smoothly. Every thousand kilometers, or each full twenty-four-hour day from the start, we reach a major city.

For the past several hours there’s been no sign of a café, and then, just as midnight approached, one was handed to us on a platter! We’re taking turns sleeping on the backseat for an hour and a half or so. In the other car the guys are listening to audio books. Today they heard a phrase from Leonid Filatov’s Love to Three Oranges: “If you find yourself in the bedroom,…or lie there with your eyes shut.” Applies to the backseats of both cars very well. The wind outside is still strong. Visibility worsens when driving through a forest, and drops to two to three meters when driving through bushes, despite our powerful headlights. We’ve got fifty kilometers to go to the rendezvous point, agreed on yesterday with our friend Melnikov from Novosibirsk. We’re 3,412 kilometers out from the Expedition Restaurant in Moscow, that’s over a third of the way. I’m alarmed by the prospect of sleeping in a chum outside, with the soft wind and no fir trees around.

But we’ve got no choice. Though an hour and a half from now we could be lolling in beds in a Novosibirsk hotel. Living the Expedition Trophy means living the Expedition Trophy. Any car can get stuck at night on a snow37

Lard is traditionally a delicacy in Ukrainian cuisine.

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swept road. They need to believe that the guinea pigs made it through a blizzard successfully. And so the guinea pigs are diligently preparing for the experiment with extra layers of sweaters and coats for the outside, and gin and tonic for the inside.

0509 (local time) We couldn’t spend the night in the area Melnikov said. Exits from the highway lead only to power substations for oil and gas fields. We keep going toward Novosibirsk. Skrynnik and I both feel that we didn’t do the night in the tent right. Bocharov helps us with overnight accommodations.

Everyone feels sorry for his wife. In Moscow it’s after 2:00 a.m. on the morning of March 8. (Morning mystery is solved: strong wind twisted something in the headlights, either white butterflies or small birds. It appeared to be pieces of thin birch bark, torn off from a tree by the wind.)

1400–1900 (local time) We managed to get up and grab a bite. We’re trying to map an off-road stage along the shore of the Ob Sea (the local reservoir). But all the roads are closed. Finally we break through to the shore. The wind is strong. It’s cold. In ten minutes we raise a chum and fire up a heater. Then we record fresh impressions from all team members. The discussion is laid-back and contemplative. Three of our Novosibirsk acquaintances drive up in two SUVs. They’re very interested in our project. We treat them to yesterday’s Omsk pizza, warmed up on our heater. It’s warm and cozy inside the tent.

A sharp contrast with the bitter cold outside. When the guys’ headlamps are on inside the chum, it’s fun to watch the dancing shadows on the tent wall from the outside.

2000 (local time) Since tomorrow’s press conference is our first compulsory stop, we’re headed for Novosibirsk, to a posh dance club called Rock City in the city center. The security people agree to let us in on condition that we remove our logo-covered jackets. We refuse, and start arguing. Fifteen minutes later, the combination of our energy and three gift copies of Expedition magazine prevails, and we’re allowed in.

For the first time, only two of our drivers aren’t drinking: Sabertooth and Stew (real name Seldemirov). We get some beer, and gin and tonic.

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Seldemirov tries to text digital trip photos to the Expedition Restaurant.

Yarosh and Oksana hit the dance floor. Skrynnik and I stay on the club’s second level, watching the dance floor on the first. Discussing the merits of Siberian women. Now and again the helicopter logo on Yarosh’s back flickers momentarily in the middle of the dance floor. “Our guy is the one setting the place on fire,” Skrynnik nods with satisfaction and sips his beer. Before long we join them on the dance floor, make a circle and dance our socks off. I don’t think we could have done it quite like that if our Expedition jackets had been checked in the coatroom.

2300 (local time) Satisfied, we return to the hotel, because we have a sauna booked for midnight. We debate washing the cars before the press conference. The road was frozen all the way from Tyumen, but not dirty, and only the slogan “There’s plenty of room on the road” is trimmed with a streak of winter dust. We conclude that it’s even better this way, and compare the headlights of our cars to a woman’s eyes with makeup on.

March 9, 2004 We get up, grab a quick breakfast, and head to the ITAR-TASS news agency office. The press conference is a smashing success. More than ten journalists show up. There’s obvious lively interest, despite people being hung over from International Women’s Day. Everybody’s happy, and off we go.

At 1100 hours Moscow time (1400 hours Novosibirsk time) we cross the border into the Kemerovo Region, and the clock jumps ahead another hour.

We pass a police station and immediately come upon a cluster of structures and a lovely, haphazard market offering local products: honey, butter, sour cream, and so on. Skrynnik the Ukrainian buys a chunk of lard and is infinitely happy. We lunch at a roadside café, where the owner lets us smoke inside, which is quite unusual. Very tasty, very cozy, very cheap. It’s even somewhat embarrassing to pay so little for such a marvelous lunch.

You can always tell when people put their heart into something…

1630 (local time) The city is called Leninsk-Kuznetsky. It looks very bleak and unfriendly.

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Even on the approach, from far off you can already see lots of chimneys disgorging black smoke. Dreary gray houses, streets that make you nervous. Skrynnik even got a headache. We’re off the main road. Stop by a coal mine to ask directions to Kemerovo.

2220 (local time) 4,400 kilometers We’re in Krasnoyarsk Territory. This is Astafyev’s land,38 and in my opinion it’s the very heart of Siberia. The crews are having a contest of wits over the walkie-talkie. In reality this is a veiled form of supplying energy. Another snowstorm is picking up. We slow down to ninety kilometers per hour due to poor visibility.

2230 (local time) 4,415 kilometers One hundred seventy-nine kilometers to Krasnoyarsk. Suddenly an enormous truck appears right in front of us. I’d kick the maniac in the teeth if I could. On the road we often encounter long narrow tongues of freshly drifted snow up to thirty centimeters high.

2300 (local time) We stop to eat along the road at an establishment with an amusing name— Lemonade Joe. Inside there’s a restaurant and a café in separate spaces. We go into the latter, figuring the food will be prepared faster. Oksana returns to her Moscow rule of not eating after 6:00 p.m., since she’s watching her figure. The rest of us aren’t, as usual. We pour the contents of a bottle of dry white wine into an empty mineral water bottle. Half an hour later we’re back on the road.

2350 (local time) The road forks into two indistinguishable directions. “That’s nice: two roads and no road signs whatsoever!” Stew grumbles. “Just like our lives,” I reply, and reach for my journal.

0125 (local time) Another snowstorm with terrible visibility. Our speed has dropped to just 38 Victor Astafyev (1924–2001) was a famous writer in the era of the Soviet Union.

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fifty kilometers per hour. After a long discussion about whether or not to wait for sunrise, we decide to keep pushing ahead to Krasnoyarsk. We (Seldemirov, Skrynnik, and myself) are driving ahead in our lane. Because the right wheel of our car keeps splattering snow off the drifts, which gets picked up by the wind and creates a mini-blizzard within the snowstorm, after suffering for a while the second car adopts an interesting tactic: now they’re driving a hundred meters behind us and in the oncoming traffic lane, effectively avoiding our snow. When we spot a car coming we warn them over the radio, not that there are a lot of cars on the road.

0140 (local time) 4,586 kilometers Exactly five days on the road. Exactly half the distance traveled. A road sign reads: “3 km to the Airport “Yemelyanovo”, Krasnoyarsk.”

March 10, 2004 0700 (local time) 4,589 kilometers We slept four hours at the Oktyabrskaya Hotel. At three o’clock Moscow time (seven o’clock local time), we’re up again. We stop by one of the local points of interest, a church on a hill; we had seen its cross on the skyline several times.39 It offers a beautiful view of Krasnoyarsk. It’s an interesting city; we’re all here for the first time. Lots of old buildings from before the revolution: some are wooden with fanciful, ornate trim; others are stone, reflecting the local architectural style of the eighteenth and nineteenth centuries.

Then we’re off to the Krasnoyarsk Pillars, the most famous wildlife reservation in this region. I think that, after Lake Baikal, the Pillars are the second most meaningful site on our entire route. We pay a thousand rubles per car at the entrance to the preserve and begin the four-kilometer ascent to the Pillars along the snowbound forest road.

Halfway up one of the cars gets stuck. The wheel fell into a hole at a spot where the snow was waist-deep. Everyone is smiling, since our blood is pretty stagnant from five days of relative immobility. For the first time 39 The Shrine of St. Paraskeva on Karaulnaya Gora (the Watch Hill) is a Krasnoyarsk landmark.

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since Moscow, we break out a winch, fix it to a tree, and jerk the car free.

It gets stuck again right away. In ten minutes the smiles gradually fade from our sweat-soaked faces. It’s early morning on a weekday, and the preserve is full of people. Some are taking a walk, others are out for a run.

One burly old man in a track suit was particularly colorful. He ran toward us as if in a cloud of steam, his gray spade beard trimmed with frost. The old man had an aura of such strength and vigor that the thought crossed my mind: he’ll outlive us all by thirty years. The second car gets stuck as well, to Seldemirov’s joy. Finally he can take his time and shoot all the photos and videos he wants. Oksana and Seldemirov leave for the Pillars, the rest of us stay to untangle the winch, and I use the rest stop to write in my journal. The powerful energy of this place is palpable. I don’t think it’s the stone giants (may the locals forgive my blasphemous thought), but a special kind of grace. Even the birds land fearlessly on your outstretched hand.

The guys are having issues with the winch. Sabertooth has an axe in his hand, looking very pirate-y. The problem appears to be serious. I ask Seldemirov to take footage of me writing in my journal inside the car, so the guys working the winch won’t think I’m loafing.

Over an hour wasted on the winch, with little progress. Seldemirov turns his camera away from me, immersed in my writing, to Yarosh, pulling on the towline. There’s the real show!

March 11, 2004 1134 (local time) I woke up a little while ago. Seldemirov took my place in the “bedroom.”

The road is like a skating rink. Not many cars around, but we’re passing terrible accidents every twenty to thirty minutes. Often the vehicles are flipped over, both trucks and passenger cars. Passed through the city of Kansk, picked up a cell phone signal there. We have a press conference scheduled in Irkutsk, so we’ll be keeping up a good pace, meaning we won’t drive fast, but no stops, either. I note the fact that no one has switched cars in the past day. Skrynnik, Seldemirov, and I are in one car, Oksana, Sabertooth, and Yarosh in the other. People are probably tired, and that’s not too good.

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1203 (local time) The road dried out a bit, we’re picking up speed. It’s interesting: you can describe the taste of pineapple with words, or you can taste it. You can hear from childhood on, that you live in a great country containing onesixth of the whole world’s landmass. But now we’re tasting the size of that number. The land of Russia seems so boundless, it takes your breath away. Especially when you realize that our route is just a tiny thread in an infinite sea of taiga hills, stretching to the horizon.

1420 (local time) Half the team is passed out. One hundred eighty-five kilometers to go to Irkutsk. I try to keep up the banter over the walkie-talkie to wake up the other car. Sabertooth responds, “No smoking in the cabins of our aircraft.”

I counter that not only is there smoking, but there’s all kinds of shenanigans that would make some people blush…

1427 (local time) 5,555 kilometers Unbelievable: exactly six days on the road, 5,555 kilometers!

1527 (local time) For the past half hour we’ve been observing anomalous weather events.

According to the thermometer, the temperature dropped sharply, from minus 12˚ to minus 21˚ in the span of twenty minutes, then rose to minus 14˚ over the next ten minutes. The terrain is hilly, but this is unrelated.

Just a local cold-weather anomaly. One hundred ten kilometers to Irkutsk.

March 12, 2004 0530 (local time) Yesterday at our noon press conference we were stunned: five or six TV cameras, twenty-five to thirty journalists. I couldn’t believe it at first, and the first two or three phrases came out all jumbled. After that things were marvelous. Journalists seem to like us, and the feeling is mutual. Our guys feel like rock stars—a just reward for the fatigue of traveling 5,700 kilometers.

0540 (local time) I’m sitting in a bar in the company of a beer bottle and a couple of kippered 159

freshwater herring. Tomorrow will be the most dangerous day of the entire route. I don’t even want to ask myself, “Why are we risking our lives on the ice of Lake Baikal?” All the questions have been asked, and all the answers found. We decided the risk was reasonable and justified. I’m more concerned with minimizing the degree of danger. I’m also thinking about ways to support Oksana, who has claustrophobia so she’s terrified of the car going through the ice. Maybe we should put her on the roof in a sleeping bag. I wonder what we’re going to do if she digs her heels in and refuses to go? How different these worries are from the nervous spasms of Moscow life! Still, I feel a bit lonely. I’m going to hit the sack; we’re getting up at 7:00 a.m. tomorrow.

1140 (local time) Our guide is Alexander Alexandrovich Burmeyster, a dynamic man and a powerful leader with a healthy dose of respect for himself and his companions, clearly at home with nature and on Baikal. But it’s a respectful closeness, like that of a relative, rather than based on the arrogance of civilized Homo sapiens. He says we need to buy offerings to the spirits and sprinkle them. But the store on the way out of Irkutsk is closed. Half an hour into the trip the muffler on our guide’s UAZ falls off. We stop. Take out a whole bottle. He sprinkles it from the first car cum sole then teaches us how to do it. We keep going. It’s sunny out. The temperature is minus 20 degrees.

1340 (local time) Sun, snow, ice. We’re a third of the way across Lake Baikal. Our instructions are short and to the point. The technique for getting across cracks involves a small ice pick with a wooden handle, designed for cutting ice holes. The guide sticks the pick into the ice, then walks about four meters away. That’s the gate the car has to go through. The faster the better. The sun reflecting off the snow burns your eyes. There’s absolutely no wind. Mirages begin to appear. The cape to our left changes shape every thirty seconds: one moment it’s a nose bulging toward the sky, the next a sloping forehead.

What a haul of photos today! The energy on the lake is staggering. Makes you want to sing, dance, declare your love for everybody, and roll in the snow. We keep moving.

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March 13, 2004 0820 (local time) We’re leaving Ulan-Ude. The temperature is minus 20 degrees. Yesterday we put up a chum in the middle of Baikal and boiled tea on a gas stove. The ice under the tent was a piercing ultramarine.

The second half of our journey across the lake was trouble-free, but adventures did await us when we tried to come ashore. The first car got hopelessly bogged down. It took a combination of two winches, furious shoveling (a first!), and a boatload of profanities for an hour to pull it out onto the road on terra firma.

The second vehicle gathers speed across the lake ice to try and fly over the impassable spot. The leap is followed by a deafening thump. Our orange tanks have never performed such pirouettes before! We pull the second car out in less time than the first. We need to push on.

Somewhere up ahead, outside the town of Neryungri, 1,500 kilometers from Baikal, Kato, Burkin, and Merkulov are already pitching camp. After Baikal I feel like the lifeblood has been completely drained out of me, and the others don’t look much better. Our looming journey across the frozen lake had captivated our thoughts all the way from Moscow. It was something exotic and unexpected, even for the local media. Listvyanka– Tankhoy is the most feasible route across, so that’s the one we took. But on the Tankhoy side there’s not a single exit road for cars! Now that’s all behind us. And there are hundreds more kilometers of asphalt still to go.

P.S. The whole car reeks of the kippers. Why the hell did we even buy them?

March 14, 2004 1800 (local time) We made it to camp. March 14 is the day of the Russian Federation presidential election. We met up at eight o’clock (local time). During the last hundred kilometers we were giving the GPS coordinates for the camp to the second car by walkie-talkie every ten minutes.

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March 15, 2004 1615 (local time) An hour ago we encountered a large owl perched on a road sign. It appeared to enjoy posing for the camera.

1700 (local time) 8,000 kilometers from Moscow The odometer shows we’ve come eight thousand kilometers from Moscow.

The marker on the railway running parallel to our route says 7,575 kilometers.

2000 (local time) Four grouse fly across the road. We’ve temporarily entered a zone with satellite connectivity.

Turns out the helicopter from Neryungri didn’t fly out to pick up our guys due to bad weather. They were expecting it at 1:00 p.m. and were supposed to break camp. Their satellite link isn’t working, and we took ours away. I have mixed feelings about it. On the one hand, it’s too bad for people to end up in the taiga in winter without transportation. No one knows when the weather will break. On the other hand, I’m proud of them and proud of the fact that I have friends like that. They’re also in the race now, just like us. But we’re in the role of participants, while they’re the organizers, pitching chum tent camps all over the country. This training run has turned out to be quite something…

2146 (local time) 8,341 kilometers We’re back on a paved road! For the first time in two days and about 1,600 kilometers. Suddenly there were two horses, right smack in the middle of the highway, at night and with no side lights!

March 16, 2004 0730 (local time) The night’s events: both cars are temporarily down, one with a flat tire, the other with wiring issues. Forty minutes and the problems are fixed.

Past Birobidjan we pull one car out of a ditch. Sleep deprivation has me 162

seeing things: an hour ago I thought I saw the number 88888.8 km.

1540 (local time) 9,307 kilometers We’re on the final stretch from Khabarovsk to Vladivostok. Last night was the toughest for me. Sleeping (rather, falling asleep) with my eyes open caused hallucinations, both visual and auditory. The cars revolted as well, and were unwilling (or unable) to keep going. Those things aside, we liked Khabarovsk. It has the good vibes of a respectable provincial town. In a gift from fate, we make the acquaintance of Vitali Mushta, head of the local 4x4 club. He’s an uninhibited guy with an open smile and a strong face. His car is the type they call a “crocodile,” and looks like it was built from an Erector set. Pieces of plywood cover the doors, with fishing rods, a jack, a rug, and a pair of felt boots hanging on them. What we mistake for a spare tire has a loudspeaker installed in it. “Goes up to forty-seven decibels, but your eyes start watering at forty,” he comments. Without hesitation he decides to come with us to Vladivostok. He talks a lot about off-road racing; everyone in our crew finds his knowledge and experience fascinating.

On the one hand, I want to sleep. On the other hand, it’s a shame to miss even a moment. We cross the Sikhote-Alin ridge, where Vladimir Arsenyev once hiked with Dersu Uzala.40 It’s already spring in the Far East, with a temperature of plus 6 degrees and streams running as if we’ve broken through an ice crust.

“You mean you really exist?”

The 2006 Expedition Trophy race inspired 1C, a Russian game developer, to make a computer game called Expedition Trophy. It sold well all over the country. In 2007 we didn’t hold a race, but organized a round-the-world tour instead. Two cars set out from Moscow for Vladivostok. We held press conferences in major cities and hung nest boxes for birds, which everyone seemed to really like. Journalists followed us everywhere.

40 Dersu Uzala (English Dersu the Trapper, London: Martin Secker & Warburg, 1939), a memoir by Russian explorer Vladimir Arsenyev, was published in 1923. It tells of his experience in the Ussuri River valley as a surveyor in 1902–1907, when his guide was a Nanay trapper named Dersu Uzala. A joint Soviet-Japanese film titled Dersu Uzala, directed by Akira Kurosawa, came out in 1975.

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Two cars arrive in Tyumen and stop by a hotel. A man runs up to us with his eyes popping out of his head.

“Whoa, you mean you really exist?”

“Yes, why?”

“I was playing the Expedition Trophy computer game with my son all night, thinking how cool the guys from 1C were to come up with it. And then I come out and your orange cars are sitting there!”

The legend of the Kalmyk flight attendant The crowning moment of Expedition Trophy 2010 was crossing the Main Caucasus Ridge. The preceding stage of the race had been run through Kalmykia.

A young woman was walking on a street in the city of Elista. Suddenly a big, beautiful SUV pulled up to her, belonging to Sergei Radchenko, owner of the Land Cruiser Club company.

“Let’s go for a ride,” Sergei offered.

“OK, let’s,” the girl responded, and got into the car.

She became known as the Kalmyk flight attendant.

One of the conditions set by the organizers was that all registered participants in the event had to climb to the top of the Grachevsky Pass, with or without their vehicles. On the morning of March 7, as the contestants were climbing, thick and wet snow started to fall. The Captains’ Council decided to climb to the summit on foot and take a group photo to prove to the organizers that the pass had been conquered. This led to a heated discussion. Two crews wanted to cross the ridge in their vehicles. The others proposed to drive around it. In the end they split up. One of the two cars that resolved to take the summit by storm carried our director Sasha Fedotov with his camera. In the other was the Kalmyk flight attendant.

By evening the command staff, as well as all those who had gone around the ridge, were on the shore of the Black Sea at a children’s camp called Eaglet. There preparations were under way for a race-concluding regatta on inflatable sailing catamarans. The last contact with Fedotov on March 7 had been at midnight. He reported that they were at the top of the pass with their vehicles. The next morning the captains were being briefed. Suddenly the organizers received an SOS from Radchenko. Flying a helicopter in bad weather didn’t seem possible. The command staff split in half, with one half 164

handling the rescue mission and the other preparing the final regatta. In two hours we learned that everyone was alive and in one piece, but that one of the vehicles had sunk in the river on the descent. It had sunk along with all the laptops, cell phones, money, and documents. This video is on our site.

When the suddenly broke crew made it to the nearest village, the girl from Elista fished a wet wad of bills out of her pocket, equaling a thousand rubles, and said, “Lunch money from my mom,”

An occupied seat and the Orthodox Church From the standpoint of the command staff, all veterans of the Expedition Trophy race start acting like drug addicts (and from their standpoint, we are their dealers (J). They are always trying to go back to the state of altered consciousness they were in from February 23 to March 8.

I remember when we were flying to Murmansk to start the Expedition Trophy 2006 race. Only the top brass had seats in business class: Alexander Davydov—chief commissar of the race, Vadim Uskov—the main judge, and myself as the chief organizer. The rest of our gang was in coach.

I walked up to my seat and saw that it had been taken by Sergei Brovtsev, an investment banker from Perm and veteran of Expedition Trophy 2005.

“Brovtsev,” I asked him, “how did you get here?”

He replied, “Well, I’m sitting in my villa in a Perm suburb. It’s evening, my wife and kids are by my side, and everything seems fine, but I feel like cats are clawing at my soul. I keep wondering what’s missing, and then it hits me!

Day after tomorrow is February 23, and I won’t be at the lighthouse for the start of the Expedition Trophy race! I zoomed to the airport and hopped a flight to Moscow, then made it to this business class cabin and took your seat.

Hold on, let me get up.”

“Don’t worry about it, Brovtsev,” I said, and moved to coach. Sasha Davydov followed me.

Sitting in front of us were a couple of pilgrims, man and wife, who were traveling around the globe to visit holy sites. We introduced ourselves and spent the rest of the flight in a lively discussion. At the end of it Davydov said to me, “You know, Sasha, you’re a dangerous man to the Orthodox Church.

You may be Orthodox in name, but you couldn’t give a hoot about their canons and formalities, and that’s the foundation upon which the Church stands as an organization.”

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In response I told Davydov about the “Genius of the AND” principle, set forth by Jim Collins in Built to Last.41 In essence, mediocre companies are ruled by “the tyranny of the OR,” focusing either on speculative profit or long-term investments, either creativity or a rigid corporate philosophy, and so on. But visionary companies embrace “the Genius of the AND,” and pursue both goals at the same time! Therefore, I am quite comfortable being in the fold of the Orthodox Church, while rejecting its formal bureaucratic dogmas.

If she would wait for me “See ya, wizard! It was nice meeting you. I had a great time,” a wayward beauty said to me. And she left.

I was stunned.

My confessions on the roof of the Expedition Restaurant had inspired her to fly to the North with me, just when the spring hunting season was in full swing. But, as it now turned out, those three magnificent days didn’t mean much to her.

In some ways we matched perfectly, in other ways we matched somewhat, and in still others we didn’t match at all. As often happens in such cases, there were many overt and mystical signs, plenty of poetry, and also plenty of pain. We alternated trying to understand one another and realizing that we shouldn’t be together at all.

She had a rich and varied history before meeting me, and at our most tense moment I found out that her ex-boyfriend was coming to Moscow. He was a Lett named Edgar, the captain of one the most stellar teams in the history of the Expedition Trophy race, a team to which my racer lady friend had also belonged.

To say that I was fuming with jealousy is to say nothing at all. But to say that I lacked the resourcefulness to deal with the situation would be equally unfair.

On a chain around my neck I put on the black amulet I had kept from our first and most special race, which symbolized going on the warpath, and planned a solo journey on which my chances of survival would be about 20 percent: four rivers, two of them uncharted (meaning either that nobody had ever traveled those rivers before, or if they did, no information about it was recorded), without food, and with no satellite phone or GPS device.

41 Jim Collins, Built to Last (New York: HarperCollins, 1994).

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Then I confessed my sins for the first time in my life, and before heading out I told her that if she would wait for me, I would return alive; and if she didn’t, then my fate was sealed.

The helicopter dropped me off at the foot of a massive black cliff, encrusted with blood-like patches of moss. The pilots recorded the GPS coordinates of the drop-off point and flew away. Before long the first lines of a poem came to me: The splendor of this creek My eyes for you shall wrest Down to the faintest tear…

And all the blackness I Shall leave amid these rocks— A souvenir.

I began to pitch camp. I had a Marmot brand single-occupancy mountaineering tent as my only defense against the mosquitoes. The tent was already stretched out and I needed only to secure it to a rock, when a sudden gust of wind blew it away and carried it with hurricane speed along the pebbled bank, in the direction of a bend in the river.

I dashed after the tent, tripping and falling. I ended up having to jump into the water and swim some distance up the mountain river to retrieve it. What a start! I thought to myself, laying my rifle down next to me and opening my journal.

The next morning I assembled a boat and decided to go fishing for grayling; I had started out with no food, and my hunger was intensifying.

Graylings are usually found around an underwater hole, which can be located by the appearance of an anomaly on the surface of the water in the stream. Hoping to spot one of these, I climbed onto a flat rocky plateau on the riverbank, and went along its edge. It was July, yet a deep layer of snow lay between the cliff and the bank where the fish might be lurking.

In a few kilometers I came upon a ravine, into which the snow cover dropped down steeply. From where I was standing I noticed an ideal spot to fish for grayling. At the same instant my inner voice shouted, “Danger!” As if goaded by the devil himself, I started my descent into the depression.

The slope got steeper and steeper, but something prevented me from 167

turning back. Then I slipped and careened downward.

At moments like that time does not tick along in linear fashion; it stretches into hours. Tumbling, I realized that after another thirty meters down the rocks there would be nothing left of me, except maybe my ears, when I hit the water.

I caught a glimpse of an ice slope literally a meter or two away, and threw myself over onto it. My rate of fall increased tenfold, and there was a whistling in my ears. This vertical ski run ended at a precipice about two stories high.

Poised in the air like a springing cat, I fell face-first onto the jagged rocks. My double-barreled rifle landed with a thump on my head.

I lay there with my face bloodied, not entirely certain as to which bones were intact and which weren’t. I moved my right hand—it was in one piece.

Then my left—it was fine as well! But my right leg… Later it turned out I had torn my shin ligaments, with some of them shifting toward the knee and others relocating toward the heel. Things were better with my left leg.

Well, the bets had been placed. And I still had four rivers to cross, two of them uncharted.

Vertical walls of rock towered on both sides of the canyon into which I had fallen. The only way out was along the river to the nearest shallows. A few hours later I made it back to my tiny camp, without any grayling, and resumed writing in my journal.

I had nothing to eat, was growing weaker, and my leg ached, but there was no way I could linger.

The next morning I set out in a small inflatable boat, which was quite easy to steer with a double-bladed paddle. Toward noon the sun came out. I chanced upon a good fishing spot and caught two large graylings.

Never, neither before nor since, have I done such a thorough job of preparing fish. I made a broth from the fish heads and poured it into two plastic bottles as emergency food, and I cooked the fillets in foil. Not knowing when I would next find food, I ate just a quarter of one grayling, packed away the rest, and got moving.

Soon the river entered another canyon, forcing it into riffles, which means an extended section where there are always large standing waves. Here my boat began to take on water. As it rose up over the side, I lost control of the vessel.

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This moment in my journey was as critical as my plunge into the river to get the tent, or when I fell and tore my ligaments, but once again luck was with me. Somehow I managed to make it to shore.

I dragged the boat out of the water, built a fire, and ate another quarter grayling. Then I laid out soaked photos of my girl along the shore, turned it into a picture exhibition, and continued writing in my journal.

Morning came. My aching leg and dwindling strength told me I needed to move faster.

On calm stretches of the river, or when the current carried the boat automatically, I allowed myself to nap, waking up only to push off from the shore with the paddle.

The first river I traversed was called the Tumbolovo, and the second had the equally strange name of Kokpela. Finally I ended up on my favorite, the Lagorta.

I greeted the river, but this time I wasn’t focused on its wonders. I had decided to keep moving round the clock, taking advantage of the Arctic day phenomenon, which provided sufficient natural light through the night.

About twenty kilometers later the Lagorta flowed into the Voykar, the fourth and final river on my itinerary. The current was fairly strong, but the river itself was much calmer. I was lying in the bottom of my boat and looking up to the sky, when suddenly I heard a scream.

The scream came from a tree. The water had washed away the high riverbank, the earth was crumbling, and a great tree was meeting its death.

Its roots burst with deafening snaps, one after another, as the tree rocked violently. It was obvious that within the hour it would crash into the river.

I felt an incredible oneness with nature. My mind dwelled on the pleasant thought that in two or three days I would reach the point where the Voykar River flows into the Voykar Salt Lake, and a blue-and-white Expedition motorboat would come for me, steered by a fairy-tale character named Captain Kolya. The next lines of the poem came to me then: I command my underwater tank, Once again I put my life at stake.

I have quite a karma, I am quite the charmer, Yet I drive my underwater tank.

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With your eyes you’ll never tell a lie, As you strive to keep your soul unburned.

You have quite a karma, You are quite the charmer, Yet your eyes will never tell a lie.

Flowers by your side I wish to grow In a house where loving kindness glows.

We have quite a karma, We are quite the charmers, Flowers by your side I wish to grow.

I also remembered that the next day was Marat Sharipov’s birthday. I had arranged his present before I set out. A crane was to lift a white grand piano to the roof of the Expedition Restaurant, and the best musicians I know were hired out of Sochi for a rooftop performance.

The next morning, at just about the same time as Marat was enjoying the show in Moscow, I heard the rumble of a diesel engine and saw a blue-andwhite motorboat come around a bend in the river. It was coming upstream as I floated down. I smiled at it, thinking, It’s over, I’m back in civilization! But it wasn’t that simple.

At first it seemed odd to me that the boat wasn’t slowing down, but then I realized it wasn’t ours! It was simply a boat going upstream, probably to the outpost of Andrei the Hermit, who lives near where the Voykar River flows out of Lake Vyrchito.

Utterly stupefied, I couldn’t think of anything better than to wave. The person in the boat waved back, and within five minutes the rumble of the diesel engine had faded away around the bend.

I closed my eyes and wept. The rain started drizzling as I cried, and then I suddenly heard a kind of clicking coming from the shore. Sandpipers! There were forty-some sandpipers, big ones with long red feet.

Despite my weakened state, at that moment my hunter’s vision was especially sharp, and in a few minutes one of the sandpipers was already lying in my boat. Its cooling corpse kept my body warm, and the thought that tonight I would feast on a hot dinner kept my mind warm.

Figuring that our boat would be coming to meet me one way or another, I took the risk of continuing downriver without a stop. But there was no sign of the boat. I passed the spot where Captain Kolya was supposed to meet me, 170

and then the river started to divide into many branches: four, six, eight…

Islets began appearing, and at a certain point I realized that the longawaited boat would probably pass me, going up a different one of the river’s branches. So I pitched camp and started cooking my sandpiper.

A little later I again heard the rumble of a diesel engine, and the blueand-white contour of a motorboat began to appear in the gap between two islands about a kilometer ahead. This boat was obviously coming for me. In another five minutes it was clear that it was going up a branch parallel to the one on which I had pitched camp, and that they wouldn’t see me. Equally obvious was the fact that I didn’t have enough strength to row against the current after them, and that Captain Kolya, stubborn as he was, would look for me to the bitter end, but only upstream where I was supposed to meet him. And my chances of reaching people downriver were also nil.

I had to do something right there and then, but what? It was night, perfectly silent, and the surface of the water was mirror-smooth. I had only fourteen cartridges, and I decided to turn my rifle into a mortar, and fire an arcing shot.

I calculated the trajectory to have the crumbling shot continually shower the water around the boat, since the people sitting in the wheelhouse probably wouldn’t hear the shots over the engine noise. I fired: one, three, five, seven, nine…nothing. The two remaining bullets were my last hope. I would see the boat one more time in the gap past the island, this time with its stern toward me, giving me a chance to nick the water at a spot directly in front of them.

And then the motorboat cut its engine, and a shout rang out. It was Captain Kolya’s nephew, who had come out to take a leak and heard my last shot.

Half an hour later I was aboard. On the flight back to Moscow, the ending to the poem begun a week earlier seemed to write itself.

The splendor of this creek My eyes for you shall wrest Down to the faintest tear…

And all the blackness I Shall leave amid these rocks— A souvenir.

And if I don’t escape The clutches of this chasm, 171

And this black stream, Forty enchanted days Will live on in your heart— Like forty candles.

A week later, on Kamchatka, when the wayward beauty and I found ourselves in bed for the first time, the chain broke. The black amulet slipped away into the soft twilight.

That night my younger son was conceived. We decided to name him Georgi. As it happened, he was born on May 7, the feast day of St. George the Victorious.

Icefox At the dawn of Expedition it was fashionable to assign nicknames to people that reflected their nature and personality. Working at the Expedition Restaurant was a young, friendly, and attractive waiter, whom we christened Icefox.

The son of a famous Moscow film director, he had grown up in a bohemian environment and was imbued with the spirit of the elite. The boy was in college, studying foreign languages, and was madly in love with Yulia Monich, his former classmate and the daughter of one of our employees, who was also working at the Expedition Restaurant.

Once we planned a trip to the North with the following schedule: a group of eight people would land at the headwaters of the Lagorta, ditch their catamarans, and then fly to Five Rivers. This is a sacred place for us, a cliff with four rivers coming together at its base: the Burkhoyrla, the Khoyrla, the Payare, and the Payteviz, forming a fifth river called the Tanyu. They flow toward the cliff from every point on the horizon, and their valleys appear across a whole panorama. It’s very important to sit for a while on the cliff. On the ledge there will always be a white-tailed sea eagle’s nest, and the eaglets in the nest are usually gnawing at the leg of a hare caught by their parents.

After that you have to cross the Tanyu River in full stream. For this crossing you typically needed an inflatable boat known as “the suicide” (that year the suicide was named Bolivar). Icefox and I were slated to transport the supplies across first, and then the people, one at a time, approximately fifty to seventy meters across the seething Tanyu. Because we were watching our carrying 172

weight, we made our paddles out of canoe paddle blades affixed to freshly cut larch trees for the shafts. Once the boat was so laden with supplies that the sides were almost level with the foamy water, we pushed off from the riverbank and began to paddle furiously, at which point the blade of Icefox’s paddle, which wasn’t lashed on firmly enough, slipped off and sank. I really had to sweat it, to paddle us across single-handedly.

We tied mooring lines on the other shore and pulled the boat up onto the rocks. Out of breath, we unloaded the cargo and sat down for a smoke. I began to philosophize.

“Icefox, you’re eighteen now. A man ought to approach his future strategically. Why the hell did you enroll in that stupid college? You’re a true Expedition warrior. If you want to learn foreign languages, we can send you abroad to work at our Shanghai office, and you’ll learn them. Then nothing will prevent you from working at Expedition and building a serious future, like a man. If you want a diploma, we’ll buy you a diploma tomorrow, and you won’t need to waste time at that stupid college of yours. And you can spend that time developing the Expedition brand, to which you’re so devoted.

You’re a grown man now, get it? And you need to be more serious about the future!”

Icefox drew on his light cigarette and said, “Sasha, my entire life experience”—this sounded pretty comical, considering that Icefox was eighteen at the time, and I was around thirty-five—“has taught me one thing: a man shouldn’t plan his future ahead of time. At this moment I like going to college, loving Yulia Monich, and working as a waiter at Expedition.

So buzz off.”

Smoking my strong-tasting Marlboro Red, I thought long and hard about his answer. I recalled all the houses I had built but never lived in, and all the great strategic projects I had accomplished but lost interest in afterward.

And I thought, Damn, tonight Icefox is wiser than I am.

Butterflies They were driving from Murmansk to Vladivostok. Somewhere beyond the Urals stretched boundless birch copses. Then a wet blizzard began, diminishing both speed and visibility.

Reflected in the swirling clumps of snow, the powerful xenon headlights blinded their already sore eyes. Suddenly, amid the bedlam, they saw a 173

swarm of white butterflies.

This collective hallucination was immediately discussed over the radio between the cars, but no answer was found.

Short of Omsk, Kolchak’s former capital,42 they made a rest stop. Suddenly a piece of birch bark, torn off by the wind, landed on Skrynnik’s knee.

Everyone burst out laughing, and their hearts felt lighter.

One of the crew had a girl waiting for him at Akademgorodok in Novosibirsk.43 With his companions dropping from exhaustion, he texted her: “Everything here smells of you, but I can’t remember the way to your house.”

“Follow your nose,” she replied.

Three hours remained until the morning wakeup call. They didn’t bother turning on the light. Candle wax dripped onto the sleeve of his gray fleece uniform with the orange Expedition logo on the back.

Before leaving, he shared with her the amusing story from the road.

“You’re so silly,” she said, and patted his hair. “Those were real butterflies you saw in the headlights. And the fact that a piece of birch bark fell on Skrynnik’s knee doesn’t mean anything.”

42 Admiral Alexander Kolchak headed anti-communist White Army forces during Russia’s Civil War (1918–1921).

43 Akademgorodok, or “Academy Town,” is a community in the city of Novosibirsk. Founded in conjunction with the Siberian Division of the Soviet (now Russian) Academy of Sciences in the 1950s, it is home to numerous scientific institutes and their staffs.

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Chapter 15

under sail A pirate comes to camp One night a pirate came to our camp. We were in Siberia, attending an “author’s song” festival. He wore a gold embroidered vest, a snow-white shirt front, and a tri-cornered hat. His charismatic beard was flecked with gray, and his eyes burned like coals. There wasn’t a trace of pretense in our guest’s authenticity.

Sometimes experienced men sniff each other like animals. I grabbed a guitar and sang a rare song by Arik Krupp. The guest replied with an even rarer one. We got to talking, and soon our entire crew was under the spell of Anatoli Kulik. He designs inflatable sailing catamarans, and then sails them out on the ocean. By morning Vasil Gazizulin had ordered our first orange catamaran, which was later christened the Mighty Squirrel.

The moniker was inspired by the fate of a squirrel that was brought to live in a cage with a tread wheel at our new head office. A few weeks later the new recruit kicked the bucket. At first we were sad, but then someone pointed out, “What do we need weak squirrels for?”

When our catamaran was ready, Vasil’s dream came true. We went to sea.

A ship is safe in harbor, but that’s not what ships are for

My Seychelles journal Gray Moscow snow. The sun can’t breach the city’s veil of smog. Traffic jams. The hostile faces of people crushed by crisis advertising. It seems as though there’s nothing other than this, and there won’t be in the future…

I have no simple answer to the question of how and why we ended up in the Indian Ocean, out of sight of land. Maybe we had grown a little tired of orange Expedition SUVs. Maybe sails have always been alive within us, as an unpaid tribute to our childhood dreams. Maybe we were ignited by the spark of an idea always believed to be impossible: to traverse the Northern Sea Route without putting in to port, in a boat that’s not an icebreaker.

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It would be an upgrade of the traditional overland winter route of the MurmanskVladivostok Expedition Trophy race.

Vasil Gazizulin, Alexander Kato, Sergei Latyntsev, Vasili Mozhukhin, and me enrolled as a group in Anatoli Kulik’s sailing school.

Today, one week later, I’m lounging around on Victoria Island in a hotel room with AC and a minibar. I’m suffering from moderate burns on my body and an inability to describe what happened to me and my friends, leading up to last night. The past several days proved that Russians have a genetic resistance to cold. Incidentally, our group hails from the following places: Murmansk, the Urals, Siberia, and Sakhalin. Conversely, Russians have no genetic resistance to heat, particularly when it’s 40˚ C. from dawn to dusk outside, and 55˚ inside a tent. The water under the catamaran is somewhat cooler, but the sharks down there will gladly have you for dinner.

We found a use for practically none of the gear we had brought from Moscow, except for white baker’s suits, sunblock, and ocean spinning reels.

We quickly realized how little humans really need. The reels steadily supplied us with tuna, the sunblock partially prevented burns, the white clothing helped the cream protect our skin, and at night we didn’t need even a loincloth.

I’d rather not go into our training on tacking, navigation, rescue operations, watch duty, and so on. For anyone who has ever smacked his head on a sailboat boom it wouldn’t be interesting, and for everyone else it would be difficult to understand. But the nightly guitar concerts, as the scorching sun drowned in the ocean and the stars filled the sky to the horizon, are another matter. Of course, so are daily challenges such as basic physiological functions (what Thor Heyerdahl called “paying tribute to the sea”).

None of us had ever been to the Seychelles before. For some reason we thought that these islands were all close together, in plain sight of each other. As it turned out, the pieces of land are scattered hundreds and even thousands of kilometers apart in the ocean. Our speed was four and a half to twelve knots per hour, depending on the direction of the wind, our heading, and the captain’s willingness to put the rigging at risk with an inexperienced crew. Even though each of us had extensive non-sailing expedition experience, it was only toward the end of the second day that our collective ability to tell the mainsail from the jib, or the command “bear 176

away” from “tack windward,” allowed our captain to rest for a few hours without having the cat lose speed. On the evening of the second day, we reached an island famous for producing the world’s largest coconuts, some of them weighing forty kilograms.

From the water the coast looked wild and desolate. But the moment we came ashore, friendly natives ran out of the coastal palm groves and helped us pull the orange catamaran, which weighed around half a ton even without the bags and gear, onto the beach. Their leader declared that he was a “powerman,” which sounded something like a human battery.

Despite his own slightly Rastafarian appearance, he let us know we were completely safe on his territory. For some reason I vividly remember his young white girlfriend, standing off at a distance and looking entirely different from the dark chocolaty mixed-race women typical of these parts.

We took shameless advantage of the fact that our ship had traveled to the Seychelles all the way from India, coasting on our captain’s glory. Usually, when the locals heard the word India, which was three thousand kilometers away, they would cluck with delight and try to help, slow and slipshod as their assistance inevitably was.

We spent the night right on the beach under the palm trees, which, we were quick to determine, burn just as well as the Siberian pine we’re used to. Rum, the stars, crabs scuttling from the surf line to a rookery full of sunscorched seals—it was pure enchantment. At a certain point our Murmansk brothers decided to find a nightclub, and disappeared into the night. Come morning it turned out that they had gotten stuck in a deep ditch, which also claimed one of Kato’s shoes, and they had been diving into the filth to the point of despair, trying to salvage the shoe.

With dawn came another day of torture by the sun. Vasil and I were snoozing on a sail, laid out on the beach. The sun drove me to seek refuge under the catamaran, but soon the order came to prepare to shove off. We were headed for Bird Island, 102 kilometers straight into the wind. Rumor had it you could still see giant turtles there.

The ocean is always alive and bustling. One moment a large tuna goes for your lure, and the next it gets attacked by a shark. The fish leaps out of the water with eyes bulging, and you can easily understand its telepathic scream: “Hey, guys, I was almost eaten alive just now!”

At one point we caught a small coral shark. We harpooned it, dragged it 177

aboard, and watched it go into a mean break-dance routine. Because our sailors are always finding something to cackle about, someone immediately said, “May you have nothing but oral sex with sharks till the end of your days!” There was no calming the toothy beast, so eventually Kato sneaked up on it and smacked it over the head with an Expedition-brand cutting board meant for cleaning fish. The board cracked in two, the shark’s eyes rolled up peacefully, and I had to sit through another round of complaints about the quality of our products. One would think we manufactured only professional billy clubs for especially hard heads. Why didn’t they try to crack open a turtle shell while they were at it?

As darkness fell we moved around the cat only with safety hooks clipped on. No one wanted to share the fate of a life jacket that was washed away by a stray squall. Our captain mused that when the jacket came ashore, the natives would say, “Those Russians had it coming, thinking their inflatable toy could handle the ocean waves.” Every so often large seagulls would mistake our boat for an island and try to land on Mozhukhin’s blond head, causing him to flail his arms like a monkey and shout obscenities.

Interestingly enough, all the rocking didn’t make anybody seasick. Only the captain puked once, at the sight of a proffered bottle of whisky.

Nighttime was a philosophic microcosm. We were surrounded by darkness, emptiness, and the sound of the waves. The watchman held the tiller, occasionally checking our heading and speed against the GPS. His relief man (at night it was usually me) made sure the watchman didn’t doze off, keeping him entertained in all sorts of ways.

We spent a lot of time discussing the possibility of traversing the Northern Sea Route: ship construction, crew composition, safety, and so on. Each day brought a deeper conception of this project’s grandeur and complexity, as well as a heightened resolve to do it. Maybe that was also because we associated the project with ice and cold, while our heads were being perpetually overheated.

The next morning a small island with sparse palm trees materialized on the horizon. We fought through the surf and dropped anchor in a lagoon.

Swaying from side to side, we waded through the water to the shore, which was teeming with creepy Hitchcock-like birds. They were everywhere: shrieking, flitting to and fro, scurrying underfoot, swarming up and down the palm trees, and fighting over territory.

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The sparse palm grove cast almost no shade. We took a narrow rocky road inland. The noon sun blazed down on us insufferably. It felt as if you’d faint if you took another few steps.

In the end that’s exactly what I did, but not before picking out a nice spot under a relatively dense palm tree. I lay down and blacked out. My companions dispersed throughout the island in search of turtles. I was out for some time. When I came to and opened my eyes, the first thing I saw was a massive, hyperbola-shaped, strangely marked boulder a few meters away.

Suddenly the boulder reached out a withered foot, and then another.

When the gang returned from their search empty-handed, I was crowned top tortoise hunter.

There were about a dozen big ones within a fifteen-meter radius of the spot where I had crashed. Occasionally turtles emit a peculiar low-pitched sound, something in between a steamboat whistle and a bellowing stud bull. When Vasya Mozhukhin, all one hundred kilograms of him, climbed up and stood on top of one of the turtles, the beast had the strength to get up on all fours and rock its shell to throw him off. We felt that the ancient creatures perceived humanity as a vexatious but ultimately fleeting episode in their history, which has spanned many thousands of years.

We buried some treasure in the crevice of a tree and returned to our ship.

The wind was now blowing almost straight in the direction we wanted to go, allowing us to hoist our largest sail, the one with the delightful name of spinnaker. It seemed as if the sail were several times the size of the entire catamaran, including us and all our junk.

The captain started preparing dinner. He didn’t like to let us poke around the box with the gas stove, dishware, and spices. I think he had two reasons for that. The first was that it would take too long to explain what was where and how everything worked. The second was that he liked to cook. Kulik’s polished movements were a practical illustration of the ergonomics of field equipment. First he made the dough for the flat cakes, followed by grilled potatoes. Then came thick soup, each batch creatively seasoned with Indian spices and whatever else the box contained.

The ocean breathed its divine coolness, rolling lazily its gentle billows.

Another round of whisky. Another concert. The crew was getting ready for some shut-eye in the tent. Vasil was on watch. He was first mate, in 179

command when the captain was sleeping. Mozhukhin and I settled onto a dishware box by the entrance to the tent, which was the only place you were allowed to sit at night without buckling up.

These rules didn’t apply to the relief man for the person on watch, and Vasil wasn’t particularly courteous in giving us a few minutes to decide which one of us was going to don the “panic” vest and buckle up. It didn’t matter that he was the only one of the three of us under thirty.

When you’re sailing on a tiny little boat, just a speck in the great expanse of a watery desert, night brings an oddly heightened perception of reality.

You feel as if you’re simultaneously within the world and outside it. You’re here being cradled by the waves, while somewhere out there humanity, bloated with false values, is hiccupping and vomiting its way through the storm of the global crisis. But, to put it bluntly, there’s no other planet around.

For several days we’d been experiencing a simultaneous reduction in material and an increase in spiritual consumption. We had a strange hope that many living people would like that.

Toward morning we passed a multi-deck cruise ship going in the opposite direction. From afar it looked like a cross between the Titanic and a New Year’s tree. Not that we heard the music or the clink of cut-glass wineglasses or anything; it was all in our trained imagination.

At sunrise we reached Victoria Island. Despite the temptation to begin disassembling the cat while the tide was low and the sun bearable, we rented a boat for a photo and video session and put back out to sea. Salt spray kept hitting the lens, leaving stains that would be hard to clean.

It took six hours to dismantle our vessel.

P.S. On our last evening in the Seychelles we sat on the grass near the bungalow of Vasil and Captain Anatoli. Half an hour earlier we had composed a draft proposal to build two twenty-foot trimarans for the Northern Sea Route. They would be like stealth aircraft, and equipped with wind turbines and electric motors. They would also figure in the Expedition Trophy 2010 finale on the Black Sea. Kulik played his guitar, accompanied

by Vasil on the harmonica.

March 2009 Victoria Island, Indian Ocean

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Gourmet cooking He is a great man who uses earthenware dishes as if they were silver; but he is equally great who uses silver as if it were earthenware.

—Seneca I think that true wealth for people lies in two things: to have no reasonable needs that are not met, and to indulge in contrasts.

One sweltering July day we were working on a raft moored off the shore of Lake Seliger. (As the head of Russia’s Federal Youth Agency, Vasili Yakemenko, once said, “An Expedition raft at the Seliger youth forum is the symbol of Russian entrepreneurship.”) Vasil Gazizulin, Taras Sharyga, and I were sifting through young people, while the Expedition Restaurant’s head chef was drafting a menu for the upcoming Northern Sea Route.

He asked me, “Sasha, what should I include?”

I deflected his question to the others. “Hey, guys, what are you dreaming of?”

They laughed in response. “Lots of black caviar and foie gras.”

“All right,” I said to them, “then that’s what we’ll have.”

Wizards should be careful what they wish for, because it tends to come true.

When we eventually did sail out on the catamarans, I opened the boxes.

They were stuffed with black caviar and goose liver. My Northern Sea Route journal, excerpted below, records what happened next. The first two days we indulged, but by the third day both the pate and the caviar were making us woozy. We sailed onward, and came upon a fisherman fishing for cod.

We moored beside him and asked, “Hey, man, you got any fish?”

“Sure,” he replied.

So we said, “Let’s trade. We give you French goose liver pate and black caviar, and you give us your haul.”

Even his motor cover was full of fish. He poured a pile of the fish into our boat, and we tossed tins of pate and caviar into his.

He looked at us and said, “Fellas, let me give you my tackle, too.”

The moment we cast off, he weighed anchor and was gone! Fresh-caught haddock and cod are infinitely tastier than canned foie gras and black caviar!

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The Northern Sea Route July 23, morning Two brand-new orange sailboats are below our lighthouse in Murmansk. It is one of those places where natural power is concentrated. This lighthouse was the starting point of three Murmansk–Vladivostok Expedition Trophy races. Today begins our journey on the Northern Sea Route. Last night in Moscow we were seen off by Arthur Nikolayevich Chilingarov, hero of the Soviet Union and hero of Russia. He said, “Most important, don’t screw around with the Barents Sea.” Half an hour ago the brass band and the horde of journalists left. We’re taking our time packing, our thoughts occupied with those who will be waiting for us, praying that everything turns out all right.

July 23, evening Kola Bay. The brass band, the consecration of the catamarans, heaps of TV cameras, a pre-start market, and bootleg vodka… We were overjoyed when we cast off from the shore by the lighthouse—the starting point of the Expedition Trophy! But our happiness was short-lived. About forty minutes later the border patrol informed us over the radio that all vessels were barred from putting out to sea, and we had to turn back. Another interesting fact is that the names of the new cats, the George the Victorious and the Marseillaise, have become our permanent call signs for official, regulated on-air communication. Several trying hours later we finally got our first radioed “All clear!” in Murmansk. It’s funny that we kept hearing in a great variety of ways about not having permission to proceed, but the “All clear!” go-ahead itself always sounds exactly the same.

Before casting off I sat on a rock and held the catamaran’s mooring rope.

The rock turned out to be a trap: it was coated with fuel oil residue. I had to sacrifice my pants to the sea, and everything they had touched had to be laundered in gasoline for a good half hour.

There are eight of us: Admiral Anatoli Kulik, Novosibirsk First mate Stas Beryozkin, Novosibirsk Vasya Mozhukhin, St. Petersburg Tanya Parfishina, official Expedition Trophy photographer, St. Petersburg Sasha Kiselev, sails specialist, Moscow 182

Alexander Kravtsov, Vasil Gazizulin, Taras Sharyga—Expedition warriors

July 24, morning It’s still polar day here. We sailed all night under motor power, from the mouth of Kola Bay out into the Barents Sea. The main problem is that the boats are overloaded. “A serious wave will break them.” It’s just like in real life. There’s a line in Oleg Medvedev’s song “The Hero”: “Your past is like an ornate chest full of old rags. As the saying goes, you can’t stand to wear them, but can’t bear to throw them away.” We can’t bear to throw anything away, either. But Admiral Kulik has ruled that the weight of each catamaran must be reduced by a hundred kilograms.

Toward morning we passed through several mirror-smooth bands in the water, where there were no waves. “The water remembers,” Kulik says. He has seen this phenomenon many times in the ocean. Taras has heard about it, too, at the museum of water in St. Petersburg. Pretty cool. If water is the planet’s main information medium, then it should have both dark and light memories.

We sailed out into the sea at sunrise. The weather is sunny and ideal for sailing. It’s gorgeous beyond belief. We moored at a small creek and dropped, each person right where he was, for several hours. It’s been several days without sleep, after all. After breakfast, a quotation from Kulik’s banter: “To reduce weight we’ll scrape the dorogi.ru sign off the side, cut the Russian flag in half, and untie the ropes.”

July 24, evening We’ve been under way for ten hours. The expedition crossed the mouth of Kola Bay and arrived at Kildin Island, on which the relict Lake Mogilnoye is located. The explorer and naturalist Professor Deryugin wrote this about it: “One distinctive characteristic of Mogilnoye is the fact that over thousands of years the habitat has achieved a remarkable balance of fresh and salt water, enabling marine and freshwater life forms to coexist. I cannot name another body of water on Earth with such a varied mix of marine, estuarine, and freshwater life forms.”

On the evening of July 24, the George the Victorious and the Marseillaise set a course for Teriberka, one of the Kola Peninsula’s oldest coastal settlements on the Barents Sea. Geographically it is split into two parts: Old Teriberka and New Teriberka. The old part is located on a low sandy shore 183

at the curve of the Teriberka River, near the mouth. The new section, more commonly known as Lodeynoye, is situated on the opposite and rockier side of the mouth of the river. Before construction of a bridge across the river, you could only get from one part to the other by boat. Teriberka is considered a true Arctic resort. The sandy beach, low sedge, and relatively warm shallow water make for a fine vacation spot on the rare sunny days of polar summer on the Barents Sea.

July 25 “Life is short. Celebrate it now!” You won’t have another chance…

July 26 Yesterday we punctured one of the hulls while mooring to check in with the border patrol. We had to make an emergency stop on a gigantic deserted beach. From afar the catamarans look like exotic animals or extra-planetary aliens. At anchor as the tide came in, they were turning in synchrony, almost as if they were communicating.

There was not enough room in the tent, so I went to sleep in the punctured boat. The powerful high tide washed away the catamaran. Kulik organized a top-notch rescue operation.

We killed two ducks. Made soup from one of them, pilaf from the second, cooking as we sailed.

Total distance traveled: just over two hundred kilometers. Those in the know call the Marseillaise “Capricious Marusya.” Yesterday her crew passed by a seal rookery.

We entered the bay at the mouth of the Voronya River.

P.S. The gang is beginning to lose it. Yesterday we played school, today we’re playing hospital. Mozhukhin and Parfishina spent the night on a cliff with cameras. On the sandbank below, an ice fox was chasing whole flocks of geese around. They said that toward morning some fur seals arrived and frolicked in the fresh waters of the Voronya. Tanya asks, “How come there are seal pups, but no seal dogs?”

July 27, morning Greetings to my friends on the mainland!

It’s the fifth day of our journey.

Whenever we moor somewhere new, Vasil shouts, “Friends, let’s call this 184

land America!” For some reason the seals are all swimming in pairs, even though springtime is long over.

Here’s an orange T-shirt slogan: “Hope is my earthly complex.”

We sailed up to an island with an abandoned lighthouse and several sunken ships offshore. One of them still had a Russian flag. An ominous place. Sasha Kiselev and Stas Beryozkin slipped and fell when we were mooring. Kiselev’s fall was especially dangerous, since a catamaran was coming right behind him under motor power.

We caught a few puffins—tupiki or toporki, I don’t remember exactly what they were called.44 They’re a delicacy in Iceland. In the evening we’ll stew them with potatoes.

We approached a drifting fisherman to check out his catch. Traded canned food for fresh haddock and cod. We haven’t had time to do any fishing ourselves. We’re in a hurry, trying to keep pace. The fisherman offered us his tackle, but we didn’t take it; for us it’s hardly more than a whim, but for him it’s his livelihood.

The border patrol officers take our bearings and grill us for a long while about our hull numbers and route. Vasil thinks we should introduce ourselves as the HMS Queen Elizabeth’s military aircraft carrier, and capture some islands in the name of the entente.

Our losses are mounting by the hour. Taras was rinsing the pan after we fried live fish: no more frying pan. Now we’re cooking fish soup, but the lid to the pot is missing. On the other hand, our eyes have been washed clear and our sense of smell sharpened.

We’ve gotten pretty good at telling a halyard from a belly wart, jibe from jive, broaching from poaching, and stringer from strings.

Toward evening we encounter whales. They breathe noisily and spout fountains. Mozhukhin says they’re narwhales, but I think they’re orcas.

We shot the sunset on video, which was an amusing sight. The sun set half way, and then began to rise again 3 minutes later. Parfishina had never before photographed sunset and sunrise at the same time.

July 27, around 3:00 p.m.

Storm. Fog. We’ve lost sight of the Marseillaise… Our communications are a mess… Kulik is pissed… We found the Marseillaise an hour later…

44 Puffins, seabirds of the genus Fratercula, may be called tupik (a homonym of the word for “dead end”) or toporik (also denoting a small hatchet) in Russian.

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We need to draft a new marine charter, so that in critical situations we don’t have to think, just follow the rules. The shroud lines have begun to whistle, with the wind blowing at approximately twelve meters per second or more. We’ve been at it for four hours. The waves are four or five degrees on the scale, which means 2.5 to four meters high and “very rough.” Scary at first, but you get used to it after a few hours.

It’s very cold. We’re quickly skidding down the sides of Maslow’s pyramid of needs. At first you dream of tawny women and hot mineral baths on Kamchatka. An hour later your sights are set on a sauna at a border outpost, and in another hour all you want is some dry firewood on the shore.

Yesterday we took a swim and a bath in the Reindeer River. The salmon were jumping. The river water is ten degrees warmer than the sea.

Another orange T-shirt phrase: “I don’t procreate in captivity.”

In the open sea we got caught on some other ship’s rope.

Psychological frictions have begun. On small-group trips, out of contact with anybody else for extended periods of time, they typically they break out on the fourth, seventh, and eleventh days. This is day four for us.

Admiral Kulik has been volatile since morning, and bucked the whole team by refusing to let crew members switch vessels to shoot photos and video. Now he says that his decision might have saved their lives. When the situation is merely dire he yells, but when it’s damn near disastrous he issues commands softly and distinctly, articulating every syllable.

We’re fueled through our watch shifts by pine nuts from the Expedition Restaurant.

We cast off through strong surf and got soaked before we had even left the shore. So our nerves are particularly taut today.

With three to four kilometers to go to land, we’re sailing in two-hundredmeter visibility. Cold waves reach up to about three meters high. The Marseillaise slips into a gap between two waves and vanishes altogether, with only her mast in view. We say, “We were promised a sail from Murmansk to Arkhangelsk in sight of land at all times.” And we answer ourselves, “Such big boys, and still believing in fairy tales!” A couple of hours later jagged cliffs loom through the fog, as the surf crashes against them with the rumble of cannon fire.

Someone asks Taras, “Do you feel safer when the shore’s within reach?”

“Sometimes not too much,” Taras replies.

Somewhere Vasil heard a claim that in the old days the boats were made 186

of wood and the people of iron. But now it’s the opposite.

The gang starts laughing about my scribbles: “Gogol must be turning in his grave. ‘Viy’45 has got nothing on this.”

July 28, morning For several days we researched what the sea discards along the high tide line. Besides seaweed, of course. Products of human activity are far more interesting. The results are as follows: about 40 percent of the garbage relates to the valuable institution of fishing. Shreds of fishing net, buoys, etc. A little more than half is useless and harmful plastic wrapping, designed by marketing specialists. A particularly high percentage of such trash is polyethylene.

Today is Vasil’s birthday. For the past two nights, after Vasil went to sleep, we’ve been discussing preparations for the celebration. Kulik nixed my idea of flying in a grand piano with musicians in dress coats by helicopter, claiming it would divert resources needed for our trip.

Taras just went to wake up Vasil, while Parfishina is picking a bouquet of forget-me-nots and cornflowers…

July 28, lunch We’re moored in a bay to wait out the gale, and celebrating a birthday. I found a naval mine on the shore. We decided it was there for celebratory fireworks. And Vasil had the right to strike it first.

In the morning we laid out a spread on a rock about a kilometer from camp.

There’s a den of trolls nearby. Live guitar music, hot tea, and red caviar.

Below us a “Jacuzzi” seethes around a large buoy. When we found an orange plastic buoy on a deserted beach, we wrote a wish on it: “A large harem, lots of kids, and a wooden house with a sauna. Dream the life, live the dream.” Vasil threw the buoy off the cliff into the furious, foaming surf.

July 28, evening The stormy wind has just about subsided. The weather is giving us its “All clear!” signal. We’ll set out in two hours. The launch carrying our replacements that will sail the Cape Holy Nose (Svyatoy Nos) segment 45 “Viy” is a horror short story by the Ukrainian-born Russian writer Nikolai Gogol, published in his first collection of tales, Mirgorod (1835). The title is the name of a demonic entity central to the plot.

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between the Barents Sea and the White Sea is also riding out the storm in a bay somewhere.

We’re debating the individual’s right to take his own life, or to risk it and the lives of his subordinates. Three people are involved in the argument: Kulik, Stas Beryozkin, and me. Because when the whales are fighting, the mollusks lie low.

I’m the only smoker in a group of eight. That inspires hope for a healthy gene pool. Sixteen cigarettes left…

Late night, July 28 going on 29 The wind has chilled us. The storm has subsided. We broke camp and donned our wet suits. Dragged the catamarans on wooden rollers to the low waterline, about two hundred meters distance for each of them. And then the wind picked up worse than yesterday.

The weather is clear, with excellent visibility. The waves are dark turquoise.

Kulik is frying flat cakes made from sweet yeast dough. Vasil asked if, after the trip, he could have the dishware box and stove from the George the Victorious. That’s when the thought pendulum swung toward a special dish for the Expedition Restaurant. I’m picturing a seafood pasta plate called the Northern Sea Route. Prepared at the table in the main dining room on swaying rockers. Within the next ten minutes we had come to the conclusion that the same kind of cooking unit could be installed in a moving SUV, taking up half of the backseat.

Vasil: “We’re like rockets. Just as streamlined and just as goal-oriented.”

July 29, day By morning the launch with the relief crew had arrived. Everyone looks so brisk and fresh, as if their mama’s meat pies are sticking out their butts.

Our group got almost no sleep at all. And it seems that it hasn’t totally sunk in, that our star team is disbanding. Parfishina isn’t the only one with tears in her eyes. The newcomers look like fresh recruits in wartime. Very slow and disjointed, just like us a week ago at the starting point in Murmansk.

We (the first group) aren’t going to Cape Holy Nose, where the Barents Sea meets the White Sea. We’re not going, so that we can provide support for the new crew, doing logistics for them from Arkhangelsk. It’s sad. Hugs to all. Talk soon!

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August 1 Our group was returning to Murmansk on the launch. The cod and haddock start biting at 7:00 p.m. We heaved to and started fishing; in half an hour we had half a bucket. Then Merkulov yelled, “I’ve got a big one!

Get the cameras!” A gift from the Arctic Ocean was hooked at a depth of seventy meters and pulled on board. It was a rock entangled in seaweed, structures built by hermit crabs, and other life forms unknown to us. All in all, it looked like the planet Earth, as it might appear to a space alien.

August 2 Our Murmansk–Moscow flight landed at Vnukovo Airport at 7:00 a.m. Unexpectedly there was a thirty-person greeting party, including musicians from the Expedition Restaurant. We gave the rock from the deep to the restaurant staff. To keep the seaweed and hermit crabs alive, they had to buy a special sea tank.

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Chapter 16

UNINTERRUPTED FLIGHT And death shall have no dominion.

Dylan Thomas

New reality and its creator Since the mid-1990s Russia’s best entrepreneurs have often found out about one another through Sergei Makshanov, that tireless collector of brilliant practices. He broadcasts these practices from one entrepreneur to another, among people who more often than not haven’t even been acquainted before then. Alongside Ruyan and many other companies in whose strategies Makshanov was directly involved, one that he used to mention was an outstanding group from Irkutsk called New Reality, headed by Pavel Skorokhodov.

Both Pavel and I had often heard stories (or “case studies”) about the exploits of each other’s companies, but we didn’t meet in person until the winter of 2004 in Irkutsk. It was during the pre-scouting run for the Expedition Trophy race, when my friends and I were testing the route to Vladivostok in our two off-road vehicles.

Parking our orange horses at the Samhotel, the city’s most luxurious hotel at the time, the overjoyed drivers ordered a sauna after several days on the road without stopping. I’m pretty sure they managed to pick up some local girls. In the meantime, Oksana Kapustina and I headed to the bar and soon found ourselves in the pleasant company of Pavel Skorokhodov and his friends and senior executives.

It’s natural for people in these circumstances to want to find an area of common interests as a basis for building something together, though merely getting acquainted and having some lively interaction often ends up being the most valuable thing of all.

The New Reality group was the top cigarette distributor in Eastern Siberia, as well as being at the forefront of Lake Baikal tourism and housing development in Irkutsk. But the main project absorbing Pavel just then was constructing a factory to manufacture car batteries, and developing a brand under which the batteries would become the top seller in Russia. Additionally, they had dug their way into one of the second-level US stock exchanges, and 190

had spent many long winter evenings in Irkutsk, planning how to purchase an American battery manufacturer on borrowed money, at the same time as they staged their own IPO, instantly making them the number-one car battery manufacturer in the world.

One of New Reality’s businesses in the tourism field was building yurt camps on the shore of Lake Baikal, and renting space in those yurts to tourists during the peak season, which was summer. And our company was (and still is, actually) the only manufacturer of chum tents, the unique design used by the indigenous peoples of the Far North. Unlike regular tents, chum tents allow you to stand up at full height, start a fire, and dry things out. Eager to arrange a demonstration, I called my buddies. They had just gotten out of the sauna. Outdoors the temperature was minus 30° C. “And where are we supposed to put the poles to support the chum?” my friends asked innocently.

“In the parking lot, through the asphalt,” I replied.

The ice of Baikal and the local spirits In twenty minutes a chum had been erected. Inside, we lounged on rugs as the fire hummed in the heater, and our conversation became very informal.

The next morning we got back on the road. Our goal was to cross the ice of Lake Baikal as part of our Expedition Trophy test run. In my diary of that prescouting trip, I recorded how we relied on our local guide for this crossing and made offerings to the spirits of Baikal.46 It was, as I’ve said, the most meaningful place on our entire route. It’s an experience I return to again and again.

To say that everyone was nervous is to put it mildly, since we hadn’t been able to find reliable information in Moscow regarding how Baikal ice behaves in such circumstances.

Alexander Burmeyster, our guide for the Baikal crossing, is a renowned traveler, photographer, and public figure in those parts, and also a bit of a shaman. Baikal’s traditions are very strong. Not only the indigenous Buryats adhere to them, but the Russians who live there also do. When the locals embark on a difficult path or find themselves in danger, they sprinkle vodka to the wind (or on the motor, the wheels, or the ice), or they crush cigarettes.

Basically they have this special language for communicating with the Baikal 46 Chapter 14.

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spirits, who are especially powerful around Olkhon Island.

Many years later, Father Dmitri Smirnov discovered among the sins I listed at confession the following item: communing with spirits.

“What’s that all about?” he asked.

“What do you mean?” I replied. “As a practicing traveler, whenever I’m in a new land I have to conform to the local rules, traditions, and people. It’s a security question. For instance, when you travel with Orthodox men across the ice of Lake Baikal, you sprinkle vodka to the wind and on the ice.”

“So if you go to Israel, you’ll get circumcised and start eating matzo?”

Father Dmitri asked sternly.

I shook my head and resumed my confession.

We crossed the ice successfully. The next time I saw Pavel Skorokhodov was in May 2004 at our meadow on the Polomet River. That’s when we truly got to know each other.

A nighttime conversation in extreme danger It was the second or third evening in our camp. Approximately 150 people were attending the meadow, but there was one group of six people living in their own small camp, away from the rest. This group included future experts, examiners, and theoreticians of the project later named the Expedition Academy of Entrepreneurship. Pavel was one of them.

One young lady, a student from the Moscow State Institute of International Relations, made a particularly strong showing at the main camp. We were interested in recruiting her to our circle, but she had a hard time making the decision, saying that she needed six months or so to think it over.

As dusk fell, I went over to the bonfire where she was sitting, and said, “Listen, why do you need half a year to think? Look, here’s the wild mountain Polomet River, a fourteen-kilometer stretch of rapids. Lots of people have traversed it during the day. I’ve done it at least twenty times myself. But no one has ever ridden those rapids at night. Come with me in a two-seat catamaran, and in three or four hours you’ll be absolutely certain whether or not you want to work with us.”

The lady declined.

At that moment Pavel Skorokhodov came by the bonfire. I said to him, “What’s this world we’re living in, Pavel? All the summits have been conquered, all the rivers have been rafted. There’s almost nothing left to discover. But nobody has 192

ever rafted the Polomet River in flood at night. Care to accompany me?”

Pavel was a total novice to water tourism on mountain rivers, but he asked only one question. “Are we talking extreme danger or straight suicide?”

Despite my extensive whitewater experience, I also had never done it at night. So I answered somewhat tentatively, “More like extreme danger.”

We decided to set out in an hour.

Ignoring the grim silence of our companions, we donned our wet suits, life jackets, helmets, and headlamps, packed a bottle of vodka and some baked potatoes in a leak-proof bag, and cast off.

The air temperature was barely above freezing, with dense fog hovering over the water.

The light from the headlamps reflected off the fog, blinding us. Thankfully, it wasn’t long before the lamps were smashed by some branches we accidentally crashed into in the dark. Until we reached the start of the rapids, there was total darkness and quiet, except for our voices.

We were extremely intrigued by each other and had an intense discussion.

The fact that Pavel knew nothing about my life, just as I knew nothing about his, added a delightful element to our exchange. We were from different circles, which it was clear would never cross. This enabled us to speak far more candidly than people usually permit themselves. On the one hand, we were like strangers meeting on a train; on the other hand, we were really very much alike.

The river was getting faster and the air colder, which meant that our vodka supplies were dwindling quickly.

The river at night is a completely different animal than during the day.

Ninety percent of what inspires fear on the river during the day you simply don’t see at night, but the remaining 10 percent you can sense.

At a certain point the catamaran was abruptly pressed broadside against a tree that had fallen into the river. I managed to slip out of my knee grips, but Pavel didn’t. The tree thrust into his back. The current exerted tremendous pressure, and his spine was about to burst.

I had to jump back aboard. The hull sank lower under the weight of a second body. Pavel squeezed under the tree, and I climbed over it.

We were immediately spun around and sucked along by the current, and before we could breathe a sigh of relief there was a crushing blow and we both doubled over. We had crashed into a rock, causing the log lying on top of it to 193

smash into our chests at fifteen kilometers per hour.

Not surprisingly, our conversation after this incident lost a measure of its intensity, and the vodka in our one-liter bottle started vanishing even faster.

All in all, our journey took six hours, at the end of which we were so exhausted that we needed help climbing out of the catamaran when we reached camp.

Our friends carried us into the sauna, laid us down, and gave us the bundled-leaves treatment47 twice as vigorously as usual (or at least it felt that way). After all, we had made them worry about us all night.

Pavel and I returned from the rapids of the Polomet River knowing a lot about each other. Indeed, we knew more than our regular circles did, including some close friends. We immediately agreed that when we took on the Ob–Yenisei Waterway (a project then in preparation), Pavel in his airplane would help us cross the watershed lake, which was the main obstacle on the route.

Journal excerpts from the Ob–Yenisei Waterway July 13, 2004 0800 Gloomy weather to go with our gloomy mood. Looks like there won’t be a plane. The plan was to be towed across the lake by the plane, since it’s shallow and silted. When you stick a paddle into the silt, it sinks in up to the shaft, as if through butter. And then a miracle happened: a strong aft wind started to blow. From that moment on, we alternated between shoveling dirt with the paddles and occasionally switching on the motor, but our sails, made of foam plastic fastened to spare paddles, were full of wind and kept carrying us forward, even when the paddles and the motor were useless. On the other side of the lake an Old Believer48 named Ilya was waiting for us on his tractor with a massive wooden sledge.

The sledge easily accommodated the entire camp, including the boats, all the gear, and eight gluttons. Within an hour we had driven the length of the canal, which had been dug out of this taiga by hand back in the 47 In traditional Russian sauna practice, bunches of dried oak or birch leaves are used to beat and massage the skin, opening up pores, removing toxins, and improving circulation.

48 The Old Believers split from the official Russian Orthodox Church after 1666, as a protest against church reforms introduced by Patriarch Nikon.

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nineteenth century. As the tractor drove we gathered mushrooms. We spent the night on a steep bank in a cedar forest with no underbrush. We took a swim. I made soup from the fresh mushrooms. Our first night in tents was the most peaceful so far on this trip.

At the Maryina Griva lock July 14, 2004 Ten minutes ago during a communication session we learned that the plane which had caused so much tension and arguing is waiting for us two kilometers ahead, where the Little Kas flows into the Big Kas. Through it all I believed that Pavel Skorokhodov was a practical man who wouldn’t give up until he reached us. Immediately past the Aleksandrovsky lock, we could see the snow-white plane on the water.

What a meeting, all the way out in the boondocks! Seventy percent of the information we had received about each other over the past five days had been hopelessly distorted. Pavel was there with his father, Alexander Pavlovich, not his brother, and so on.

Trying to describe the rest of the banquet would be futile. Pavel went to sleep early. His father, Kamenev, Mozhukhin, and I hung out by the bonfire until the middle of the night.

July 16, 2004 Early morning. We spent the night on a sandbar. The plane should have caught up to us from Krasnoyarsk by now. In one day we’ve traveled sixty to seventy kilometers as the crow flies, or 120–150 kilometers on the water.

The situation is ambiguous. On the one hand, if we keep up a brisk pace we’ll make it to the Yenisei today. On the other hand, the more distance we put between ourselves and the rendezvous point with the plane, the less likely we are to assist them. The song lyrics, “For three days we searched in the taiga for cowling and wings,”49 don’t elicit particularly optimistic associations. We call Bocharov to get him to mobilize Pavel’s company, New Reality, in Irkutsk. And it’s 3:30 a.m. in Moscow, where Bocharov is!

1230 We pull up at a small farmstead called Kasovo. No people around. We’re sitting under the roof of a summer cookhouse, hiding from the rain. Our 49 From Yuri Vizbor’s song “Seryoga Sanin.”

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dinner is four crackers and a piece of lard for each of us. Inside the shed are Siberian stag antlers and a 1987 copy of Man and Law magazine. Still no communication with the plane.

Yesterday at 1800 hours Moscow time Denis was a guest on a live radio program for the Mayak (Lighthouse) radio station. For seven minutes he talked about the freshwater fish called ide, canal locks, Old Believers, and our rendezvous with Skorokhodov’s plane. Today the plane is nowhere to be found, and all the Mayak listeners will find out about that on the air.

We arrive at the village of Novy Gorodok at around 1:00 p.m. We aim to find two things in the village: a radio communications link so we can get some news about the plane, and gasoline (we’re about ninety liters short).

Sabertooth leaves for the gas station. The gas issue is resolved, but still no communication with the plane.

Around 2100 Everyone’s in a lousy mood. We’ve decided to push ahead to the Yenisei.

It’s our last hope, that the plane might be all right and waiting for us there, at the mouth of Big Kas River. At the same time we’ve begun organizing rescue operations out of Moscow. Dima Merkulov is set to fly out to Krasnoyarsk in the evening and hire a search helicopter tomorrow morning. We might ask the Yartsevo emergency services for help, since they have a service chopper on call. That’s if we manage to get hold of them. Twenty-two kilometers to the Yenisei.

July 17, 2004 0900 We reached the Yenisei at around 11:00 p.m. No plane. There’s a severalkilometers-long island with an inland lake across from the mouth of the Big Kas River. We pitched camp on the pebbled spit between the two great rivers. Then a quiet and peaceful night fell. In the evening, at 2200 hours local time (1800 hours Moscow time), while Denis was connecting to a live Radio Mayak broadcast, down on the shoals Skrynnik found a chip of mammoth tusk, polished smooth by the water.

0930 Dima Merkulov is working his magic at the airport in Krasnoyarsk. There’s some kind of flood going on, so Emergency Situations Minister Sergei 196

Shoigu has arrived on the scene and there are no helicopters available. As a result, a chopper will fly out to us from the Stony Tunguska River, and four people will go on the search mission: Kamenev, Mozhukhin, Skrynnik, and myself. We reason that the plane departed from the Aleksandrovsky lock on the river, and that it couldn’t take off, so it’s floated downstream.

No contact with them for two days now. Their supplies of food, vodka, and fuel are limited. It’s sixty kilometers to Novy Gorodok, in shallow water with no paddles. But that’s all right, as long as they’re on the water and not in the woods.

Without parachutes After two days of waiting it was clear something had happened to the plane.

With no communication, we decided to commence rescue operations. The decision was tricky. My friends asked subtle questions like, “If New Reality is as strong a company as Ruyan, where are their people in this situation?”

I had no answer.

One of our crew members said to me, “Sasha, if you were the one who’d gone missing, we would turn over every rock in the river till we found you.”

The operation was conducted simultaneously by Dmitri Merkulov from Moscow and by our group on site, where the Kas flows into the Yenisei.

When the four of us jumped into the orange helicopter sent to our spit from the Tunguska River, the commander saw that one of us had a firearm.

He declared that he had been contracted for a commercial flight, not a rescue operation. We used the means at our disposal to explain to him that our friends had gone missing and we weren’t about to debate the matter any further: the helicopter had to fly wherever we said.

As we rounded a bend in the river about an hour later, we caught sight of white plane debris floating in the water. The river was pretty narrow at that spot, maybe fifty meters across. We circled, trying to spot anybody on the ground. There was still hope that they had survived and made it to shore (Skorokhodov was flying with his father, a forty-year small aircraft veteran from East Siberia). Nothing. No one.

The pilot gave us a questioning look. We asked him to line up directly over the river, and we jumped straight out of the helicopter into the water.

We are often mistaken for tourists, and Expedition is vaguely associated with voyages, but in our circle it’s considered bad form to go looking for 197

adrenaline rushes, thrills, or extreme adventure, which often leads to trouble for yourself and your friends, for no good reason. And when journalists ask me whether we do skydiving with parachutes, I recall this incident and reply, “When necessary, we jump even without parachutes.”

Under water We swam across the river, but didn’t find any traces of people on the shore.

The plane was upside down and broken in pieces, looking like a scrapheap of sharp pieces of iron.

Andrei Kamenev, a professional extreme sports photographer, was the only one among us to have dabbled in deep-sea diving. Knife between his teeth, he was the first to dive into the plane, and informed us that the bodies were inside.

We did a lot of diving that day.

It is common knowledge that a person without special training can hold his breath for one minute. But we had to dive under the plane and make it inside through jagged breaches in the fuselage. Feeling our way around in pitch-black water, we had to cut some belts, because the corpses were wearing life jackets.

We swam back across the river, pushing the bodies of our perished friends in front of us. We then took them to Yartsevo, the closest settlement and the district center, and from there to Krasnoyarsk by helicopter.

Writing a will, or not At the Krasnoyarsk airport I met Igor Kokaurov. At that moment he was no longer a New Reality employee and Pavel Skorokhodov’s partner. He was simply his friend.

He drove the deceased to Irkutsk in his car.

The weather was hot and it’s a long way, and I doubt Igor will ever tell anybody what that journey cost him.

Bidding him farewell, I flew out of Krasnoyarsk to Moscow. Before boarding I called and demanded that all four Ruyan shareholders meet me at the airport.

All this time I was trying to look down from above through Skorokhodov’s eyes and understand: out of everything he had left behind on Earth, what would he be most worried about? And it seemed to me that his primary concern would be the future of the New Reality group, which now, along with his kids’ future 198

material subsistence, depended on his senior executives. And I imagined that this story would not be an easy or happy one.

When we landed in Moscow I told the four Ruyan shareholders that they must draft their wills and submit them to me as soon as possible. When the ASAP deadline was approaching, however, Oksana Kapustina came to me as their delegate and conveyed the following. “As a team, we consider that writing wills is undesirable, because that would program us for a dire outcome.”

I thought it over and decided not to push the matter. To this day I don’t have a definitive opinion on the subject. I’ve drafted a will several times since then, but circumstances, relationships, and business operations change so fast that the will needs to be revised every three months to remain up-to-date. And that’s quite a demanding job.

A speech at the Berghaus restaurant Several days later we flew out to attend Pavel’s funeral. There were three of us, because my friends were afraid to let me go alone.

From the airport we drove straight to the church where the services were being held. Many New Reality employees were present, and hushed whispers sounded behind our backs: “Those guys are the reason he’s dead.…” But the question on our minds was, Where were all these people when the rescue operations were under way?

Standing by the grave—three people in orange T-shirts and gray uniform jackets with a big orange logo on the back—we could barely endure the energy of it all. We felt the eyes of everyone attending the funeral on our backs. Those were heavy looks. And then something completely unexpected happened: a fourth man in an orange T-shirt and a gray jacket appeared and stood next to us. It was Alexander Burmeyster, the ice captain from Lake Baikal. He had found out about what happened, and came to the funeral to support us.

The funeral banquet was held at Kokaurov’s restaurant, called the Berghaus.

People took turns coming to the stage, taking the microphone, and giving traditional memorial speeches. Everything was hopeless and bleak, almost physically devouring the light. I was more preoccupied with how Pavel was looking down on all this, when it was already clear that the New Reality shareholders faced a difficult future together.

Another speaker took the stage, grabbed the mike, and proceeded to speak simply and even joyously, paying no mind to the leaden heaviness that hung 199

in the air. He said that Pavel had loved the most beautiful woman in town, who became his wife and gave him a son (she was already pregnant with their second). That he had wanted to be the top car battery manufacturer in Russia, and that’s exactly what he did become. And also that he had wanted to fly.

Regardless of what the people gathered thought about the matter, he had wanted to fly, and that’s exactly what he did!

I think I wasn’t the only one who recalled the situation when Pavel made a forced landing on Lake Baikal in stormy weather. He was flying his Corvette (a very dangerous aircraft; that year had seen four of them crash in Russia alone).

Moreover, landing in a storm on meter-high waves is equivalent to driving seventy kilometers per hour on a road with meter-high waves of asphalt. His plane disintegrated, leaving him, his wife, and their baby seventy meters from shore. They managed to swim to safety, and even after that he kept on flying.

The joy of flight trumped even the fear of death. This speaks volumes about him, and it shows what was most important.

After that it was easy for me to take the stage, grab the microphone, and say everything I wanted to share. Everything that you cannot omit about a friend who was always greater than his own death.

An apartment in a military town Once, I flew into Moscow late in the evening. Before I could catch my breath, Sasha Davydov, the irreplaceable chief commissar of the Expedition Trophy race, called and proposed to meet me early the next morning on the Leningrad Highway outside the Moscow Ring Road. I had a lot of plans and things to do in Moscow, but knowing Davydov, I decided that there must be a reason for his unusual invitation.

We met in the morning at a gas station and started driving toward the Tver Region in two SUVs. Davydov had other people with him, two of whom turned out to be old acquaintances of mine. Near the town of Klin we turned off the highway, and in a few kilometers drove up to the guarded gates of a military unit. For some reason they let us in without a hassle. Soon we arrived at a decrepit five-story khrushchovka,50 climbed the stairs and rang the bell on a door, through which a very different reality awaited us.

The icons in the apartment exuded myrrh. Living there with her family 50 A khrushchovka is a prefab apartment building, often dating back to Nikita Khrushchev’s time in power in the late 1950s and early 1960s in the Soviet Union.

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was a woman with a very complicated life. At one of the most perilous of the extraordinary moments with which her life abounded, an icon that was very precious to her (a simple paper icon, if anyone’s interested) began to weep myrrh. Her family’s faith and this icon were so powerful, that the icons surrounding the first one began to exude myrrh as well. People often brought them images which had been found at the sites of fires. Completely dark at first, the burnt faces brightened and the colors came alive. Icons were brought from other churches and from abroad, to absorb their wondrous power. The woman said that when disasters occurred in the world, catastrophes in which large numbers of people died, the icons in the house would become covered in droplets of blood.

Before witnessing the phenomenon myself, when I imagined an icon exuding myrrh, I had pictured a paltry drop sliding down a wooden surface.

The reality was very different. In fact, when the woman took the icon in her hand, her palm became as wet as if it had been in the rain, and the trickling myrrh was of comparable intensity to water trickling from a leaky faucet. As a result, the apartment walls were so damp from the myrrh that the wiring often short-circuited. The icons exuded so much myrrh that the family ran out of places to store it and developed a pressing need to share it.

And then people started flooding in. They entered the apartment in groups, each spending an hour to an hour and a half there. From what I understood, the flow of people was never-ending. The woman told them her story, the story of her family and her husband. He had been a sailor in the navy, but had to quit the military and move to central Russia when his wife gave birth to a sick child who needed special medical equipment, unavailable in Severomorsk. At the end of each group’s visit, everyone recited the Lord’s Prayer together. The woman traced a cross in myrrh on the forehead of all persons and gave them bottles of myrrh to take with them. For a long time afterward I would draw a cross in myrrh on my youngest son Georgi’s forehead whenever he got cranky, and he would instantly calm down and fall asleep.

Later on I learned that in order to take me there, Davydov and his friends had obtained a special blessing from a priest. For me, this whole story was something of a Golden Envelope, because upon arriving in Moscow I had been exhausted and preoccupied with my own plans, oblivious as to where we were going and why, since no one had bothered to explain anything to me. It was an unexpected gift from fate.

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in lieu of an afterword

Don’t cry because it’s over.

Smile because it happened.

—Gabriel Garcia Marquez The stories in this section, along with my journals, were written in my free moments on the road or dictated into a voice recorder while working on this book. Without these impromptu sketches, the book feels incomplete, just as life feels incomplete without “poetry.” Especially the lives of heroes and enchantresses, for whom (and about whom!) all the pages collected under this orange cover were written.

Business as an expedition and expeditions as a way of life: there is no gap between these two concepts, and you can’t master one without the other.

In the introduction I mentioned that I’m offering this book to the reader as a kind of inherited treasure chest.

When new questions arise, the answers can almost always be found in our own past. We even came up with a special term for this: autobenchmarketing (J).

In conclusion, I would also like to expound on our future habitat. And how to influence this habitat.

The initial draft title of this book was Chronicles of Outrageous Expeditions.

We envisioned it as a chronicle of our company and a tale about us, people who are constantly unappeased by life. To quote d’Artagnan as he set out to England to retrieve the queen’s diamonds:51 “We’ll meet again, surely we will!” Whether on these pages or in a market without competitors, or at a crossroads, or in Ruyan City. Time will tell.

I am not a slave to my work I am not a slave to my work. It’s amusing to look back and see that I initially went into business for two reasons. The first was my complete unwillingness to stand in line for products in the early 1990s. I felt genuine revulsion for the people who jumped the line, for the ones who submissively stood in it, and for myself, forced to waste precious moments of my life in that way.

The second reason was youthfully romantic. I dreamed of building a hotel at the intersection of the Arctic Circle and the border between Europe and Asia, which passes along the axis of the Ural Mountains. To this day there are 51 The allusion is to Alexandre Dumas’s The Three Musketeers.

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no cities or roads in that area. My hotel would be called The Crossroads and would cater to guests who thought the way my friends did: tourists, hunters, and geologists. It’s funny, but in 1992 I thought that it would take maybe fifteen to twenty thousand dollars to open the hotel.

Several years went by. My working time was growing in value, and how I used it made an ever greater impact on the health of a rapidly growing business. Pretty soon I had a personal driver, administrative assistants at the office, a housemaid, and a nanny for my oldest son. Along with the need to handle my various domestic chores personally, a measure of my perception of real life also disappeared. It became difficult for me to gauge what one hundred or one thousand dollars meant for an ordinary person, since I was risking hundreds of thousands and even millions of my own and borrowed money on a daily basis, and sometimes my life.

Once, I had to spend a week being escorted everywhere by two goons as my personal bodyguards. The kind of loathing I felt for myself reminded me of standing in those milk and bread lines years earlier. To refuse protection meant going underground, living in hotels outside the city, and being incognito when in Moscow. But at least it was freedom.

I didn’t drive and I still don’t, because I want to be able to think while traveling. I also don’t use a computer, because I try to preserve and exercise my brain’s working memory. My partners and subordinates have long since transferred their data to digital files. As a result they are unable to convert the data in their heads, for instance, when they’re in an airport check-in line.

They can’t do it because they don’t know the initial information. This makes it very difficult to discuss with them, say, next year’s sales target or last year’s financial statistics.

I once lost my temper after spending half an hour in line for a notary public (though my assistant held my place in line earlier). Back at the office, I asked Alexander Bocharov whether, in his opinion, heads of state or multinational corporations wasted their time in line. And if not, why did he value my time so little? From then on the notaries public started coming to us.

When the construction of the restaurant that later became Expedition started, not all of the Ruyan shareholders were happy about it. Construction dragged on for over a year, not only siphoning off time and effort, but also eating up a huge amount of investment, with the returns uncertain. One of the shareholders was Alexei Belevtsev, who had become one of our charter 204

members on account of being Volodya Chekurda’s “sister-banger.” Belevtsev voiced the view that the working time I was spending on the northern cuisine restaurant was going to lose money for the company no matter what, unless I spent that time managing our mosquito repellent and shoe care businesses.

I perceived his statement as an insinuation that I should be the shareholders’ indentured servant for life. In retrospect, it is clear that the Expedition Restaurant is one of the most profitable investments in our history, with annual profits higher than the three million dollars invested in it, while the building we bought in 2000 has risen in value eight times over during the past ten years. But that’s not the point.

The reason why I, and many entrepreneurs like me, made the decision at a certain time to embark upon this perilous and arduous path was to attain freedom. The freedom to be with people like yourself, and not with those who disgust you. The freedom to do what you see fit and go where your inner calling takes you. Expedition expanded this concept to include freedom from office walls and big city smog, and Ruyan City will take it onward to the creation of a new habitat and the promotion of fresh meaning for human life, which is stuck in the cul-de-sac of today’s surrogate civilization. Naturally, we had to sacrifice some things, and we’ll need to sacrifice more in the future. It is like a gambit, a chess opening when you sacrifice a pawn or two, but gain time and achieve an advantageous position as a result.

Of course, not all the sacrifices were justified, especially those regarding health and relationships with loved ones. Even so, if we were to start again from scratch, our path would be more or less the same. Because experience has shown that we are not slaves to our work.

So, I’m not particularly sorry about not driving my own car. At least it goes where I want it to.

A gift for Lake Baikal, and promoters with flashing lights At a minimum, Expedition differs from tourism in that we have a practical goal: to find the best Russia has to offer. And the best that we find, we bring back with us as trophies, so that people who cherish and value such things, and have no stomach for surrogate values, can touch them.

But one day the thought occurred to me that we were violating justice: we take and take, but don’t give anything back. And we decided that since 205

Russia’s main pearl is Lake Baikal, containing 25 percent of the world’s fresh water, it would be a beautiful and logical gesture to offer a pearl to Baikal.

We scoured the Russian Federation for the largest pearl we could find for sale and made an agreement to sink it during the Expedition Trophy 2008 race.

We would spend the night on the ice above Baikal’s deepest place, and at sunrise the lake would receive the gift.

A very serious preparation period began. Local artisans crafted a charoite jewelry case with the Expedition logo on it. The case was then secured to a string of small buoys, which would allow the treasure to be retrieved from the depth of eleven hundred meters when human technology makes it possible to descend there.

We also had the thought that, though Baikal is the largest pearl on the territory of our homeland, it is far from the only one. Then we bought a number of smaller pearls and decided to sink them in every regional capital on our route, starting from the Urals. Accordingly, two orange SUVs drove out a day ahead of the race, to drill holes and sink pearls. Sometimes the press was happy to film us, sometimes we were alone. Along the way we invented that new method of long-distance travel across Russia, which we now use every year. Eight people travel in two groups of four: one group in cars, another in a train parallel to the highway. When the people in cars get tired, they transfer to the train and sleep peacefully, while members of the rested group leave the train and take the wheel.

In Irkutsk the news about the pearl caused a furor. There was a big press conference, and six local journalists, including those from two TV channels, decided to come with us to our overnight camp. The journalists were all very peculiar. On the way to Olkhon Island, the starting point for our Baikal crossing, they drank vodka right there in the car and munched on the pepper they had shaken out of the bottle of Nemiroff pepper vodka. We drove out onto the ice on a frosty, starry night, and two innovators in our group, Barsukov and Kato, immediately decided to use thermal steam generators to heat the chum tents. The generators died in fifteen minutes. The firewood was damp, so it had to be split into small pieces, placed vertically, doused with starter fluid, and tirelessly fanned with foam plastic. Only then did it agree to burn, at least somewhat.

The journalists swore like hardened sailors. Swearing in the company of women is prohibited at Expedition camps, and we had two women with us.

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I firmly explained to the journalists our rule against swearing, and warned that if they did it once more we would simply drown them. Ten minutes later they did it again. “Sasha, cut an ice hole,” I said to our unfailing samurai Sasha Kato. He grabbed a chainsaw, and soon enough a two-meter-by-twometer ice hole clearly demonstrated that we weren’t kidding. The press quickly surmised that it wouldn’t take much effort to drown an averagesized journalist in the hole. They retreated to an SUV and stayed there until morning. Silence fell over the lake. Come morning a helicopter flew in, carrying representatives from a national TV network, and we solemnly lowered the jewelry case with the pearl into the dark turquoise waters of the lake. It entered Baikal gracefully. The wire rope continued to slide into the depths for a long time, keeping everyone’s eyes glued to the ice hole.

The chopper scouted the area in the direction opposite from the shore and discovered a crack in the ice. But our options were limited. That same evening, the entire Expedition Trophy race was expected in the village of Barguzin on the other side of Lake Baikal. We had to be there, so we got in our cars and set out.

Two hours later I received a call on my satellite phone. It was from the Expedition Restaurant on Solyanka Street in Moscow. “Solyanka is blocked off. The elections are today, and ex-President Putin is bringing newly elected President Medvedev to the Expedition Restaurant to celebrate.”

Feedback from the world sure is fast, we thought.

A week later we had to raise prices by 15 percent because the restaurant was overflowing.

A little more than two years later, Vasil Gazizulin was digging a heavy stone out of the mud on the banks of the Ob River. The stone was to be taken to far-off Rügen Island and traded for the similar one that would become the first foundation stone of Ruyan City. Vasil’s phone rang. “Solyanka is blocked off, there are flashing lights all over the place. Putin is bringing Prince Albert II of Monaco to the Expedition Restaurant.”

Parallel worlds In my view, what is one of modern Russia’s biggest problems? It’s something I recognized eight years ago and even wrote a letter to Putin about. It’s that at the very top you have two or three powerful men, and all the way at the bottom you have powerful and effective people, but between them is a chasm.

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And it’s not that the nation’s leader lacks the willpower to fill that chasm, but that there’s nothing to fill it with. It’s bad enough that there’s nothing to fill it with today, but the real problem is that there won’t be anything to fill it with tomorrow, or the day after.

I had a vision of how to create the tool kit to fill the human resources chasm. I laid it out in writing, but assumed that if I sent the letter and it reached its addressee, I and my company risked losing some of our freedom.

The letter remained unsent. Nonetheless, several years later, Federal Youth Agency head Yakemenko came to me and said, “Alexander, we need to explore nonstandard approaches to Russian business education.” That conversation was what brought the Expedition raft to the Lake Seliger youth forum.52 Why does a nation like Germany succeed? It’s because the government and the people want more or less the same thing. In Russia, however, we live in parallel worlds, though real strength for our nation would come from the politicians and the common folk living by shared interests. This is where the strength of any organization comes from. Do you think that any Sberbank employees care about Sberbank’s revenue?53 Or any Gazprom employees about Gazprom’s revenue?54 Admittedly, we’ve also had some mediocre people at Expedition. This translates into mediocre logistics, mediocre store locations, and mediocre product quality. The outcome of an accumulation of defects is predictable.

Conversely, when outstanding people join together, they achieve the exact opposite. Comparing these results can be baffling: how could the annual performance of two stores operating under the same brand, in similar cities and in malls with comparable foot traffic, differ by a factor of twenty? Where could such a difference come from?

Here’s a joke.

Two girlfriends run into each other. “I’ve taught my guy to quit drinking!” one says.

“No kidding! How did you do it?”

“Easy. I found a dead cat in a trash can and threw it in his moonshine! He puked his guts out and has been sober for two months now.”

52 Chapter 4.

53 Sberbank, the Russian national savings bank, is the largest bank in Russia and Eastern Europe.

54 Gazprom is the largest extractor of natural gas in the world and Russia’s largest company.

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The other girlfriend calls her a week later. “I tried your method. When I came home, he was at the table, squeezing the cat: ‘Just one more drop, my dear pussycat…’”

The conclusion is simple. We classify business processes into cats that have been “squeezed dry” and those that haven’t. This is a fitting time to recall the “Desdemona principle” as formulated by S. I. Makshanov: “The grasp on Desdemona’s throat must be firm until she stops quivering.” What’s left is the unsolved problem, or rather, the opportunity to solve it: to forge Othello-type personnel, people who can squeeze all there is to be squeezed out of our business cats. That’s why, when spring arrives and the snow melts, the Expedition meadows will once again begin the selection process for our anti-MBA Academy of Entrepreneurship. The company also has open house days. If you plan to attend, read the section entitled “A floating flame,” just in case, so you’ll know what you’re in for.55 On that topic I have another joke.

A man dies and goes to heaven. Things in heaven are pretty good. Psalms can be heard everywhere, the sun is shining. Everything is predictable, calm, and peaceful. He rests for a month, recovers his breath, and begins to look around.

He notices a sign that reads Travel Agency.

“Where are the tours to?” he asks.

“To hell, of course,” comes the answer.

The man arrives in hell and finds bars, girls, people singing through the night.

Green lights a la Expedition meadows, philosophical debates on life with the “idea brothers.” The week flies by in an instant.

He returns to heaven, but now he’s on pins and needles. He runs back to the travel agency and asks, “Can I apply for permanent residency in hell?”

“Sure, no problem!”

Once the paperwork has been processed, the lucky SOB goes back to hell, only to be grabbed by demons and thrown in a frying pan.

The man whimpers, “Hold on there, fellas, something’s wrong! I was here only a week ago and everything was different!”

“Don’t mistake tourism for immigration, bro!”

55 Chapter 12.

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Truly hopeless causes are the only ones worth fighting for Expedition is an umbrella brand.

So how do they propose to build a city, if all they produce is umbrellas?

—From a Siberian journalist’s blog The two most frequently asked questions about the city are: “How much will it cost?” and “Where will you get the money?” To be honest, we don’t have definite answers to either question (I’m joking, of course, but there’s a lot of truth to it). Usually my answer is: “Whatever we manage to make is what we’ll invest in building the city.”

This answer is the truth, but not the whole truth. An expert appraisal estimated the construction budget at four hundred to six hundred million dollars. And we don’t like borrowing money. This situation is very inspiring for me personally and for my friends. Life hasn’t issued us a challenge quite like this one since back when we were organizing the first Expedition Trophy race.

There are too many unknown variables in this equation. Certainly, great hardships and tribulations beget breakthrough discoveries and technologies. So our reply to another question, “What do you need to do this for?” is sometimes that we simply thought it up as a powerful motivation for discovering how to make more money. Next, let’s add a measure of gravity and complexity to the picture. One of the goals of this book is to foster development of the business community in Russia and in the world. It is clear to me that healthy, living money derives from the energy generated by effective entrepreneurs.

I once gave some thought to how the famous formula Е = mc2 might apply to business. If E represents entrepreneurial energy and m represents money, then what are c and c2? I decided to consult my “idea brother” Misha Babin by phone.

We decided that c2 must stand for multiplied human potentials. Upon further reflection, Babin added that a quadratic function is not simple multiplication.

“It’s a delicate matter. ‘For where two or three have gathered together in my name, I am there in their midst,’”56 Misha quoted the Bible and hung up. Now let’s recall the T-shirt slogan, “Ignorance of the laws of physics delivers you from doubt,” and move onward.

No matter how high I estimated the earnings from specific projects (even 56 Matthew 18:20, New American Standard Bible (1995).

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the most promising ones) over the next three to five years, no matter how fast my models showed our portfolio of franchise businesses expanding, it didn’t come out to the amount of money needed for the city. The main limitation is that entrepreneurial companies living off their operating margin usually can’t cash in on their businesses until they sell them. That’s when we came up with the idea of a backbone enterprise.

This is where I try to seduce you (J).

The Ruyan Investment Club is a place where heroes and enchantresses get together, both online and in real life. The simplest way to picture it is as a pyramid with an isosceles triangle as its base.

1. people who own the head franchises of replicable projects 2. people who are prepared to physically replicate these projects 3. people who are willing to invest money in the head projects and/or the physically replicated facilities At the top of the pyramid (4) is a community of entrepreneurs of impeccable reputation, who have the authority to ensure the integrity of business dealings within the club.

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Of course, all of this is integrated in an online social network, except instead of people there will be enterprises that can set their status (available, unavailable, partially available, open to business flirtation). I believe that this will enable us to: • achieve synergy among best business practices and simplify the legal structures thanks to mutual accountability • learn to cash in partially on a business before it is sold in full (a kind of micro IPO) • beget something entirely new through our close and intensive interaction, something which we cannot yet even imagine • ultimately build a city that will assemble the elite, where we will all want to live (or at least visit often)

To feel like an eagle, you must fly with the eagles And now I suppose it’s time for me to reveal a little secret.

The two inflatable sailing catamarans, the Rudyard Kipling and the Mighty Squirrel, brought not merely a single stone from Rügen Island to Kaliningrad, but six of them. The first was laid in the foundation of Ruyan City on November 2, 2010. The other five are stored in our business library, collecting entrepreneurial energy. They await their hour, when they will be laid in the foundations of five lighthouses—the first buildings of new cities. Cities that don’t yet exist on the map.

Facing Antarctica I’m writing this page in the rooftop bar of one of the noisiest hotels in the city of Punta Arenas, Patagonia, on the farthest coast of Chile. The hotel is on the shore, literally ten meters from the ocean. It is the southernmost tip of South America, with no more land between this point and Antarctica.

Day after tomorrow is New Year’s Day 2011, and tomorrow a Chilean Air Force plane will take us to the Bellingshausen Station on King George Island, where thirty-five polar explorers live. There stands Trinity Church. I played a role in its construction, but have never been there.

One of the goals of my trip is to observe how people live at the station, since it is also an autonomous city of like-minded individuals.

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I’m surrounded by drunk and merry Chileans. I am anticipating the joy of meeting the polar explorers, to whom we’re bringing a live New Year’s tree and presents. I’m also trying to visualize the face of the reader, who has traveled alongside me and my friends to the end of this book. I gaze into your eyes for a few seconds, order a glass of champagne, and smile…

Candles and lighthouses My older brother, the poet and priest Konstantin Kravtsov, played a big role in making this book. We’ll probably need to publish another book about Expedition, this one written by him. The text below concludes this book and starts the new one.

When Anacharsis, a son of Scythian royalty who became a philosopher in Greece, was asked whether the dead or the living were more numerous, he answered, “Under which heading do you classify those who are at sea?”

If our entire life is a sailing voyage, then all those who haven’t yet passed into eternity are seafarers. The only difference is that some of us stay home, and some of us embark on risky expeditions. When Anacharsis was informed that the sides of a ship are four fingers thick, he said, “Sailors in ships are just four fingers away from death.”

Those four fingers mark the difference between those who are at sea and those who remain on land. Between the living and the living.

There are no dead; there are only those who sail closer to an unfamiliar shore and those who are farther away from it. Those who remain within familiar confines and those who aspire to the unknown. And the latter discover the New World, build New York and New Orleans, and light lighthouses…

When Kravtsov and his friends sailed their catamarans on the route of Odysseus, the following events happened. One night around midnight they moored at an island, which they knew had been deserted long ago, and that the city on it was a city of the dead. They climbed up the rocky shore and saw a Greek church.

The courtyard shimmered with its covering of Byzantine mosaics, and the wall was breached by an olive tree that had collapsed onto it, its dry leaves gleaming in the moonlight. The church was open. The seafarers walked inside and froze in their tracks: candles were burning in the church!

Who lit them? Angels? Fishermen? Shepherds, leaving their goats to graze on the deserted island? Did it matter? The important thing was that someone had 213

lit the candles, someone for whom “An abandoned church is still a church.”57 Candles and lighthouses… There is no fundamental difference between them. Just as there is none between them and the stars. And, of course, “if stars are lit, it means there is someone who needs it.”58 Who needs it? The living. But candles burn even in a city of the dead. It follows that there are no dead cities, just as there are no dead people. Any city that comes into existence becomes a city of the sun. Not the sun of Tommaso Campanella, not the sun of utopians, but a star beyond human conception or handiwork.

The travelers exited the church. It took them a while to fall asleep in their sleeping bags, which they had unrolled on the shore. At sunrise they were roused by the tinkling of bells: the goats grazing on the island had come to check out the interlopers. The rising sun inundated fractures in the cliffs, which still remembered the ships that besieged Troy. A fishing boat could be seen somewhere on the horizon.

I’m up for a swim, Sasha thought to himself.

Half an hour later, the dumbfounded fishermen followed him with their eyes for a long time, as, after smoking one of their cigarettes and exchanging a few words in English, he swam back to the catamarans on the rocks.

The city of the dead had another church, except this one lacked a pleasing mosaic in the courtyard. It was made of gray concrete, a lock hung on the door, and no candles burned inside. After inspecting the town’s deserted blocks (with their limestone, red tile, swallows, and sun-scorched grass), the team returned to the shore. The desolation, punctuated by the jingling of the bells around the goats’ necks, brought to mind the question which had made the team embark on this voyage in the footsteps of the crafty son of Laertes, a question demanding an immediate answer: should they build the city? Is it necessary? Twenty, thirty, or fifty years from now, will it be deserted like this one?

“Which ships are better?” a young Achaean asked the philosopher.

“The ones hauled up onto land,” Anacharsis smiled.

He was right. But the youth could have retorted with these words from an orange Expedition T-shirt: “A ship is safe in harbor, but that’s not what ships are for.” And he would have been right, too. There is the truth of the risk-takers 57 The line is after (with one word varied) Mikhail Lermontov’s 1837 poem “We have parted, but thy portrait…” (“Rasstalis my, no tvoy portret…”).

58 Vladimir Mayakovsky’s poem “Listen” (1914) is quoted.

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and there is the truth of those who abstain from risk. To each his own. One may act (and every action is a risk) or one may avoid action.

The seafarers dragged their worn sleeping bags aboard and set sail.

To build or not to build? To build, of course! As an Englishman once said, our duty is to act, and what happens thereafter is not our concern. Our mission is to follow the path of Odysseus. Everybody ready? Then let’s take our seats, and off we go. Onward!

While the narrowing rails slide together behind you; And on the deck of the drumming liner Watching the furrow that widens behind you, You shall not think “the past is finished” Or “the future is before us.”

At nightfall, in the rigging and the aerial, Is a voice descanting (though not to the ear, The murmuring shell of time, and not in any language) “Fare forward, you who think that you are voyaging; You are not those who saw the harbor Receding, or those who will disembark.

Here between the hither and the farther shore While time is withdrawn, consider the future And the past with an equal mind.

At the moment which is not of action or inaction You can receive this: “on whatever sphere of being The mind of a man may be intent At the time of death”—that is the one action (And the time of death is every moment) Which shall fructify in the lives of others: And do not think of the fruit of action.

Fare forward.

O voyagers, O seamen, You who come to port, and you whose bodies Will suffer the trial and judgement of the sea, Or whatever event, this is your real destination.”

So Krishna, as when he admonished Arjuna On the field of battle.

Not fare well, But fare forward, voyagers.

—T. S. Eliot, “The Dry Salvages,” Four Quartets 215

Working on this book I felt constant temptation to add as much photos, illustrating the stories, as possible. In at the same time, I was afraid to make a kind photo album of the book. Thus and so the idea appeared to publish selected set of the brightest photos.

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Seychelles. March 2009.

Sunset on the Northern Sea Route. Year 2009

Park-office on the raft. Year 2008

Flash-mob during the first holiday “New year twice a year”. December 8, 2009

Reaching the Olkhon. “Expedition-Trophy”. Year 2008

Mexico “Expedition Around the World”. 2007

White rainbow on the Northern Sea Route, near the Saint Nose Cape. Year 2009

Festival “Expedition Live Music� in Nickola-Lenivets village, Kaluga region.

June 2006

Ruyan-city view from the helicopter. November 2010.

Ice of the Baikal. “Expedition Trophy”. Year 2008

The first church on the continent. Antarctica.

The holiday parade near Reichstag on the company’s birthday.

Berlin. January 23, 2008

My birthday. Passing freezing the Volga river by Dyrchik.

Bikini slogans: “Nice? expensive!”, “Beautiful, no matter how you spin it!”

Flags on the Red Square in Ruyan-City.

Ruyan-City. At the upper – the first wooden house. December 2010.

Our favorite bear Umych in the restaurant made of ice at the Baikal.

Seychelles. March 2009.

Content IN LIEU OF AN INTRODUCTION Stories from treasure chests Not a “memorial,” but a manual

PART I. SPATIAL ORIENTATION

6 11 13 17

Chapter 1. WHO WE ARE AND WHERE WE CAME FROM 18 Music and permafrost Open season

19 20

Chapter 2. MY FATHER

22 22 22 23 24 24

The most important person A store of trust as start-up capital Russian folk tales are all expeditions Not for me to judge The skua’s cry

Chapter 3. ADAPTING TO RUSSIAN REALITY How the army maps onto life On the regular army, guerillas, and sabotage units

Chapter 4. INITIATION When you know you can do anything Hunting mammoths Our first business school: the Luzhniki street market

PART II. A HOW-TO GUIDE FOR BUSINESS SURFERS CHAPTER 5. THE PRIMITIVE ACCUMULATION OF HUMAN CAPITAL Finding captains The first hint from my “idea brothers” How to save time and money Not so much the people, as how they combine We don’t play democracy In the event of mutiny on the ship The ideal decision Never let go of the helm Machiavelli and downhill skiing The propeller: axle and blades Dodging the ice floes: full speed ahead!

26 26 28 30 30 30 32 35 37 37 37 38 38 39 40 41 42 43 44 45

CHAPTER 6. MOTIVATION AND INVOLVEMENT Not for money Three green lights When heroes are with their wives, and enchantresses with their husbands A boat trip for employees’ parents Almost an anti-retreat unit The acting scapegoat A heart-sized stone The second hint from my “idea brothers”

Chapter 7. OUR SHIP – FOR OUR PEOPLE Choosing a banner to raise The essence of Ruyan’s philosophy Two kilos of cash All steamed up A system of coordinates Values as a diagnostic tool Metaphors instead of a Goebbels-style hammer How we built trust in others…

And how others came to trust us Not crossing the line Cultivating a winning tradition

CHAPTER 8. HUMAN ORCHESTRAS AND UNCOVERING POTENTIAL An aircraft carrier made of rafts Intentionally limiting rates of growth Don’t become a flabby broiler Be the master of your own destiny Just like the spetsnaz The k-key is not to be s-scared Relishing uncertainty The golden envelope Night alarm The “dry fanny” exercise New Year’s Eve twice a year Business is always a show Concerning orange and black underwear

47 47 48 50 52 53 53 55 57 58 58 59 59 60 61 61 62 63 64 66 67 70 70 73 73 75 76 77 78 80 82 84 85 89 90

Budgeting energy Open sesame!

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Chapter 9. PARTNERSHIPS AND RESPONSIBLE INVESTING

95 Find out what he likes 95 A souvenir from Red Square 96 A fur coat for Gabriele 96 Controlling the tempo, and the art of coordination 97 The promise of interlocking ownership 98 Deep personal communication 99 Three principles and kicking under the table 100 A snapshot as reliable as a Kalashnikov 102 A game of Russian whist in the Moscow–Dnepropetrovsk train 103

CHAPTER 10. MARKETING?

105 Just like in geology 105 High-speed product development 106 Don’t bother with remedial training 107 Create the right environment, and record the details 108 Supermobility 110 A tale told by empty boxes 111 Pith helmets 111 New Year’s tree jewelry 112 Orthodoxy, cookery, and seasonal business 113 Don’t hunt for other people’s treasures, bury your own instead 114

CHAPTER 11. THE CREATION AND NURTURE OF BRANDS The consequences of a pilot’s error From lighthouse to lighthouse Yo-ho-ho and four liters of champagne

CHAPTER 12. ROUGH AND TUMBLE Escape from Moscow Approximately one month later…

A floating flame The naked truth of life A young community, impassioned activists, and bureaucrats The city is already here!

An expedition into a fairy tale

115 116 119 123 124 125 126 129 129 132 133 135

PART III. OUTSIDE READING CHAPTER 13. EPIPHANY EVE AND THE FREE SKATE On beauty On the leader of an elite group and its final campaign On Dyrchik On the power of argument

140 141 142 142 144 145

CHAPTER 14. EXPEDITION TROPHY: CAUSES, OUTCOMES, LONG-TERM CONSEQUENCES

147 Journal entries from our pre-scouting run 147 “You mean you really exist?”

163 The legend of the Kalmyk flight attendant 164 An occupied seat and the Orthodox Church 165 If she would wait for me 166 Icefox 172 Butterflies 173

Chapter 15. UNDER SAIL A pirate comes to camp My Seychelles journal Gourmet cooking The Northern Sea Route

Chapter 16. UNINTERRUPTED FLIGHT New reality and its creator The ice of Baikal and the local spirits A nighttime conversation in extreme danger Journal excerpts from the Ob–Yenisei Waterway Without parachutes Under water Writing a will, or not A speech at the Berghaus restaurant An apartment in a military town

IN LIEU OF AN AFTERWORD I am not a slave to my work A gift for Lake Baikal, and promoters with flashing lights Parallel worlds Truly hopeless causes are the only ones worth fighting for Facing Antarctica Candles and lighthouses

175 175 175 181 182 190 190 191 192 194 197 198 198 199 200 202 203 205 207 210 212 213

People, who constitute the core pillar of the “Ryan” company and the “Expedition” brand today Arhipenko Denis (1) Balkova Ekaterina (2) Barsukov Uriy (3) Basis Oleg (4) Bahmet Luda (5) Birukova Anna (6) Birukova Elena (7) Bocharov Alexander (8) Volkov Sergey (9) Gazizulin Vasil (10) Golovina Luda (11) Degtyarev Andrey (12) Zaruta Katia (13) Ivanov Nikolay (14) Isupov Valentin (15) Kato Alexander (16) Kazatsky Yakov (17) Karaya Nina (18)

Kovalskaya Marina (19) Konoplev Ruslan (20) Korchagina Marina (21) Kravtsov Alexander (22) Larina Elena (23) Nikonenko Oxana (24) Safonov Alexander (25) Safonova Inga (26) Skvortsova Alexandra (27) Sokolov Kirill (28) Sokolova Maria (29) Stepanova Irina (30) Tonkova Zara (31) Tsurkan Lera (32) Sharyga Taras (33) Scherbinin Alexander (34) Yarosh Alexey (35)

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walk into the private lives of russian entrepreneur Alexander Kravtsov and his friends as they fight for their piece of the market and become creators of several russian and international brands that stand at the center of their respective fields today. A russian best seller, this novel was translated into English to teach readers around the world proven techniques for achieving outstanding success. Made up of “true tales for heroes and enchantresses,” it is a guide to finding business in one’s life and devoting oneself to it. having created numerous businesses and thousands of jobs, Kravtsov uses ingenuity, experience, and a pragmatic approach to deliver a relevant and intimate account of his life that will inspire anyone who wants to achieve greatness. Told through readers’ eyes, this exciting and enlightening read is for those in search of opportunity and a foundation from which to create their own success. renowned russian entrepreneur Kravtsov is the creator of ruyan company and the brand Expedition, as well as the founder of the Academy of Entrepreneurship, Business Surfing School, and ruyan Invest Club. Born in Salekhard to a family of music teachers, Kravtsov enrolled at the Moscow Institute of Oil and gas before serving in the Soviet army two years later. In 1995, he and his friends founded ruyan company and went on to produce russian and international brands that stand at the center of their respective fields today. Since 2001, the focus of ruyan has been the lifestyle brand Expedition.

www.expeditionbook.ru