Ruminations on Russia

In Saturday's FT there is a long piece on Liu Chuanzhi, Legend's CEO and The Man Who Ate IBM (Subscription only) The article says very little actually unless you are a sucker for reading PR releases.

Also in today's FT this piece on the first time in Ikea's history that they have failed to open a store on schedule. The blame is being put squarely on the local authorities shoulders who in a usual piece of shameless hucksterism saw a way to a quick bribe when they "discovered" that an obscure stamp on an obscure piece of paper had not been obtained. I am sure that it happened but normally Ikea would have solved the problem; whisper it quietly but the rumor doing the rounds of the retailers is that they were just not ready. Anyway this post is not about Ikea exploiting corrupt bureaucrats to cover their own problems.

The theme is China versus Russia. Mr. Liu Chuanzhi started Legend in 1984/5, 8 years before the collapse of the Communist regime of the former Soviet Union. After a couple of missteps they localized IBM PC's. They started building their own brand PC's in 1990. Today he runs a business that has bought the PC making business of the guys who invented (sic) the PC. Does it seem likely that a Russian-led firm will buy IBM chip design business before 2010?

The question is in itself flawed, as the comparison is actually apples and oranges. Legend has taken over a business that is about inventory and logistics and the application of technology. Russia will never compete in this business space. The real question is where are the international business leaders in Russia who have boot-strapped businesses and when will they start to challenge to be global leaders. Where is the Russian tech business that is exploiting Russia's great talents to take on the world?

My life is about entrepreneurs not established businesses. However, I don't feel or see management quality almost anywhere. There are some inordinately clever people surrounding the Oligarchs and a bunch of pretty clever ones around the Minigarchs. But they are not building businesses they are deploying overwhelming financial power to win in not very crowded spaces. They are not and never will be entrepreneurs. For the record let it be known that VC's are not entrepreneurs either. Some may think more entrepreneurially than others but our future is safe - until it's time to raise the next fund. I spent some time with a pizza & cinema entrepreneur from the regions this week. His mantra is quality of execution. There are very few other businesses where I get that feeling.

There was a point to the Ikea link. Business in both Russia and China is fundamentally corrupt at the bureaucratic level. Yet China has succeeded in creating a number of international businesses that compete on their ability alone; Legend, Huawei and UT Starcom straight off the top of my head. Where is the Russian UT Starcom?

A previous post despaired at the India versus Russia comparison because it is so meaningless. This one despairs at the China versus Russia comparison because it is so huge.