DANCING WITH THE BEAR A Serial Entrepreneur Goes East DANCING WITH THE BEAR A Serial Entrepreneur Goes East Roger Shashoua Publisher’s Note Every possible effort has been made to ensure that the information contained in this publication is accurate at the time of going to press and neither the publishers nor the author can accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the author or the publisher. Readers of this publication may copy or download portions of the material herein for personal use, and may include portions of this material in internal reports, provided that such portions of the material are attributed to this publication by name, the name of the author and GMB Publishing Ltd. 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All rights reserved. © Roger Shashoua Hardcopy ISBN 978-1-84673-076-4 E-book ISBN 978-1-84673-077-1 British Library Cataloguing in Publication Data A CIP record for this book is available from the British Library Library of Congress Cataloguing-in Publication Data Typeset by Saxon Graphics Ltd., Derby Printed and bound in Great Britain By Cambridge University Press Contents Acknowledgements vii Foreword Nicholas Berry ix Prologue xiii Chapter 1 The Wonderful World of Publishing? 1 Chapter 2 International Book Fairs Beckon 11 Chapter 3 Hello Moscow – Adieu Paris 17 Chapter 4 A Rookie in Russia 27 Chapter 5 The Moscow Motor Shows 47 Chapter 6 Natasha – The Rise of a New Russian Woman 59 Chapter 7 Growing the Business 71 Chapter 8 From Russia and Beyond 89 Chapter 9 In Praise of Women 107 Chapter10 ITE Comes of Age 125 Chapter11 Getting it Right: Expomedia 139 Chapter12 Making it in Emerging Markets – Paper Millionaire, Mega-millionaire or Oligarch Billionaire? 153 Chapter 13 The Key Emerging Markets – 2007 to 2010 175 Acknowledgements Jonathan Reuvid is an author and editor of business books, with more than 30 titles to his name. He is Senior Editor at GMB Pub- lishing and Senior Consultant Editor to the business and reference division of Kogan Page. Formerly Director of European Opera- tions for a US Fortune 500 company, he has been engaged in joint venture development in China for more than 20 years. Acknowledgements There are many friends and family to thank for their contribu- tions to the writing and publication of this book. First, the com- panions in my adventures – in particular my brother Roddy and my elder son Mark, whose recollections of events are as vivid and sometimes clearer than my own – have set me right on some of the factual detail while reading the early drafts. Thanks also to my sister Joyce and her husband Angus James who have patiently read successive drafts and offered constructive criticism and to my younger son Daniel. I am especially grateful to my friend and travel companion Nicholas Berry for his advice and the Foreword, which neatly pinpoints the problem facing all serial entrepreneurs – what to do next. And so to the publishing professionals. I am grateful to my daughter Deanne for her close involvement throughout the writing and editing process and to my publisher Peter Chadwick for taking on the publication of a text that is not in the business book mainstream. Last, but not least, my appreciation goes to Jonathan Reuvid, my literary adviser, for his continuing input from incep- tion of the book to publication. Roger Shashoua Foreword THE HARE AND THE TORTOISE What happens when an entrepreneur succeeds? In the initial stages before success, he or she supplies brains, energy, initiative, and someone else usually supplies the money. But now he has the money as well. Does he become an investor? Or does he seek another challenge? Does he continue to develop his original project? Or does he retire to write a book? Roger Shashoua belongs mainly to the second category. ‘People without dreams’ he tells us, ‘are like birds without wings.’ For him, therefore, once the thrill of the chase is over, boredom will set in. The hare hates the thought of becoming a tortoise. But is that rational? The greatest diffi culty that Roger has faced is not entrepreneur- ship, but with après entrepreneurship. Only then does the restless impatience, which has carried him to the summit of success, become his enemy. The skill in becoming a successful investor is the opposite to that of the serial entrepreneur, which he is. In his pursuit of constant action, the serial entrepreneur ignores the eighth wonder of the world – the effect of compound growth. A thousand dollars invested in Berkshire Hathaway 50 years ago x Dancing with the Bear would be worth around US$300 million today, although admit- tedly this is an extreme case (and there would have been no fric- tional costs from tax, or from paying off greedy merchant bankers). I do not believe that the pursuit of riches is Shashoua’s main driving force. I think that the explication in his case is tempera- mental, not rational. Rather, there is within him a low boredom threshold, a longing for something new, and a furious impatience with anything old. Impatience is one of the most obvious qualities of this multi- faceted man. ‘What is Shashoua like?’ I asked the stockbroker who fi xed up our fi rst meeting fi ve years ago. ‘He does not have much time for fools’, he replied unhelpfully – since presumably he was not referring to himself. The quality that comes across from the fi rst moment is an amazing verbal fl uency, like an ‘always on’ radio, which makes the idea of his writing a book – let alone two – unlikely. But what a programme! There are many – too many – books on business by entrepre- neurs. Normally, they recite a seemingly inevitable Horatio Alger- like climb up the ladder of success. Roger tells an altogether more honest, and far more absorbing tale of his career to date, strewn with the need to overcome daunting and hidden obstacles. If you placed Roger Shashoua on a desert island, it would only be a matter of days before he had started trading with the natives, had struck up a close relationship with the local chief and proba- bly married the chief’s daughter. Today, the terrains of his choice – Russia and Eastern Europe – are altogether more treacherous than our increasingly legalistic West. The frontier between entrepreneurism and piracy is – to say the least – blurred, with few laws to rely on. In these places, there- fore, the law of mutual advantage is the one on which to rely. So, exceptional doses of perseverance, boldness and ingenuity are required for success. And Roger Shashoua has these in buckets. Foreword xi His idea that for every problem there must be a solution is exactly the opposite of the critical-thinking-argument culture in which the West is saturated. Central to his success is his quality of instant empathy with people in many different cultures, including a multitude of women. The ability to immediately place himself in the shoes of a another party – possibly a competitor or adversary – and to improvise more or less instantly a solution that will benefi t all sides has to be seen to be believed. And it can be seen in this book*. This skill, which is so rare in most of us, is second nature to him. The Shashoua family comes from the same Iraqi village near the Tigris that has exported to Britain such brilliant business brains as the Saatchis, Jack Dellal and the Zilkas. Was it something in the water supply? Among the many stories that he tells in this book, there is one of international signifi cance which, as far as I know, has never even been hinted at before. Through his friendship with Zhao Ziyang, the Chinese leader of the 1980s, he learnt that the Chinese were fl abbergasted by the British offer to hand over Hong Kong early for nothing. At the very least, they expected a substantial trade-off and, incredibly, were even ready to consider sharing power with Britain permanently. In dealing with Roger Shashoua, following him around the world, usually well off the beaten track to places like Delhi, Agadir, Bombay, Casablanca, Yekatrinberg, Volgagrad or Bel- grade†, I have frequently been exasperated, confused and exhausted but never, for a moment, bored. Given the character of ‘our hero’ that I have attempted to describe above, this entertaining book that follows on from ‘The * See in particular Chapter 11 † I should mention here that Roger’s grasp of geography is notoriously shaky. Those along for the ride should bring their own map. xii Dancing with the Bear Paper Millionaire’ can only be the second of several likely future volumes – an interim report, if you like. Nicholas Berry Nicholas Berry is an investor and publisher. His family interests include Mintel International, the Anglo American research busi- ness, Intersport Psc in Switzerland and Stancroft Trust. They were formerly owners of the London Daily Telegraph.