The Untold Story of Post-Soviet Entrepreneurs | Marat Ressin

My guest today is a successful entrepreneur starting off his career after the fall of the Soviet Union, building and buying over 30 businesses before coming to Canada and launching the number one globally ranked accelerator incubator in the world.

Every single venture, every shoemaker company, every sewing factory, everything belong to government. That means that bureaucrats separated people who think that if we build this socialist type of economy that will live better. They're mistaken because I lived in this.

The story sounds kind of like the origin stories of Russian oligarch, except you went the other way.

It was the time in Russia when KGB wanted to take over everything. So. And you cannot say no. So. So once I spend the entire day in the KGB building, everything you, you have stays in this company and you cannot escape. But it's actually a slavery and nothing else. I said, I need more time. And then we just left the camp. And that was the moment I thought, yes, I'm doing something right. And my mom said, I, she said, I don't believe how these serious people with money trust in you. Like, you know, investors always live between two types of fear. One is fear to lose money and the other one is fear to lose opportunity.

What would you say is one of the biggest mistakes entrepreneurs make when they're starting out?

At the very beginning of my very first lecture, I normally tell them, Thank.

You for joining us.

My pleasure. Thanks for having me.

You have an incredible life story. I mean, take us back to your young guy in your early twenties. The Soviet Union is collapsing. What happened? How did you start your first business and all that?

Every single venture, every shoemaker company, every sewing factory, everything belong to government. What does it mean, belong to government? That means that bureaucrats separated, right? Meaning it's not efficient. That's the problem. People who think that if we build this socialist type of economy that will live better and we'll have more money to, to do social justice. They're mistaken, I believe, because I lived in this bright future, which is the dirty past of some people. So it was at some point, even before the full collapse of Soviet Union, it was allowed to build small ventures, but the ventures have to belong to bigger government owned corporations. So, and I just finished university and I was working one of the institutes and our institute in partnership with another institute. It was so many years ago, they decided to build a small business together and they needed a director because I was the youngest. They decided to up with me as the director. And that's how my business careers started. So they thought they need somebody who's young. I was 22 or something back then. And I became a director of a venture and I had 65 employees. And every single employee was at least twice older than me or three times older than me. And that's how my business career started. And in a couple years after that, I already started my own business. There were many ventures that were bankrupted or about to be bankrupted just because the leadership of the ventures didn't know how to operate in the new market situation. So they, they ran the, their ventures down.

So, so after the collapse of the.

Soviet Union, this was after the collapse and I just happened to purchase one of the ventures which was a sewing factory and completely re engineered and it was very successful. And, and then I did it with ventures of, from many different sectors.

So the Soviet Union collapses and you have this sewing factory for example, that was run by bureaucrats, meaning there weren't people that understood the business so well. They maybe they were put in place as leaders of that business. They may not have any idea how to build it or manage it. So when the Soviet Union collapsed, they actually have to survive based on market forces. They actually have to be a profitable, productive business, which they know how to do. So I really want you to walk us through how you ended up buying that first business. Like walk us through the nitty gritty. How did you find it? How did you finance it? How did you go in there with. Because you're a young guy, you're what, you're in your early 20s, mid-20s by this point. How did you know how to do all these things?

Okay, so I actually didn't, but I wasn't afraid. And this very first venture, it was back in 1994, it was actually a neighbor of mine, the director of that factory. So once I met him and he said, you know what, we have to go bankrupt it. And I'm responsible for like 100 people who work for, for me. And I feel this pressure on my shoulders and I feel myself guilty and I'm close to depression because we are literally one day before bankruptcy and people cannot find job after that, and what will I do? And so on. But the way how it worked back then, the government allowed the organizations like this to privatize the equipment. And then later you may probably purchase the real estate that he was operating. But of course nobody had money to do that. But they were able to privatize the equipment for no, no fee. But the old equipment was old. And I thought to myself, okay, you know, the universe gives me this opportunity. I already had the experience working that small business that was created by government Ventures. Maybe I can try. Why not? Maybe I can save. No, for me, I, I. All my life I believe that people come to this world to make it a better place. And I literally thought, okay, this guy is coming to me and I can help, I can help these people. I can help this organization. Why don't I try? And also not much to risk, right? Because okay, if I don't succeed, then they almost bankrupted anyways.

So you're able to get the equipment. I remember you told me before there was kind of a big property. You, you kind of let go of some parts of it so you can generate income. But walk us through that story. Like, how did you turn this into a profitable.

First of all, I somehow I found investors who were ready to invest in this project. And my mom said, she said, I don't believe how these serious people with money trust in you like you are 24 or something. I don't understand. I said, no, they don't trust in me. They trust in the project. And I was able to let them understand the, the business plan well enough. And by the way, speaking of, it's very important for entrepreneurs not only to understand their vision, but to be able to let others understand it as well. It's a, it's a special knowledge by itself and skill. Anyway, so I was able to convince the those guys to invest and we purchased the real estate. So that factory consists of big manufacturing facilities. Then it was an office building. Then it was a cafeteria which was facing inside towards the manufacturing facility. So it was only people who work at the factory were able to use it. And also it has two stores in the center of Moscow, very good locations. And the stores were used to sell the product. Oh, I see that they produce and it was really run down. The equipment is old. Nobody buys what they do because, you know, it's new era. Western brands come to the market and everyone wants to buy something which makes sense, not the old school, you know, Soviet clothes. So what I did, we actually sold this office building. Then we renovated the cafeteria and made it a restaurant, opened it to the street and then sold it as well for the money that we got from that. Completely renovated the entire machinery and everything, the manufacturing part and the stores. And also it was the time when western brands came to the market. And I happened to be first to talk to them. Like for example, Adidas, which was in even in Soviet Union before, but they just came to, to the Russian market, like seriously at that point. And so this factory was first to manufacture Adidas in Russia.

Wow.

Back then and I use the stores to. To bring brands. It was Adidas, it was Diesel jeans, Pepper jeans, something like that. And we were not only. We're trying to. To actually help them to produce their product. So it became really successful business. It still exists? Oh yeah, Yeah. A few years ago, last time I was in Russia, I visited them and I was proud to see that it exists. And there and then a few years when I guess in a year or two when it was up and running operational and successful, I sold it to other investors. In the end of all I had long list of investors who were interested to invest into creation or re engineering of existing businesses and a different list of investors who were interested to purchase the business when it actually works the braids well in the in normal market situation.

So curious. How did you get Adidas to manufacture with this just fact of the factory? Like how did you. What was the process to get them to trust you and to actually sell them on that.

It was Italian guy, Giovanni Chicalungi. Hey Giovanni, if you hear me, who was appointed by Adidas to. To. To. To be director of Adidas Russia. And I don't remember how, but I met him. He was like. He had just one small office and he had to build all these ideas Russia. And I spoke with him and I said I was actually looking for those people for people who get licensed or appointed by brands in Russia. And I said like, okay. We spoke about using the. The stores for their product. And then I said like why. Why would you manufacture it somewhere else and then pay. Pay the fees and transportation. This and this. Why don't you manufactured in Russia? By the way, back then the salaries in Russia were really low. It was like $40, sorry to say it. $40 per month. Yeah, yeah. So I said what's the reason for you to manufacture somewhere? And he said there's no good equipment here. Go see it. Wow. He was amazed. And that's how we started.

Wow. You also mentioned something at the beginning of the story that you were only able to get the capital from investors because you were able to communicate the business plan.

Yeah.

So there's a whole lesson in the business plan. It's not the fact that you were able to. You had this vision for this factory. So that's incredible. That's a whole story in and of itself, I imagine. But this communication angle. What did you learn about communication that allowed you to do this? Because you're still a young guy. Like it's probably the first time you've Ever done this? What, what did you know that, you know, entrepreneurs today should know about communicating a business plan and developing trust with investors?

Yeah. You have to, first of all, convince the most important person for your project, which is you. You have to be fully convinced. You have to have these shiny eyes for this project. And also the project have to be well put together and you have to know this project in and out. And people have to get this feeling of this power of yours towards this project that you own this project. You know, investors always live between two types of fear. One is fear to lose money, and the other one is fear to lose opportunity. And your job is with your shiny eyes to bring investors towards the fear to lose opportunity. And here you go. It doesn't matter if you're 22 or something. You have to know your project. You have to trust in the project. And I always say, you know, my friends and family back then, they said, like, how can you, how can you even think of taking such a big project on your shoulders? And I always said, I said, I believe that the good project supports itself. And you know, to look at this as a bigger picture, if you're doing something right, then the universe supports you. Okay, it depends on who believes, but you can see it from different angles. But generally speaking, if you do something right, then everything supports you anyway. I again, I normally say, you know, if you, if you think of magnetism, right, magnetic waves, you don't see them, you don't feel them, right? If you try to, to push a metal ball this way or another way, the speed will be different because of something that you don't see, right? But, but if you do something right, that means you are moving your metal ball in the right direction. And this magnetic waves, let's say, supports you as well. You know what I'm saying?

That's great. I love that framing that you have to bring an investor, basically from the fear of losing money to the fear of losing an opportunity. That's great framing. I'm going to use that, by the way. I'm going to take that.

You're welcome.

And then the second aspect of that is this idea that if you're doing something right, you know, kind of naturally things will work in your favor. And I think that's true in a lot of ways as a startup investor, right. I think about two things, really. When I'm doing an investment, there's kind of two things has to be true. One, you have to be directionally correct in the market that you're in. It has to be Big enough, the opportunity has to be there. And the second is the entrepreneur, him or herself. Like you have to be investing in the right people. So I'm sure when you were pitching this, people saw you as an exceptional young guy that wanted to. That was very ambitious and smart. So I assume that had a lot to do it as well. But you're right. Kind of this. The opportunity has to make sense, but also the person pitching has to. Has to deliver in a very, in a very good way and develop that trust. That's great.

Yes. I want to mention something. I still think it's important connected to that story with the swing factory. So I purchased the shares of course from, from, from the shareholders. And the. Every employee had shares. That's the way how the privatization Russia worked. So every employee got shares and like if the company is bankrupted, then it's nothing. Right.

Right.

But I was able to. To purchase it using the money from. From investor. And it was a story that. I remember one older lady, she's about retirement age. She came to me and took me aside and said, I want to say something to you. I said what? She said, you literally saved my life. So how. Why she was a lonely person, like almost retired age. And the pensions in Russia were so low that you cannot sustain if, if you're not supported by, by kids, by family. And she thought to. To commit suicide. Just that you literally saved my life. Because now I got this money for the, for the shares and I calculated how many years like it will give me. And, and, and that was the moment I thought, yes, I'm doing something right. That was a signal from, from the universe to me that this is the right direction.

So this is. We're not gonna get into all the stories of you doing this. You did this over 30 times. So I want to focus a lot on the first one because it kind of gives an example of what you've done multiple dozens of times after.

Yeah.

But I want you just maybe to walk us through kind of how that first deal turned into a whole business buying these assets and turning them around.

There was no need to find next opportunity. People, the directors of those organizations, they somehow knew about me and they came to me. Was a construction company. It was like other manufacturing companies, like many, many, many others. Yeah. In most cases, in most cases, the directors, they just knew about me and came to me and offered.

You've do this for many years. You developed a very successful practice. I would call it more like a private equity firm at that point. I mean, you're looking for undervalued assets. You're fixing them up, you're selling them, you're doing all this amazing thing, amazing things. And why ever stop doing that? Why not stay in Russia and keep building out that business?

To some extent it was a midlife crisis because I achieved everything that I wanted. By the way, since I had this experience in all the different sectors, as I mentioned already, I thought that the approach have to be similar and I decided to do some research on that. And that's how I wrote my PhD thesis because my original education was applied mathematics. But then I summarized my experience and I put it together as this PhD thesis which was called Small Business Crisis Management. And I got my PhD. And then I thought to myself, okay, I achieved everything. Like I need more, more problems to solve. That's one approach. The second approach, it was the time in Russia when KGB wanted to take over everything. They wanted to have a share in every good venture for the reason to control, to control the financial streams, to make sure that the companies will not fund other political movements other than the one that supports Putin and his party. But when they were able to, to get those shares in the companies, somebody has to operate it, somebody has to manage it. And they were actively doing head hunting, I guess people from Russia, they know this period what they did, they offered to people that they trust can run the business well like mid size to big business. They offer to those people to sell all their business on the good market price to the people that they appoint. And then you use this money in some much bigger project, let's say 15 or 20% of that project, and they add additional funds and you become the director of this organization. It sounds good, huh?

Yeah.

Does it? Yeah. But it's actually a slavery and nothing else because everything you, you have in this stays in this company and you cannot escape.

Right?

Yeah. So I, I know few people who escape empty handed. The only way for you to escape, if they allow you to escape everything.

And quit, I want to kind of explain to see, make sure I, I get it myself. So let's, let's, we're going to use fake numbers here. These are not real numbers. Let's say your business was worth a hundred million dollars. They would come buy it out for a fair price. They would take that 100 million. They won't allow you to keep it take, put in your bank.

Exactly.

They would roll that into a project of 1.5 billion. You own part of it or whatever and they put you as a director of that. So now you're Much bigger.

You. You said 1.5 million.

1.5 billion.

Oh, 1.5 billion.

Let's say one 15 times that. And it sounds great on paper, right? You're very wealthy, you live a good lifestyle, you have a lot of power, but you're stuck because the KGB won't just allow you to take that money or to sell it or to go out of the country or to do whatever you. Unless you give up everything.

Yeah.

So that's how you get to the.

If they allow you to give up everything, you have to ask to be able to give up everything. I know the stories of few people who ended up like this, so. And you cannot say no. So. So once I spend the entire day in the KGB building, they offered me exactly that. It's a great project that actually was realized after that. Really good project. And yes, they wanted me to sell all my business. And it. It was 20% of that project. It's a big project, an interesting project, and everything is good, but I'm not playing games with them. So I said, you know what? I'm finalizing my PhD thing, and you cannot say no. I said, I need more time. Like four to six months. I need to finish my PhD. I cannot. I have to focus on that, this and that. And. And then we just left to Canada.

What happened to your businesses?

Well, everything is fine. Look, I have my team, and people work there.

So you still own. You still maintain ownership of some of the businesses?

Yes, yes, yes. And the main reason. Okay, so first of all, there's no market in Russia. Right. So I cannot sell it for price. Yes. There's a risk that it will be confiscated somehow. Okay, I can take this risk. But what's the most important? I have the employees of my companies because they work. They work with me for 30, 35 years. They. They're about retirement age, and if I will sell everything, then they can find job or something like that? Yes, of course I can. I can pay them part of the money that they will get on this. But still. Still, it's not good for them. So. Yes, I still have three companies there.

Wow. It's. What? The story sounds kind of. Kind of like the origin stories of a Russian oligarch, except you went the other way and said, I don't want to. I don't want to do that. You didn't want to be kind of like a slave to the party, you know, I guess Putin's party, the kgb, all that. Yeah, yeah, yeah. Why'd you come to Canada?

Why Canada specifically? It was A compromise. I wanted to go to Israel and my family wanted to stay in Russia. So Canada was a compromise. Similar climate, strong community, more opportunities for kids and this and that. So at that moment, after I spent the day in kgb, we actually had study visas to Canada to two oldest kids. And that's it? That's it. We had study visas.

But not for you and your wife.

No, no, no. And not for younger kids and everything. So we just packed our bags and came here with basically no documents. It was an immigration program called for entrepreneurs. The government said if you, if you have a business, you have to apply to that program. So I applied, we waited for five years and then they, they closed the program itself. They returned US application fee and that's it after five years of waiting. But then I got this work permit from university and we went to a different immigration program, which was express and ship something.

So when you came to Canada, you did a lot of the same kinds of things that you did in Russia. You kind of looked for undervalued assets and you kind of transform them. Walk us through, like one, one or two examples of what you did here when you came.

Yes, so what I did in Russia, mostly I purchased the companies which were about, about the bankrupt. It's not the case here. But what I do here, I purchase real estate where I see potential for development. Like, for example, I purchased really rundown metal factory in industrial area and I rezoned it and redesigned it as a cultural center, the ballet school with art school, music school, like all, all the stuff, art center. And in a year or so I, I sold it as a successful business. And by the way, it was, it was a gentleman from Brampton, like older gentleman from, from Brampton. He said, oh, I, I saw you on tv. It's such an honor for me to, to buy this from you. He was proud that he, he, he buying something from me and I was proud that he's happy and so on and so on. And by the way, yeti, our institute, maybe we'll discuss, we'll speak about it later. But two big campuses that YETI have the same approach. It was industrial building, run down and rezoned as university and redesigned. And now it's a business school. It's startup hub and accelerator and everything.

Right? And just for people that don't know about real estate, you're going to get much lower cap rates, meaning a much higher valuation of your property, which is when you transform it from industrial to education. Right? Because generally speaking, it's less, less cyclical. It's more stable, higher rents, all that stuff. Right. So generally you, you created significant value from transforming them.

Yes, if it works.

If it works, yeah.

Little comment. You have to, you have to, you know, double the value within a year or two or maximum three, otherwise you fail this project. So it's not as, as simple as, as you said, but if you do it right, then yes.

Yeah. My father's in real estate and does all this stuff. Like I, it's, it's very, what you say, a story in like 30 seconds. Very few people understand how difficult it is and how much risk is inherent in some of these projects. So it's a testament to the fact you know what you're doing, obviously taking all the things you've learned, doing this for decades, doing something similar. I do want to get into you starting the York Entrepreneurship Development Institute, which I've been involved in. I've come to your event, it's really great. You have a lot of high quality startups getting involved. Now you have a basically university program attached to the Schulich School of Business, which is considered by, by many the number one business school in Canada. Right. So walk us back to the catalyst of this. Why start that to begin with?

Okay, so again, York Entrepreneurship Development Institute is an academic institute, charitable organization. It's a college, it's a business accelerator, incubator, venture fund, research center, entrepreneurial hub, like everything together, one stop shop for all the entrepreneurial needs. We actually started back in 2013 in Schulich School of Business, New York University. And for several years we ran this program in Schulich. But then back in 2021 we separated and we got our own college license. The good news is that the campuses belong to YETI itself, not to university. So we're able to separate. And as I said, we got our college license and we started from there originally when I came to the executive director of Schulich executive education center, Dr. Middleton. By the way, now he works at YETI.

Really?

Yeah, he retired from Schulich and he works at Haiti as an instructor. So I came to him and I said, we have great business school here, best in Canada, but we have programs only for big corporations. The Executive Education center, not BBA mba. There's a special wing where I teach as well, dedicated to executive education. But I said, we have only programs for big corporations, not for small businesses. And more than half of the Canadian economy, Canadian gdp, relies on small businesses, so why don't we do it? And he said, you know what, we tried a couple times. It doesn't work because startup entrepreneurs definitely cannot pay high level sort of tuition. Right. People want to invest every cent into their startup to, to pay this. So okay, give me the chance to try it in a different model. He said great Canadian words. He said, sure, but I will not give you any money. Which was absolutely amazing result because we already had the shooting strong Sch brand next to YETI brand. Who knew Yeti? Like everyone knows Yeti brand now or Yeti Logo brand. But back then, next to Schulich brand was very important.

And Schulich brand for Americans wouldn't know this, but it's like the Wharton of Canada. It's considered a very, very good business school. Yes, but it's in Canada has the same type of brand.

Yeah, yeah, exactly. That's it. And that's, and that's how we, we started in different model. We registered YETI as a charitable organization and we raised money not from the startup entrepreneurs, but from those who have the money, meaning from investors. By the way, in most cases business accelerators, and specifically university business accelerators, they built in two types. One of them being like, relied on government on grants, maybe on university grants as well. Basically on grants. So whenever we have the money, we teach everyone who comes this and that and everyone knows it's not that efficient. Recently I was in China, even they understand it. They said, yeah, we build our business accelerators based on this model and we now know it doesn't work. The other model is, is when private venture capital funds make their own business accelerator like and which is great and efficient, but Y Combinator, like Y Combinator, of course, and many others, but they may help just a few because they look for, for the project that they, they want to invest in. Right, right. But we wanted to hug as many as possible, but to make it as efficient as these private accelerators were. So we designed this new innovative model. I don't know if anybody else works in this model. I, I pitch it on every conference and everyone comes and say, wow, such a great thing, but tell us what's. Yeah, nobody copies it. So basically, as I mentioned, we're a charitable organization, but we raised funds from investors. So on our selection committee we have investors and this way we tell them, if you guys want to invest in the startups that come through our programs, give us money for the, for the education as a charity, we give you a tax receipt. So you write off the taxes. But you may have access to the good ventures that come through our programs which already know how to put together great business plan. Financial Projections, communication skills. Sometimes we give them grants, connect them with other stakeholders and so on, so forth. So the investors save a lot of time and money on that. So they give us much less than they save. Basically. They understand it, by the way, not nowadays. Maybe 40 of the donations that we receive comes from former graduates of our programs. Yeah, they build their ventures, of course. So we normally tell them, somebody paid for you. No. Yeah, pay for somebody else. We also have some revenue from international students as well. We have, we build special program, intensive program called international program to let people understand how Canadian North American market work. Sometimes, sometimes we do it online, sometimes people come to us, sometimes we come to other countries.

Yeah. The most recent program at Oxford I saw online. Yeah, that's really cool.

Yeah, it was a very interesting experience. And, and that's how our model works. Again, that means that the ventures are selected by investors, but we can attract many investors and we can attract many students. And this way, as I said, we may hug as many as we can, but we do it efficiently because we work in partnership with this. And we have our own venture capital fund, vc. Our own vc, which is. I don't know why, but it's a general member of Canadian Venture Capital Association. I don't think we deserve it. Maybe they wasn't the only charitable venture fund that exists. I don't know. But it's a very good tool because through that association, when we invest in some startup, then other biggest Canadian vcs immediately see that and they may consider it as well.

Right. And it's, it's worked out phenomenally because again, I've been involved a little bit. But you've been ranked the number one business linked, sorry, university linked business accelerator in the world. Right. Like it's not, it's no joke. You guys actually do a pretty amazing job.

Yes. So there's an organization called Uber Global Swedish research organization that ranks university business accelerators and incubators every second year. Back in 2018, the. Back in 2018, the Rake, they ranked us number one in the world university business accelerator. Since then, we were always top five. Yeah, it's, you know, it's impossible to be number one.

Always.

Every time. And also it's subjective to some extent, but what I can say that we are top five in the world every time.

Wow. So we're actually going to leave a link down below. If you're an entrepreneur looking to get involved in yeti, you don't have to be Canadian or based in Toronto or anything. Look at their programs. We're gonna leave a Link down below if you want to get involved. So what's interesting also is that you, you actually teach also. You just. This whole thing in your life of, of learning and teaching and kind of get, get a little bit more understanding about you. Because I'm thinking to myself, if I'm doing the successful business, buying real estate and flipping them and really making good money, why am I wasting my time building a business accelerator? Like, to me it's just that must take a significant amount of your time, but you actually care about teaching other people. So you're also professor for these students. What, what drives you to do that?

I like teaching. And also, by the way, I'm driving through this city or other cities, and I see this is the business that my graduate build. Like we also have program for nonprofit organizations, not for profit organizations. And this and that, this makes me happy. Okay. I know I can build some. Something which is successful. Okay. I have the money to pay my bills. I don't need, you know, big pile of money to sit on it. It's not that interesting. But when I see the, the results, the, the change that my students do, well, as one of our professors say, our success is through their success, and I really feel it. And that's what they. That's what makes me happy. Happy the most, to be honest.

That's beautiful. That's where we, you and I will differ because there's not a pile of money big enough to satisfy me, which is more of a spiritual problem with me. But, you know, that's. That's where we'll differ. But it's very beautiful because obviously we need people like you to do what you do. Right.

Maybe you need a couple more years just to grow yourself.

Yeah, that's true. It's a lack in me, but I can't think, like, if I make a billion dollars, would that be enough for me? Probably not. I don't know. But we'll leave that for my. For my rabbi and therapist.

For many, many years already, since I was really young, I have the money to pay my bills and care about money as money, but I always care about money as a tool. As a tool to make a difference.

That's beautiful.

And I'm honest on that.

Can you share maybe one or two of your biggest success stories at YETI or your students?

Well, there are many. We have about 2,000 students. And I, I really like, every time I mention somebody and people say, why not me this and that, of course I, I will mention few. At our very first Group Back in 2013, we had Professor Godfrey, you probably know him. No, he, he, he was, I believe he was UFT professor who developed a drug free methodology to help kids with adhd.

Oh, Arnie Gottfried.

Yes, AR Godfrey.

Yeah.

Okay. So he was like, like it's older gentleman with the long gray beard. So he was sitting in our classroom and the, our very first cohort and he came to, to understand how to build a business and he was successful in that. So he, he built his clinics I believe two here and now in Florida and everything. So yeah, it's called Maximize Center, Maximize Learning Center. Also just recently I was in the conference in China. As I said, the government of China now understands that the model they work in terms of accelerators is not the best one. So they invited like big conference and I was a keynote speaker there. Just to show them. I brought, we brought, because it was a team from yeti, we brought two of the graduates of ours and it was just recently and that's why I will mention them. One of them called for, for blind and it's a special device that can help you communicate with blind and deaf people. Both and deaf, which is amazing. And it works. It's a, it's already on the market. And the second one is the device that helps paralyzed people to actually move and even type on the computer and, and everything. It's very interesting device. So we brought both entrepreneurs to show them that we are select agnostic, we have ventures from any sector but we wanted to show them that the deep tech also works well in this model as well. So not to mention the three, but, but we have 2,000.

That's pretty incredible. So you've been teaching, you had 2,000 students to come to the program and I assume almost as many startups that, that have been created as a result of what you've done. What would you say is one of the biggest mistakes that entrepreneurs make when they're starting out their business?

I start my, at the very beginning of my very first lecture I normally tell them don't start business just to start business. Don't start business just because you want to do something or if you just want to make money, start a business when you find a problem in the society and then if you feel that you are the knight to kill this dragon or this problem, then go, go ahead and do it. So start from a problem and people who are affected by the problem, they'll become natural customers of yours. You don't have to run after them, they'll come to you.

That's, that's, that's Great advice. What about how do you cancel people today when it comes to using AI either in their general operations or defending against AI in their business? Like what, what do you, what are you teaching now when it comes to AI in your programs?

I do remember this world when Internet didn't exist and people were afraid of it. I do remember it and. But I always understood it's a great tool that we will use to move faster, to get there faster. The same, the same thing with AI. It's a tool, it's a very important great tool. You cannot avoid it the same way as Internet now everywhere AI is almost everywhere, but it will be even more involved in, in everything in our life. And it's okay. You have to understand it's a tool and you have to use it properly, you have to use it wisely. It's a powerful tool. There are certain ethical issues related to it because the humankind didn't develop the, the rules and regulations, moral approach to different issues. I have the entire lecture for on that. So again, if you want the universe to support you, don't do things against the general rules, right? Including this powerful tool. It's a bit more complicated subject, but the main idea is don't be afraid of it. It's a tool to help you to be more efficient.

Would you ever advise someone not to become an entrepreneur? Aside from, let's say the problem issue, which is a great point, only start a business where you feel compelled to solve a problem for people, let's say they get over that. Do you think there are just certain people that shouldn't become entrepreneurs?

No, I don't think so. You have to have this entrepreneurial spark in the UI and you may be born with it, as I believe I was, but you can, you can develop it in yourself. There are certain mindset, certain character type that you have to develop in yourself. And it's possible, I believe everyone can, can be entrepreneur. Like for example, remember I mentioned Professor Godfrey? He never thought he can be, he's an academic, right? But then he came to the program and yeah, I probably can do it. And he did. And I also know many academics who, who cannot do it, they don't want it. And by the way, for that matter, we have this diploma program, entrepreneurship and small business management. And some people come to develop their own startups to get knowledge, to develop their own startups. But some other people come to become managers for startups that based on methodology, technology, innovation of somebody else.

Really? Oh, that's interesting. So what would you say is like the most important trait then of an entrepreneur, like if you're looking at someone whether to invest in them, or if you're predicting whether or not they're going to be successful, it's like, oh, this is the trait. And I know I can kind of decide whether they'll be successful or not.

People have to have this spark in the eye and people have to be really, really, really interested in, in the, really interested in solving this problem.

Like a hunger.

Hunger for that. Yeah, but hunger not, not to feed yourself, but to make a difference. To me, when I see a person who really, really, really wants to make a difference in special field and they have enough skills and experience or they know how to put together a great team to do it, that's, that's the point. When I believe in them. Now, now you know what, when people want to become a plumber, an electrician or something, they understand they have to go to college and get, get some education. When people want to become entrepreneurs, for some reason they think you just go and do it. Yes, you can do it, do it. You can go and do it. You can fail as well. Education will help you to get there faster. It's not about being able to get there. Yes, you might get there, but with the proper education business, you will get there faster. Also, in average, the statistic is about 3% of the startups survive after one or two years. In general, if we look at our graduates, 87% survive after two years. Not just survive, they also grow. So that's the difference. Do you want to, to get to this 87? We want to try to get to, to those 3%. It's up to you.

So a lot of the people that go through your program must think that they need to raise capital in order to build their business. I don't believe that. I think in a lot of cases people try to raise money when they shouldn't be. What's your perspect when a company, an early stage company, should raise money and when shouldn't they?

Well, as we all understand, the later they raise money, the less they lose the stock and the shares of their company. It's, it's not about the moment when they raise money. It's mostly about how they communicate with investors and under which terms. And of course, the, the later, the later, the better. Sometimes people say, oh, we need to raise money to, to build a prototype. No you don't. Because in most cases you may build the prototype to do a market test for almost no money. You just have to think about it how to do it. The prototype have to deliver the same feeling as your product or service, not to become your product or service or even not minimum viable product. Because people pay for feelings, not for products and services. If you deliver the feeling, then you test it.

Do you have any book recommendations for entrepreneurs?

One of the most recent, recent I believe. Robert McCarthy. It's how to start a business. Okay, but generally speaking, generally speaking, books are great books make people more intelligent, bring you more diversity of thoughts and this and that. But I believe entrepreneurship, there's something more important than reading books. For example, if you come to our program, you not only communicate not with one influencer, also successful entrepreneur and academic. The same point, but with 20. Let's say like we take our diploma program, there are 20 brilliant people like the best minds of this country that will come there and you will. And, and you will be able to talk to them and see the world from their point of view. It's a much more three dimensional picture than from one book.

Right.

And you will be able to communicate with your peers, which is also very important. I believe that programs like Yedi provide may be more, more important in addition of course to reading books because we assign reading with every course, but it should be based on, on the program.

So here's my last question for you. What's the best business advice you've received?

I will tell you. I started the industry back in Russia. I started the industry so nobody can give advice seriously because older people, they, they had different, they had mindset of the previous era, of this government, Soviet era. Every time they give you advice, you have to do opposite. And, and this probably is the best answer. When I was young I, I received the advice from, from people which were involved in, in socialist operations. And I, I use this advice to do opposite or to understand what's wrong there. Maybe, but it's a, it's a special strange circumstances of my life.

You have the wisdom to, to understand that these people are not. You don't look up to them because they don't have the experience to really give you the path of how to do what you want to do. Right. But I'll ask this maybe I think.

I got a couple of good advices from, from good rabbis, not from business leaders.

That's also good too. But maybe I can just ask you also, what's your advice today for entrepreneurs who are struggling?

For entrepreneurs who are struggling, which is all entrepreneurs. Which is all entrepreneurs. Yeah. The best, the best advice. I already said start a business when you see a problem Be a partner of the society to make it better. Right? Don't be alone. Talk to people. Always, always try to, to build your team to some, to some extent, right? Every time you, you are somewhere, talk to people say I help these people with this problem. What can you suggest? Right. Map your community all the time. Because every business have to be social to some extent because it helps society to be better, right? So have this mindset. One more thing, people normally think about problems. It is good if they think about the problems of their customers. But there are many other stakeholders around the venture and you have to think about them. As I said, suppliers, financiers, government, like whatever. Make sure that you have the vision where every important stakeholder sees and sees what they want to see and solve their problems. And your partners. Partner as much as you can with organizations, with people, talk to people, with investors of course, and that's the way, the way to succeed. But it always starts from a vision and the vision starts from a problem in the society.

That's great words of advice to leave off on. We're going to leave more information about marad, how to connect with him about YETI down below in the comments and the description. Moran, thank you so much for joining us. Very illuminating conversation.

Thank you.