12.05.2024

25.000000 Hey, everyone! We're in the Silicon Valley. First thing people normally do when they come here is rush to see the famous Wozniak and Jobs garage. That's where many years ago, Apple was created. But this garage behind me is much more emblematic. In the 1930s, it served as the first office for William Hewlett and David Packard, two Stanford University graduates who founded HewlettPackard, one of the first IT giants in America and the world. It's believed that this is where the modern world started. The Silicon Valley is the place where they create our everyday conveniences, making billions of moneys doing it.

More and more Russian speakers arrive here every year. How do they end up here? What do they do? And why in America, and not back at home? To figure it all out, we stayed here for almost a week and met with a bunch of different people. Right. We want to make an important note here. The majority of this footage was shot before the coronavirus. But this video isn't about who's the richest or the coolest right now. This episode is about the value system that allowed people to turn an 80kilometer stretch of land into the technological capital of the entire world. This system and these values are decadesold, and it's very likely that even the issues that befell the world in 2020 won't be able to change these values too much.

Besides, the two main points we were making in this episode are unlikely to be affected by the coronavirus. The episode you're about to watch has two main purposes. First, to remind everyone that even if you were born and grew up in a small town, you can still make it to the very top. Second, to prove that making money is a lot more fun than collecting it. Let's go! You live here? (Davidov) Yeah. Renting. $10,000 a month? Give or take. Well, you're at least paying for the view as I understand. Yeah, the house is old. Old. But what's the average rate here? You won't find anything cheaper in Los Altos Hills.

[32 years old]

[Cofounder of Gagarin Capital venture firm.]

Oh. So this is like a down-and-out place.

- Yeah, it's a down-and-outer. [32 years old]

[Cofounder of Gagarin Capital venture firm.]

Okay. What about Mountain View

where we're staying? $6,000 minimum. A house. $6,000 a month. How much do you think it's worth? We have three bedrooms. $2.5 to 3 million. Three bedrooms is around that. Dude, I could kick a hole I'm no JeanClaude Van Damme, but I could kick a hole in a wall there just like that. Materials cost nothing. Labor costs a lot. Minimum wage. And meeting requirements. No, but land probably costs a lot? Land costs a shitton.

But labor costs the most. For example, we recently had another earthquake. One of our sewage pipes had rotted away and collapsed. Water in the kitchen sink stopped going away. We called the plumbers. They went and checked it out. They gave us a choice of two solutions. Worth $16,000 and $35,000. That's local plumbing bills for you. You should've seen their gear! They looked like Ghostbusters. With the backpacks and the visors. The snake with the camera like the one they use for colonoscopies. You know It was a long pipe. We know what that is. In plain and simple terms, I help scale businesses.

I help businesses grow faster than they would've without me. I find a company that I find promising and start helping them out. If they don't currently need money, I can help in other ways. But most of the time, it's investment. For example, people might need a million dollars to finish their product to get initial revenue and initial user reviews. We serve as the investor they need. We make a profit on helping them then sell their now scaled up company, and split the profit with them. You work in an investment firm that you founded with some partners. You raised some money, several millions dollars.

You find promising projects and invest in them. For example, you give them $100,000 in exchange for 10% of the company. And then your job is to make those 10% worth $5 million instead of the initial $100,000.

Yeah. Exactly! Then you split the profit. Is this essentially what you do?

Yes. Fazliev. Amazing entrepreneur who made two good companies. He got several offers to sell his company in the last year. He won't tell how much they offered. Can you estimate as an expert how much his company could be worth right now? I'm an insider. I invested in his company too. But it's hundreds of millions of dollars? Most likely.

Holy crap. Could you explain to people who don't deal with IT [40 years old]

[Founded the Ecwid ecommerce platform ]

and don't read Forbes [40 years old]

[Founded the Ecwid ecommerce platform ]

what your company does

in a few sentences? [40 years old]

[Founded the Ecwid ecommerce platform ]

Online stores. [40 years old]

[Founded the Ecwid ecommerce platform ]

We allow people to create online stores. We allow people to create online stores. You don't pay anyone any money. You go in and make on yourself. For free. You made your first million at 21, correct? Yes. How? In short. Online stores, but they were different online stores.

Could you hold that million in your hands at 21? Or was it a virtual million, as is typical for the IT crowd? [but it sounds like a slip of the tongue.]

At 21, I couldn't hold it*. I remember one of my biggest amateur mistakes. There was a competitor company. They were from LA, California. They started out as consultants on my own product, XCart, [created in 2001.]

but later launched their own,

Magento. [created in 2001.]

Right? [created in 2001.]

Magento eventually became so big

that they sold it to eBay for $160 million. Magento eventually became so big that they sold it to eBay for $160 million.

When they sold it to eBay for $160 million, at that point, they were smaller than me. Let me tell you, I don't have $160 million.

Right? And this makes me very sad. There were offers. But I didn't just decline. I didn't pick up the phone. This was a typical thing in those years. They'd contact tech support, saying: "We wanna "We wish to talk to Ruslan." "About what?" "We wish to buy XCart." "Oh, you don't need to talk to Ruslan to buy XCart." "You need to go to our site, click whatever, yadda yadda." "You don't understand. We wish to buy XCart "the company." But I didn't talk to them, because I was young and stupid.

I thought they didn't understand how this whole affair worked and wouldn't be able to buy it. Like, they wouldn't be dealing with briefcases of money, you know? Doronichev? Doronichev is great. He's awesome. Was he the one who made the YouTube app? Yes, he made the YouTube app. More so, Doronichev Let's lock this in. A Russian guy Yes. made the app that we use when we can't watch YouTube on a big screen? Yes. In fact, we use it more than the big screen version. You're from Medvedkovo? Yes. [in the northeastern part of Moscow]

And you're the Director of Product Management

at Google?

- Yes.

This is the famous free food! Yes. They feed the dogs too by the way. They do? Yep. The dog has a badge. They give it a badge so you can bring it to work so it's not home alone. [37 years old]

[Director of Product Management at Google]

They give it a badge so you can bring it

to work so it's not home alone. [37 years old]

[Director of Product Management at Google]

Really?

It's simple. [37 years old]

[Director of Product Management at Google]

You wanna stay at work for longer,

but your dog misses you at home. [37 years old]

[Created the YouTube mobile app]

You wanna stay at work for longer,

but your dog misses you at home.

[37 years old]

[Created the YouTube mobile app]

This way, it's around you,

it's got food. This is like another way to tether people to Google's offices? Not exactly "tether." It's more like a comfortable environment so you don't worry about trivial shit. Do you come here? Of course. I eat here every day. You're in shape. The guy from PR is also in shape. How do you do it? There's so much chow around, but people somehow stay in shape. So there's a thing called Google 15. When you start at Google, you usually quickly gain 15 pounds. It's like 7 kilos. That's exactly what happened to me. You gotta get back in shape afterward actively.

There's a gym right over there, behind the food trucks. See the next building? That's where people go to run and lift weights. You know? In my estimate, around 98%, maybe 99% of employees in Russia will see this and raise their brows. They don't know what's the point of all this free stuff. Can you explain? If you wanna create something unusual, something much greater than what's predictable, you need an unusual environment. You need to create an environment where people can focus on creating, inventing, thinking outside the box, et cetera. Each step you take in this direction works towards your company's capitalization.

Therefore, by reducing the need to think about all sorts of nonsense, you increase the amount of time people can dedicated to solving problems. Do you though? Doesn't it relax people? Well, the thing is, you hire people whose purpose in life is creating. They just need the environment. That's why I'm here. I just really wanted to do my work and I found the best environment to do it without worrying about anything else. This is just inappropriate. Very much appropriate! You see Here's the thing. [and founded Google when they were 25.]

[In early spring of 2020, Forbes estimated Brin's net]

[worth at $49.1 billion and Page's, at $50.9 billion]

These guys, Sergey and Larry,

when they founded this company, [and founded Google when they were 25.]

[In early spring of 2020, Forbes estimated Brin's net]

[worth at $49.1 billion and Page's, at $50.9 billion]

they drew inspiration

from their school.

I.e. Stanford. You've been there, right? Yeah.

- They have courts too. This is basically the climate of a college campus: free exchange of knowledge, you're relaxed, you're a student, you can play some volleyball, read some books, write a report and so on. Graduates would stream here to build great things. They created an environment for them that was as close as possible to something like Stanford. The second major influence, I think, was the Burning Man. It's a crazy festival that Sergey and Larry had also gone to. [by clicking the link in the description]

It's a crazy festival that Sergey

and Larry had also gone to.

[by clicking the link in the description]

The free bicycles, the free food. [by clicking the link in the description]

This whole culture of giving. This whole culture of giving. Like, let's all give as much as possible, and something great will come out. It's basically like "from each according to his ability,

to each according to his needs." The more you give, and if a crowd of people is doing the same, you'll get something great as a result. You know what's the hardest part of editing episodes like this one? Being reminded that there are things like airports, airplanes, flights and other things that used to take you to places other than home.

Even if you love your home very much. The only saviors, you guys, are this couch and YouTube that you can watch on this couch. Here are two YouTube channels to help you stay sane during this quarantine. The first channel is called Arzamas. Many will once again make fun of me, saying that it took me until 2020 to discover internet, but yes, only in April of this year, I first watched two great videos on the Arzamas channel: Ancient Rome in 20 Minutes and Ancient Greece. They're history lectures fitting the year 2020. Channel number two. One of the funniest rumors about our creative crew was this: "Dud' produces the Tender Editor channel." The Tender Editor channel has only one producer.

And her name is Tatyana Mingalimova, the wonderful, tender lady, who used to be our editor for the longest time but then started her own thing. Last year, "her own thing" materialized as the show Girl Friends. When I hear Tanechka confessing the fact that there's little sex in her life and exploring this as an issue, in those moments I realize I'm a real prude who's embarrassed to say the word "sex." So, girls Artiom!

...godspeed! I'll be watching these and other channels sitting on this very couch on my new TV, Philips 7303, which I got from, guess who, my buddies from ELDORADO! That's you?! That's YOU?! While we were setting up the TV, we remembered that Seriogas* were also

famous content creators and used to make videos about rope jumping.

What did the nightmare of all Russian fridges Sergey Linkov look like in 2012? Is that him? That's him! I thought I had a big head! Serionia! You actually jumped? Holy shit! I already watch the first two channels. This one, I'll start watching on this TV. It has everything you need: full Smart TV functionality with the Android TV operating system, easy navigation, intuitive interface and a wide selection of applications. Stylish design. 4K UHD resolution. Unique and super handy Ambilight feature. It's main effect: the picture appears larger thanks to Ambilight filling the space around the TV with a colored halo.

This feature works particularly well at night if you enjoy watching TV in the dark. It substantially reduces eye stress. It also has a special Lounge mode where Ambilight works even without video, simply filling the room with mood light. There's a link under this, not the couch, video! Smash that link below to get 15% off with the promo code "БУДЬВТЕМЕ15" when purchasing this or any other Philips TVs. While my buddies from Eldorado will deliver it to your place safely and free of charge, so you're entertained during quarantine. Hold on, guys! Attack! What if someone gets injured? Immediately with the liabilities, huh? Yes! It's not functionally sound! Some guy's car parked outside broke down.

This entire house is yours? All mine. Yes. We're in San Francisco. Threestory house. Yours. - Yes. But it's millions of dollars. It was much cheaper than what it costs now, because I got it in a really bad condition. I got it for $2.5 million. And renovated it? Yes. Renovation wasn't cheap either. Is it mortgage? Yes. I owe money. If you don't owe anyone, no one trusts you in America. You need to owe someone. How does a guy from Medvedkovo become the Director of Product Management of all of Google? First, you need to try and create something in Medvedkovo. You'll probably end up with something bad.

Then you'll need to want to create something again and move out of Medvedkovo. My journey was long. I went from Medvedkovo to Prague, from Prague to Dublin, from Dublin to London, and eventually moved here. Let me try and shorten that story. You have a programmer's diploma. Yes. You created the site Tapok.ru. Yes. In the era of simple mobile phones if you wanted the Boomer tune on your phone, you had to do it on Tapok.ru.

Yes. And it made you a lot of money. Not a lot, but some money. You said you could buy a car every day? Not every day. I could buy one every month. You could buy a new car every month. Yes. A shitty one.

What? A shitty car every month. After that, you moved to Prague. Yes. Why? Because I realized I had no one to learn from how to make something truly big. I wanted to Tapok. ru wasn't much different from mobile YouTube. It was a mobile service that gave you access to content like videos, music. But on old phones. On old phones. But that's not the point. The point is that it was Essentially the same idea took the shape of "Send a short message to" This sort of lowscale business operation without much of an idea behind it. When I realized that the same idea could play a significant role on a global scale in how the world operates, when I saw that this was real, I realized I couldn't do it living where I lived at the time.

I recently rewatched this video. We had someone film us at school in 9th grade. They asked us what we wanted to do. I had read some nifty book and said that I wanted to develop business strategies for companies for money. I had little understand of what that meant at the time, but it sounded cool. Eventually, it did become my job. I worked for Cisco. It's a tech company. [network equipment for major organizations]

[and telecommunications firms]

It's a tech company. [network equipment for major organizations]

[and telecommunications firms]

Then I went to study

in Scotland, got back [network equipment for major organizations]

[and telecommunications firms]

and started trying to launch

various businesses.

[network equipment for major organizations]

[and telecommunications firms]

Then I realized that Then I realized that After another failure, one of my friends came to me and said: "I already have a working business." "Can you help me raise money to expand?" "We have incoming orders." "We just need the money to produce." I agreed to help them. I put together a nice presentation, they got the money. I thought: cool. I didn't ask for money, but the way, but they paid me. They paid me well over what I earned in six months. I thought: "Wow! Why do I even go to work?" I continued to do this in the background. This got me introduced to Sergey Solonin.

My college mate's father introduced me. I came to him with an investment offer. He said: "I don't understand this stuff" Sergey Solonin from Qiwi? Yeah. "You want Serioga. He's smart. He's into technology. Talk to him." [payment platform. Net worth according]

[to Forbes2015 ranking — $400 million]

Yeah. "You want Serioga. He's smart.

He's into technology. Talk to him." [payment platform. Net worth according]

[to Forbes2015 ranking — $400 million]

I go to the address he gave me, Petrovskiy alley,

and find this super expensive palace. I go to the address he gave me, Petrovskiy alley, and find this super expensive palace.

Just pure luxury. Expensive pictures on walls. $100,000 leather couch. I don't know how much it was worth, but it looked ridiculous. Sitting on the couch was this guy in track pants and a wifebeater, with greasy hair, like mine right now, and red eyes of someone who hasn't slept in three days, reading something. He checks out my 15page presentation, just flips through it like this, asks three questions about its weakest points and says: "Total garbage. Redo it and come back." I thought: "Wow. This guy is SMART." I redid it. Came back. He checked it out and said: "Better. I won't give you any money, but I like you." "Let's open a fund." I knew what funds were and how they worked, 'cause I studied it in college.

I thought my journey to a venture fund would take ten years. Instead, it took one chance meeting. You moved to Prague? I moved elsewhere. To me, it was all "overseas." I moved overseas. I moved in search of a crowd I could learn from. Prague wasn't the place. Wait. What was the idea? You moved: Charles Bridge, Staropramen beer What did you do over there? There, I lost the part of me I was always familiar with. It was just a way to drag myself out of my old environment. Oh. So you moved elsewhere not planning to do anything particular?

Yeah. No. I moved to work. I moved to learn. I moved to search.

I just didn't know where to go yet. I had the "Muscovite's globe": MKAD, beyond it, Siberia,

and then the overseas. More or less. I didn't know how the Silicon Valley was different from London or how London was different from Prague. I just moved elsewhere to make some sort of step. If you don't know what to do, make one step. You studied there? No. I tried to start a business. Didn't quite work out. I lost all the money I had 'cause I was stupid. Ended up in a tough situation which is really motivating. "All the money" was how much exactly? At the time, I had Leaving the country, I had around $100,000.

How did you lost them? Bad investment, in Russia. In what? In my relative's business. He was doing some shady things. Didn't work out in the end. You said you ate sausage clippings there? Yeah, I did. What are sausage clippings? When they slice meats at the deli counter, they end up with end bits. They actually sell them. You can ask if they have leftovers that end pieces of sausage. They're sold real cheap. If you can't afford sausage, you can buy these clippings. They're much cheaper. I had a daily budget of 200 rubles for a family of three people. You said 300. Or was it 300? Yeah, 200 korunas or 300 rubles. Right.

How did you survive? Humbly. Humbly, but with a lot of determination. You know? With a purpose. How did Prague lead to Google? I wrote a letter to Google. I read books, I wanted to understand. I moved to learn. I moved to learn how to create largescale products, how to make something like iTunes. iPod had just come out at the time. And I started reading books about the founders of some major companies: Dell, Oracle, Microsoft. I read one about Google. And it blew me away. I realized that someone had built a culture I wanted to build myself. I had no idea how to build it. I wanted to learn and I realized that I wanted to learn from these people.

So I sent them an email. An email? Yes. I sent an email to jobs@google.com that said something like: "Guys, you're neglecting the mobile phones." "Mobile phones are the future." "Everyone here in Russia is on mobile phones." "I know how to do it. Please, hire me and I'll do it." They didn't reply. Obviously. They didn't reply? They didn't. They didn't reply after a month, after two months. I kept looking for contacts to reach them. Eventually, they replied. I couldn't find anyone. They just replied themselves several months later. Sounds kinda unreal. Totally. Like emailing the Kremlin. It was totally unreal.

I don't know of another story like that. I still fund it really weird that it worked out. The stars must've aligned. Why do you think they replied? I think I got lucky. I believe every success involves a lot of effort, many failures and the perseverance to overcome those failures, but realistically, you'll always need some luck. They called me after all the interviews and said: "We have a job opening for you, but it's not in Prague." "It's in Dublin." At that point, it no longer made any difference. On my globe, they were practically the same. So I went to Dublin. What are these holes? They're ground squirrels called gophers.

There's a ton of them out here. It's the wilds. They're prey to eagles in the sky, roaming foxes, mountain lions and coyotes. You warned us not to let your cat out. Why? They'll eat him. Down here, cats None of ours ever got eaten, thankfully. Friends and neighbors lost 'em just like that. They run away and Cats are naturally cocky. If it sees a raccoon, it'll start a fight with it. A raccoon will kill a cat just like that. Larger animals will too, mostly coyotes. How do you let your kids out to play? They don't attack children. I believe, in the last five years, only one child got attacked by a mountain lion.

Just don't let your kids stray too far alone. They don't come near houses. If you have a child with you, you want to pick up the child. The animal will see you as a single large entity. Who lives here besides your family? We live on the top floor. My family, kids. One the second floor, we have several business owners, all Russianspeaking. It's a great little gang. There's four of them. On the ground floor, we have an assorted group of people. Why are you offering them shelter? They're renting. Oh, they pay you money? Yeah. It kinda appears like Erlich's place from the show Silicon Valley. It does! Guy offers startuppers housing in exchange for 10% of their startup's capital.

Do you too take 10%? No. I agreed to much less. I put money into one of the secondfloor startups. I bought some shares from Dumik. I was one of the first to invest in his Chatfuel. Only him though. So you're just offering guys shelter? No. I gave him some money for the company, I invested in his company, and also he pays me rent. I use the money to pay off the mortgage. Can you tell us about the two guys sitting behind Serioga and I? I believe they're both really smart and talented guys from the former Soviet Union, Belarus and Russia, who are living proof that you can come here alone, with empty pockets, and create multimilliondollar companies with nothing but hard work and your vision.

Alone. I watched this happen for both of them. Both Dima Dumik and Mikita created huge companies from scratch right before my eyes. I'd look at them and think: "What am I doing with my life?" For the last two days, Andrey has been preparing me, saying: "I have your carbon copy living in my house." [34 years old]

Let's look in the camera. [Founded Chatfuel, a platform for creating]

[chatbots for the Facebook Messenger] And now sideways.

[chatbots for the Facebook Messenger] [chatbots for the Facebook Messenger] We do look alike!

[chatbots for the Facebook Messenger] We do look alike! You too were born in '86? Yes.

But you're from Taganrog. Yes. Okay. It's a little bit spooky. But okay, let the audience decide. Can you explain in super simple terms what chatbots are? Chatbots are You're talking to someone in the Messenger, right? Yeah? You can similarly talk to a business. You can ask questions, request help our support, while a business can communicate with you, engage you, send you GIFs. They'll ask: "Yura, what are you into?" "You're going to San Francisco. We're having an event. You should come." It's super personalized communication. But I need to subscribe? Yes. And it'll tlalk It'll talk to me on Facebook? Yes.

Not on Telegram or..? There are other platforms that work with Telegram and other messengers. Yours, only on Facebook? Yeah, yeah, yeah. Okay. Right. How do you monetize it? Businesses pay a fee to use the platform to send messages. The more users you want to reach the more you pay, on a monthly basis. Some of your clients are Uber Yes. CocaCola - Yes.

- And even Golden State.

- Yes. [basketball team based in San Francisco]

Assuming I've become your client,

how much do I pay? $15 to start. Up to 1000 users. Right. What's the cap? There is no cap. But the biggest clients pay tens of thousands of dollars.

Tens of thousands? Yeah. A month. Okay. What's your monthly profit? Uhm I can't announce it publicly, but it's in hundreds of thousands of dollars. That's profit? No, that's our revenue.

- Gotcha. But you make a profit? Yeah. Yes, we have a positive operating margin. You haven't sold the company yet? No. Andrey says that if you do, you'll be a multimillionaire.

It's a possibility. Mikita Mikado. Yeah. [33 years old]

[Created the PandaDoc]

[document automation service]

Are you Japanese?

No, I'm Belarusian. Belarusian. [document automation service] [document automation service]

You said it so cute! We Belarusians are very cute.

You said it in such a voice that I just want to hug you! "I'm Belarusian!" Why "Mikado"? When I was 19, I came to America for the first time.

Right? As part of a student exchange program. What was it? Work and Travel USA. I came over and was lodged at this Japanese guy's house. The Japanese guy used to call me Mikita, Makaka, Mikaka, Mikado That last one sort of stuck. Then they launched LinkedIn. Yeah. Back then, using your real name on a social network was kinda scary. I registered as Mikita Mikado and optimized this LinkedIn account for certain search engine inquiries. "Website development Hawaii." I lived in Hawaii at the time.

People started contacting me. I started getting business. I made a business card for Mikita Mikado. I started signing contracts, making and selling websites. I was just using it more and more. 'Cause my last name is impossible to pronounce in America.

What is it? TSEPLA-VU-K-HA-U. See? That's in Belarusian. What is it in Russian? Teplouhov. Oh! Teplouhov? Yeah, yeah. Wow. Complicated. I thought only popular singers used stage names.

Well, now you know. Programmers too. Programmers do too, yeah. Damn! What does your business do? Ever signed a document? A contract? Yes. We make it so you can sign documents without paper, without couriers, mailing documents and so on.

And they have the same legal power as documents signed on paper?

Yes! For real? It works. You can test it. So we can sign documents remotely? Yeah. Uhm Important It's worth noting that it works in the US and countries with... Electronic document flow? Not just electronic document flow, but also esignature laws. Oh. They don't exist in Russia. They're a little different. When I came to Google, they didn't offer me to work with mobile phones. It was all only starting back then. For a while, I worked on some other things. Only about two years later, they put together a mobile team in London that made mobile apps for all of their products.

What year was that? This was 2008. 2008? Yeah. They trusted you with something because you did this mobile thing back in Russia? They trusted me with something because no one thought it was important. They thought it was nonsense. But how? This is 2008. Everyone has phones. Couldn't they see that..? At that point, people hadn't yet connected the dots in their heads that the internet would be something you carry around in your pocket. Everyone though the internet was: you come home, turn on your computer and go online using a modem or a wire. Mobile was for calling and sending short messages. Maybe occasional email. That was the pinnacle of communications technology.

The idea that people would watch movies on their phones or play online games sounded like unrealistic futurism. You said you specifically asked them to let you develop the mobile app for YouTube? To be honest, when I joined their mobile team, all the good products had already been assigned to more talented folks. Stuff like Gmail, the Google search itself, they were already assigned to someone. Only leftovers no one else wanted remained. YouTube was one of the things that I mean, no one cared about the browser version either, did they? All it had were some dogs on skateboards and similar garbage.

I was the new guy. They offered me a choice of several not very successful products. When they offered YouTube I knew that Tapok that I made back in Russia was almost the same thing. I knew that people would watch video on their phones because they used to BUY them on my site. People from backwater towns used to buy Crazy Frog videos through SMS to simply go: "Hey, man! Check it out! Crazy Frog!" This was my first project, a mobile app that let you use your phone to You're speaking. There's a presentation. It let you change slides, record your voice and broadcast it. This didn't exist prior? Nope.

Right. It didn't take off? Crashed and burned. Right. Then? Then I We'd raised money for it, venture money. Which you didn't return? No, of course not. Yeah. The project didn't take off. I realized no one's ever giving us money again. I met my partner, the now CTO of my current company. We figured we had one last chance. We either do something or I'm just not cut out for startups and I should go back to corporations. [5 years at Procter & Gamble]

I had to call my parents. [5 years at Procter & Gamble]

I'd been supporting

myself for a while, I'd been supporting myself for a while, but at 25, I had to call them to borrow several thousand dollars.

You know, "this is my last chance." And it took off. It was a mobile app, Myata. And We knew there was no room for failure. We were two people. We did everything ourselves: coding, design, product. Myata was the thing that assembled a feed based on your interests? Yes. It's an app For VK.

- Yes. Yeah. Okay. What do you mean by "took off?" It made you money? Yes. It made us money. "Took off" means that when we launched on App Store, we reached #2 on App Store. We had 300,000 downloads in a week. And we started monetizing it with ads. How much did it make you? We sold it. We sold the Russian version.

We had a Russian version. We decided to make a global one. We sold the Russian version. For not too much, several hundred thousand dollars. We started working on the global version, and it was a struggle. They use Facebook. It has its own rules and restrictions. That's when Pasha Durov posted in his blog, saying: "Guys, we're launching chatbots on the Telegram platform." I call Tioma and go: "Hey, wake up." He's in Moscow, it's night. I'm here. "Tioma, wake up. This is the next big thing. We need to make something." A team of developers needs to make it so there's a YouTube icon on the screen. How many years? What are the steps? Well, there are YouTube servers somewhere out there hosting videos and sending them via the internet to some device.

The device must be powerful enough to decode them. The connection must be fast enough to download them. And then this app needs to work on this small device with its small processor to download videos, to offer you choice of videos and different menus. They key piece of course is the player that decodes and plays videos in real time. At the time, this was a fairly complicated task, because we were developing it from scratch for those old phones. The first app was actually designed for Nokias and old Windows PDAs. It didn't work. It was awful. During the first year, I thought: "What am I doing here?" "It probably won't work." When did you realize that it will? When Android came out.

The player worked on the first Android that we launched. [came out in September of 2008]

The player worked on the first

Android that we launched. [came out in September of 2008]

This was yet another prophetic but

seemingly idiotic move, This was yet another prophetic but seemingly idiotic move, because there were zero Androids and millions of Nokias. But nothing worked on Nokia, while on Android we could get it to work. I only had, like, two or three engineers at that moment. We decided to go for it and switched over to Android. And later iPhone. And it worked. When we got our first 100,000 views on mobile phones, obviously, the site youtube.com had millions of views by that point, but mobile users had cumulatively added 100,000 to that number, and we went to a bar, I bought all the engineers beer.

We were joking around: hey, 100,000 views is free beer, cool, but what do we get for one million? I said: "Guys, one day, mobile YouTube will be bigger than that other YouTube." "When this happens" My engineering partner says: "When this happens, you'll take us to Hawaii." I said: "Yeah, I'll take you to Hawaii." I did. When did this happen? This was somewhere around 2013 or 2014. Today, most people watch YouTube on their phones? I can guarantee you that most people watching this video of us are most likely watching it in the app I helped launch. Gamedev is a huge industry. Just like filmmaking.

Gamedev is bigger than filmmaking. [The film game industry made $100 billion in 2019]

Guys from Briansk creating

3D animation for movies and Russian freelancers working out of Goa doing the same thing, they're making good money, because it costs a lot. We create content for games, movies, media and TV shows, mostly for California, but we have clients all over the world. [Founded the 5518 Studios digital art studio]

Our headquarters is in LA.

Production, in Russia. [Founded the 5518 Studios digital art studio]

But we also create teams: [Worked on art for World of Tanks and Call of Duty]

Brazil, Australia, CIS.

[Worked on art for World of Tanks and Call of Duty]

We have people from all over, because you can no longer say that CoD was made in the US. We have people from all over, because you can no longer say that CoD was made in the US. It's made by the Vietnamese, Indians, Russians, Ukrainians, Americans, Brits. Same with World of Tanks. Same with other projects. They're now global corporations. Just like us. We have people from all over. For example, someone's making a video game, they hire you to create some of the art and pay you to do it. We help large companies produce content on time, because games are becoming more and more complex and expansive.

You can't produce everything inhouse. That's why they delegate art and coding to talents from around the world. We help them with that. What if we decide that our show needs some graphics? Say, for our geographic routes. We want a super map that shows us going from Moscow to San Fran, to the Valley, to the towns. How much will it cost us? Depends on task description. If you know exactly what you want, it's figure A. If you go, "Maks, let's change this part," it's B. If you wanna redo the whole thing, it's C. Let's say, we know exactly. This costs anywhere from $10,000 to $100,000. But it depends on whether we can show it, whether you let us display it, and if you're a pleasant person to work with.

Besides, we want a client like Yura on our portfolio, so we could do it for a cup of coffee. You're from Ulyanovsk. How did you end up all the way out here, in the Silicon Valley? I started working in ninth grade. First with Russians, then quickly switched to Americans. I have been working with Americans since ninth grade.

Doing what? I started out as a designer. I made websites, logos, applications. Then I switched to digital art. I created art for many games: Call of Duty, Fallout, World of Tanks. I started out as an artist, then senior artist, then I supervised some people, then I started my own company.

For World of Tanks, we made a ton of tanks, environmental objects, barrels, airplanes. Lots of stuff. Then you see it in the game. And millions of people are buying this tank with real money. The feeling's orgasmic. You're thinking: "Fuck!" What did it look like? You're in Ulyanovsk, in your apartment [massbuilt from mid-'60s to '80s.]

Hrushovka*?

- Yeah. In Ulyanovsk. How did you draw? Did you have a special tablet? Yeah, I got a tablet. I didn't initially. I just had a mouse. I'd draw with it, super poorly. I'd look at other people's works and wondered what's wrong with my hand: why are my works so crooked.

Then I realized I needed to get a tablet that cost my entire salary.

Yeah? I saved up, my parents pitched in too, and I bought myself a tablet. And away we went! Turned out, drawing on your computer was super convenient! Wait, do you have any artistic talents or was it formulaic stuff? I studied at Kuliok. That's our University of Arts in Ulyanovsk. I was a very bad student, actually. And I'm ashamed, because instead of painting art and understanding Ayvazovskiy, I'd draw all these zombies, and monsters, and women with big boobs, because I drew inspiration from games. Teachers would give me C's. I'd go home, draw my stuff, and the Americans would go: "Dude, great! We love you!" I was like: "So am I an A or a C student? What am I, really?" My big advantage was that I didn't argue.

I think we still have this issue in Russia where we believe that getting feedback is always shitty. I go: "Yura, you need different jeans." You go: "Piss off, Maks." Something like that. Many act this way at home. I'd go: "Great feedback. Thank you." I knew I was inexperienced and they knew better. I didn't argue. I just said: "Let's do it this way. Or that way."

Or: "Here's a couple of options." 'Cause Americans are often super busy and they just go: "Hey, can you make us a tank for Call of Duty?" You say: "Okay. Any references, pictures and stuff?" They go: "We leave it to you." Basically, our subsequent work needs to make them go: "Option A. With this track. Tomorrow. Go." We need to meet them halfway sometimes.

Others often go: "I need a detailed task description. I can't work without one." "Give me a detailed task description." Clients often don't have time for that. Your point is, being proactive and selfreliant rules? Being proactive, selfreliant, able to predict what the client wants, and giving options are the things that I find help a lot. When you're not sure what they want, make two options. Or better yet, three. And say: "Here's what you asked. Here's my vision.

And here's a crazy third option." The client will appreciate it. This is the entire valley? (Davidov) Yes. This is the entire Silicon Valley.

You can see its every corner from here. Palo Alto, Mountain View. That was is San Jose. San Jose is where the Valley started. The semiconductor companies started out there. [was one of the Valley's biggest companies in the 1960s]

Fairchild Semiconductor. Those guys

would get military grants. [was one of the Valley's biggest companies in the 1960s]

They made the first computers,

exclusively for the military and NASA. [devices like circuit boards, transistors, LEDs]

That's where life sort of started. [devices like circuit boards, transistors, LEDs]

Stanford graduates finally had

a place to go to make big bucks.

It all started in the '50s, with Stanford. and. the super liberal vision of then head of the university. who began to sponsor his graduates, lending them. [from 1949 to 1968. The Research Park was spearheaded]

[by Frederick Terman (it was his influence that led Stanford]

[graduates to create HewlettPackard in the 1930s)].

[In the 1950s, the university leased some of its land to]

[high-tech companies and expanded its operations to get]

[government grants from the Department of Defense.]

[Terman is considered the father of the Silicon Valley]

who began to sponsor his

graduates, lending them. [from 1949 to 1968. The Research Park was spearheaded]

[by Frederick Terman (it was his influence that led Stanford]

[graduates to create HewlettPackard in the 1930s)].

[In the 1950s, the university leased some of its land to]

[high-tech companies and expanded its operations to get]

[government grants from the Department of Defense.]

[Terman is considered the father of the Silicon Valley]

offices or space

to use as offices,.

[from 1949 to 1968. The Research Park was spearheaded]

[by Frederick Terman (it was his influence that led Stanford]

[graduates to create HewlettPackard in the 1930s)].

[In the 1950s, the university leased some of its land to]

[high-tech companies and expanded its operations to get]

[government grants from the Department of Defense.]

[Terman is considered the father of the Silicon Valley]

and was essentially the pioneer

of this whole venture capitalism idea.. That's how HewlettPackard was founded.. [in brand new types of business]

The very idea of nurturing talent. [in brand new types of business]

and believing in it so much that you give

them money so they try to create something. and believing in it so much that you give them money so they try to create something. in this brand new, totally foreign at the time field of.

Semiconductors, processors and so on started out in Stanford. Then the inventor of the transistor came here. He created a company, it was fairly despotic, I mean, he was a fairly despotic genius, [with its founder William Shockley]

it was fairly despotic, I mean,

he was a fairly despotic genius, [with its founder William Shockley]

and he ended up losing

eight of his key engineers. and he ended up losing eight of his key engineers. These eight key engineers who earned the nickname "the traitorous eight" actually created the second super important element of the Valley, the flow of ideas, the tolerance for the idea that people may leave your company to start their own, and it's okay.

They all left and founded all the key companies. Intel, AMD and others were in one way or another fathered by those eight dudes. Stanford is basically the cradle of the Silicon Valley. Its students went on to become founders of Google, senior execs at Facebook, Microsoft, EA, LinkedIn. They all studied at or at least got accepted to Stanford. But didn't all graduate? (Miheyenko) MANY of them didn't. Let me try and outline the history of founding of Stanford very quickly. [44 years old]

[Professor of Finance at the Stanford University]

[Graduate School of Business]

There was a rich man who made

a lot of money on railroads.

[44 years old]

[Professor of Finance at the Stanford University]

[Graduate School of Business]

His son died at 15

from typhoid fever. And he decided to found a university in his memory. Is it true, that 150 years ago, founding a university in someone's memory was a browraising decision? It was, but not because it was founded in someone's memory. It raised brows because California was a backwater state at the time. The idea of creating something bright in California was hard to process. Moreover, there already was a university in California. There was a university at the other end of the San Francisco Bay, one of the most respected universities in America today, University of California, Berkeley And this was a state university.

I think many laughed at Stanford for trying to create something that could compete with Berkeley. And what's the point of a second university in California? A lot has changed in the last 150 years! A lot HAS changed. And not in the last 150 years, but probably much closer to now. 'Cause even around the time World War II broke out, I doubt the major East Coast universities like Harvard, Princeton and Yale saw a competitor in Stanford. Then it all suddenly changed in the span of 15 or 20 years. The greatest garage in the Valley is not Jobs' and Wozniak's garage, but the HewlettPackard garage? Yes. It was where it all started, this whole culture.

HewlettPackard was the first operation that Stanford sponsored. That garage was where the seeds of this culture were created. A lot of other companies were later started in garages, including Google. Google started in Susan Wojcicki's garage. Today she's the CEO of YouTube. Our queen! What's that behind you? That's the campus of the Stanford

Graduate School of Business. You mentioned a garage for startups? Yeah. Startup Garage. What do they do there? Or the Stanford Venture Studio. It's very interesting. About 5 or 6 years ago, we decided to open what we called the Startup Garage, where over the course of one semester or one quarter, Stanford uses the Quarter System with the summer quarter off, over the course one quarter, our students at the Graduate Business School could practice actual entrepreneurship.

Over the course of a quarter, they could gather into small groups, organize their own startups, discuss different ideas, get assistance from our alumni, [startups in their earliest stages]

angel investors, venture capitalists,

professors and so on. [startups in their earliest stages]

We didn't initially intend for these

startups to become real startups. We didn't initially intend for these startups to become real startups. The idea was to let firstand secondyear students to try their hand and get a feel, and obtain certain skills required for becoming entrepreneurs. Initially, we believed this was a purely educational process.

Just another program. We have a lot of wonderful, informative programs. But in these 5 or 6 years, everything changed. Turned out, at this stage, students can band together for just one quarter, students from the business, engineering and medical schools, come up with an interesting idea and tinker with it a little without getting any sort of money, any financing, or assistance from the Stanford University, for just one quarter, and in an insignificant number of cases this leads to a real startup. There are now real firms that came out of this Startup Garage. And they actually make money? They've raised some serious money from serious venture capitalists, and some of them now cost billions of dollars.

Oh wow! Hey! Hi. Hi. Tolik. Tolik, what are you doing here? Me? I Is that a check from your investor? You all set?

Yeah! Oh yeah? Nice! No, what is that? It's actually a check to pay for my wife's

medical insurance. Really? Yeah. Costs an arm and a leg.

I got my PhD at Stanford. Where are you from? I'm from Krasnodar. Right? I spent a lot of time in Moscow, moved to Norway, went back to Moscow, bailed and came here. You're in IT too? I'm a cofounder. Typical stuff for these parts. But what I actually do is I spent a lot of time doing geological surveying. Uhhuh? I'm developing this combination artificial intelligence for geology.

Why do you need AI in geology for? For example, there's computer vision currently used in autonomous cars that lets them identify trees, pedestrians, what have you. But what's happening underground, we don't know. At all. We don't have a good scanner. Let's say, I have information that we can get from sources Without sending anything down? No, no. For example, there's some acoustic information from a scanner, but it doesn't give us true information. Like, it's not a universal truth, it's not real information. Some devices can use systems like AI and computer vision to interpret what's really going on underground.

The dude we met at Stanford. Do you know him? Yeah. That's my brother's friend who got inspired by his example and moved here too. They live next to each other. And he's launching a startup grounded in geology? I hope he's make it, yeah. That's what I love the most: people with different backgrounds, from all over the world get inspired by this spirit of entrepreneurship. It's very easy to get stuck in an environment where you think: "Me, an entrepreneur? Nah. You have to be someone's son." "Or you have to be insane." That's what I thought back in Medvedkovo. "No, this is crazy. Entrepreneurship?" They move here, and it comes so naturally here, that every Uber driver is also doing business on the side.

Every cashier in the supermarket. How does entrepreneurship benefit society? I mean, why is it better than working for the state? Entrepreneurship improves the stability of the society. In my view, you want the economy to look like a grape cluster: lots of small sweet berries that together form this big fruit. When you have an economy that's like a single watermelon, if you drop it, the entire watermelon's ruined. Whereas when you're economy is like a grape cluster, you've got natural selection, competition, a ton of ideas being tested at the same time. You have this fluidity and adaptivity that let society react quickly to rapidly changing circumstances.

Without the internet, economy was one way. The internet came along, and a ton of global businesses collapsed, you know, these enormous beasts. But then a ton of In a society where entrepreneurship was normal, a ton of new companies immediately emerged in their place, the future facebooks and googles and other multibillion corporations, in a world where I mean, in '92, none of them were close to emerging or even possible. Dasha Navalnaya is studying here since this year. I read on the news. Sadly, haven't seen her around. There are a lot of Russian students here, Chinese, Indian. They get education here.

They become a part of the society and they know it. We have a lot of clients here, and they show what Stanford is. It's the spirit of entrepreneurship. It's not even about knowledge.

MSU* isn't any worse. They teach you here that you can open your own startup tomorrow, come up to your dean or your professor, and they'll give you $5 million in the initial investment round. We have a friend named Tony. He graduated from here. He created a startup that teaches children coding. His math professor was his first investor. Did the startup take off? Yes. And the professor made millions? He hasn't reached IPO yet.

He hasn't made any money yet, but his shares did skyrocket. [shares on the market to invite investors]

[or make money from the sale]

He hasn't made any money yet,

but his shares did skyrocket. [shares on the market to invite investors]

[or make money from the sale]

'Cause they went into the second

investment round, [shares on the market to invite investors]

[or make money from the sale]

and this Stanford professor They invest bits of their salary? Like, their savings? Their savings and the money they made

from other startups. I wish I could come to my dean in Ulyanovsk and go: "Sir, could you spare a couple mil? I have this dream project in the works" Sadly, that won't work over there just yet.

If you're a professor at Stanford University or a student, or an employee of the University, and you get an idea, the university offers you the opportunity to develop this idea, to take it out of the University walls and commercialize this idea. The University provides ample assistance, both formal and informal. For example, with the help of numerous alumni of the University that help you develop this idea, with advice and financially. But most importantly, the University has a culture and a vision that these initiatives are welcomed. As a result, a lot of, for example, professors of Stanford University have their own startups.

You mean they're investors? No, no. They're founders of startups. Ohh! They create startups themselves. I'll give you an example. There was a professor at the Stanford University that specialized in biochemistry. He came with an idea in his lab to create the socalled artificial meat. Had he been a professor at some other place, this idea would've probably died in terms of commercial application. But by using his contacts, by using the Stanford University, he became the founder or a cofounder of a startup, raised substantial venture money, and now his Impossible Foods is one of the most successful companies out there.

[It has raised $1.2 billion as of March of 2020.]

[It produces plantbased meat products,]

[including burgers]

Is his still a professor? [It has raised $1.2 billion as of March of 2020.]

[It produces plantbased meat products,]

[including burgers]

He continued to work as a professor

for many years. [It has raised $1.2 billion as of March of 2020.]

[It produces plantbased meat products,]

[including burgers]

I believe he left the position

some time ago and focused on his startup that's now become a multibilliondollar company. But there are other examples where people continue working as professors.

For example, my another colleague, Daphne Koller, a Computer Science professor, who founded Coursera, a very famous educational startup. She works as a professor at Stanford University. I don't have any school expenses, only living expenses, 'cause it's freaking expensive here. How come you're getting free tuition? Special talent? No. Stanford just sponsors a lot of people that come here and study for free. They offer free tuition, housing allowance In exchange for what? What do you give them? In exchange for me doing my research here. I also hold a research assistant position here. I mean, they do it in exchange for Stanford

Stanford call themselves The Farm. Yeah? Their idea is: "You guys come here, you're like saplings." "We plant you, water you, and share certain values with you." Different values. Cultural, social. "Then spread out wherever you go "and spread these values to other people one way or another." It's a sort of missionary work, you could call it. Or soft power. Exactly, yes. It's soft power. Why does the Stanford University support entrepreneurship? Does the Stanford University take a cut off its beneficiaries? That's a great question. Two questions, actually: why and does it? Taking a cut depends on how much of the resources of the Stanford University were used.

I'll give you two examples. In the '90s, two startups were created, Google and Yahoo! They were both created by students of the Stanford University. Google's founders used the University's resources quite extensively. Stanford came to the conclusion that because this search engine was an inhouse Stanford project, this technology belonged to the Stanford University. So Google bought the rights to the technology from Stanford. Yes, at some point in the past, Stanford owned a considerable amount of Google's shares. [the university's domain, google.stanford.edu]

Yes, at some point in the past, Stanford owned

a considerable amount of Google's shares.

[the university's domain, google.stanford.edu]

With Yahoo!, this was another Stanford

student, Jerry Yang, [the university's domain, google.stanford.edu]

but the kinds of University resources he'd used

were night hours and such, and so, as far as I know, Stanford University concluded that university resources hadn't been used, and so it wasn't involved with Yahoo! shares. But then what's the point for the University? The point for the university There's a number of reasons. First, because it's a very natural balance, because lots of scientists care about the application of their knowledge. It's very important.

Because many European universities treat entrepreneurship very differently. Over there, a professor sits on a high mountain, thinking and inventing something great, while someone else scuttles around at the foot of the mountain , trying to put it to work. Down here, it's very different That's number one. Two, we earlier discussed the interaction between the scientific and the learning processes. It's very important, because in all these examples I brought up students often take part in practical application of new scientific knowledge. Obviously, most of our students don't become professors. Most of them head out into the socalled real world.

- Yeah.

Thanks to firsthand experience of applying the knowledge they get here in interesting practical projects, they can work in the real world with a lot more responsibility and success. And the monetary appeal is, if you do become a millionaire, you'll donate to them as their graduate? Absolutely. Besides, lots of Stanford graduates are VPs of a bunch of major companies. They donate a ton of money on research groups and their support. Including you? Yep. Precisely.

- Damn. You know how much money they get each year in donations? Who? You know the figure? Stanford. From their graduates. No. One billion bucks. Holy crap! I tried to imagine this money. It's freaking crazy! One thing I found interesting about the 18year-olds that enroll here.

We choose a faculty once and stick with it. You pick the Journalism or the Economics Faculty of the MSU and you study there for 5 years. It's different here. Precisely. And it's one of the biggest differences between Russian and American education. I enrolled in the Economics Faculty of the MSU in the '90s. I was 18. I'm not sure that when you're 18, you can tell with certainty what you want to do for the rest of your life, biology, math, economy and so on. They have a different approach here. You're not enrolling in a particular faculty. They don't have faculties here. You enroll in the Stanford University.

You do what you want for the first two years. Of course, there are limitations: you have to take at least X courses, you have to do Y amount of work. You might get interested in something along the way. A ton of people start off on philosophy, then switch to computer science, or start off on physics, then switch to biology, and so on. Usually, only by your third year, you're required to choose a specialization. But again, they call this specialization "a major." Major, greater. It doesn't mean that it's all you study. It means that a set number of your subjects as well as your bachelor's thesis will be on this subject.

There's a sister concept here in America called "a minor," smaller.. Many students have a major and a minor.. It means that you have a primary specialization. and may have a secondary specialization.. These two specializations may be completely unrelated.. For example, you can have Computer Science and Economics.. You can have Physics and Music.. You can have Engineering ...and Marketing?. You can't get a bachelor's in Marketing, there are limitations for specializations.. But, let's say, Engineering and Biology.. [of the English name of the element Si ]

[and the correct name of the compound "silicone."]

[The proper name of the element in Russian is "kremniy."]

[A popular layman translation of the region's name]

[is therefore "Silicone Valley," if translated back to English.]

[The correct name "Kremniy Valley" has become]

[more popular in the recent years.]

Silikon or Kremniy* Valley?.

I vote silikon. I'm actually against silicone, but for it in this context. But Why? Kremniy is the correct word, isn't it? I'm used to it! I mean It sounds like Silicon Valley! It doesn't matter. The Valley isn't about tits OR silicon. It's just a word. I thought it was called Silikon Valley as a kid. I dreamed to go to Silikon, ended up in Kremniy. Why Kremniy? The English word "silicon" means "kremniy." But somehow, someway, half the Russians say "Silikon." When you hear "Silikon," you know that it's wrong? My inner Russian language A student says: "Guys, it's fucking 'Kremniy!'" But then my inner Marketing D student says: "'Silikon' sounds way fucking cooler!" "My inner A student." Nice. Mine too gets me into trouble all the time.

The correct translation is "kremniy." Uh-huh? "Silikon" is Acceptable? Acceptable.

- Or is it hillbilly talk? Hillbilly talk, yeah. "Kremniy" of course. Like the element. So anyone who calls it "Silikon" is a hillbilly? Because it's not "silicon." It's "kremniy." What is "silikon?" What's "silikon" in English? It's just silicone. The word "silikon" is a transliteration of the English "silicon," i.e. "kremniy." That's the main building over there, right? That one's the main building. But yeah, this is all the main campus. So this where it all This was the first building of Sergey Brin and friends? Yeah. They originally had an office in this building, where all the big discussions happened.

Where do you think is the office where they bought YouTube? I'm sure it was in Marrakesh, in that building. There's a huge conference room there where they used to make all the decisions. I recently remembered that I remember it like it happened yesterday. I was working for the PROsport magazine. One of my colleagues came in the room and said: "They bought YouTube!"

It's a historical deal! They bought the company for over a billion! [YouTube for $1.65 billion]

They bought the company

for over a billion! [YouTube for $1.65 billion]

Given that today, a billion is nothing for companies

like these, it sounds funny, doesn't it? Given that today, a billion is nothing for companies like these, it sounds funny, doesn't it? [that if YouTube was a separate company,]

[it would've been worth]

We'll have a caption on screen with YouTube's

current estimated worth.

[that if YouTube was a separate company,]

[it would've been worth $160 billion]

I just can't recall from memory. [that if YouTube was a separate company,]

[it would've been worth $160 billion]

It's billions and billions. I've been in the Valley for 5 years now. Prior to that, I'd been communicating with Americans via Skype and email for over 10 years. So I initially understood them through text. I was an expert at typing in English. When I first came to the Valley, I couldn't understand a word besides "hello" and "give me money." Then you begin to understand that your school and your university English and California English are completely different things.

Texas English is another thing still. When people tell you out here, "Great! We love it! Fantastic!" you can't Googletranslate what they actually mean — you have to sense it. Read between the lines. When I first came here, I'd show my portfolio to everyone. I was an okay artist. Everyone said: "Great! Amazing!" I figured I'd been underappreciated back in Russia. 'Cause we, Russians, say: "This is shit. This one's a redo.

This one's passable." In America, they all said: "Great! Amazing! We love you!" I was like: "Shit! I'm staying!" But then I noticed they said all the same things to John from Alabama, to Khan from India

I went: "Crap! I must be doing something wrong." The AngloSaxon communication culture is much more indirect. We often step on Russian developers often run into glass doors here of what they consider hypocrisy. That's not the case. That's just local culture. They believe here that telling someone their work is bull is extremely rude. It's worse than throwing poop in someone's face. It's better to throw poop in someone's face than shit all over their work. In Russia, it's normal. They say: "Dude, what you're doing is nonsense." "It'll never take off. This was a waste of time." To us, that's normal.

But to Americans and the British, that's extremely offensive. So instead they'll tell you: "This is amazing." When you ask a Russian how's it going, the typical response is: "It's going fine," which means it's going not bad, it's good. You don't say "good", because you don't want them to think you're bragging. Only to someone I'm truly close with, I could say: "You know, things are actually going well!" Or the opposite: "Things are awful!" Americans will tell everyone they're doing "absolutely amazing." Even if they have fresh bruises on their face from the worst possible morning you could ever have, they'll still say: "Amazing." If they're not doing well, they'll grumble: "Amazing." Someone told us yesterday that they teach kids storytelling here, from third or fifth grade.

And kids in elementary school can put together presentations.

Yep. Was that a lie? That's actually true. And in fact, that's another thing here guys back at home could really use to be successful in big places like this one, is the ability to communicate effectively. In Russia, and I know this from experience, communication is much more direct, and they find it really rough and coarse here. They don't try to smooth out the edges. They don't bother with careful wording. They just go: dudu-du-du! They often end up unheard by folks here, just because, woah! I tried to figure out why that was the case. In reality, they never teach us that.

They don't teach us in school to present ourselves, to effectively communicate our ideas, to debate with arguments but politely. They don't teach that. You're good at dealing with bullies outside. You know your comebacks to "whatcha lookin' at?" But they don't teach you how to pitch a startup idea. I have a great example from my own life. I was very surprised. My daughter's been going to school here since she was little. I believe she was 8 or 9 at the time. Eight. She came home from school I had no idea she could do anything on the computer. She came home from school and said: "Parents, I need you to plug the computer in the big screen." "I made a presentation." We were like: "What? What presentation?" She plugs the computer in. She made slides.

She has a perfectly structured, clearly techniquedriven pitch on the subject: "We need a cat." She starts going: "We need a cat." "Here's a set of issues. I'm cold and lonely in bed at night, so I don't sleep well." "And I don't study well." "We need a cat." "If we get a cat, I'll learn to be responsible and take care of this small creature." "Dudu-du-du-du." So she pitched me a cat in five minutes. I was super against pets. So insidious! And now I have a cat! After I landed at the San Francisco airport, my partner and I went to rent a car. We came to this booth, where the salesman told us about the insurance, how much it's gonna cost, and so on and so forth.

And he said: "What do you do? Why did you come?" We said we were programmers from Belarus and we came to show our startup to the world. So He went: "Guys! You're programmers, huh? I have this crazy idea" He starts talking about his super idea. "Pitching" it, as they call it. He's pitching his startup. We're in shock! If some small car rental salesman is carrying around a startup idea and tries to pitch it, then, damn, this place is truly full of ideas, active people and dreamers. To stay as up to date as possible, you need to maintain social connections and network with everyone. So far, this is one of our biggest impressions from the Valley: even waiting in a restaurant line, for a table to free up, they start talking to each other, knowing that this waitingin-line small talk could help them out in the future.

It could help with networking. But it's so cynical! Well, small talk is a cultural thing. It's not about getting something out of it. They're not trying to hook you. But you're right, people here are always trying to meet someone useful. Isn't it cynical? I don't find it cynical, because everyone everywhere needs something from others. You can try and meet people in Moscow because you wanna get a contract with them or you're hoping for a recommendation or a promotion. Down here, they're just upfront about it. It takes a lot more time and effort to move this relationship along here than it is in Moscow.

In Moscow, you can meet with someone over coffee, talk with them for 40 minutes and sign a contract. Or agree to sign a contract after one dinner. I'm sure many have. Down here, in most cases, it takes, like, five years of being in the same environment, being around, taking your kids to the same school, playing at the same golf club, going to the same pottery class, whatever, and only then you go: "Hey, John, so what do you do again?" Though you know exactly what they do? Of course. Ugh! There's something called UberPool. You call a taxi, but you don't ride alone — you pick someone up along the way and you split the cost of the ride.

Say, if a normal Uber ride costs $10, an UberPool ride costs $5. He just picks people up? Yeah. Along the way. It takes longer, it's inconvenient, there's someone else in the car and so on. Anyway, I called an UberPool. We were scraping by at the time. I paid the $5. We picked up another dude. He also called an UberPool. We start talking. "What do you do?" "I'm an entrepreneur."

We're both entrepreneurs. Ten minutes later, we're making plans for world domination. When neither of us can pay for a solo taxi ride. Did the driver turn around and offer funding?

Yeah, yeah, yeah. He offered to drive us for free.

So everyone's obsessed with it? Yeah. It's like Hollywood for the entertainment industry. But it's, like, painful? Painful how? That everyone's obsessed. Yes and no. This kind of concentration of unified context makes people think in one direction. That's what produces these cuttingedge ideas. Thanks to this context, everyone's thinking about it all the time. You walk around and you can't not think about it. That's why I think you get these cuttingedge ideas. That's why the Valley is so great and performs so That's why you can't replicate the Valley. You can't replicate such density of context.

A week in these cafés is worth much more than a month or a year at Four Seasons Moscow in coffee, because you soak it all in here. How does it work? You sit at a table at that pancake place over there. And what? Someone useful can walk in? There's 74,000 people living in Palo Alto. About half of them are in IT. On our way here, half of the people in that Starbucks work at Google, LinkedIn, Facebook. They connect very easily. We have a friend who used to work as a barista at a Starbucks, but had an idea for a startup. Where did he meet his first investor? In that very Starbucks. Some guy from Google just walked in to get a coffee.

Vanillacappuccino 2-in-1. And signed him a check for $100,000. That's a small sum, right? It's a tiny sum, yeah. I think he lended him some of his pocket money, his bonus for that month. Did the startup take off? Honestly! Be honest now! We did a number of projects. Some of them worked out, some of them didn't. Did the Starbucks guy's project take off? We're currently working with him, yes. Oh! As..? He just got initial funding from You work as an investor? As partners. We're doing visual graphics for him. What's the startup for? Video games? AI. This place attracts the most ambitious, the most passionate, the people that want to change the world or the humanity.

Whenever you move up one step, there's always someone one step above to compare yourself to. You exist in this progression. You're surrounded by people who You might say: "My company's worth tens of millions of dollars." Someone turns around and says: "Mine's worth hundreds of millions." And you're, like, okay, we've got work to do. You get constant reminders that you can do better, faster, stronger. You come to a party, you meet people There's some guy, you shake his hand, and he might say: "We raised 20 million yesterday." You're like: "Okay, I'm outta here." That's normal. Something I noticed working with Google, these days, instead of hiring people with one success they hire those with five failures.

'Cause these people know what they did wrong. If they can analyze and process it, next time, they'll act differently. This is a new trend in the Valley. People care about failed projects, and if you've analyzed it, they'll want to support you. 'Cause you want risktakers now. Everything's been done. You can use templates to make a typical game or a typical film. People don't get hyped for those. You have to think outside the box. How? By trial and error. You mean someone with two failed projects is more useful than someone with three successes? Five failures are better than one success. With three successes, you're probably on par with Google yourself and you can invest in new startups yourself.

Another important thing is tolerance to failure. Meaning, failing in the Valley is not shameful. So for example, I'm checking out résumés, and someone comes to an interview and says, "My startup failed, so I'm looking for a job," or, "I've had two major failures." I don't think to myself: "Why would I hire you then?" I think that this person They have experienced failure and are therefore more valuable than someone who hasn't. So he's not a loser, he's a guy with experience? He's a guy with experience. And also he's proven that he can get up after a failure and move forward. That's super important, because given what this place is all about, failing is pretty much a mandatory part of the game.

You're constantly failing because you're trying out new and crazy ideas all the time. If you're not failing, then you're not taking enough risks. That's super important. And the final thing that, in my opinion, has a big effect on local business and the community itself is the acceptance and tolerance towards the crazy, the unconventional, the things you're not used to — all this wacky stuff. 'Cause all great ideas sound crazy at first. If you can't accept people that dress differently, or act differently, or something like that, a community like that probably won't support a crazy new idea like: "Hey, let's make a social network "where people will use their real names and share pictures?" When Facebook was just starting, this idea sounded crazy.

No one used their real names on the internet. But venture capitalists believe in those ideas and offer funding because it's common knowledge here that crazy ideas are a good thing. And they know that they can fail. Are there as many broken dreams as in La La Land? When you move here to become a star of the industry but end up making coffee at a Starbucks. Yes. This is what I talked about at the start. Unlike La La Land, where your success depended on the backup of producers and studios You didn't have YouTube to put together a team and start filming interviews and become a star. They didn't have that in Hollywood.

Well, unlike that scenario, here, you've always had it. You come here alone. You rent a garage. Or you don't even rent a garage and just sit at home like these guys and you work on your idea until it become something big. You're the master of your fate here. That's the biggest difference with Hollywood. I was in shock at first. My friend and I, we used to smoke cigarettes back then, left our apartment Smoking cigarettes is extremely unpopular here. If you're standing with a cigarette outside, people will recoil from you, like you're shooting up heroine in the middle of the street. It's that strong.

So we're standing there smoking, and a police car pulls up. This huge SUV, bunch of lights. The cop's a Navy SEAL: bulletproof vest, tattoos — scary stuff. He turns to us and says: "How's it going?" We drop the cigarettes and go: "We good! We good! We don't want any trouble!" "There are 'no smoking' signs that way and that way. We thought we'd smoke here." He's goes: "Guys I just asked how you were doing." We're like: "We're doing fine. Why?" "Great. I just wanted to remind you that there's no crosswalk here." "So when you go back across, please, make sure a car doesn't hit you." "This is a dangerous stretch. Please, be careful." Salutes us and leaves.

We stood there in silence for, like, five minutes, trying to process what just happened. "Why did he pull up?" "He was going on his business, noticed we were standing somewhere we could get hit, "told us to be careful crossing the road and left?" [an exemplary citizen that helped others in need.]

[The author eventually turned him into a police officer]

[that continued doing good deeds above and beyond]

[his regular duties.]

"Is he a reallife Uncle Stiopa*?" Turned out, yeah. Down here, a police officer is a respected job. They salute the police. They love 'em. If you wanna get any sort of professional help here, you should expect that it's gonna cost you.

Even supposedly menial jobs like waste collectors, plumbers or gardeners. Gardeners charge $200 for a visit. The place will get overgrown without them? Yeah. It IS overgrown, actually. The landlord doesn't hire help. These are all weeds. [and thus humorous.]

"Landlord!*" So okay. You have two kids, right? Yes. How much money do you need here to support a family of four without shelling out like a rapper? Twenty. Twenty thousand bucks, if you don't go crazy. Yeah. Thirty, if you spend freely? Yeah. Damn. Depends on your definition of "freely." If you make $50,000 a month, that means you get $30,000 posttax? More like $25,000. Got it.

So for a decent living, you have to make at least $500,000 a year?

Yeah. From two salaries. Damn. Do Facebook engineers make that kind of money?

Yes. A typical engineer? Well, a typical engineer makes

around $250,000 a year. I.e. twentyish a month. But that's a tenner posttax? You spend those on housing, taxes and, say, food, but you also get options and bonuses. [to motivate and keep them from leaving;]

[paid out separately from normal salary]

They're automatically put

in you savings account. [to motivate and keep them from leaving;]

[paid out separately from normal salary]

There's also a separate

pension savings account.

[to motivate and keep them from leaving;]

[paid out separately from normal salary]

So in total, a Facebook engineer

could make a million a year. But they'll still only get about $300,000 in cash. How much do programmers make in the Valley? It depends, but programmers do have really big salaries here. That's because competition is mostly for talent rather than markets and whatever else. Or users. By 'talent' I mean any kind of professional. The starting salary of a software engineer who's just graduated college is around $120,000, something like that. A year? Yes. And from there Important note: 120 is pretax, right? - Yes.

Posttax, that's 60? With $120,000, they probably get $80 to 90 thousand, 'cause it's a progressive tax scale. It starts from 30%. What if you're coming in from Russia and already have experience? Then it's $200 to 300 thousand. And once you start producing results It all depends on your performance. Down here, no one really cares about your titles or credentials, or your accolades or whatever. If you don't produce quality work, you won't be making any money. If you do produce quality work, no one will care that you don't have a diploma. You'll make half a million, a million and so on. What are the housing prices? I used to rent a small room for $3000.

The best part about it was Room or apartment? A room. But it was right next to Google. But you had roommates?

- Yeah, I did. I know you can rent a decent house for $5000 to $7000. But it's something a ways. In the center, it's 10k and up. That's just rent. What about buying? Five to ten million dollars. For a 120meter* shack?

- For a fixer-upper, yeah. Something pretty

from the get-go will cost more. 120 meters, cardboard walls, three meters away from the next house — this could cost 5 million? small lawn. Yeah. Most of the people doing well here are the IT crowd. Half of the menial workers live below the poverty line.

It's the other side of the Valley. Palo Alto was a small town just 30 years ago. If you watch James Franco's movie. He was born here. He made a film about the Palo Alto of his childhood. It's a typical small town where IT took off, is all. The IT crowd used to comprise 10% of the population. Now, it's 50%. The rest aren't doing as well. How is it possible that over here, houses cost millions of dollars, cross the road, and it's a total A? I still can't wrap my head around this side of America. It's not just this place. You walk down the street in LA, it's all classy and fancy, cross the road, it's homeless people, crazies, and someone's pointing a gun at you.

You walk five meters back, and it's scents and corgis. That's because Because what? It's because municipalities get financing from their respective neighborhoods. Palo Alto is where the IT crowd lives. They can pay for the police and the firemen. Happy firemen. East Palo Alto doesn't have IT. They have a lot of crime. So they can't fund police or medicine. But they're neighborhoods of the same city! They get funding separately, each has its own. That's why it's hard to imagine this in Moscow: you can go here, but you never go there, even in broad daylight. Yeah, Moscow doesn't have ghettos. Yeah. In San Francisco, even Americans say: "Stay away from that place. Always." Until very recently, East Palo Alto was the "murder capital" of the US.

Beating New York and such. They were the first city in the US to use the automatic police alert system with gunshot sound triangulation. You shoot a gun, and there's a police car on its way. If you wanna call the cops in East Palo Alto, because you're being mugged or something, shoot in the air or the mugger. It instantly calls a car? Wait, there are mics in the air? It's a audio system that triangulates your location based on the gunshot sound. Holy crap. I don't know if they're still using it,

but they used to. But you cross the road, and there's Apple's HQ.

Across the road. Yeah. Well, Apple's in Cupertino. But Facebook's here. Yeah.

You cross the road, and there's Facebook's HQ. Facebook, Stanford. The poverty threshold here is $200,000. So if you're someone who makes less than $200,000 A year? A year. Wait, let's break it down for clarity. If you make less than $17,500 a month

A month. If my math's correct. [$200,000 a year = $16,666 a month]

Approximately.

Give or take, yeah. [$200,000 a year = $16,666 a month]

you're poor? [$200,000 a year = $16,666 a month]

Not just poor. You need

to be subsidized. [$200,000 a year = $16,666 a month]

If you make less than 17,5k..?

Yes. If you make less than 17,5k..? Yes. But it makes sense, because

First, we're not taking into account how much of that you're giving up in taxes. There are federal taxes. According to them, it's a large sum. You pay a large a tax from it. Super expensive housing, ridiculous healthcare. I don't get sick a lot. I have great health. But I still spend $20,000 a year on healthcare. On health insurance? Yeah. Insurance combined with some minor things. Totals at 20k. You ever filled a cavity in the Valley? No. I do fullbody maintenance in Russia whenever I get the chance. 'Cause it's also faster. Importantly, in Russia, it's not just cheaper; it's better. When you come to a doctor in the US, you spend an hour in line, even though you pay $1000 for it.

Narking is another thing here. They do that here? Of course they do. It's not just there. It's great! When you first come here, you're like: "What? How can you nark out your neighbor?" But then you realize that it's super convenient. Let's say, I'm pissed that my neighbor leaves his trash bins out in a way that they stink up the place where I cook barbecue. Right? I can tell he's violating some regulations. What are my options? I can come up to him and go: "Hey, buddy, could move your bins?" He'll tell me: "Screw you." We'll get in a fist fight. At best, we'll have an argument and harass each other for a while.

Instead, I can call the sheriff and go: "Sheriff, bro, my neighbor's stinking my place up with his trash bins. Could you take care of it?" The sheriff goes to him and says: "Dude, move your trash bins or next time I'll fine you." Problem solved. You have a wonderful moderator.

You ever did that? No. But I plan on narking one of my neighbors out. You're okay with it? Perfectly okay. That's something you grow into. First, you need to learn to trust the sheriff as your friend and realize that this dude doesn't expect you to bribe him. That's difficult, you agree? It's very difficult! One of my first trips was

I really wanted to do this, I did some research and found Jobs' houses. Jobs' old houses. Jobs' current houses. The reason this was so illuminating was that Sadly, this was right after Jobs had passed away. I come to this house. First thing that struck was, rather than

a house of glass and concrete, this was more like

a hobbit's cottage. A really conservative little old house. You may know that his car of choice was Mercedes 500SL. And he'd always get a new one to avoid putting number plates on it. Drove around without plates. Parked in handicapped spaces. Whenever it was time to install the number plates, in six or twelve months, I can't remember exactly, instead of installing them, he'd return the car to the dealership, the dealership would sell it as Jobs' excar and give Jobs a new Mercedes.

The fact that it was a hobbit's cottage rather than a glassand-concrete house, was that a quirk of his mentality or classic IT guy psyche? Lack of time? Exactly. It was good enough. That's like his 50 black turtlenecks. Another one of his houses, the one he grew up in,

his parents' house, was also this tiny little house with a garage where it all started. That's the most fascinating thing in the Valley to me — going to these places where you see this plain house and this plain garage, where they started. They didn't come up with any intermediate steps before they'd get to work. They didn't think, "Oh, I need to raise funds first," or, "I need to get this extra degree." They sat down in their garage and started working because they were excited about it there and then.

I believe that that's how great companies are created. It's exciting to witness that. Someone told us you could meet Sergey Brin out in the city alone, without security. Yeah, he took his kids to our school for two years. Then their mom said the school had weak math and transferred them to a different one. The only security he had was this 60ish-year-old guy in a white Prius, that always slept, or pretended to sleep, in the parking lot, and some suspicious gardeners would walk around in the forest, doing something... in the forest. You think it was his security? It was definitely his security.

Because as soon as they transferred their kids,. both the gardeners and the guy in the white car disappeared.. They do it carefully.. Discreetly? Super discreetly!. Unless you specifically look for them. and go: "Uhhuh! This guy's new!" every day,. you'll never notice them.. Zuckerberg has a lot more security.. They, like, put him in a van.. There's another van following his van.. He has sort of presidential ambitions in terms of security.. Whereas Brin and Page. Tim Cook goes to my gym.. Only he goes there at 5 AM

to avoid being bugged.. With pitches? With startup offers?

Yeah.. Which is weird, right?. On the show Billions, New York traders make fun of each other, going:. "Wait, you go to a gym with other people in it?". "Are you poor or something?". Whereas Tim Cook, the CEO of Apple, mind you, goes to Equinox.

That charges $100 a month and anyone can afford it. Why does he go there? It's convenient and comfortable for him. Why should he do anything special? They don't appreciate showoffs here. I have lots of neighbors that make a lot more money than me, but they all drive regular cars and wear regular clothes. Showing off your wealth is frowned upon in the Valley. They'll point fingers at you and go: "Ugh! Showoff." This is a fairly welloff neighborhood. - Yeah. Mildly speaking. But when it comes to fences I can see a small picket fence over there, but they don't put up tall ones here, do they? Yeah, it's actually prohibited.

It was a tradition at first, but when Russians started coming in, they passed a law. First, the are wild deer. Tall fences disturb them. Second, they make your neighbors uncomfortable. Everyone has to maintain an open path through their land here. The law requires that you have a path for horseback riders. You gotta spend your own money to build a special path that meets certain guidelines that's comfortable for horsies to hoof along. If you do a poor job maintaining it, your neighbors will nark you out: "We maintain our side of the path. This asshole doesn't. Please, fine him." The Valley has an insane shortage of girls.

The ratio is something like 70 to 30. Around 70. For real? How do guys live here? This joke from Silicon Valley: "It was a great party last night. There were eight girls at once!"

So that's pretty much real? It is close to real. It was a bit of a shock

for me too after Moscow and Peter*. When you're used to Russian beautieful sights, you move here and you're super confused, like: where are they? Are they hiding them from you? What's going on? How do you meet girls over here? I understand they're a minority here? So I'm not an expert. I'm desperately married. But my friends complain to me about that all the time.

They say: "That's it. I'm done. I'm booking a flight to Odessa." I'm like: "What? What flight? We have a ton of work to do!" He goes: "I can't take this anymore. I'm going to Odessa. Give me one week." I I... I go, "What happened?" He says, "Let me show you my Tinder." He starts swiping through Tinder, and yeah, if I was looking for someone to try and start a relationship, I doubt I would use Tinder for that, but if I did, I would spend A LOT of time swiping. There are just few women here demographically. Ever since the gold rush, right? Yeah. No one knows how many arrived by land. They only registered those that arrived by sea.

In '49, 70 thousand people arrived. Only a thousand of them were women. In '49, 70 thousand people arrived.

Only a thousand of them were women. That's One to seventy. One to seventy! And they were someone's wives. There were no free women. That's why all the way back in 1849, they had an actual gay neighborhood in San Francisco. The American LGBT community has been drawn to this place ever since, because 'queer' has been normal for so long here. So the only practical option is bringing along a wife? Yeah. Or occasionally go: "I can't take this anymore! I'm going to Odessa!" [The implication is that the "unwind city"]

[will depend on the country you came from.]

Or Minsk, or Moscow, or Kiev*.

I moved with my lady. We later broke up. My current girlfriend is Well, she's Russian too. It's an issue. It's a big issue here. But on the bright side, nothing's distracting you from work. Not even nocturnal emissions? Yeah. At some point, it all just stops. You wake up and all you think about is ploughing on. Hey, I saw birches over there. Yeah! Birches are everywhere, dude. Every country I lived in, I've lived in five, I had a birch tree next to my house. Why did they tell me in school that a beriozka*

could only grow on Russian soil? Because a beriozka is a metaphysical concept. You do miss the beriozka birches when you're anywhere but in Russia.

You wanna be careful with them. You come to Russia, those beriozkas, they pull you in and don't let go. Dude, stop torturing me! So it's another school myth then? Yeah, it's a very common plant. Birch tree. No one identifies it with Russia? Well, you and I do. But Americans wouldn't understand why we..?

No, they wouldn't. It's like if you monopolized the palm tree and started telling everyone that palm trees were inherently Russian. Very few people intentionally create bubbles. A lot of the time, they happen on their own. For example? Usually, they're created by investors. Is there a textbook example of a bubble? Theranos.

They made a book about it "Made a book?" Made a movie, wrote a book. The investigation. Founder's being sued. Elizabeth Holmes, a blonde in a turtleneck like Jobs' with intense grey eyes and an unnaturally lowpitched voice, was obsessed with the idea that huge machines for blood testing were stupid and we needed something that would let anyone donate a little blood at home to do 150 different tests. Parading this vision, she collected investor money. She managed to lure in some incredible talent. She had a seriously impressive team. She'd sign hundredmillion-dollar contracts with pharmacy chains who'd say: "Here, we're happy to pay for your machines in advance." Something like nine years later, she's got nada: no machines, no technology, nothing.

The company's worth $9 billion. She's worth $4.5 billion. [the youngest and wealthiest female billionaire in the US.]

[Several months later, The Wall Street Journal released]

[an investigation that brought about the exposure of]

[Theranos. Forbes subsequently revised Holmes' net worth]

[to be zero. Theranos shut down in 2018. As of spring of]

[2020, Holmes is charged with 11 counts of wire fraud,]

[court hearing pending. She is facing 20 years in prison]

In real money? [the youngest and wealthiest female billionaire in the US.]

[Several months later, The Wall Street Journal released]

[an investigation that brought about the exposure of]

[Theranos. Forbes subsequently revised Holmes' net worth]

[to be zero. Theranos shut down in 2018. As of spring of]

[2020, Holmes is charged with 11 counts of wire fraud,]

[court hearing pending. She is facing 20 years in prison]

Well, she cashed in some

of the money, yeah.

[the youngest and wealthiest female billionaire in the US.]

[Several months later, The Wall Street Journal released]

[an investigation that brought about the exposure of]

[Theranos. Forbes subsequently revised Holmes' net worth]

[to be zero. Theranos shut down in 2018. As of spring of]

[2020, Holmes is charged with 11 counts of wire fraud,]

[court hearing pending. She is facing 20 years in prison]

This was a textbook bubble. [the youngest and wealthiest female billionaire in the US.]

[Several months later, The Wall Street Journal released]

[an investigation that brought about the exposure of]

[Theranos. Forbes subsequently revised Holmes' net worth]

[to be zero. Theranos shut down in 2018. As of spring of]

[2020, Holmes is charged with 11 counts of wire fraud,]

[court hearing pending. She is facing 20 years in prison]

She was blowing it up

in hopes that

There's an expression in the Valley, "fake it till you make it." "Pretend until you actually do it." Is Tesla a bubble? Tesla has a product, it has customers, it has an army of fans. It's sold hundreds of thousands of cars. What about the share sales? Aren't they essentially donations? They're not exactly donations. Tesla has awful financial management. Just awful. In terms of financial management, Tesla operates like a small startup, even though it's a huge car manufacturer. That's inexcusable irresponsibility. The company's bank account has enough money to last it just three or four months. That's an indefensible level of risk for such a company.

At the same time, they have a fairly reliable product. They have a huge international network of charging stations. I mean, the product's cool, right? Someone will buy Tesla if they start to The Chinese? China's out. Why? Big politics got involved. Trump's grabbed hold of the Valley and all this stuff, and charged the There's this committee called CFIUS. It's a trade commission that decides which export deals are okay and which aren't. They recently said that, in addition to the defense industry, the state should also oversee IT. If you're an American company that develops AI technology, like autopilots or whatever with potential for military use, they will have to approve the sale of your company and even your stock.

That's why local Chinese venture funds are closing one after the other. Stas! You work for Tesla. Yes. [31 years old]

Stas! You work for Tesla.

Yes. [31 years old]

As an engineer.

No. [Works for Tesla]

As an engineer.

No. [Works for Tesla]

What then?

Engineering manager. [Works for Tesla]

You supervise engineers.

More or less. You supervise engineers. More or less. In plain terms, your army of engineers stuffs this beauty with all the features that we know of. In fact, my army is responsible for everything starting and running properly on this thing. All of the software in this car.

Damn! We're touching the future right now, aren't we? Or rather the present. Actually, for me, this is the past. 'Cause I first saw the current firmware about six months ago. Right? 'Cause we constantly update it and add new features and new cool things and roll them out for users all over the world. You can't see this, but I basically have this huge tablet over here. And What is it showing? Actually, it's showing that we're on Mars and providing navigation on Mars. It's one of the car's Easter eggs, to show that you're on Mars. This is an actual map of Mars. Why? What's the idea? It's a reference to SpaceX.

If we go to About This Car, it will show the properties of one of SpaceX's ships. How about we get warm and comfy? Damn! It's like those bigscreen fireplaces they hang in offices. Know what's missing? The smell of burning wood. Would've been better. The sound! The sound!! Yeah, it does sound good. (laughs) Anyone ever complained they thought their car was on fire? (Dud') Damn! Are those vegetable patches? They are! For gardeners. That's normal here. Say, you're a gardener, you wanna dig around in dirt a little and grow something to unwind. You go outside and garden. Some employee enjoys gardening Yeah.

They have some gardening patches out here and they come out on breaks to to grow some cabbages. Have you seen Elon Musk? I sit pretty close to him. I see him every Tuesday. He sits out with everyone? Yeah. Well, not exactly out. There's the office floor, and then a small room, it's open too.

Yeah? And his open office is in that room. And like all the local billionaires, he's super chill and works next to everyone? Yep. Yep. He walks around. He talks to people. I first met him in my first week on the job. I didn't know if he was around or whatever. I come out of the, excuse the details, bathroom, staring at my phone, typing, talking to someone.

Someone walks past me and goes: "Hey! Hi." That's a standard American greeting even for people you don't necessarily know. I was already used to it. I went, "Hi." Without even looking up. And I sensed something's wrong because people started turning heads. People still turn their heads when he walks past. I looked up. It was Elon. A real live Musk?! Yep. The real deal.

(muffled Wizards in Winter by TransSiberian Orchestra starts playing) That's another mode. What is it doing? That's the Christmas Mode. It's presenting itself or something? Something like that, yeah. "Come here, driver." You could say that.

Woah! It's starting.

- Damn! That's crazy! Look, it's flapping its wings. I understand that it's like car striptease? Sort of. It's like she's undressing so you Yeah. For your visual pleasure. I'm not leaving my baby. I'm not! Despite this undressing act! So tempting. She's tempting you with those open doors. Holy shit! Over there is Cupertino, which you probably know by the "designed in California" guys. That's the site of Apple's presentations. Yeah. Behind Cupertino is Milpitas and other small villages. That way's Mountain View, home of Google. Those two large hangars are where NASA used to build blimps.

Google's leasing them now. They leased that place for 50 years because it has an airfield for jets. 'Cause Google's execs

fly on private jets. And not just Google's execs. And not just Google's execs. Also at this Moffett Airfield, the place with the hangars, Yuriy Milner hosts his own Nobel Prize called the Breakthrough Awards. [Some of his investees include VK, Facebook, Twitter,]

[Alibaba Group, Xiaomi, Spotify, Airbnb and others]

Yuriy Milner hosts his own Nobel Prize

called the Breakthrough Awards. [Some of his investees include VK, Facebook, Twitter,]

[Alibaba Group, Xiaomi, Spotify, Airbnb and others]

He organized his own Nobel Prize.

[Some of his investees include VK, Facebook, Twitter,]

[Alibaba Group, Xiaomi, Spotify, Airbnb and others]

He figured the Nobel Prize sucked

because it's awarded to old people He figured the Nobel Prize sucked because it's awarded to old people for things they did ages ago, and it's all outdated, and the discipline list is outdated. And the prize is too small. Let's award more money for pioneering achievements here and now. [A Nobel Prize in 2019 awarded $1,100,000]

Let's award more money for pioneering

achievements here and now. [A Nobel Prize in 2019 awarded $1,100,000]

They organized a really cool prize.

[A Nobel Prize in 2019 awarded $1,100,000]

Hosts include Zuckerberg,

Milner himself, Musk. Hosts include Zuckerberg, Milner himself, Musk. What's your take on Yuriy Milner? I think we should be proud of Yuriy Milner. He's a true He's probably the only Russian name in the Valley's investment circles that's precisely on the same level as all the other local Silicon Valley VCs, venture capitalists. The deals he's made and the outcomes of those deals, including investing in VK, they're brilliant, well thoughtout moves that, from the top of my head, none of the other Russian investors have made. Same with Facebook, in which he invested very early on.

Milner is like an apostle of venture capital. Milner is great in that he's the first Russian investor who made a fortune using venture capital and proved to the world that Russia has both money and the brains to manage this money wisely, and also entrepreneurs to capitalize on. But the bulk of his investments weren't in Russian business? Later on, no, but he started with Russian business. His main asset was Mail.Ru, which he basically collected piece by piece and took it public. Later on, when they were going public, he invested in Facebook, he invested in Twitter, he invested in Groupon, Zynga

The list of companies he and his fund DST have invested in goes on and on.. He's probably one of two or three people in the Valley. responsible for the idea of the unicorn race.. A unicorn is a company that costs one billion dollars, yep, and is still privately owned.. It hasn't gone public.. The reasoning used to be: "I'll create a company. Let it grow.". "Once it's worth $1 billion, I'll go to the stock market. From then on, we'll be a public company.". "We'll issue new shares. Investors at the stock market will buy them.". "That's how we grow. We'll know exactly how much we're worth.". Milner said: "Uhuh.". "We can raise enough money. "to go public when the company's worth $100 billion rather than $1 billion.". In the movie Social Network, Sean Parker tells the young Zuckerberg:. "A million dollars isn't cool. A billion dollars is.".

Then Milner comes along and says: "Dude, a billion dollars isn't cool.

A hundred billions are." Milner is in the movie? No, he isn't. But he would've been in the sequel. Because Milner came to Facebook and didn't just beat all other offers. Everyone here was doing the cuckoo sign at first: some crazy Russian showed up and bought the most expensive house in the Valley. Something like $120 or $140 million. [a house in the Silicon Valley for $100 million]

OUCH! [a house in the Silicon Valley for $100 million]

The most expensive house

ever sold in the Valley. [a house in the Silicon Valley for $100 million]

Fence?

No. No fence.

Fence? No. No fence. Well, a chainlink one. Then he comes to Facebook who are unable to raise more money than in the previous round. I believe they'd gotten $6 billion. Now, they were being offered $4 billion. Milner shows up and says: "Guys, I'll give you ten." "I can also tell you're having trouble raising money." "I'll be your agent. I'll help you raise money in all future rounds." As an adviser? Yeah. He lead them all the way to IPO on NASDAQ, where they were worth $70 billion, I believe, at the time of offering. Today, they're worth $400 to $500 depending on stock price. How much did he multiply his investment? Uh Seven times. At least.

In the process, he made money off of WhatsApp. 'Cause Facebook bought WhatsApp with a substantial amount of their shares. [A substantial portion of this sum was paid]

[with Facebook shares]

'Cause Facebook bought WhatsApp with

a substantial amount of their shares. [A substantial portion of this sum was paid]

[with Facebook shares]

Milner was an early investor

of WhatsApp too. Do you think it's a team? I mean, he manages a fund where a team of people predicts where to invest. He has intuition and great understanding of the market. 'Cause the most important thing here today is predicting what's gonna happen tomorrow.

Today, AI and biomedicine are king. Virtual reality, which was popular three years ago, has fallen off considerably. It's not as hot anymore. But biomedicine and development of AIs for soil irrigation are super in. What's biomedicine? Biomedicine means biohacking. The things that help you live longer and enjoy your health and life itself for longer. Like erection at 80? Exactly. This project will surely get billions in investment money. He has a great team. He has the best team in the world. And they're not Russian? It's a mix. Some are Russian, some aren't. Why is he so reclusive? His wife gave an interview to the Science and Life magazine.

And Tatler.

I understand his wife is a bigtime local socialite. They live an incredibly complicated life. They probably put together more parties than anyone in the Valley. His annual Gagarin Party, which just happens to share its name with our fund, gathers all the local big shots in large quantities. Every morning, somebody has breakfast at his place. Every night, someone has dinner at his place. Every week, a party for around 30 people. When he's in the Valley, the house is never empty. And it's complicated event management. It's continuous event management. What for? For fun or for business? For business.

Milner says that venture capitalism lives and dies by asymmetry of information. One investor has a little information. Another has a little more. The investor with the most information ultimately profits off of everyone else. That's why, to possess more information than anyone, you need to maintain social connections, the network, with all the important people. Regarding the fact that everyone here is either a startupper or an investor. Dude in Moscow saves up half a million dollars, they're thinking of getting a place in downtown. He'd think differently here, wouldn't he? Down here, he'd think: "Why would I buy something for half a mil?" "I'd rather found my own fund and start giving out small"

Not even a fund! Not even a fund. They'd go to a meetup where startuppers present their projects

A meetup? - Small gathering.

- There's several a day, right? There's like 50. If you open Events Near Me on Facebook, it'll take ages to scroll through them all. What is it like? Guys just gather and..? Yeah. Someone's found a place where you can sit people down. Someone has a friend at Silicon Valley Bank, they tell 'em, "We're doing a biotech startup meetup." They go: "Hey, that's cool. We wanna pitch in. We'll pay for the wine." You have a little standing buffet, a stage, a screen and projector setup. They get guests from Google, Facebook, engineers. They're listening, going: "I think this will take off." "I wanna invest $10,000 in you." That's how people raise their first hundred thousand.

How does our fund work? There's always a hierarchy, right? We know that when we invest in 30 companies A little into each. How much is "a little?" $200 to $400 thousand. Uh-huh. This is after they've gotten the initial, angel funding. They have a product, some numbers. Sometimes even revenue. Out of those thirty, ten will be doing very well. Out of those ten, we'll pick five, maybe seven, strongest ones, and give them a million, a million and a half more. Out of them, one will be doing super well, and give a 3x return on the fund's investment, with another 3x return from the rest of the companies combined.

I.e., to make a profit, you need to make at least 30 deals if you know what you're doing or 100 deals if you don't know what you're doing. You said thirty. How many of them will fail? Most of them. Most of them. But others will make enough to make up for it?

Yes. And make a profit. Percentage of failures in the Valley is very high. A lot more startups fail than take off. Interestingly, the percentage of failed startups today is likely much greater than 15 years ago. When I travel My major is venture capital, the Valley, innovative ecosystems, corporate innovations. I travel a lot and I keep hearing: "A lot more startups fail today in the Valley." "Does that mean the Valley is losing something, its secret sauce?" Quite the opposite.

Because the business model of startup financing and the process of startup creation have changed drastically. If you have $50,000, 15 years ago, you couldn't do anything with them. Today, you can open a new startup with this money. All the startups that came out of our studio and all the new upand-coming startups making waves, with rare exceptions, they don't need to raise $5 million. They can take off by raising $250 or $500 thousand, maybe a million. Only when they're successful, they'll then raise big money. This means that if you had a crazy idea 15 years ago, but had no money, you needed a crazy person sharing your vision with $5 million in the bank.

Today, you need the same kind of crazy person, only with $250,000 in the bank. Those are much more common. The most idiotic idea for an app or startup in your memory?

Or the most weird and wacky? Hmm Like the app from the Silicon Valley show that looked for Like the Bro app. I believe you can't go wrong with the Yo app here. At some point I feel this was the quintessence of this rush when people put money into just about any mobile app. Some guy made an app with only one function — to send someone else a "Yo." You type anything else. And they had a whole People talked with straight faces that this was the future of social communication, that "Yo" could be used to express many different feelings.

And Yeah. They successfully raised money. They raised several million to develop Yo. Didn't quite take off. They teach the idea of investing ever since you're a child here. My kid's eight. I explained investing to him, and now he invests money. He has a portfolio that he funds with the allowance money that he's been saving up for two years now. He's investing this money in the four companies he believes in. He's investing in Google, Netflix, Microsoft and Amazon. Hold up! Virtually or for real? No, I bought pieces of those companies for him. Real Google shares? Yes. He now follows his portfolio and he understands that money is not something you hoard in a golden safe and then spend on pretty things, but rather that money is a tool.

It's a tool that has to work. It's like your employee. You find them a job and they do something useful. Somewhere else, while you don't actively use them. All Americans understand this key idea since they're little. It's very important. When you understand this, you also understand the idea of diversification, i.e. that if you put all your "soldiers," your money in one place without spreading them out and lowering risks, then you'll probably It's super risky. You're likely to either make very little or lose it all. You don't get investment rounds for sitting on your ass. At some point, you have to show a profit.

And this profit has to be a multiple of Your profit combined with speed of your growth determine your valuation. You may bum your initial money off people on the idea stage. You can raise $500,000, a million, two million in investment money with just your idea and your name. "My name is Yuriy Dud'. I'm super successful on YouTube." "I have this idea for a platform to promote upand-coming YouTube faces." "Here are some designs and ideas. Please, give me funding to get started." At that stage, yeah. How much do you think we could get? I think you could raise two million on the seed stage. Dollars? Yeah.

- What do I do with them? Depends on your business idea, but you'll probably hire engineers.

If you're smart about it, you'll hire engineers in Russia or Belarus or something. 'Cause it's gonna be much cheaper and you'll be able to hire some super talented guys that you wouldn't be able to afford here. With that money, you'll build your MVP, the initial version of your product. My what? MVP, minimum viable product. In my world, that stands for "most valuable player." (Dud') That's why I got confused.

Gotcha! You'll build the initial version of your product that will prove to the investors and you that you have a socalled product-market fit, i.e. that your product does indeed satisfy an existing demand.

Once you see that people are returning and the product's growing, you'll go and get the next round, this time, for expansion. You'll get your Round A, [It starts when the firm enters the market, begins]

[serial production and hires a full team]

which you'll spend on growing your product as

quickly as possible without getting sidetracked [It starts when the firm enters the market, begins]

[serial production and hires a full team]

to millions and billions

of users. In Russia, where the entrepreneurship culture is far less evolved than here, there's a stereotype: young startuppers raise capital, then quickly spend it on huge offices and expensive cars — all the selfgratifying things that have nothing to do with the business.

Does this ever happen here?. Well, anything's possible.. With tens of thousands of startups, anything's possible.. I'd say that local investors are much more professional.. Because funding startups, investors are funding specific entrepreneurs.. They always keep their finger on the pulse.. They also know what to expect.. Particularly, when startuppers don't exactly act right,. smart investors immediately know what to look at, how to assist and what to prevent.. That's why situations like what you described are possible,. but they're extremely rare.. Because here. If we look at the most successful startups,. what they spend on private jets after they've become multibillion companies is irrelevant,. because starting out,. they normally rent the cheapest office or even manage without one these days,. they save on everything,.

And certainly don't buy expensive cars. The idea can come from someone who's not a programmer, right?

Of course. The idea comes from someone with a vision for a product. In your head, you're like: "I'm reaching this audience and solving this problem." That's what product managers do, or in the case of a startup, that's usually the founder. Not all founders are programmers? A lot of them aren't. The most common setup for a typical tech company is two founders, this is very common, one's with a product/business vision, i.e. a people person and a problem person who arranges things, the other's a tech guy.

It's a common synergy that has proven its effectiveness. Like Richard and Erlich from Silicon Valley? Yeah, sort of. At 23, you signed a deal that made you a millionaire. [28 years old]

[Cofounder of the selfie mask app MSQRD]

At 23, you signed a deal that

made you a millionaire. [28 years old]

[Cofounder of the selfie mask app MSQRD]

Correct. [28 years old]

[Cofounder of the selfie mask app MSQRD]

Can you briefly tell us about it? About the deal itself? About how you created the app MSQRD, which took off so well that it got purchased by Facebook. Well, I didn't create it myself. We had a pretty big team.

In short, I started coding at 14. I always dreamt of creating startups. I read about it on the internet, in magazines. I founded several companies. My childhood friend Sergey Gonchar happened to move here. Together, we founded several companies. Eventually, we designed the mobile app MSQRD, which quickly became rather popular. At some point, it appeared on the radar of several major players, including Facebook. We did a lot of thinking and decided this was the right move at this stage in our careers and agreed to sell the company to Facebook. This was December 25, 2015. I was browsing App Store.

I regularly download App Store's top 200 or top 500, whatever's new, always on the lookout for new stuff. And I read in some local Belarusian news that they'd held a hackathon with such and such new projects. I read about it and was like: "Cool idea!" It said they'd promised to release the app by Catholic Christmas. I'm like: "Hey, it's the 25th. Let's see if they kept their promise." They had. It just released. I clicked on it. I open it and go: "This is nice. This will take off." "This will definitely take off. I even know how I'm gonna promote it." I check out the publisher. It's an Indian name.

"Yauheni Neuhen." When you transliterate Belarusian names into English, they always look funny. It actually was Yavgeniy Nevgen, you know? "Yauheni Neuhen." I thought it was Indian, and was like: "Wait, I read about Belarusians!" I find him on Facebook and start typing a message, and it loads the history, showing that he's been trying to reach me for 18 months, but Facebook's been filtering it out, so I never knew. I got so embarrassed. We agreed to meet. I talked to him and Yura Gurskiy, [Was a mentor and investor of projects]

[like Flo, Prisma, MSQRD,Maps.Me]

whom he already knew —

Gurskiy was the project's mentor.

[Was a mentor and investor of projects]

[like Flo, Prisma, MSQRD,Maps.Me]

They said: "We don't need money at the moment.

Nothing to spend on just yet.". [Was a mentor and investor of projects]

[like Flo, Prisma, MSQRD,Maps.Me]

"But we could use help in the States.". "You're in the States. Help us get big in the States.". "We have 500 users. We wanna get big.". I started 500?

- 500 users total.. I was user #515.. It was basically all friends of Zhenia, Seriozha and another Zhenia.. [Mostly used by the older generation.]

Can you explain what MSQRD is to people

who still use Odnoklassniki*?. They're masks that appeared on people's faces when they made selfies or shot videos?. Instagram introduced these masks after they bought you?. Yes, on Instagram and in other Facebook products,. like Messenger and the Facebook app itself,.

It's our technology, our platform and our masks. So Facebook didn't just buy your app? They bought your solution and started integrating it into their products? Yeah, the idea was to buy the team that created the solution and all the artwork and the solution itself. They didn't much care about the app itself. They wanted to introduce this feature in other Facebook products. Let me get this straight. When a company like Facebook buys an app, they're not buying an App Store icon — they're buying the solution? Of course. In most cases, pretty much always, Facebook has little interest in the product's users, because Facebook has

Enough of its own. several billion users. Billions! Few can match that number. That's why they buy solutions and the people behind those solutions. This was in March of 2016? Yes. Were Instagram stories around at the time? That's was Facebook's plan — to launch stories with masks as a day one feature. So they launched after? Yes. I understand that one of the reasons stories took off so well was the abundance of strapped on extras, including masks? Of various artistic tools, yeah. Draw something, put on a mask. Now I understand the idea behind the deal. I get why they did it, 'cause when you buy an app with — how many users did you have, ten million? Thirty.

Thirty at the time. Okay. Whatever. What do you do with them? Why buy you? Why not hire one of you and have them explain how it works? Well, for starters, the technology itself wasn't unique. There were even similar opensource solutions available online. The base technology is called Face Tracking. Those technologies were available — you could download it from github or something. Our technology, developed by MSQRD's cofounder Zhenia Zatepiakin, he's the creator of this technology, it was the fastest solution for mobile phones. As you know, mobile phones have certain limitations in terms of performance.

Zhenia Zatepiakin's scientific work aimed to develop an algorithm that would be as precise and as fast as possible on mobile phones. We did a cool stunt with Jimmy Kimmel. That was you? Yeah.

- He didn't notice you first? His director followed Zhenia Zatepiakin, one of the cofounders, on Twitter. Zhenia told me. I went and checked it out, and sent him a direct message, saying: "Hey! Heard you liked MSQRD?" He said: "Yeah,Jimmy's daughter and I love it." "Cool app. Guys did well." I'm like: "Can I call you?" We talked. I did my homework — I watched like 20 episodes of Kimmel Live, found out he didn't like Matt Damon.

His girlfriend had left him for Matt Damon. And every episode, he says: "We have" For those who don't know, Kimmel Live is Evening Urgant. One of Evening Urgants. Yeah, there's lots of them here.

They're all alike. And he's been making fun of Matt Damon for years? "We'll have Matt Damon on." Followed by: "My apologies to Matt Damon. We ran out of time." I went: "Jimmy, how about we make a mask of you?" He says: "Can you make one of Guillermo?" He's like our Hrustaliov? Hrustaliov. That's their Guillermo. I went: "No problem. We'll throw in a Matt Damon mask." "For you to try on." He laughed. We couldn't make it in time before he needed to go on air.

And he just said: "You know what? Screw it. You have a great app. I'll show it off as is." He showed us once. They fooled around with it and laughed. It aired. People noticed the app. We later finished the mask, sent it to him and said: "Jimmy, here's your mask. Here's Guillermo's. No Matt though — we ran out of time." He laughed for five minutes nonstop on the phone. He said: "Well, now I just have to feature you again." And gave us like five minutes of screen time. Five days later, you closed the Facebook deal? Not closed yet. It was in the process. The deal took four days to close? It was all done very fast.

It coincided with the weekend, and we had to pay the lawyers double. For some reason, Facebook wanted to do it as quickly as possible. Probably to avoid this information from spreading to other corporations who could contact us with a better counteroffer. They didn't want any setbacks or leaks. So they wanted to close the deal as quickly as possible. You mean you had to stay in the office round the clock, at night too, while the lawyers were handling the paperwork? Or you weren't there physically? They didn't spend four days STRAIGHT doing the paperwork. We didn't spend four days in the office with the lawyers.

It involved different people: Belarusian lawyers, Facebook lawyers, our American lawyers. It was a lot of work, and it was done in two shifts: Belarusian office and American office. How is your work evaluated in these situations? Through discussion. Depends on your role. If you're a strategic advisor that does the M&A, then it's 4%, 5% or 6%. [that merges two or more companies into on.]

If you're a strategic advisor that does

M&A, then it's 4%, 5% or 6%. [that merges two or more companies into on.]

If you simply introduced them and they signed

the deal themselves, you get 1%. If you simply introduced them and they signed the deal themselves, you get 1%.

Zhenia Nevgen became a multimillionaire after this deal? Zhenia Nevgen is a very talented and successful young man. Can't confirm any numbers. Millions of bucks at 23. Is that a burden? They asked me about a month after the deal at some conference in Minsk what was different in my new life. I said, "Now, I take the taxi." 'Cause before that, we used to ride the bus. That's how the first few years went. The money we were getting Importantly, we didn't get the entire sum all at once. There wasn't a moment where all the money for the deal instantly appeared in our account. They paid gradually, and it actually took a while.

Also, we tried to invest the money as soon as we got it. We didn't start spending on expensive things or something. We only got the things we desperately needed as soon as we got the money, but there was never a moment where our world view suddenly changed. What is that? That's our new app, currently being developed by the exMSQRD team. It's called Loóna. Like the Russian rock band. It helps people fall asleep or get in the mood to sleep — relax after work, forget about the A lot of people flick through Instagram and watch YouTube because they can't just get into their bed and fall asleep after work.

I know that a lot I can tell you're one of those people who instantly crash out. Yeah, totally. But You don't idle on Instagram before falling asleep?

- No. Well, in reality, a large number of people can't fall asleep quickly. They keep thinking about the events of the day, their issues and worries, their plans for tomorrow, and they need a distraction. What do you do here? You color? We have a number of scenes. They're all particular places. So it's mechanical in What happens if you swipe? When you're done coloring the scene, it puts on a sleep story. It's a story about the place from the scene.

The user shuts off the screen, puts the device down on their night stand and listens to this story that helps them doze off. The story's in English? Yes, in English. So the Belarusians immediately went global again. We'll probably add Russian language too. What do you think about MSQRD? I'm astounded by how this project was starting out and what it's become, and how this in a way led to the explosion of the Belarusian wing of the industry. There's a ton of projects right now created by MSQRD's cofounders or former employees. This is a success for the CIS as a whole. 'Cause now, when we present ourselves, many know about the successes of MSQRD, Prisma, Wargaming.

This makes it much easier to get funding. Reliable gang? Yeah! If those guy made it, why can't these? Because there hadn't been too many cases of successful company sales in the Valley. Your dog is from Belarus? Yes! From Minsk. It's a Swiss mountain dog, but it hails from Belarus. Was she a gift from your partners? No, I bought her myself. We wanted to get this breed specifically, There were lines for them in Moscow. The puppies are sold before they're conceived. It's crazy. "We're mating the dog and the bitch in three months." "We'll probably have 4 or 5 puppies." "But we're selling them now." (Dud') Damn! Sounds like a startup! It's crazy. My aunt said: "I know a breeder, but she's in Minsk. You'll have to drive for the doggie." We did. Went and got the dog and came back.

You're obsessed with Belarus, aren't you? No! The dog was my first and least successful Belarusian investment. All others were great. Legend, or maybe truth, has it that Masquerade Technologies was born as a result a 48hour hackathon. There's some truth to it, yeah. You came together A hackathon is an event where programmers develop all sorts of things. The reason I know this isn't because I'm smart. Sports.ru just hosted a bunch of them. So I got to see it. That's where you first showed your whole thing with masks. I read that one of the masks you showed off was a mask with mustache.

It belonged to Aleksandr Lukashenko. Is that true? It's true. But this mask was never available to the public.

Funny story, actually. When we came to the hackathon, we had some things prepped. Most importantly, we had the face tracking technology, but we didn't have everything ready for the app. Well, hackathon rules state you shouldn't have ANYTHING ready. Yeah. Of course, we did the majority of development at the hackathon. We realized we couldn't put in all the masks that we wanted in time. We decided to use some of the most recognizable faces. Well, who's the most famous, most recognizable Belarusian? So yeah, at the hackathon, we had this mask. But we knew that we couldn't go general public with it, so we got rid of this mask after the hackathon.

Why not? For starters, our criminal code prohibits offending the president. That was a sufficient reason. Fellow countries. Nevgen's currently involved with the startup Flo. Yeah. He's an investor. It's a menstrual cycle app? Yeah. It's great! There's a huge number, like 80 million women around the world use it to track their cycle. And it brings money? It does. There's a subscription fee. The cycle can slip. It's not synced with the calendar. It depends on a bunch of factors. Knowing when your cycle's coming up is very handy. With Flo, several hundred thousand women every month plan to get pregnant and get pregnant.

The fact itself that people now know what's going on with them, their body and their health, that makes us happy. This is a calling for us. It's a dream. Our bedtime app Loóna. Again, it helps people become more productive, because they get a good night's sleep. We know we're having an impact. We're doing something meaningful and valuable. That's very important to us. Who's developing it? Other Belarusians? Belarusians in Gomel, in Grodno, in Vitebsk? Yes, it's made by Belarusian guys, but It's getting harder and harder to hire in Belarus. There's a lot of IT companies in Belarus today. There's series competition for quality staff.

We hire people from all over the world. We bring in people from Ukraine and Russia. We meet them at the airport, help them situate, sit them down. For this particular product, we're currently running a pretty large HR campaign. Hiring You're looking for Hold on. You're telling me that Belarusian engineers are so loaded that you have to hire in Russia and Ukraine? They're in such high demand that you have to bring in people from other countries?

It would appear so. You can certainly say that software engineer is a very popular job in Belarus. Why are there so many of you? Software engineers? Yeah! Belarus is like a motherlode.

These guys created Wargaming. These ones made Masquerade. And you just keep going. Why? Lots of smart people. No oil. Maybe that's why. No oil? Well, there's a little. But barely. What a reason! I think there's a link. Why? The link is that when you have a small country with a small domestic market, you have to produce things for the entire planet Earth. Maybe that's also the reason why Israel is such a big IT country. Estonia too. Small country. No domestic demand. You have no choice but to come up with something to make money. They don't have domestic demand. Meaning, they can't sell anything back in Belarus.

They don't have the money in Belarus to buy it. Say, a Russian entrepreneur starts developing an innovative product. Who are they creating it for? For Gazprom, or MTS, or Sberbank, or any other local Or the Russian market in general. Exactly. They start making money off of it, and they can no longer go foreign. Why? Because business is different

everywhere. All companies have their own mentalities. You need different products And Belarusians? Belarusians don't have any local buyers! They aim for the American or the global market from the start. Two countries are like that: Belarus and Israel.

Also, their government is pretty chill about it.. Funny, isn't it? The head of the Technopark came here.. [It made cryptocurrencies and the blockchain legal,]

[established English law institutes and visafree entry]

[for international employees of the local IT cluster]

Funny, isn't it? The head of

the Technopark came here.. [It made cryptocurrencies and the blockchain legal,]

[established English law institutes and visafree entry]

[for international employees of the local IT cluster]

Right?

- He's a state official back in Belarus.. [It made cryptocurrencies and the blockchain legal,]

[established English law institutes and visafree entry]

[for international employees of the local IT cluster]

They told me: "Kolia, meet with him.

He's a cool dude.". [It made cryptocurrencies and the blockchain legal,]

[established English law institutes and visafree entry]

[for international employees of the local IT cluster]

Wait, what's a technopark?.

Wait, what's a technopark? They have this place in Minsk

It's like a Minsk Skolkovo*?

- It's a Skolkovo made right. Right? As I talk to him, I realize that they have the right idea. For example, he said: "If a Belarusian is moving to the Silicon Valley to found a startup "or to work at Google, "I'll help them every way I can." "I'll go to their place and pack their things." "Because I know that they'll either come back "with knowledge and money, "but most importantly knowledge of how you do it right, "or they'll hire Belarusians from over there, "because they know them and how to work with them, "thus we'll have money and expertise flow our way." Okay, you get an A in GR for massaging the Belarusians as an investor.

Hold on, I was being honest!. Sure, but then how come the CEO of Wargaming has been living on Cyprus for so many years?. [moved to Cyprus in 2011. The company also moved its]

[headquarters to the island — to efficiently control its]

[international operations. The company's biggest office]

[is still in Minsk, the workplace of game developers and]

[coordinators of the other 15 offices. In 2016, Bloomberg]

[estimated that Kisliy's net worth had surpassed $1 billion]

It's not easy to run a big business

in Belarus. If you look at. [moved to Cyprus in 2011. The company also moved its]

[headquarters to the island — to efficiently control its]

[international operations. The company's biggest office]

[is still in Minsk, the workplace of game developers and]

[coordinators of the other 15 offices. In 2016, Bloomberg]

[estimated that Kisliy's net worth had surpassed $1 billion]

Again, if the Belarusian government

supports all startuppers,.

[moved to Cyprus in 2011. The company also moved its]

[headquarters to the island — to efficiently control its]

[international operations. The company's biggest office]

[is still in Minsk, the workplace of game developers and]

[coordinators of the other 15 offices. In 2016, Bloomberg]

[estimated that Kisliy's net worth had surpassed $1 billion]

how come the head

of the BIGGEST Belarusian corporation [moved to Cyprus in 2011. The company also moved its]

[headquarters to the island — to efficiently control its]

[international operations. The company's biggest office]

[is still in Minsk, the workplace of game developers and]

[coordinators of the other 15 offices. In 2016, Bloomberg]

[estimated that Kisliy's net worth had surpassed $1 billion]

And Prokopenia served prison time.

And Prokopenia served prison time.. [in spring of 2015 for unregistered business activity.]

[Prokopenia was released in late 2015.]

[In February of 2016, the case was dropped]

Yeah. How come?

I mean, that's insane!. [in spring of 2015 for unregistered business activity.]

[Prokopenia was released in late 2015.]

[In February of 2016, the case was dropped]

I'm not saying they're

great and perfect.. [in spring of 2015 for unregistered business activity.]

[Prokopenia was released in late 2015.]

[In February of 2016, the case was dropped]

They're moving

in the right direction.. [in spring of 2015 for unregistered business activity.]

[Prokopenia was released in late 2015.]

[In February of 2016, the case was dropped]

We don't even have

THAT in Russia!. You know this joke about Belarusian business?. Belarusian businessmen are like passengers on a public bus:.

One half is sitting, the other's shaking. Yeah Then how can you say that..? If Elon Musk was Belarusian, he'd still be sitting for PayPal. Popular joke. Also works for Russia. I'm not saying you should do business in Belarus. That's just my answer to why Belarusian IT is on the rise. It's a combination of a nonexisting market, lack of state meddling in the early stages If a Belarusian Why do startuppers do so well in Belarus? You can't rob them. They have jack shit. And so they support them. If they build a big company over there, then sure, trouble will ensue. A ton of people will suddenly go: "Hey, they've got money!" That makes sense.

But startuppers have nothing. And there's no market.

And the country's dirtpoor. That's why the first thing you make competes with Google. You have your own Skolkovo, don't you? HiTech Park. And unlike Skolkovo, it works? Yeah. HTP is a state organization that surrounds itself with tech companies. The biggest benefit for these companies is tax reduction. You have to meet certain criteria. You have to have a business plan. You have to adhere to this plan. Then they accept your company as a resident of the HTP, and you pay reduced taxes. Go create and develop? Yeah. But follow regulations. Regulations, sure. It's in Minsk, right? The company doesn't necessarily have to be somewhere physically.

It could be located anywhere. So the Park doesn't exist? It exists. Yeah? They have learning facilities, they have a coworking, they have offices for lease for IT companies, but it's mostly spread around. [In early March, the Silicon Valley instituted]

[a strict isolation policy] How's your dog doing?

[In early March, the Silicon Valley instituted]

[a strict isolation policy] The dog's doing wonderful. It's super happy. Some friends told me their dog had had a rare injury — a dislocated tail. 'Cause everyone's always at home, and it kept wagging its tail 24/7. Mine's holding in there. She has a strong tail.

We showed off the Good House.. [project in San Francisco, where he shares his house]

[with Dumik and other startuppers]

This was all very sweet,

when people could come out.. [project in San Francisco, where he shares his house]

[with Dumik and other startuppers]

But without the freedom

to leave the house,. [project in San Francisco, where he shares his house]

[with Dumik and other startuppers]

is it still sunshine and rainbows?. is it still sunshine and rainbows?. I'm grateful that I'm facing this situations in this house. and in these circumstances, because Here's why.. A friend called me the other day and said: "Our house has a pool.". "We're chilling in the pool." I went:

"Well, my house has people.". "Other people that you can talk to from six feet away.". He was like, "Daaamn!" You know?. In these circumstances, your friends, family and neighbors are priceless.

He envies you?

- Of course!.

People to spend time in your backyard with. We comply with the rules of isolation, of course. We occupy different floors in the house, but it's a shared yard. We comply with the rules of isolation, but we might go to the yard, sit down at a safe distance and talk, drink tea or sing songs with a guitar. We do various events in Zoom. For example, my housemates Dima Dumik started this cool dance in Zoom that brings together hundreds of people from all over the world. Everyone's dancing at home, but it's like they're dancing together. It proved to be a great workout, both physically and mentally. Everyone in the Valley either worked remotely or was prepared to.

I.e., everyone had the infrastructure. So once the initial news from China started coming in, people took their kids out of schools and went into selfisolation. That view behind your back is called selfisolation, right? I'm super lucky. I know that it's as if I was preparing for this, for what's going on right now. I'm even luckier than it looks! My inlaws are stuck here with us. Is it lucky though? Of course it is! They're saints! They tolerate my kids. When we started to go crazy in the first two weeks, when you realize your bed's also become your workplace where you can sometimes find chicken bones from last night's dinner and where your cat naps, all that stuff, we wanted to do something about it.

So my wife Tania put a schedule on the wall and we started sort of imitating a normalcy. We started to wake up on time, put on our work clothes, go outside and walk in circles around the house for half an hour to imitate the feeling of having walked to school, come back inside and only then get on our laptops and start working. That way, things started to resemble our normal lives. We shot several hours of footage exploring how the Valley worked, how startups were created, all those connections and inspiring stories and all the other interaction networks. Is it all now obsolete? No, it'll be that way forever.

Some things will stay, others will change.. Some things will become much stronger, others will probably go away forever.. What do you think will go away forever?. I'd say, the excessive prioritization of location will.. It's one of the changes the Valley was already moving towards.. This microlocation: working specifically in Mountain View or specifically in Palo Alto,. or specifically in San Francisco.. This was already slowly changing.. Some had moved across the Bay to Oakland. simply because it was cheaper and had more to offer to a family.. Some had moved to the surrounding suburbs.. Some Valley companies would go: "We'll have hubs over here, here and here.". For example, Square said: "Our new hub is work from home.". [solutions for receiving and processing online payments]

For example, Square said:

"Our new hub is work from home.".

[solutions for receiving and processing online payments]

Why was this localized

hyperconcentration so important?. Why was this localized hyperconcentration so important?. Because you could meet up with anyone in the industry in like 10 minutes, or just bump into them.. It's like this magic soup.. Now that this magic soup has moved to Zoom,. turns out, it's doesn't really matter where you are physically.. The spirit and the culture matter.. Well, the spirit and the culture will definitely persist.. It's gonna be one big village,. only spread out geographically.. What about all the unique features like competitiveness,. the endless influx of fresh blood,. the tolerance towards the crazy and the unconventional,. the tolerance to failure,. Stanford as this citadel of enlightenment. that attracts fresh blood, fresh minds and all that stuff?.

Will they all persist despite the coronavirus and the fact that you don't have to be next to others physically? Well done on the key feature checklist, actually. Yeah, it'll all persist, of course. Social connections change too. It's not just harder to work — managers have a harder time supervising their subordinates. Many managers switch to the socalled "seagull management," where you fly in, yell at and poop on everyone and fly away agay. You don't actually know what your people are doing, 'cause you can't see them, and it's all very unusual. When your toolset is lacking, you turn into a seagull.

"Seagull management!" Damn! So accurate! I recently read about some guys from Ukraine that had founded a startup for restaurants. Their app lets you order food before you arrive at the restaurant. They were in the middle of raising money, and you'd think that their startup would've keeled over. But that's the thing about Valley mentality — quick adaptability. They instantly repurposed their startup to help restaurants that never offered takeout before quickly learn to process orders and offer takeout. This adaptability to changing environment is the very DNA of the Valley. We're witnessing it right now.

Is Zoom the biggest company of the coronavirus era? I believe so. Zoom and all the remote medicine and remote education services. [Hackers are abusing this. In early April 2020, thousands]

[of private video calls were uploaded to the internet]

Zoom and all the remote medicine

and remote education services. [Hackers are abusing this. In early April 2020, thousands]

[of private video calls were uploaded to the internet]

There's a ton of nonconsumer

companies that work with businesses [Hackers are abusing this. In early April 2020, thousands]

[of private video calls were uploaded to the internet]

that also benefited

from the situation.

But Zoom's up there of course. Zoom's user base increased twentyfold. Twenty? From ten million to two hundred million. What is that if you convert it into money? It's like a spike, but most people won't actually renew their paid subscriptions. The important part is that user habits are being changed. User habit has unbelievable momentum. When a company manages to turn its product into a user habit for a large swath of people, that's guaranteed success. Zoom is currently becoming a user habit for 200 million people. As a result, they'll multiply their money, maybe not 20 times, but 10 times for sure.

How much were they worth before the corona? Their stock didn't go up by that much. Maybe about 30%. Currently, Zoom's worth is like Uber and Lyft combined. [and Uber's biggest competitor]

But that's not much more

than what it used to be. [and Uber's biggest competitor]

Because investors already had

high expectations for them. One, two or three companies that thrived the most with corona? Mine did. Very humble! I'm not being coy. It's just easier to talk about things that I know. We at Ecwid are super happy that it didn't affect us much. In fact, we're having an easier time now in some respects.

The reason is, what we do is help businesses go online, we've always been doing this. The demand for it is now enormous. We've always been a workfromhome-friendly business. We never had set work hours. No one's supervised your presence. You could not show up at all. Previously, we used to be work from homefriendly. Now, we're work from officeunfriendly. You used to choose between home and office. Office is no longer an option, is all. That's why the transition was so easy. We closed our offices much earlier than you had to in California or in Russia. That part of organizing work got easier. At the same time, the demand tripled.

In this context, we really wanna act responsibly. The reason is because this is where the Valley mentality comes into play. Which part of it? The part where you always shoot to win big in the future rather than cash out today. We know we're good on money. When small businesses face this kind of shit, our purpose is to help them. That's why we We had free programs to begin with. We considerably expanded our free programs. Made some previously paid programs free. Stuff like gift certificate support. Businesses that had to close down There's a local trend over here: support your local food place. It's basically like futures or donations, right? Yeah, yeah. It's exactly that.

We moved those things to our free programs to help those guys out. We offer free On a number of programs, we just said: "We're charging you nothing in 2020." "It's a bad year." "Leap year." "Let's not bring up money this year. Just use our services." It's super important, because there's a concept in the Valley called "longterm customer value," or LTV. Your current profit is not as important as this LTV statistic. Are there any companies that the corona straight up killed off? Of course there are. It killed off travel firms. What about the big players? The brands that we're used to. Most of those brands will get bailed out.

If it's an American brand, Expedia, Booking.com, all the airlines — they'll bail 'em out. They just print money for them, essentially distributing their losses across the nation. In case of America, across the world, because everyone depends on the dollar more or less. Is it the government that does this? Yes, it's the government. The government understands that a controlled economic loss is a lesser evil than 100,000 unemployed in a certain business sector. That's for a small sector. For a large sector like air travel, it could turn way uglier. What do you think is gonna happen to Tesla? On our way to the Valley, we wanted to test the Russian stereotypes like "Musk is clueless!" "Tesla is a bubble!" Everyone we met told us that it wasn't a bubble, that they had infrastructure, a product, yadda yadda.

What about now? Tesla is a great company. I have I dunno. Don't wanna stumble around with the camera. But I have a disassembled bike outside. I removed its battery, 'cause it's outta juice, and I don't wanna go to the station to touch any hoses. It can wait. Car's empty too. But Tesla is the only vehicle I drive these days. Because it's always charged. Solar batteries on the roof. It's complete autonomy. I don't need anyone. I love driving it. Moreover Is it a perfect company from customer's point of view? No. For example, I have to repair their fancy extending handles all the time. I recently called in Tesla service.

Again, they're perfectly adapted to this world. Because I scheduled the visit through their app.

Ohh! The guy came over. It's mobile service! You don't have to go anywhere.

They come to you. They fixed the handle and left. I got a notification from the app to pay for the service and I did. That was it. They're perfectly adapted to the corona world. The corona world will obviously come to an end. Tesla will stay. It's a great company. It's a great idea. I'm sure Musk will figure it out. I went to the vet to get my dog's teeth checked up. I made an appointment. They said: "When you arrive, don't leave your car. Just call us." I go there. It's all covered in signs saying "Don't leave car," "Don't go inside." I called them, said I was there.

A nurse came out, took the dog without touching me or the car and from a considerable distance. She went inside, and the doc called me on the phone. The doc and I talked on the phone the whole way through. I explained everything. Of course I'd filled out all the forms online prior. Afterward, they gave the dog back to me, again no contact, and called and said: "Please, give us your bank card and insurance details so we could bill you." Some tiny fourdoctor vet clinic in this village turned into an online operation in just one week, digitized in every way: online payments, online desk, online forms, esignatures.

That's cool! I hope all business will do this. 'Cause I always hated waiting in line at the vet clinic. Must say, I was never a follower of this idea that the Valley was our savior, that technology was everything. I've always been skeptical about these things: "Are we sure we're doing a good thing, or have we gone too far?" But in this particular situation, thanks to the Valley, half of the world kept going in some capacity. We continue shopping, ordering food, going to school via Zoom, working, et cetera. Maybe this is wishful thinking, but we figured that the place world repair solutions would come from, 'cause the world will obviously require repairs on a ton of its systems, will be the Valley, and places like it, where you've got brains, money and an established and sustainable setup for said brains and money to work in tandem for the betterment of the world.

Am I comforting myself here, praying I don't end up jobless, or does this ring true? It does ring true. 'Cause even though new connections aren't being made, the brains and the money haven't gone anywhere. Neither has this place's unique culture, the culture of people who want to change the world, improve it, help others — all those local themes. Each place has its own theme. In Moscow, people want to make money. In New York, people want influence. In the Valley, people want to change the world. Money is a means and influence is a means to change the world and leave your mark. Whom do people envy here? Those who left a mark.

Those who created something which changed people's user habits. Certainly, being with a group of people, sharing the same physical space, when it comes to creative and artistic jobs, you usually perform better and more efficiently. There is a sort of magic of presence. We do sorely miss it. My productivity has dropped dramatically. Probably, by 50%. I keep hearing it from others too. Meanwhile, all my colleagues and I work more hours. We spend more time in video conferences. But we get less work done. So this sort of magic of human communication that you create with campuses, offices and all kinds of artistic spaces, it's missing right now.

But again, I think we'll adapt and might even say we don't need any campuses. Though we'll probably revert after realizing that we do need physical communication and interaction. Free food isn't going away though, is it? I believe they'll keep the free food. Yeah, I think the free food will stay. Serioga sighed in relief! Serioga, come over! We'll get you fed! (laughs) As soon as they lift the ban, come over, dude! I understand that lately, more people are coming specifically from Russia? You mean compared to Russia previously?

Yeah. There was a spike, a couple of spikes, when a lot of great NEW people came here.

I found myself surrounded by people whom I doubt I would've been able to even meet in Moscow. Given how great they are. Super talented guys. When was the spike? After the launch of the Crimean campaign, a lot of people moved here. Did people start to flock here after 2014? In droves. I was coming here knowing that two or three people I knew had moved here before me. I thought, "Okay, I'll find people to talk to." I moved and I started getting messaged every day: "Hey, Kolian! I moved too. Can you clue me in on what's where?" "What's up with local schools? Where do I drop off my kids?" Half of my course mates had moved.

What course? Like 15 people I went to college with. What course though? This was Management Faculty. Like 15 people from one course. Out of, what, 200 people? They were probably the bottom, right? That's the thing: people that moved were the best of the best. When programmers approach you these days, in whatever way, and ask for advice: "Should I move there? Over there?" What do you tell them? It's a sore subject for me. Pray tell? I'm a serial migrant. I jumped countries several times. My base motive was There were a bunch. I'd come up with businessrelated reasons too. [English name and the diminutive suffix K.]

But I think the reality is very simple.

I was one of many who went:

"Gotta skip Rushka*!" This sort of popular sentiment.

Awful. It is awful! It's so dumb. People don't understand that leaving your country, usually, you're not the bottom. They lament their living, but they're usually not doing the worst in their country at the time. When you move to another country, you're resetting your social status. As a migrant, you have to develop new skills. Most of the time, it's a net loss. It differs from case to case, but usually, emigration is a big mistake. People don't get this for one simple reason. Their peers that left earlier are a bad influence. Here's how it works. Their what? People among their social connections who'd left.

In reality, you'll feel awful after migrating. Honestly. It's not just me. I watch other people. There are a ton of downsides to migrating. No migrant will ever admit that they're unhappy. I have a pretty bloated ego, so I can easily admit these things without hurting it. I can admit certain soar spots. But most people can't. Admitting they'd made a big mistake would hurt too much. They can't come back. Why? 'Cause they're weak? Well, because you Most people will... I have enough money. I can move at any time. It'll cost me a ton of money, but I don't mind. Someone else will have committed. They'll have gotten a new place, sold their old one.

This moving transaction is pretty expensive. And you usually can't go back anymore. It's also a very tough decision. I remember how tough it was to go back. Twice. I made this decision twice. And both times, I had to force myself. "You giving up?" And so on. But I made it. A typical person can't admit this was a bad decision. What they can do is project happiness towards home, because they can't project happiness to the locals. Locals probably get paid more for the same work. Locals live in a better neighborhood. They'll be doing soso compared to the locals. But because there are others back in Russia with a dream to LEAVE, and since they'd made it, they get this affirmation that they did the right thing through others.

They project "I did good" on their former countrymen. Everybody dreams of the Valley, don't they? Not everybody. A lot of people are like, I don't wanna go anywhere. Many say: "Screw your Valley. It sucks. I wanna live in Europe." Do they tether themselves to Russia? Many do, yeah. What do they do? Work for people who moved West or for Western companies, or Chinese companies. What about our companies? Or for the state. Or for the state? You consider Yandex stateowned too now? No, it isn't yet. They soon will be. But they're holding in there. They're like an islet of freedom. Does watching things unravel around

Yandex make you upset? It makes me very upset. What particularly upsets you? You know, from the beginning, Yandex was probably the most independent island in the independent sea of internet.

The culture of this company was mostly built by Ilya Segalovich. [He died in 2013]

The culture of this company was mostly

built by Ilya Segalovich. [He died in 2013]

After he died, Yandex started

changing from the inside. With constant external pressure, it started to bend. I don't it would have if Ilya was around. Simple, obvious question. Why was your goal to teach here, rather than in MSU or NES or any other place? [private economic school in Moscow]

Why outside of Russia? The most important thing for a scientist is the community. Second most important are the students. By "community" I mean the research community.

You wanna work with accomplished people who are smart and interesting to talk to. Top universities usually have very interesting research staffs. In Stanford, each professor is not only a leader in their area of expertise, but also an incredibly interesting person to talk to about science and not just science. That's one. Two, the students. Quality of students here is absolutely superb. Third, surprisingly important and something I didn't fully appreciate at first was that Stanford University is very tolerant towards what you do. On the one hand, you have to achieve incredible success, because sooner or later, they have to give or deny you tenure.

At some point, they'll make a judgment on whether

you'd become an apex scientist in your field. But they're very calm about: what research papers you write, whom you do research with, what specific subject you're studying. This freedom of research You know? You want room to breathe! Freedom of research is unbelievably advanced here. It's one of the things for which I'm so grateful to this university. Because when I first came here, I was researching one thing,

and achieved success there. But afterward, since I'd moved to work at a university in the middle of Silicon Valley, over the course of several years, I got interested in a different subject.

I became interested in venture capital, corporate innovation, et cetera. And I believe I would've had a harder time switching gears at a lot of other research centers. Down here, it was very simple. All the young boys and girls watching now, thinking: "That's it! I'm applying to a tech faculty!" "I wanna work at Google, or Facebook, or something like that!" Is there potential for disappointment? Of course. They WILL be disappointed! Could they run into a global, strategic blunder of the fact that in ten years, the world won't need this many software engineers? If they chase a madeup goal like this, they WILL end up disappointed.

I think if you pursue a particular area only because someone told you there's money in it, you might be disappointed. If you pursue your passion, which will itself reinforce ambition for perfection and perpetual curiosity, you'll do great. You said a lot of things in Russia distracted from doing business. Yeah. What exactly? There's always a sort of uncertainty. Stuff like: will I get a surprise inspection today? As soon as you reach a certain level, they might become interested in you. I mean Also, the legal side of doing business is rather It takes a lot more resources than some place like America.

There are cases where For example, Fiodor Ovchinnikov, the founder of Dodo Pizza Cops found drugs in the bathroom of one of the restaurants [as a witness after an anonymous tip that his pizzeria]

[chain was a foil for a distribution network of Latin American]

[drugs. According to the detective, drug stashes]

[were found in several restaurants of the chain.]

[Ovchinnikov said that this was an attempt to frame him]

and started dragging him from one

legal agency to another. [as a witness after an anonymous tip that his pizzeria]

[chain was a foil for a distribution network of Latin American]

[drugs. According to the detective, drug stashes]

[were found in several restaurants of the chain.]

[Ovchinnikov said that this was an attempt to frame him] [as a witness after an anonymous tip that his pizzeria]

[chain was a foil for a distribution network of Latin American]

[drugs. According to the detective, drug stashes]

[were found in several restaurants of the chain.]

[Ovchinnikov said that this was an attempt to frame him]

He created a He's from Siktivkar, isn't he?

Yeah.

[as a witness after an anonymous tip that his pizzeria]

[chain was a foil for a distribution network of Latin American]

[drugs. According to the detective, drug stashes]

[were found in several restaurants of the chain.]

[Ovchinnikov said that this was an attempt to frame him]

He created an amazing company

with lots of positive energy. He created an amazing company with lots of positive energy. It's a global pizza chain, right? But they search him in Russia and start

this whole drug affair. It's absurd. As soon as you become someone, they'll come to collect. Or this business where they clamp down on the freedom of speech.

Say, you've created VK. You have this new media with communities for oppositionists. They start clipping your wings. Those are the differences and limitations that I don't much care for, because they're in the way of my goals. It's not a bad thing, is it? The Belarusians said it best: the fact that we left was great for the country. Because Think about it. I invest a ton of money in Russia myself. I pay a shit ton of taxes in Russia. A lot more than what I was paying when I lived there. I've created a couple hundred jobs in Russia. What do you do there? Development of a bunch of companies from our portfolio.

Wait, but I thought it was better if people like that lived in their home country? They're open to the world and stuff. I mean, they leave and don't plan to come back, do they? I mean those 15 from your course? Quite the opposite. We're all very different in that People from the sausage migration wave were leaving to leave. [USSR and early Russia in late '80s and early '90s]

People from the sausage migration

wave were leaving to leave. [USSR and early Russia in late '80s and early '90s]

They were going AWAY,

not TO. We left TO and IN ORDER TO. We left to learn. We left to achieve something, driven by ambitions.

We also left knowing that the world had changed. In 2016, when we were moving, the borders were a lot more fluid. Our biggest fear was that they could close the borders and we wouldn't be able to return. The beauty of the situation is that we travel freely. I could find myself in Moscow tomorrow, meeting with someone, doing business. The day after, I'll be in Singapore. Then back here again. That's great! I've never encouraged anyone to move away or run from something. I get it that sometimes you have to. I've never done that. I always moved TOWARDS. If you believe that the place you're going to has something that will help you achieve

Or just do something optimally, dude, pack up and leave. If you can't explain why you'll be more efficient there than anywhere else, you should think about it and figure things out. I believe it's much more important I think I told you this. I believe it's much more important to live for the things you were born for rather than to live in the place where you were born. I think it's fine. The world's gotten a lot smaller. You can travel and move at will. If there's a place that lets you do what you wanna do, you should pack up and go. Without fear. Know that it's gonna be tough but that you can persevere.

But moving just because this place is bad and somewhere else will be better for some reason, that's completely different. I doubt it will It seldom leads to success and happiness. When you When you HAVE TO leave, you leave. I get it. But the people that believe that the grass is greener on the other side, as a rule, eventually suffer disappointment. Here's how our attitude changed over the course of these days in the Valley. Initially, we were thinking: what a strange world. Then we realized that every person you meet here is either a startupper or an investor. Last night, I was already thinking of investing into something.

Caught the bug, huh? Yeah. I have a certain amount of money put aside. Thought I'd store it away for a rainy day or for the college fund or whatever. Now I'm looking for a startup to invest into. What for? What for? Yeah. Well, first, this is interesting. Good. I feel that this leads to new knowledge. If I invest into something, then obviously, I'll get invested in the matter intellectually too. And third, it's a backup plan. You have good motivation. Some people coming here say: "I have 50 mil over here. Looking where to park 'em." That's not a very good idea. If your primary motivation is, "I wanna learn; I wanna help create something big; "I'm not afraid to lose money on this because only 1 out of my 100 investments paid out," then you should start investing.

Though I never liked America. I never thought I'd move to America. I'd been to America many times, obviously. This place particularly, on business. But I never thought I'd live here. But then I came here and felt like I was at Yandex's campus. Bunch of smiling faces with excitement in their eyes. People on hoverboards working to change the future. It felt a lot like Yandex' campus. That's what I meant: the Valley is the product of a critical mass of people creating a particular climate. You're now in it, and it's working its magic. But it's exactly like the gold rush! Many are investing, admit it, only to get rich.

Yes.

And that's normal. That's capitalism. But the difference between the gold rush and what we're seeing today is that gold you need to find and then share. Ideas you have to create, and you can create them infinitely. You know? They multiply too. One good idea yields two better ones, and so on and so forth. It's like a snowball effect. That's the uniqueness of NOW. It's not another gold rush. It's not a zerosum game, where your gain is someone else's loss. It's a place where people cocreate. And the ecosystem of this place only gets better. For example, the iPhone allowed YouTube to become better, even though Google and Apple are competitors.

Then Facebook, technically a competitor to both of them, further enhanced this ecosystem, because it allowed you to share YouTube links and so on. Each company you build into this structure, technically a competitor to everyone else, in reality, they all enhance each other. This place wasn't born 10, or 20, or even 50 years ago. 150 years ago. 170. In 1849, when the gold rush started here. All of this is the fruit of the gold rush. It's the mentality of people striking dirt with a pickaxe in hopes of finding a shit ton of gold. Same thing. They're perpetually consumed by the gold rush here.

So nothing changed? When everyone was going crazy about cryptocurrencies in Russia: "Bitcoin! Buy it!" [that operated in the 1990s.]

this was probably the first

Russian gold rush after MMM*.

Yeah. No one even noticed it here. Because something like this happens here every 15 days. Romania, Belarus, Indonesia, India, France — they all tried to build a "Silicon Valley killer." But that's impossible. At best, you can build something of its own. Because this place is a combination of investment capital, positive thinking, Stanford and military research that took place after WWII. It emerged on its own around Stanford and a few other local universities: University of San Francisco, Berkeley and Santa Clara University. DARPA, basically an American defense agency for strategic initiatives, would give out grants to scientists for all kinds of shit.

During the Vietnam War, they researched telepathy, trying to figure out if they could launch psychokinetic attacks on people. They funded that too. They had this broad investment program. They also started funding local university research labs that gathered teams of people, protected by American law, who started developing things that could potentially be commercialized. People started investing money into this stuff. When it got big and started making money, those initial investors became so rich that people who heeded them also started investing into this place. State financing, military research, development of IT and internet — amalgamation of all these factors led to the birth of the Valley.

You can't duplicate it. But you can create something different. Not even in Skolkovo?! What's the best way to put it? I can see that Russia is trying, and we have some good companies. Everyone knows Playrix, Kaspersky, Yandex. [in Vologda by brothers Dmitriy and Igor Bouhman.]

[Combined monthly audience of Playrix's games]

[is over 100,000,000 users]

Everyone knows Playrix,

Kaspersky, Yandex. [in Vologda by brothers Dmitriy and Igor Bouhman.]

[Combined monthly audience of Playrix's games]

[is over 100,000,000 users]

Yandex makes drones,

some of the best in the world too. [in Vologda by brothers Dmitriy and Igor Bouhman.]

[Combined monthly audience of Playrix's games]

[is over 100,000,000 users]

We have our own way.

And it's great.

But no one's managed to copypaste the Valley. And you don't need to. You mean Skolkovo is a valid part of our path too? Out of the things I've seen in Skolkovo, I don't believe there was a single startup that had succeeded globally. On our way here, I stumbled upon a video I hadn't seen before. It was an NTV report about Dmitriy Medvedev's visit to the Silicon Valley. He says: "We'll open a Skolkovo branch in the Valley." Today, this sounds like a bad joke. What's wrong with Skolkovo? This is a tough and complex question. The groundwork was good. Lots of typical Russian problems got in the way.

One of them is corruption. Another one is politics. Third one is struggle over resource control. Which is basically a mix of corruption and politics. That's what happened in Skolkovo. Has Skolkovo produced anything? I don't believe so — if we're talking about things other than their business school, which is doing SOMETHING. The Skolkovo technopark itself I've not seen anything good over there. Let me ask you as someone who wants good things in Russia too: why is the Valley possible across the ocean, but in our country, somewhere in the Krasnodar Kray, someplace near the sea, or anywhere else, in Skolkovo, I know how tasteless mentioning it here is, it's totally impossible? You just answered it.

You started with a similar place. When they build in Russia, they first pick a place: "Let's build a think tank!" "Software engineers are like cockroaches! We need to put a cardboard box on top of them." "Then it's AOK from there!" In reality, you need to invest in the ecosystem, in the sauce, in human interaction. So what you're saying is, creating something like this, instead of copying geography, you wanna build up a place like Akademgorodok in Novosibirsk. [that gathered scientists from all over the USSR.]

[Founded in 1957 near Novosibirsk]

a place like Akademgorodok

in Novosibirsk.

[that gathered scientists from all over the USSR.]

[Founded in 1957 near Novosibirsk]

Yeah, exactly! [that gathered scientists from all over the USSR.]

[Founded in 1957 near Novosibirsk]

Why aren't they doing it? [that gathered scientists from all over the USSR.]

[Founded in 1957 near Novosibirsk]

Time. Networking and time. You wanna switch things around less. Let people grow. Keep them from dispersing. 'Cause a lot of the time, reaching certain success, people pick up and leave. You want an ecosystem to gradually develop. They should've started by putting the interests of investors, venture capitalists and angel investors, on top.

Develop laws that would save them the shaking. From the public bus joke? Yeah. Our powers that be prioritize maintaining authority over the interests of investors and the economy. That's the main issue. You mean the superior power? Throughout. It permeates. Why do you think no one makes any investment deals under Russian law? This FRII fund created by the Agency for Strategic Initiatives, only they make deals within Russian jurisdiction. Why is that? Because no one believes that they could protect their business interests under Russian law. Even the smallest deals Scenario: I work as a sales manager for some company.

I have $3000 of free capital. My neighbor has a startup. I wanna give him this money. I'll be signing this deal someplace like Cyprus. I thought people did this strictly because of taxes? No! Of course not! 'Cause you'd pay less taxes. Not anymore. They introduced CFC. You're not dodging shit. Russia has small taxes. Why try and dodge 13%? It's 50% over here! Depends on the tax. Russian payroll tax is very high. Payroll tax is, yeah. But you're not gonna process wages through Cyprus, are you?

True. You use offshore jurisdictions specifically for investment deals. Tax optimization costs zilch. It's done specifically for English law.

Because our courts So in case something happens you go to court

to the House of Representatives. Cyprus uses English law? Yes. One of the reasons the Valley emerged where it did was, paradoxically, the fact that this was lawless countryside. West Coast was quite a bit away from East Coast. All the big companies were on the East Coast. They developed electric lamps and stuff. Well, the West Coast cowboys made them too, nonchalantly ripping off East Coast technology. Lucky for them, enforcing patent law across the continent was a tall ask. That's why venturous types would come and stay here.

They formed a community of peculiar personalities. This community evolved and evolved. The Valley's all about networking. That's why it works. So the right way to do it wasn't building a NEW think tank near Moscow, but rather building up, again, Akademgorodok or some such place where smart people have been living next to each other and creating cool things for decades? Yeah. Especially when this new think tank is super statey and super official, official and cool. You get officials going, "I want my son in there!" "Now work! I'm paying good money here!" Maybe his son doesn't even want that, but he'll go either way.

Instead you want mavericks. All breakthroughs are made by mavericks, people who don't fit.

By what now? All breakthroughs are made by mavericks. Jobs was a maverick. Gates is this foureyed maverick. Revolutions are started by people who don't fit normal life.

Not by officials? Yeah. People with normal lives don't need revolutions. They're fine. You wanna build around a university. It's got academia. Okay. But if a lousy soft science graduate like myself gets it, how come the guys ruling the country didn't get it? They did. They also knew that once they picked an existing akademgorodok or some other existing place, struggle for resource control would immediately ensue.

You can't start in MSU. That would give the president of MSU too much power. And to Moscow. So it has to be outside of Moscow. You can't start in Novosibirsk Akademgorodok, because the region's governor didn't do enough to deserve it. It's politics. Politics is stupid, and I try to stay away from it. It's not just Russia that can't copy it. At this stage, I think no other place can. For better or for worse, this is the place where the right conditions coalesced. Now this place attracts the kind of people that can do all these things. Sooner of later, they end up here. And If you took 10,000 of the most important people here and moved them over to Russia, that place would probably become the new Silicon Valley.

But that's a tall ask, 'cause this place offers them an environment that no other place can compete with. 'Cause people make the Valley. It's not a place. It's not about technoparks and pretty offices. You could build pretty buildings in Dubai or Skolkovo, or anywhere else and dump a ton of money in it, but if it doesn't have this spirit of: "We fail. We experiment." "We're okay with doing new crazy things, "and no one's gonna look at us askance, on the contrary, it's encouraged," without those things, you can't create another Valley. They'll either produce derivative and boring copies of things or just ideas that aren't innovative in any way.

You can't create something like this artificially. They emerge organically when two kinds of people meet, dreamers and people with money. And both have to feel comfortable. The two want different things. Dreamers want set of conditions X; people with money want Y. Fat cats and nerds? Fat cats and nerds. You could say that. Nerds and investors. This place has these things? Yes, it does. Stanford and Berkeley It has several strong universities with great academia. They produce a constant flow of new nerds, as you called them. At the same time, this is a nice and comfortable enough place for people who've made billions.

So they don't leave to stay in their villas in France and instead live here. And this constant exchange where some nerd could meet a billionaire at some coffee place in Palo Alto 15 minutes away from their place, they both live 15 minutes away from it, resulting in some sort of exchange of ideas and subsequent investment contract, that's what makes this place so unique. It's a tiny stretch of land. You've driven around. 50 miles both ways. That's the Valley. It's tiny. This tiny stretch of land generates a GDP that's comparable to GDPs of some countries. Could something emerge in Russia in the nearest future? Nearest, no.

I can't see the light at the end of the tunnel. Maybe it's around the corner. All we can do is look to the future with hope. Imagine that life is a playground. Children come out to play. Some play soccer, others play pocketknife games. You came out holding a Junior Engineer set. You like soldering radios. That's your idea of fun as a kid. You have time until sunset. Mom's gonna call you soon: "Andrew! Inside!" I come out with my Junior Engineer set. I need a table. Boys with the football need a goal. I need a table to sit there and solder quietly. I sit at a table, but it's occupied by men.

They're not good or bad. Just normal men. They're cursing and playing dominoes. I sit next to them and try doing the thing I came out for. But they keep elbowing me and taking my soldering iron away, stuff like that. I have a few options. I could give up and just go, "Okay, I'm not gonna build this radio." I could go, "Okay, I'll play THEIR game." I'll learn to play dominoes. That's what they play at that table. To hell with the radio. I could start fighting and locking horns. That's yet another game. But it's not MY Junior Engineer game. Some do THAT. But those older men They're older than me. They've sat there longer than me.

The rules of their game were invented long before any of us were around. And there's another option: pick up your set and find a table where you can do what you wanted to do. You'll build your radio. Might even treat the dominoes crowd to some music. That's basically what happened with me. I left, I did what I wanted

to do here, but everyone's enjoying the end result. There's you. There's your channel. There's Russian YouTube. People are watching us at this moment. In part, thanks to my work. Do you think the older men will ever scoot over? (sighs) I think they'll build more tables. I hope so.

Those men need a place too, you know?. Someone has to play dominoes.. You can't change these things by force.. I don't believe you can up and rebuild something in a jiffy.. You see? In this metaphor, sunset's coming. Mom's gonna call you home soon. . I only have so many years in my life to create something meaningful.. I can only create something I'm good at.. That's why I'm merely choosing the environment that lets me achieve this with maximum efficiency. and maximum benefit for everybody.