"You wake up at three in the morning, drive to the plant in Kaluga, stuff the car with a product, then unload it at nine in Moscow," recalls Dmitry, reminiscing about those early days. "Andrey took two shifts delivering the product, and I took two shifts. Of course, we were not following the established rules: we were not adhering to storage regulations; we wrapped the product up in blankets to make something that looked like a refrigerator. After a month and a half of this, we realized it was time to look for someone with a proper vehicle."
The initial stage of a business is an ideal time to go slightly off-piste (within reasonable limits) and bend the rules a little, while avoiding any penalties or fines. As far as the authorities and regulators are concerned, your company does not exist yet; the few clients you have are not highly active. For a start-up, each day can easily be its last. Bending the rules at this stage is a necessary evil, but only insofar as this "illegal" period enables you to п¬Ѓnetune your business processes and hone them until they are functional, efficient, and legal.
Over three months, Andrey opened two more Izbyonka locations, and created an intuitive software program to automate product ordering, oriented to the volume of sales from the previous period, so that each day the program became "smarter."
But success still eluded them. For nearly four months, each of the three locations had been losing money, and none of them enjoyed heavy customer traffic. The initial start-up capital of a million rubles was running out.
It was time to start Plan B.
"At first," recalls Andrey, "I opened four locations. However, the first three Izbyonkas proved this was not the right thing to do. I was ready to end this project and look for a new, more promising niche. But I did not have any new business ideas, so I opened the fourth location – to at least fulfill my initial plan."
If it was not for that one decision, nothing would have come about: no VkusVill, no producers doing well because of VkusVill, and no book…
The fourth store opened in a new location. Before this, Andrey had intuitively chosen available space at farmers' markets, counting on the considerable traffic from the market's customers. But the final experimental location was in a shopping mall, close to a Billa supermarket in Mitino (a large suburb of Moscow).
The experiment was a slam dunk, and Izbyonka found its target audience. The suburb – Mitino – was a young district with a lot of young families with small children. For them, high-quality dairy products are a priority when shopping for groceries. It turned out that foot traffic in a shopping mall suited Izbyonka far better than the farmers' markets.
The п¬Ѓrst day in the shopping mall showed Andrey and his team that it was far too early to admit defeat. Izbyonka's refrigerators were empty by lunchtime. News of a new and innovative dairy shop with domestic products spread like wildfire, simply by word of mouth. And on that day, we grasped the immense power of the grapevine.
We modeled each successive Izbyonka on the Mitino experience. Being focused on young mothers with children, we were "squatting" near major supermarkets by offering a dramatically different product from the large chains. We abandoned the idea of farmers' markets and everything that was excessively local.
"I learned an important lesson from Izbyonka's identity crisis," says Andrey. "When you try to offer a brand-new product or service, it is important to try all kinds of different tactics and options. Your vision may very well differ from your customers' needs and desires. And never judge the success or failure of a project just on one attempt. Opening a business is a process of experimentation and adjustment to the situation. Often something that seemed to flop at the start ends up being the winning formula for your success."
RULE 3
Hire people who you find interesting and feel comfortable with, especially at the beginning.
By the start of 2010, Izbyonka was safely off life support. Its retail locations began to pay off, and the company took its first tentative steps. It was still a start-up, affected heavily by the world around it, but – borrowing yet another medical term – we observed an improvement in the patient's condition.
That is when the key employees appeared at the company, the ones who remain at its core: Alena Nesiforova, Renata Yurash, Tatyana Berestovaya, Evgeny Kurvyakov, Maksim Fedorov, and others.
The company now lives by the rules of a unified, well-functioning organism: perhaps not an ideal one, but certainly a harmonious one. In a perfect organism, all the organs work flawlessly, as if in a laboratory. Entire systems can fail in a coherent one, but the organism will turn on its immune system's defense mechanism to fix them.
Meanwhile, the concept of "us" is developing; an important phenomenon in terms of a healthy corporate culture.
Henceforth I will use "we" to mean our collective hive mind, although I can anticipate many questions from readers: "Who are 'we'? What do you mean, 'we decided'?"
Honestly, we do not have a standard answer to these questions. At some point, it became difficult to determine who produced an idea and who developed it into a working concept, or who first questioned the viability of an idea, or the person who caught the whiff of a mood, then set a rule and was the first to follow that rule. We became such integral parts of each other that, over time, distinguishing the "I" became meaningless.
Today, if you look at the way we assembled the puzzle pieces of the small but ambitious Izbyonka team, you might conclude that it was merely dumb luck, because some coincidences are otherwise impossible to explain.
Now, Alexey Ilyichev owns a medium-sized transport company that provides delivery services for Izbyonka and VkusVill. His success story amazes and defies any logical explanation.
"I live in the Tushino district, near the mall, where the second Izbyonka opened. Once, my wife asked me to buy sour cream. She told me to look in the dairy stall there. I did not п¬Ѓnd a single dairy stall and bought sour cream elsewhere. Later, my wife brought me to Izbyonka and told me to mark it as the place she wants me to buy all our dairy from. I recall a salesperson and a young man running around with boxes, and later I realized that the young man was Andrey Krivenko and Nadezhda Spirova was the salesclerk."
Ilyichev continues: "I had already been working for myself for a long time in the (private) transportation business. Out of curiosity, I asked Andrey what trucks they drove. He answered that they were just getting started and driving products around by themselves but were looking for someone to take the job on. I gave him my phone number, and ten days later, Andrey called me back. We met at the warehouse, and he showed me products and said: 'Here is the milk, and here is the kefir.' I answered: 'Right, but what is next?' Andrey said, with a surprise: 'What do you mean, what is next? Take it, drive it, unload it.' I did not even show him my passport!"
Alexey recalls the early days, "I could not believe that Andrey just handed me the keys to his warehouse full of product! It was fun back then. Such enthusiasm! Of course, I knew from the beginning that I would not be the only driver for long, and that is what exactly happened. After we opened the sixth outlet, the question of a second vehicle came up. But Andrey stepped away from solving transportation questions from the very beginning, so I handled everything."В The next story is about Alena Nesiforova, who worked as a market researcher for DuPont. Nevertheless, she swapped her business trips to Paris and Barcelona for work trips to Kaluga and Ryazan after deciding to work for Izbyonka:
"I studied at the Moscow State Linguistic University, the best linguistic university in the country, and at one point tried my hand at tutoring. I posted an advert on a website, and the first call came from Alena Krivenko (Andrey's wife). She had a lot on her plate, not a lot of time, and a need for English. I was the perfect choice, as I lived right across the street from her son's kindergarten. We started working together and understood that English was not the only thing that we had in common. We talked a lot about life. A couple of years after we met, Alena told me that her husband Andrey was planning to launch Izbyonka and suggested that I give it a shot. I agreed it was a significant risk – I was leaving a large, stable company to jump into the unknown. When I look back on it now, it seems like such an adventure!"
Nadezhda Spirova was one of the company's п¬Ѓrst salesclerks. She came to Izbyonka in June 2009 and is still working today. She has happy memories of those early days.
"In 2009, I moved to Moscow and worked at Kroshka Kartoshka[2 - Fast food chain serving baked potatoes that is popular in Russia.] for a few months. Then my sister saw an advert in the newspaper for sales staff at Izbyonka and suggested that I go for an interview. The company still did not have an office – I met with Andrey Krivenko and Dima Kozyrev in a café. I liked everything. Andrey told me to come to look at the location on Friday, and on that Saturday, I started work and have been there ever since. In 2016, I transferred to VkusVill.
Nadezhda recalls the early sales tactics of the first Izbyonkas: "We grabbed people and persuaded them to try something. As soon as a person opened his mouth, you shoved a spoon full of cottage cheese[3 - Cottage cheese, or "творог" (tvorog in Russian), is a type of soft cheese like quark or curd, made by warming soured milk. It is white and unaged, and usually has no added salt. It is traditionally used in the cuisines of Baltic, Germanic, and Slavic-speaking countries.] in, and while he chewed, you told him who you were and why he should buy dairy products from you. We, the first salespeople, were like the Three Stooges rolled into one. We were not afraid of being funny, and we deeply believed in the products we were selling."
There are dozens of these kinds of stories. These people, our priceless employees, were the ones who created this company. They erected this fortress, brick by brick. And they did this not because they were paid phenomenal money, or because they were being threatened with п¬Ѓnes and punishments, or even because they were consummate professionals. It was just because each of them was п¬Ѓrst and foremost a human being, and only after that a market researcher, clerk, or analyst. Each of them created their world and did so sincerely. These people just cared.
WE, THE FIRST SALESPEOPLE, WERE LIKE THE THREE STOOGES ROLLED INTO ONE. WE WERE NOT AFRAID OF BEING FUNNY, AND WE DEEPLY BELIEVED IN THE PRODUCTS WE WERE SELLING.
And when someone asks at another conference: "What HR strategies did you use to create your team while launching your business?", we just want to walk up to that person, hug them, and wipe all those HR strategies out of their head. Life, intuition, and engagement are so much more effective than any HR strategy out there.
RULE 4
The earlier you have a conceptual crisis, the better. Izbyonka went through it for a year and a half of its existence, and this period changed the entire company for the better.
By the end of 2010 and the beginning of 2011, Izbyonka had nineteen office workers, about eighty salesclerks and assistants, and the company served thirty-one retail locations.
It was a period of radical reengineering of the Izbyonka project. The key processes were well-managed, and that allowed us to focus on the product offering. We were opening new retail locations and attracting new customers. However, we were faced with an unexpected and vexing problem. A large-scale survey of our clients showed that most repeat customers did not trust Izbyonka. They were drawn to us for our unique products, such as Mechnikov Prostokvasha (a type of fermented milk) and cottage cheese casserole, but they would have been more than happy to buy these products from better-known brands had they offered them. In other words, most of our customers WERE FORCED to visit Izbyonka. This shocking revelation forced us to examine our intoxicating success in a different light. What we perceived as the demand for our products was the lack of alternatives rather than our products' intrinsic value. That fact made the company extremely fragile and vulnerable.
Thankfully, the book Corporate Religion[4 - Jesper Kunde.Corporate Religion: Building a Strong Company Through Personality and Corporate Soul (London: Financial Times Management, 2000).] by Jesper Kunde fell into our hands at about the same time. This book radically changed our relationship to brand positioning. And thanks to Kunde, for the first time we considered the importance of a unified business concept.
Kunde's example of SAS was an organization with a clear and well-defined concept: "to become the best airline for business travel." Everything at SAS was subordinate to this idea, which immediately defines what planes the airline needs, which drinks to serve, which newspapers to offer, etc.
We had cherished the dream that Izbyonka would become an irreplaceable part of the lives of intelligent Muscovites and that we could change their habits and tastes. But how does a brand become a religion? Are there step-by-step instructions for the process? This is where Kunde's work came in handy for us.
The primary message of Corporate Religion is that customers are not naturally inclined to be content with advertising slogans. People are looking for a narrative or message that confirms their faith in a brand. Emotional values are replacing material values – and this is where we found room for growth.
We analyzed Izbyonka based on the algorithm that Kunde proposed: How do we see ourselves? How do others see us? How should people see us? The result was a depressing diagram (Fig. 1).
In an ideal world, all three circles should intersect. The deeper they integrate with each other, the stronger and more successful the company becomes, and the more self-explanatory the concept will become.
Our situation was the reverse: our customers did not understand what we wanted to say to them with our products: we said one thing, but the customers interpreted it in a completely different way.
We had to find a solution to this pressing problem.
The beginning of the solution was the creation of the unified concept department in 2011, which was led by – and is still curated by – Alena Nesiforova, that valiant girl who swapped Paris and Barcelona for Kaluga and Ryazan.
Alena's task was a formidable one: to develop a unified concept for Izbyonka that would convey the company's core values to its customers and rally employees together around a shared idea, just as Dr Kunde had proposed.
"It was one of the most challenging but exciting periods ever, which I am happy and proud to look back on today," says Alena with a smile. "We analyzed the positive aspects of our company and found that there were several: we offered natural foods without chemical additives, short shelf lives for products, assiduous quality control, pleasant service, and producers who were committed to our values and who hailed from different regions in Russia. But these different pieces of the jigsaw did not form a whole for our customers. They considered us to be just another dairy kiosk: if we disappeared, so be it. For the majority, it would not be a major tragedy. But our goal had never been to sell milk. We set out to change the culture of food for Muscovites. We just forgot to tell the Muscovites."
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notes
РЎРЅРѕСЃРєРё
1
W. Chan Kim and Renée Mauborgne.Blue Ocean Shift: Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth (New York: Hachette Books, 2017).
2
Fast food chain serving baked potatoes that is popular in Russia.
3
Cottage cheese, or "творог" (tvorog in Russian), is a type of soft cheese like quark or curd, made by warming soured milk. It is white and unaged, and usually has no added salt. It is traditionally used in the cuisines of Baltic, Germanic, and Slavic-speaking countries.
4
Jesper Kunde.Corporate Religion: Building a Strong Company Through Personality and Corporate Soul (London: Financial Times Management, 2000).
