Sergey Kozlovsky: “My income grew 300 times when I began to think globally”

Serial IT entrepreneur about business in Belarus and abroad then and now

Sergey Kozlovsky was at the origins of, and Assist Belarus. And now he is in Belarus only for 2-3 months a year because he is engaged in international projects around the world.

Ivan Vedenin and Sergey Lavrinenko, authors of the ItStars Podcast!, had a fascinating hour-long conversation with Sergey. We extracted and collected the juiciest in this article from their talk.

How a historian got into IT

In 1995, I entered the BSU Faculty of History majoring in art history. I didn’t want to work either in a museum or school, so in 1998 I started my business. Then web studios just appeared, and my partner and I decided to build websites: he programmed, and I was engaged in sales, negotiations.

I remember the first deal with the National Economic Newspaper. They bought our subscription service for $ 20 a month, it was a lot of money. All I had was an A4 leaflet, there was written “Our proposal”. I wore a tracksuit and came to the editor-in-chief with that paper. He had been laughing for 10 minutes, then wiped away his tears, and then sent our proposal to the technical director. There was something to laugh at: all I knew about the sites was Figurnov’s book about Windows and the FrontPage program, which I supposed to do everything itself.

The technical director asked how we were going to maintain the newspaper’s website. I replied:

“Well, there is nothing complicated, I’ll press the button, and everything will happen by itself.”

The layout looked simple: $ 2 for hosting and $ 18 profit. And then we faced the reality: we had to publish all the articles on the site manually — and it was not that profitable. Therefore, we sold the second site for $50, and the third for $200.

But not all newspapers were led by our proposal. The editors of the newspaper “Name” almost threw chairs in our backs. There were very professional people there, however, now this newspaper is no longer exist.

What SEO optimization was like before Google appeared

We met a Latvian through ICQ in 2000. He had a task for us. We had to add thousands of URL to Yahoo sites on a day-night-day schedule through the night. We also had to do the same with Lycos, HotBot, AltaVista search engines. This is what SEO optimization was like at its beginning. We didn’t even ask what were the conditions.

We agreed and had been working in this format for 2 weeks, spending the nights on a crumpled sofa. And then he transferred us $ 7,000 with Western Union.

We immediately bought a new BMW 3, although no one had a drivers license.

Belarusian acquiring beginning

In 2003-2004, we decided to reformat the business and try out the finance industry. We agreed with the team of the Russian payment gateway Assist and made for them the project — an analog of modern WebPay. So we came up to the idea of developing acquiring in Belarus. But, looking ahead, the idea was realized only in 2009.

A long period has passed in the study if it was possible to implement card payments in Belarus. It was incomprehensible to any bank.

The problem was that online stores asked banks when they would allow buying with a card, and banks asked when stores would give high payment traffic to pay off costs. It was about $ 50,000.

But in 2008 Belavia came and said:

“So, we need to sell tickets online right now. Who’s stopping us here? ”

After that, a dialogue began, and in 2009 the market turned.

In 2009-2010 we with our partners, including HC Dynamo-Minsk, launched the ticket operator ticketpro. I even saved the first ticket purchased for the Dynamo HC match which was at the Sports Palace.

The businesses localization and the problem of Philip Kirkorov

My main specialization was the localization of international business ideas in Belarus. Now there are a huge number of niches where the same approach can be applied. Bicycle-sharing is the most striking example now.

The choice of an idea for adaptation depends on personal preferences. I have such criteria: it should be an online business and it should be implemented on the principle of “you are sleeping, but money is dripping”. Processing or ticket business — both meet these criteria. This is not the work of Philip Kirkorov, because his biggest problem is the inability to exclude Philip from the production process.

8 years on the road to online insurance

I had been having financial losses from 2010 to 2014, and in 2012 I left all businesses. The idea of selling an electronic insurance policy appeared. I reasoned like this: if there was a success in ticketing, why not get down to electronic insurance.

The plus is that the commission for a ticket sold starts at 6% at the beginning and reaches 1% with increasing competition. In insurance, it is fixed — 20%. At the same time, there is a compulsory insurance market, which is 6 million policies per year, plus 2 million policies for traveling abroad.

In 2011, I launched The idea was that everything was online, but we ran into the limitations of the Civil Code: it was necessary to sign the recipient of insurance. And we started delivering them by couriers.

Our record is 18 thousand policies per month! But because of the delivery method, all this was at a loss. The Ministry of Finance liked the idea, but they wanted the state-owned company to do it. As a result, a decree on electronic insurance was issued only in 2019.

“Belarusians make iPhone for Minsk, and Bobruisk is the capital of the blockchain”

I have been working in other countries since 2015, and now I am in 4 domains.

The first is processing in Europe and Asia. The second is a blockchain and artificial intelligence outsourced services for a Sweden customer. At the same time, the team is in Bobruisk. By the way, I believe that this city will soon become the capital of blockchain development, but it is a secret. The third is real estate in Berlin, and the fourth is blockchain bonds/loans, also in Germany.

Belarusian banks work better than Swiss, given the speed of money, the absence of bureaucratic red tape, etc.

But they are not popular in the world because of the country’s reputation and the long introduction of innovations. They have their plan, but it is for the country, it is not global. Our banks basically do not export their services.

The locality of thinking is the biggest disease of Belarusian society. If we remove it, then we would even beat the Chinese. But Belarusians are the people who make the iPhone for Minsk.

What should the anarcho-capitalist do in the era of corporate wars with states

I bought Bitcoin for $ 100. It was a deliberate investment, although people told that I was a fool. But it was obvious that Bitcoin would fly, because there was a lot of hype and speculation around it. People also played a cruel joke with it themselves.

Because now the industry looks like that Indian in gold with the sign "I’m here for the sake of technology."

The problem with cryptocurrencies right now is that there is no mass adoption. If an ice-cream seller didn’t need a cache, but a bitcoin from you, then it would be about the mass adoption of cryptocurrency as an exchange tool.

But it can be resolved by a guy like Mark Zuckerberg, who is ready to pay a fine of $ 5 billion to the financial regulator, but make Libra cryptocurrency popular for the 3 billion Facebook audience. But both Trump and the European Union will actively oppose this process.

There are several inflamed conflicts in the world. The first is the confrontation between states and corporations which already almost has its population, its currency, even private military companies. And the question is why should a huge corporation, which capital is bigger than many states combined, cut off its piece for some taxes? Moreover, they are poorly distributed. And even though Apple has its pocket congressmen, it wants for revenue to go without obstacles. It is what inflames this conflict.

And on the other hand, there will be anarchists with their keys to cryptocurrencies. I am a staunch anarcho-capitalist.

“Global thinking has increased my income 300 times!”

Belarusians are very similar to the Germans, and Belarus to Germany. A slight difference is Belarusians tend to be more relaxed Dutch. Moreover, if we take Belarusians, Russians, and Ukrainians, then Belarusians are the most inhibited and lazy. We do everything slowly, but only because we do not want to accelerate.

Foreign partners note that it is comfortable to work with us. We are decent, reliable, law-abiding. Compared to Indians, the code is cleaner, people think quicker. But the comfort of life for Belarusians is more important than money.

In China, for example, productivity is 3-10 times higher because they are ready for anything for the sake of money. In this, we are not competitive.

We use to blame state system, but the truth is Belarusians themselves choose to be slow. Western entrepreneurs work in the same rhythm, but in this rhythm, they do more because they have many years of experience in entrepreneurship. All this can be resolved by basic business education at a school or university.

Moreover, changes come from the realization of this error. It worked for me: changing the speed and scale of thinking from a small town to a global one increased my income by about 300 times!

Belarus is a wonderful country to live in, but there are risks from the legal system. Capital flows to the UK because there are guarantees. Belarus does not give guarantees, and a sense of patriotism fights the thirst for these very guarantees.

Moreover, Belarus is a steep country from the tax side

If you are an entrepreneur, then with an annual income of up to $ 110 thousand you pay only 5%, and after that — only 16%. In the Netherlands, taxes are 25%. Germany and France have extremely high taxes. The rules of the game are excellent, the main thing is that they all comply.

How to choose a country for life (except Belarus)

Imagine that God empowers you to choose a country or region for life, talks about the pros and cons. What will you choose? Germany is the stability of laws, the economy, a calm country, but everyone is on his own, few friends, problems are discussed only with a psychologist, not with friends while having a beer.

Or let’s talk about Japan. Tokyo is perfectly clean; after a day of walking, the sole remains as if shoes just purchased. But here is an example of a package of milk: to throw it away, you first need to rinse, cut off the plastic parts, fold it to the plastic and hand it on Thursday; fold the cardboard itself with an accordion, put in the same and hand it over on Tuesday.

By accepting the rules of society, you accept not only benefits but also responsibilities.

You can live with a woman if you are satisfied with her shortcomings.

Same thing with the country. Do not confuse tourism with emigration.

And besides Belarus, I chose Bavaria.

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