About Success Builder
How do you find your place in life? How do you find something to do that both comes naturally to you and makes you happy? The answer is that you have to apply the knowledge you’ve gained from university and from life itself correctly. The Success Builder Project features HSE University graduates who have discovered themselves through an interesting business or an unexpected profession. The protagonists share their experiences and lessons learnt and talk about how they’ve made the most of the opportunities they were given.
After graduating from HSE University, Dmitry Borisov and Yury Goldberg followed different paths. Dmitry built a career at KPMG and Deloitte while Yury became an entrepreneur. They joined forces in 2016 to launch a business. How did they manager to ‘Uberfy’ the chaotic home remodeling and construction market? Has it been difficult helping people overcome their aversion to remodeling? What’s the point in helping your alma mater? They answered these questions and more in an interview with the HSE portal.
How did you start working together?
Yury: It’s just that HSE chooses only the best – those who are inspired to succeed.
Dmitry: We studied in different faculties, but mutual friends introduced us in 2014. The atmosphere at HSE is such that groups of students form according to common interests and goals. As with any good school or university, you have to pass through a demanding preliminary selection process. It took me two years just to get into HSE. But it you manage to get accepted into this community, you are surrounded by people with certain views and values, to which HSE adds its own. And this continues when you become part of the alumni community.
Why did you want to come to HSE in particular?
Dmitry: I had a simple goal — to find a way out of my hometown, Ryazan, and get to a new level. I began working during my third year of studies and found that holding down a job in a new city makes you stronger. In my fourth year, I got a job at KPMG and gradually began to understand where my career was headed and the reason behind my studies. But I also understood that it wouldn’t be possible to continue combining work and study.
Yury: I didn’t have a specific goal. When I was in the ninth grade, my parents transferred me to a different school where it was harder to be the same straight ‘A’ student I had been. This was a blow to my ego, but it also helped me recognize my potential for growth. I wound up in the school’s economics track and chose HSE simply because it was the best university for economics. But it wasn’t until I was already finishing up my bachelor’s degree that I appreciated what this education had given me.
Dmitry, before you opened your business, you had managed to climb fairly high on the career ladder. Which is more important for a career — work experience or academic training?
Dmitry: Most important is the ability to learn and be flexible in acquiring new skills. If, right now, I were to go head-to-head against an upperclassman in a battle of knowledge, I would definitely lose in every category because I have forgotten so much. But I have gained applied knowledge of how the world works.
I have already put all of my acquired knowledge through the ‘meat grinder’ of practical experience and developed a good sense of how things work
Knowledge is great in itself, but at some level, you realize that you only know how something is done in theory. A university provides a broad education, something you couldn’t get on your own. It comes from communicating with others, the general atmosphere, your personal experiences. What’s more, 80% of all people are simply unable to study on their own.
Yury, why didn’t you continue your academic career after graduate school?
Yury: I was not a super-talented student. I did well, but I wasn’t ready to devote myself completely to science. However, I was full of ideas and implemented a number of projects: I was a co-founder of the Quadro investment company, the founder of the NSKA (apartments under construction) company, and the creator of the NSKA Novostroika investment fund.
At what point did you decide to stop working for ‘the man’?
Yury: It was the last year of my master’s studies. I teamed up with other HSE students to create an investment company. I specialized in financial and stock markets and we developed contacts among brokers. We also had trading experience, so we got our start mainly through networking, and it was very successful. However, because of the 2008 crisis, all of our efforts came to nothing.
How did your career begin, Dmitry?
Dmitry: I didn’t take the risk of starting my own business. I spent two years at KPMG, then went to Deloitte, and next to the A&NN Group where my career advanced for seven years. I was comfortable in the corporate environment. I thrived in that atmosphere, developed a number of useful contacts and got good at making deals and working with companies. But then, some people came into the picture and I had difficulty working with them, so I decided to quit. I began wondering what I should do and my friends offered advice. Because most of them were entrepreneurs, I leaned towards taking a risk. I opened a Sunlight jewelry franchise in one of Russia’s regions. Honestly, I didn’t like it much: it was definitely a step backward, especially in terms of the amount of information I had to process. I was overcome by a deep desire to go after something more interesting and creative. It was then that Yury proposed the idea of teaming up on an NSKA project in a new format — for developers.
Starting a business always entails operating outside of your comfort zone. How did you cope with all of the headaches and challenges?
Dmitry: Of course, if you’re used to sitting in a chair and receiving a big paycheck on the first of every month — and a bonus at year’s end — then, of course, it would be tough to endure the hardships. But I was already outside of my comfort zone when I made this decision and that’s why I didn’t stress over it. I made my choice and there was no going back. I had no choice but to dive into and deal with the risk of entrepreneurship.
Yury: Our situation was not the easiest because we had been working in completely different areas before we launched Rewedo. Then we started projects in a field in which we had no prior experience at all — construction and home remodeling. But we were hooked on the idea and decided to try it. The initial stage of starting a business turned out to be hardest. It required a certain amount of courage. And not all of our projects took off: we also lost money, but we gained invaluable experience.
What was your first joint project?
Yury: We started out offering construction insurance. But the laws changed, as often happens in Russia, and we had to leave that market.
Dmitry: A state fund handles construction insurance now. However, we managed to develop certain business processes in this field. As a result, we saw a new niche that we decided to enter.
The construction market in Russia is chaotic and terrifying. How did you find the courage to plunge into it?
Yury: Actually, that’s just what we were thinking — that we’d make money if we could bring order to the chaos. In the home remodeling business, the middleman has a profit margin of more than 50%. So, we created the “Uber” for people who want to remodel their homes. We brought the client and contractor together.
Under the Rewedo brand, we united private remodeling contractors, offered their services to clients, and assumed responsibility for the quality of their work.
We simply made a product that anyone can understand and offered it at the same standard of quality that is customary in many other fields. Now, when someone decides to remodel, he doesn’t have to pull his hair out or worry about getting cheated or swindled, and so on. Everything has been put into an orderly service where, right from the start, it’s clear how much everything costs and who will pay for delays or cost overruns.
Did you study the market in order to offer a systematized product?
Dmitry: No, we didn’t do anything like that. We just saw that the customer has a pressing need and created a product to meet that need. The customer needs deadlines, detailed estimates, and standardized and clear procedures. He needs someone to take responsibility for all of the bedlam involved. Everyone is wary of being cheated. We tried to make the process clear and transparent, fulfilling every customer’s dream. This approach is sorely lacking in the home remodeling market.
Yury: If you type ‘remodel a two-bedroom apartment’ into a Yandex search, the dozens of ads that appear are all from middlemen who offer services but take no responsibility for the result. That’s like posting an ad with a detailed description of your personal merits without offering any proof or guarantees to back it up.
In addition to Rewedo, you have a project called Rerooms. How are they different?
Dmitry: Whereas Rewedo helps find a home remodeling crew, Rerooms does the same thing, but with a narrower focus on design and décor. The client opens a personal account and orders services according to certain parameters. We find a work crew to carry it out, create a clear and detailed estimate of the work, make it possible for the client to track their progress, and so on.
Yury: Rerooms is almost all online. We break the entire design project down into blocks in an online system. These include deadlines and the various stages — taking measurements, the brief, planning, iterations, time spans for each stage, the terms of reference for draftsmen and designers, the shopping list, the actual components to be installed, work estimate, and so on. We have more than 500 artists, draftspeople and designers working for Rerooms. This is a more complex project than Rewedo technically. It involves more details and processes that the client can monitor online at all times.
Are all 500 people working in the office?
Yury: We have a permanent staff of about 60 who are responsible for IT development and for bringing all the components together. After all, Rerooms also has an internal store for design and remodeling. The rest of the staff work through the platform.
Dmitry: The main idea of Rerooms is that it enables the customer to meet all of his or her home improvement needs in one place, from design and repairs to the purchase of furniture, décor elements, lighting fixtures, etc. It saves clients an enormous amount of time that they might otherwise have spent on a helter-skelter search for home improvement services and products.
Our goal is that, when confronted with the enormity of the challenge, the client does not give up, but understands that it’s actually possible to do everything!
We also created a marketplace with different categories of products: furniture, floor coverings, lighting fixtures, windows, doors, etc. Customers can buy everything in one place with the help of an online assistant or by using algorithms that select the best products based on their stated preferences.
How did you get into this field in the first place? How did you develop the initial concept? You must have had help from consultants.
Yury: We developed everything ourselves and found the cheapest ways to attract clients through Rewedo. First, we simply had the idea, and that later grew into the separate Rerooms project that was designed to lower the cost of home remodeling. It was continually refined through our interactions with customers. We repeatedly found niches to fill. Then we discovered that there were no analogous companies in Russia — although there are such companies in other countries that are valued at more than $1 billion. Tubatu in China is one example.
How much investment is required for projects that are so technically complex like Rewedo — and the even more sophisticated Rerooms?
Yury: It took us a long time to come up with the best business model. We went through several trial versions of Rewedo. In the process of testing each one through trial and error — without which no business project can succeed — we came to a clear understanding of the goal. Our first attemps were called SvoiTender and Priceremont. We went through several names. Two years and approximately 20 million rubles went into developing Rewedo. We launched Rerooms in May 2018 with help from an angel investor. About 60 million rubles has gone into that project and it continues to develop.
Dmitry: We have invested a lot in order to grow faster and find the optimal economic balance through trial and error. In the current stage, we are no longer in the process of checking figures or ideas, but of multiplying — the cost of attracting customers, income per unit, and scaling the business. This requires another level of investment, but at this stage, the project is honed and polished and you know that everything will work perfectly. The investment is justified and it is easy to calculate the returns.
You are both members of the HSE Donors Club. Do you feel obliged to thank the university?
Dmitry: It’s necessary to help in order to have high-quality education in Russia.
Yury: As you can see from Dmitry and myself, there are different paths to self-realization. Like many students who take jobs during their studies, Dmitry wound up in a big company. I have never worked in a corporation. Today’s students need to understand that all of us who have achieved anything started out as HSE students just like them.
We trust the people who created the university’s endowment fund and we know that they want to see the university develop. This project has a real purpose. After graduating from HSE we realized that it might not be the best university in the world, but it is definitely the most advanced in Moscow. HSE University uses an entirely new format to educate its students and help them develop their thinking. When we give money to HSE’s development, we know that it goes to new scholarships, libraries and buildings.