The new Moscow generation

I am in the plane back from Moscow, just spent a few days there with Pierre Mechentel. We have had many meetings in a very short period of time with russian entrepreneurs and of course as we are both french, the local french entrepreneurs. My goal was to try to understand if we can and should launch TypePad in Russia and better the market. Only based on word of mouth we already have more than 120 000 livejournal blogs in Russia.

The last time I was in Moscow was 12 years ago, a few years after the fall of the USSR. I had spent some time there as I learnt russian as a first language and unfortunately lost most of it today. Obviously the way Moscow changed is impressive. The price of a flat in Moscow is catching up fast with largest cities in the world with $5000 per square meter, there are more Mercedes 500 sold in Moscow than New York and I would be there a more hip restaurants (and better decorated) in Moscow than London and Paris. Don't expect to have dinner in one of these high end restaurants for a good price, they are more expensive than in London. Walking around the Kremlin is an experience, the former popular shopping area Goum where the average russian used to go and buy fruits and bred has been transformed in the most luxurious shopping mall I have ever seen. Vuitton and other luxury shops are just in front of Lenin's tomb, looking at the "mosolei lenuna" as if capitalism had taken its revenge over communism.

The young generation has the latest mobile phone and spends anything between $20 to $150 on it every month. The largest russian mobile operator, MTS, has more than 30 million subscribers and was the worlds fastest growing phone operator last year. The PC sales in 2005 should reach 500 000 units, twenty times more than only 7 years ago. Samsung and LG Electronics who have been one of the first electronics brands to invest in the russian market have reached dominant positions on the computer screen and TV markets.

Don't be surprised in the street or your hotel if your bill is in... "units". The first time I heard "units" to pay a bill I was quite surprised. A few years ago the Government made forbidden to show prices in dollars in the streets but the russians got fed up to change the prices all the time with inflation so they launched a new "currency" that is difficult to describe as it has no official existence but is everywhere. You might think is it in dollars, well it is close, but it looks like the russian start to say it is closer to the euro now...

The picture of Moscow we usually have of an underdeveloped city is totally wrong. I felt also very secure in Moscow, another "cliché" that disappears quickly when you walk around is insecurity.

Meeting russian and french entrepreneurs who live there was a pleasure. Some of them built amazing fortunes in a very short amount of time in the Internet, direct mail, luxury goods or real estate industry when others have built world leaders such as Plesk. I had been very impressed by China and clearly I was underestimating the way Russia moves. Coming back to France will be difficult with all this energy around as "Old Europe" has setup itself into a very comfortable socially protected situation where the most important thing in France or Germany is to defend it. I the eastern countries as well as China the only way is "up" and the energy of the entrepreneurs and the young has nothing to do with what we see in western europe.

Of course all the buying power and the wealthy people in Moscow cannot hide a very poor bulk of the population living everywhere else, mostly from agriculture revenues. Still, Russia is catching up and fast, stay tuned before it becomes one day the capital of Europe. Russians I have met tell me that the situation varies very much from one city to another, from one region to another, Moscow looks like a country alone with its 15 million inhabitants.

Thank you again Pierre for getting me there and thank you all, Olivier, Alexandr, Laurent, Boris, Philippe, Nikolai, Pascal, Stanislav for your help and fun there !

Before I forgot, do you think russia is Europe and should join the EU one day ? I personally do. Russia joining the EU would be a huge strength for Europe towards the US, India and China.