Правильно направить энергию. Зиявудин Магомедов – «Черновику»
We met with Ziyavudin Magomedov, chairman of the board of directors of the Summa Group, during the APEC Summit in Beijing. The Big Port Zarubino, being implemented by the Summa Group (see Chernovik №26 of 07.04.14 – editor’s note), is not just a business project, but also an important strategic point of contact between Russia and China. Ziyavudin Magomedov is a giant in the literal and figurative sense of the word – just under two meters tall, athletic, intellectual, and well-mannered. No ostentatious luxury trappings, which a person on the Forbes List could easily afford: no expensive Vertu phone (just a common iPhone), or diamond cufflinks or a luxury watch. There is also no condescending, pompous behavior when communicating with people (even with subordinates). Nevertheless, we must admit, that during transcription of our interview, several times we had to “Google” the names and terms which he used.
In Dagestan, the Magomedov brothers, who are commonly referred to as the “Smolenski” brothers, are little known to the general public, due to low publicity. Therefore, we were primarily interested in Ziyavudin Magomedov as a person. We saw a businessman, deeply versed in the spheres in which he works, and who is well abreast of all events in our rapidly changing world. We saw a Dagestani man who cares a lot about the state of affairs in his homeland (during our interview, now and then our conversation turned to the situation in Dagestan and the changes taking place there, in which Ziyavudin Magomedov is keenly interested). And how do you see things there?
- What does Dagestan mean for you today?
- Dagestan for me – means a great deal... First of all, this is my small Homeland. As you get older, you begin feeling ever more acutely connected to it, especially after some sad events occur there. Recently (this conversation took place on November 9 – Chernovik) I learned about the death of my homeroom teacher in High School No. 39 – Zoe Semyonovna Yushkina, who taught Russian language and literature, just like my mom.
- And how did you hear about this? You keep in touch with the school?
- Yes, of course I keep in touch. My old classmates informed me. I saw her a year ago.
- In Dagestan, almost everyone knows your name, but as a person, you remain a mystery. Tell us a little about yourself.
- I was born in Makhachkala. I went to School No. 39, left the Dagestan Republic in 1985, served in the army, studied in Moscow, and ended up staying there. In the 1990s and 2000s, my connection to the region slightly weakened. We were mostly working on developing our business, focusing on growing the company. There was a time when for over 12 years I never visited Dagestan, and went back only two years ago. Makhachkala, of course, has changed dramatically – and not for the better. This is not the same city where I was born and raised, but the republic remains my homeland.
Of course, we have a great desire to help Dagestan. However, it seems to me wrong to help only by giving money. The most valuable asset in our republic – are the young people with their crazy energy! I have been thinking a long time already on how we could help. Besides the usual charity work, which we, of course, are also engaged in – help with repairs to a higher educational institution, providing money to build a school... However, I was trying to think of mechanisms that would actually help in the development of society. After all, the state in which Dagestan finds itself today, simply does not correspond to the rich history of our bright and talented people. And I think that education – this is the main area, which can make a real difference...
- That is why you created the Plug & Play project?
- This project is not fully formed yet, including in terms of its educational component. I think that I need another three or four months, maybe half a year to finally form a strategy for it. I am now talking with many different people, including those who are working on similar global projects. Not long ago, in Los Angeles, I spoke with Sir Ken Robinson – a global guru on the development of creative thinking, and educational systems.
- It turns out that on the basis of the Plug & Play project, you organized a platform for the development of opportunities first of all for people in the intellectual labor sphere – and this was not done just for the sake of appearance.
- I think, in Dagestan, there are two areas of possible growth – technology and education. Our people are very enterprising, and the young generation wants to be successful. Moreover, in Dagestan, we have experience of high-tech manufacturing, a base that has been preserved since Soviet times. The most important thing – is to properly direct this energy. That is why education plays such an important role. I really did not wish to engage in the development of basic educational infrastructure (schools, kindergartens), but given the high birth rate, I now understand that there is no way around this. Perhaps, over time, we will implement two projects. The first will be in Makhachkala – this will be a high-tech innovative project with an emphasis on providing students with opportunities to create business startups. Of course, this will be no Caltech or Stanford, but we will strive to be like them. By the way, the interconnections between education and business are nowhere as strong as in Stanford – this is the number one university in this regard. For me this institution is an example of modern higher education, and I think, it surpasses even the Ivy League Schools – universities located on the east coast of the United States – though it may be that the academic education there is better.
The second project is a secondary educational cluster in Khunzakh for the mountain regions – the concept for this is now being developed. I will not talk about these ideas in detail just now. Let us wait until we have a final concept developed, and we begin to implement these projects.
- You talk so enthusiastically about education, and where did you yourself study in Moscow?
- The Economics Faculty at Moscow State University.
- You had no desire to get a second degree?
- You know, life is so dynamic, that even if I would have had the free time, I would have thought – is it really worth getting another degree or finding a better use for this time?
- Do you think that the higher education system in Russia has outlived its usefulness?
- It has not outlived its usefulness. Now a lot of criticism has been heaped on the traditional education system. My friend, Peter Thiel, who created PayPal (an online payment system – Chernovik), Linkedin and gave Zuckerberg money for Facebook, himself is a graduate of Stanford. Nevertheless, now he provides grants of $100,000 to the best students of leading universities, so that they would leave their institutions and study at home. He does not believe in the usefulness of a modern university education. However, I am more conservative in this matter. I think that as a social and communicative environment, the universities are needed. Nevertheless, as to post-graduate education, for example MBA studies, I have certain skepticism. Those who wish to realize their ambitions in business, I would advise not to bother with this education. Better to study four or five years, and then – get on with the real work.
- How many languages do you speak?
- Three: Avar, Russian and English. (Laughs) And no others. Russian I know the best.
- You speak Avar fluently?
- Yes, fluently. I was born in a Russian-speaking city – Makhachkala. However, in my academic, as they used to say back then, family of teachers, we often spoke not only in Russian, but also in Avar. In addition, my summer holidays, which I spent in Khunzakh, left their mark on me, having helped me learn my native language better.
- And how about your university course-mates, do you keep in touch with them, as much as with your old classmates? Have any of them achieved success?
- Some of these guys are working with me, including some former classmates. And I maintain constant contacts with the rest.
- At this moment in your life, are there problems or issues that need to be addressed – global choices?
- Are you now talking about the spiritual or practical side of life? (Laughs) You know, life – is full of daily barriers, both small and large, obstacles and trials. Life’s a challenge! – as they say in English.
- How do you like China?
- China, in its evolution, has made a big leap forward, because it has rejected the idea of a self-contained Middle Kingdom just at the right time. You should not build a state that is closed, cramped within some frames. The modern world is very diverse, and in its various parts appear the best ideas, the best technologies, and the best practices. Those who have realized this, those who now fight for human capital, these are the ones that will win.
- What are the interests of the Chinese in Russia?
- I think that first of all, it is the natural resources.
- Are there any trends, interesting for Chinese businesses, which might encourage you to buy new assets or launch new projects, especially in terms of doing business with this country?
- The Summa Group now has so many projects on the go, that in the next two or three years, we will not be buying anything – except for new technology, into which we will invest.
- I would like you to get some practical advice from you. In Dagestan, there are quite a number of enterprising people, with rather little capital. What advice do you give to people of Dagestan, having one to two million dollars to invest?
- Now we, that is, the Summa Group, jointly with other investors, are creating a Hi-tech Fund of $250-300 million. And there are a number of projects on which we are already seriously working. If we talk about where to invest, then I would advise sensible guys from Dagestan to pay attention to projects in the high technology sphere. Nevertheless, it is better to realize these with people who have a history of success in this field. I have no history of success in technologies, so I found partners for this. I find this very interesting, and I am learning about a new sphere, as a person who would like to work in it professionally in the future. At that, Internet projects develop faster than, let us say, biotechnology, energy or pharmaceutical projects. Take, for example, the application Uber (mobile application for searching, calling and paying for taxis and private drivers – Chernovik) – a seemingly simple theme: Press a button on your phone and a limousine arrives to pick you up.
I recently had a team of young guys come to talk to me about a very interesting project. By the way, some of them were originally from Russia. These guys researched the charter market, the annual turnover of which is $30 billion, and realized that 25-27% of the flights, depending on the destination, travel empty, that is, the plane flies back without any passengers. Moreover, they noticed a trend that people often wait for connecting flights at airports. Suppose you are flying first class to New York, and have to wait a long time for your flight, while at the same time there is a private plane, which is returning empty to your destination city. You are offered a flight on this plane, at a rather modest price. For the owners of the aircraft this is still more profitable than flying the plane back empty. Thus, for example, a passenger pays $10,000 for a ticket, to fly in a charter jet that would normally cost $100,000. In the course of one year, these guys, by finding passengers for empty business jet flights, earned $20 million. Now they are collecting moneys for the second round of investments – $80 million. This is actually an Uber-equivalent in private aviation. We are now reviewing their project, and appraising the investment opportunity. This I mentioned as an example, so that you could understand, into which kind of projects I would advise investing.
- And are there such interesting technological ideas in Dagestan, in which you could invest? Not as charity, but as business projects?
- Yes, now within the framework of the Plug & Play project, we are considering investing into two interesting ideas presented by Dagestani guys. In such cases, specific calculations are carried out to determine the possibilities of these projects achieving future profitability. Nevertheless, these first projects will be considered not so much in terms of their paybacks, but rather as some examples of success stories for other young people of the republic.
- Previous president of the Summa Group Alexander Vinokourov told me during the Russian-Chinese Expo in Harbin, many people in the Group are involved in sports, including martial arts. It seems to me that you yourself like MMA... (Magomedov gives the impression of a person who exercises regularly.)
- Yes, very much so. I know the names of all our athletes fighting in the UFC and Bellator. I do believe that Russia now has the strongest team. We have great guys, such as Habib Nurmagomedov, Vitaly Minakov, and Ali Bagaudinov.
- Dagestani athletes are usually strong in individual sports, but not in the team events...
- Well, why do you think that, we have the football (soccer) club Anji...
- Since the topic of Anji has come up, I cannot help but ask you – what is your relationship with Suleiman Kerimov?
- We have good relations; we have known each other for many years.
- The Summa Group supports the Admiral Hockey Club (Vladivostok). In your opinion, do you think Dagestanis could achieve success in hockey?
- Of course, in terms of the expression and dynamics that prevail in that sport, Dagestanis could succeed. Hockey primarily requires the presence of infrastructure. Accordingly, if skating rinks and grounds are built, then I believe that this sport can be developed in the republic. I remember as a child, during rare evenings and nights when temperatures fell below zero in Makhachkala, we poured water to create skating rinks in yards and played hockey. This looked very funny, probably, but we were very passionate about it.- Now you will not see such things in Makhachkala... But in general, what do you think sports give to a person?
- I believe that in sport – the important part is that what we call success. You mentioned that in Dagestan we have always placed a special emphasis on martial arts. This is true, and again, this is connected with the expression and dynamics that we have inherited. The question again is how to properly direct this energy. Do you know what the motto of Fight Nights is? “It is better to fight in the ring than on the street.” It is better to convert one’s energy into achievements, including sports – in wrestling, boxing, and MMA.
- I cannot avoid asking the nationality question: in business, in high-level contacts, are there any ethnic barriers that arise in the everyday lives of ordinary people?
- In Soviet times, the nationality question, if it did arise somewhere, was not as sharp as it was in the 1990s and 2000s. This is a problem of a spiritual vacuum in society, which begins to be filled with ideas of nationalism. An example of successful co-existence of more than thirty nationalities – it is Makhachkala in the 1970s. Whoever lived there at the time, will understand what I mean. There were no nationality issues there. Yes, they teased about the strength of the Avars, and said that if a Jew and a Lak sat down to play chess, then a lot of onlookers would suddenly turn up. However, all this is at the level of friendly caricatures, and there were no evil nationalistic insinuations. The nationality question in politics, in the distribution of posts, I also do not understand. We will not build a healthy society, if we rely not on the professional and personal qualities, but look at the nationality of one or another candidate for public office.
- And your Western colleagues, do they perceive you as a Russian? Or is it necessary, to explain, for example, to the Chinese that you are from Russia, but not Russian, and so on...
- The Chinese themselves still have no easy time with the nationality structure of their society –there are many nationalities and dialects in the country. The question of nationality, as a rule, does not arise – Dagestan is considered as being part of Russia.
- The Summa Group has assets in the agricultural market. Do you think that such assets will become very important in the current era? What, in your opinion, is the most important resource of mankind today? Food?
- In the long term – it is water. I like the feeling that I live in a country that has 20% of the world’s freshwater resources.
- Is the Summa Group is planning to participate in the construction of stadiums for the 2018 FIFA World Cup?
- No. The contractors for that have already been selected, and the Summa Group is not among them. Although, we were involved in the construction of a stadium in Kazan, in which some World Cup matches will be played, as well as in carrying out certain preparatory works in other cities, which will host the world championship.
- What kind of relationship do you have with the leadership of the republic? What are the points of contact?
- The relationship is good, business-like. There are projects that we are implementing, and the republic’s authorities support them. For example, we are planning to build the Matlas Resort Complex in Khunzakh. Some time ago, we hired consultants, representing one of the leading companies in the field of human resource development, which studied the work of government agencies in the country and found a curious detail: there are very many young people with intelligible and articulate view of life, working in the second and third echelons of government in Dagestan. These are not the ministers or deputy ministers, but heads of departments, divisions. Strong young guys that could potentially form the backbone of the talent pool, which is so necessary now for Dagestan. The correct theses need to be implemented in life.
- On the part of the leadership of the country, you received offers to take on the management of the republic yourself? However, it seems obvious that you do not aspire to enter government...
- Why should I? The country has a leader, supported by the Russian president and the people of the republic.
- Is it hard to find like-minded people in your life?
- I think, in Dagestan there are many like-minded people. I perhaps do not know all of them personally, but I am sure that we are thinking in the same direction.