Don Craig – 25 years in Russia.
Don Craig has been living in Russia for a quarter of a century, and thus has lived and worked through some extremely difficult as well as rewarding times.
Interview by John Harrison
Don, it is your 25th year in Russia. How did you come to be here for 25 years? What made you come here in the first place?
I was working with a group of investors from Staten Island (New York), and they were searching for different types of businesses to invest into including but not limited to trying to do manufacturing of after-market parts for washing machines etc. They were looking at setting up a production base in Russia. The company got in with a group of people interested in setting up a western style automotive business selling American cars with a fully functional western service centre. I was brought in at that point as an inventory specialist in car parts along with my brother who was heading up the project.
This would be the first time I had travelled across the ocean. I got a passport and a Russian visa, and on the 25th of January 1993 we were sitting at JFK and I found myself wondering what on earth I was doing! So I originally came to Russia to work in the automotive industry.
Did that work?
Yes, I worked with them for the first year and had the opportunity to work with some interesting people including a Lieutenant Colonel from the Russian army who had been based in Cuba, so he told me some great stories. There were a lot of players from various government agencies to get the certifications, different levels of security, some with special ties (some armed some not). There were things that you didn’t want to think about that could have happened and a lot that did that you don’t want to talk about.
We worked together for most of the year until Mr Yeltsin decided to blockade the White House. Actually, I flew home two days before that to get my visa renewed. During the 5 days out of Russia there was some scandal within our company. Somebody had taken control, and I was summoned back to settle this dispute. I came in and was able to settle that problem with an interesting group of arbitrators. Later on the legal partners went into litigation and eventually settled a couple of years later. You can’t say that there was no structure to the way that deals were settled in those days, there was. After the dust settled I had offers from both sides but I decided on my own path and started importing car parts to Russia in 94, the company DC Limited was born.
Tell us a little about your business please
I started small. We soon worked up to a very healthy turnover. There were a group of us, I kind of led the way. We ran that business all the way up until 1998. In August 1999 it changed, that was when all the auto parts companies started to organise inventories and working out what parts were needed in advance as drivers no longer wanted to wait for two weeks for a part to arrive.
So, the business lasted for 4 years, that was a long time in those days!
It did well, and in 1997 my now ex-wife and I decided to go back to the States for four months, that’s the longest period I have ever been away from this country. I tried to get something going in America a couple of times, but it just didn’t work out, I lost a good bit of money trying. Was I making a lot of money in those days? Not really, I certainly had no more than the average person working in a ‘normal’ job. Needless to say I headed back to Russia
In 1999 I started working in leasing, in Russia.
Ah, leasing, Russia has provided us with incredible opportunities hasn’t it?, to do things that we maybe could have never done elsewhere?
It still does.
But the bad part of it is that it is hard to keep hold of what you earn?
Yes, that’s normal, you had to have partners you had to pay somebody something. That’s the way it used to work at least. I don’t see that being around these days, if it is there, I don’t see it. Everybody in those days did things in the way that they knew how, in the way that they were brought up in the business world. Most of these guys have turned their businesses into ‘white’ situations, and if they are doing anything now it is much more complicated, and very transparent. In those days it was very hard core; guns in pockets, you had no choice.
There was a guy who owned a leasing company and he invited me to come and work for him, and I worked for him from the beginning of 1999 to the summer of 2005. I took it on, learned it real quick, and became one of the experts in leasing here for a while. The gentleman I worked for at the time had some problems with his clients, and he left with unpaid debts, so you can add another tidy sum to my losses. He started selling off his cars to raise cash, and he has never been back to the country since then.
So your worse situations were with foreigners, not Russians?
Yes. But I think this was more of a steal from Peter to pay Paul situation. It is difficult to place all the blame on one individual’s shoulders but at that time I was probably close to what you might call a nervous breakdown. We had cars being stopped by police and locked up by the bailiffs, this went wrong and that went wrong, I had to fight all the time, on all fronts; we had to pay for garages and so on. Of course, I was a legal entity at that time, so I had legal obligations. It took a lot out of me at the time. They are doing good business now, but it took a lot out of me.
After that I moved into construction. I was invited to work for a construction company. The first time they offered it to me I didn’t take it, a friend of mine took the job. That was in 1995. That was when I met John Roche, we worked together along with other great people like Johnny Oxenham , my guitar playing friend Tony Young, Johnny Jensen, and others. I was supposed to take over a project but it didn’t work out, instead I took over their procurement department which was actually one of the most pleasing jobs I ever had, because I didn’t have to deal with people! I enjoyed doing the numbers, I enjoyed seeing the results and doing the buying. I liked seeing the company do well, and I enjoyed seeing the profits, of course I never got too much of them! I worked for them for almost 5 years. Then the business experienced difficulties and one of the people there did not turn out to be exactly honest, anyway, problems with salary payment set in and it was impossible to get paid. As they say, ‘Karma is a bitch’ and that company doesn’t exist anymore, and as I understand it, most of the people who stayed working for that company lost money.
Then in 2010, and I worked for another construction company for a very short period. They probably screwed me worse than anybody else did in my lifetime.
One Russian, one Brit. I found a couple of projects for the company to work on from people that I knew, but I soon discovered that the work wasn’t getting done on time. I had to personally bear witness to this and explain every day what was going on. I got caught in a Catch 22 situation. My mother passed away in January 2010 and I had to go home, I couldn’t get home before because they were screwing around with my visa and I almost didn’t even make it home for the funeral. I came back to the same mess, the problem escalated, and I wanted to resign. I requested they give me my documents back, that took two weeks plus. It was a Wednesday at 5pm I was told to stop by and my passport would be ready to pick. To my surprise, I looked through my passport and my Visa had been cancelled, I had to leave the next day – they had held the passport on purpose. They made one mistake though, they bought the cheapest ticket they could back to the states with a layover in Kiev. In those days I had good connections there and was back in Moscow the following Monday. I was sitting in a bar and one of the people from the company walked in. I was polite and said hello, how are you doing? Everybody was sitting there just waiting for the punch. Even though I would have liked to have done something to him, I never did. I thought I would just let God take care of it. That was the worst thing anybody has ever done to me. Screwing me out of money is one thing, but doing that – after I had brought business to him was another. It was probably the most disrespectful thing anybody has ever done to me. But I came back up, left them, and went to work with another construction company.
It was about then, in 2010 and 2011 I really got into doing my night time life business. Actually, this was not the first time I had got involved in this kind of work, my first project was ‘Wednesdays’ in 2001, and I started doing ‘Shamrock’ at the same time. ‘Wednesdays’ closed for a period, about a year, so then I helped the ‘Hard Rock Café’. Then it grew, people got to know me, and inviting me to promote their places.
What does the work involve?
I create social media networking events, I organise special deals like Happy Hour, networking events, special evenings, music events when the venue can afford it, and create non-commercial social gatherings. It’s very much the same sort of thing that I do now. A lot of people do this to make a lot of money out of it, I did it to have fun, in the beginning anyway. Then when it became a job and people asked me to help them, of course I took a commercial view on it. But it’s not a lot of money, and it’s a bitch of a business to be in. Since then I’ve probably helped about 18 to 22 different places.
So you are marketing these venues?
Yes, when they are opening or when they are in trouble.
Then you move on to the next one, you don’t usually stay in one place?
Yes, I move on usually. Once business picks up for them they usually think that they can do it better themselves, and I am no longer needed there. Usually they get it wrong, and it doesn’t last, but that is their business. One place that I was involved with for a long time, and still am, is the ‘Papa’s Bar & Grill’. During that period, I also helped the new ‘Chesterfields’ on the New Arbat.
My favourite is ‘Bar BQ Café’ located on Manezhnaya Square, I love the Friday evening get togethers there. I have a lot of respect for Henrik Winther, more than anyone else in the business in fact, and Henrik is a friend. I know Novikov and everybody else, but Henrik is a real person and his staff respects him which should tell you everything.
You have to do something new nowadays. There are so many people and places trying to do this business. It’s difficult to get everybody together, and the expat community is so small now in comparison to what it was. White collar expats socialize in specific spots, the ones who don’t come out from wherever they are hiding show up only for Black Tie affairs, or you might see them at somewhere when Tony Watkins is playing because he is somebody they can relate to, or know.
There are now many different places to go, my friends all have their favourite places, and there is nothing you can do to change that apart from giving beer away free, but that isn’t profitable.
So most of the people you are working with now are Russians?
Yes, but that doesn’t matter, I have always been working with Russians. Right now, nobody wants to commit to this business. They come into it for all the wrong reasons. I think the Americans and the Brits are the exception, they mostly get it right, they understand the public better, and people like Steve Conway have been successful. He knows it costs money, he comes and does a proper menu, he employs good staff. He never has a situation where things run out behind the bar and he keeps a reserve of food in the kitchen. Most places operate when they open by inviting friends in who eat for free, but that isn’t always the best thing to do. Basically, in this business if you don’t have enough capital to run for 6 months you may well run into trouble.
Are there more people now who have that 6 months’ capital behind them?, is the market now becoming more professional?
I think that people like Novikov and Henrik have put a new face to it, people who have the money to do it correctly, but they are still the minority. The only reason my name is above the door of the bar we are in now, and this is public, is because they wanted a quick take off. I agreed, I shouldn’t have, but I said OK. They made a lot of promises like everybody does. Since then I have set two of the highest business turnovers in 5 years. But once the money is coming in, it’s like: “what are you doing still employed here,” and somebody runs away with the money, you have no idea! Now those doors are closing
Actually I do.
It tends to disappear very fast. Business itself is difficult, it wears on you. I remember what Doug told me one time: “if you can’t take it, you shouldn’t get into it.”
I think that eventually it will turn out to be more like what people like Henrik and Steve Conway are doing, and also the younger generation. People like my son, who has real knowledge, they can do things differently. I actually didn’t want him to get into this business, I brought him in only so that he could make extra cash whilst he was at college. A barman can always make money anywhere in the world.
Is the reason it has been so difficult here something to do with the collapse of the old Soviet system, and people woke up one morning and found themselves living in a different country, were clueless and didn’t understand what capitalism was all about? Although some people were streetwise in funky way, it took most people a while to figure out how to do things?
It didn’t take them that long.
But now, it is different because of the length of time involved, now a new generation is growing up, for them it is different?
In 25 years I have seen a new middle class evolve. There wasn’t one before. You had upper lower and lower upper but you didn’t have middle class. Now everything is done for the middle class. You have a full score credit system, people can buy cars, and of course their pay checks are eaten away by credit payments. I think it is educating people. Let’s see what the result on retail is going be. Retail is most of business here. Just look around you, I am sure that there are more jobs in retail than in any other kind of business. There’s a shopping centre every few yards. In 1993, when I first got here, when you walked down Tverskaya, there were no lights, there was no neon, there were windows full of flowers and flower stores, and there was the red star above the Kremlin. Pizza Hut on Tverskaya and the McDonalds were the first foreign restaurants which opened in Moscow, and they were the only two places on Tverskaya apart from Night Flight! Certainly Luzhkov, apart from all the bad stuff he did, started a lot of action here in Moscow. With the present mayor, I have seen Moscow become a very beautiful place, a stunning place, I mean the parks, everything, and he is taking care of it. The oldest part of Moscow that I know is the metro, I love the metro, and they have actually started extending it. I think the strategy is to bring a lot of new people in to live in the so called ‘New Moscow’, and as they do that, the new areas will develop, a lot of infrastructure has to be built. In some parts of that it is a bit like Dakota compared to New York City. It’ll take time, but it’ll happen.
Do you see yourself staying here for the rest of your life?
This is the first time that I have thought about leaving, although I love it here, it has been my home; it has been the longest place I have ever lived in one place. So in a lot of ways it is home for me. I have made so many good friends here, it is comfortable here. But at the same time, because it is Moscow, I can fly half way round the world and deal with different people in different countries, that I never ever would have known and would never had had the chance to meet if I had stayed home. For me, what is going to happen over the next few months is very important. I am trying to do my own Pepper Sauce business, if I can get that going I might be here in another 25 years. Even if I am not living here, however, it will still be home for me.
27.1.18. Don Craig © RussiaKnowledge