About
About
John Rose, Chairman, Rose Creative Marketing is a veteran marketer, strategist and entrepreneur who has led businesses in the US, Latin America, Europe and the Middle East. His years in Russia coincided with one of the most dynamic periods in the country’s post-Soviet history. He founded and led the first advertising agency in the former USSR, launching global brands including Kodak, Coca-Cola and Sony, and introducing world-class marketing with the first mass media campaigns to a rapidly changing marketplace. From advising major brands entering Russia to navigating its evolving business culture, his work bridged East and West during a time of extraordinary economic and cultural transformation. Today, based in Dubai, his agency serves the MENA and CIS markets, and he advises companies on strategy, branding and market growth.
Daniel Satinsky: As I remember originally—I don’t know exactly how we met, but I know I wrote an article for a magazine that you had. It was called what, Moscow International or something like that?
John Rose: I think it was Moscow Business.
Daniel Satinsky: Moscow Business, that’s it.
John Rose: Right. I think that’s how we first came across each other. And that was really, really early days. We were just starting to come over. Before we even launched the agency over here, we somehow got involved with…there was a—since I know you’re looking for some of this historical perspective I’ll draw it out a little but stop me any time.
Daniel Satinsky: Absolutely.
John Rose: The way we came into this was that my partner, one of my partners at the time ran into some Russians on a plane. This was late ’88 maybe, early ’89. And this is as the media here under the Soviet Union were told you’re on your own, go figure out how to make money, because you’ve got these massive printing facilities, you’re your own little industry, but you don’t make any money. And so he met some Russians on a plane that were working for Moskovskaya Pravda*, a newspaper, and they had permission to start the first magazine that could accept advertising.
And that, through various conversations, because he said we can help you—because in those days, this is all pre-internet, the agency business was a lot about print. We did a lot of magazines, a lot of publications. We did a lot of tourism and travel, so we were handling magazines for the city of Boston and for various corporations, and all of that kind of stuff. So, we can help you out. And so we started consulting with them. And out of that came a joint venture to create Moscow Business with that newspaper, with Moskovskaya Pravda.
Daniel Satinsky: Okay.
John Rose: That’s how that came about.
Daniel Satinsky: Okay. And you had an agency here in Boston.
John Rose: Right, exactly. I started an agency in 1984, and then we grew up organically and through a series of mergers to become an agency that ultimately became Friedman & Rose, and then Friedman & Rose came to Moscow, and that’s how I started doing this stuff. My partner, who was much older and Czechoslovakian—he’s no longer with us—he had no real love for the Russians. He made a couple of trips and then said I’m out. And we had a client in Boston. One of our clients was Kodak at the time and they said we’re interested in what you’re doing over there, one of our divisions makes large color management systems, and we’d love to talk to some of these publishers and printers and people that you’re talking to, maybe you could make some introductions.
And we came over during, what was it, USA 89, the big trade show and all that stuff. And so we started doing that, and that’s the couple of trips that I made with my partner. And then the way we brought the agency over was in addition to helping Kodak out—and they were a Boston-based client, and we were sort of giving them an overture to look at things here—I found out that Coca-Cola was opening their first bottling plant, so I knocked on their door, and suddenly we became Coca-Cola’s first agency.
Daniel Satinsky: Oh, wow.
John Rose: And then Merck Sharp & Dohme. So, we had Coke, we had Merck Sharp & Dohme, now Merck, we had a bit of Kodak, and then the next big break was—well, the agency environment at that time was really Young & Rubicam, Y&R—I don’t know if you know these agency names—but big old guard agency, Y&R, Young & Rubicam had a joint venture with Sovero, which is another large publishing group here in Soviet times*. And they weren’t really doing agency things yet, but they were just sort of trying to feel their way around.
There was a professor—Ogilvy, at that time Ogilvy & Mather, another big agency, was trying to make some inroads here, and they somehow got involved with some professor who also didn’t know very much outside of the academic sphere of marketing. And little old us came in, and suddenly we were the only ones really doing anything quickly on the ground.
Daniel Satinsky: Wow. ’88 and ’89, this was right with perestroika?
John Rose: Yeah, this would be like late ’89 when we really started launching the agency services for real locally. We were the first independent agency. We were not part of a big network at the time, and arguably—I don’t know, you can debate about who was the first actual agency, but we were certainly there at the beginning. In fact, even before BBDO and other famous agencies came over I briefed them. I talked to them before they came over because I was interested in getting more things going. We launched the local advertising association and things like that.
But the big break for us was Y&R, the only account that they got, and they had it for less than a year, was Sony. It was an international account. And for whatever reason, Sony decided they weren’t too happy, and they put it up for review, and we won it. And so then suddenly we had Coke and Merck and Sony, and on the back of that I built an agency here, and we kept growing in Boston, out of Boston, and we had a little satellite in New Hampshire. And then we just sort of built it out from there. I started going back and forth every two weeks from Boston to here on that old Lufthansa flight that used to have to sit for six, seven hours at the airport in Frankfurt. Remember in those days?
Daniel Satinsky: Yeah, I know that flight, yep.
John Rose: And so I did that for a number of years. And then we ended up actually selling the agency. We sold it and got it back. We sold it to a French group—again, this is all alphabet city to you, I’m sure—but BDDP. And then they got acquired—we created an affiliation, they were buying us, it was on an [international] basis, so it’s in phases. And they got bought by a British agency which then was taken over by Omnicom, so suddenly we’re part of Omnicom. And then they wanted to merge us with another agency, and we had an out clause, so we got out. Got to keep some of the money, which was even better. And we had an escape clause, and we became independent again. That was around ’95. And then we’ve been independent ever since.
Daniel Satinsky: So, in that period before you were independent, you had at some point decided to stay there in Russia full-time?
John Rose: Well, I was going back and forth, and my partner, who was older, he doesn’t want to do anymore traveling, and so the original thought was well, okay, I’m young and eager. I was about 30 at the time. And he could sort of hold down the fort. We had a big team in Boston. I could use those resources, and I could come over here and start something up. So, like everybody else, I worked out of a hotel room for a little while, like everybody. And then got DOD permission to bring over laptops and things like that. And then finally opened up an office inside of a hotel, and we lived through the coups and—
Daniel Satinsky: Which hotel?
John Rose: We went to the Sovietskaya, a small hotel, like…it’s central, but it was a small hotel. It’s funny because it was the first hotel that they had brought me to in my first trip when I landed in Moscow in ’89, and when I landed in Moscow in ’89 it was night, it was raining, my first step into the Soviet Union, didn’t even understand Cyrillic at the time, couldn’t even read… And brought me to this hotel, which is a very Soviet—I mean, Sovietskaya, very Soviet hotel. I remember they gave me a little room. I had brought our CFO over and we were starting to put some things together, and then they said we have a much better room for you tomorrow.
And I remember the next day telling our CFO listen, I’ll go check out the room, it’s a suite for us. And I go down and I get the key, and I go up, and I go down this long, long corridor, because everything’s on these big corridors, okay, and I get to the end and there’s a double door, and I get to the end and there’s a double door, and I open up the double door. There’s no bedroom or anything. I see double door, double door. I open up another double door, it’s a dining room, okay, huge table.
There’s a grand piano at one end that I can barely see as I’m turning on the lights, and double door, double door, double door. Open up another double door there’s a big living room, okay, I mean, the ceilings are enormous, there’s huge pictures of Stalin, and an enormous couch and desks and so forth, and I still haven’t found the bedroom yet. I have to go back around through the other double doors. I finally find the bedrooms and the bathrooms. It was just enormous.
Daniel Satinsky: Wow.
John Rose: And so this happened to be…so it was just incredible. It was the kind of room where, if the doorbell rang and you were on the phone, you couldn’t get to the door before they started walking away, or vice versa. And then years later that room became our office. We pulled all the furniture out of it, and we put desks in there, and that’s where we were when the first coup, when they were shooting, when Yeltsin was out in front of the White House and the tanks were there and everything, that’s where we were ensconced.
Daniel Satinsky: Wow, wow. And so, when you went, was your motivation that this was a business opportunity, or was this an adventure, or was this a way to participate in history? I mean, what were you thinking?
John Rose: I don’t know that I had any sense of history yet. To think of something as historical, that’s in hindsight, I guess. But going over it was certainly exciting. I grasped the inevitability of the market. In other words, here’s a market that has zero advertising, okay? The anecdote would be at the time when I was coming over here, and when you were here in those early days there were lines for everything, right? People were standing in line to get anything. The joke was you’d get in line and then figure out why you’re standing in line.
Daniel Satinsky: Right.
John Rose: And so when I was first trying to explain advertising, the Russian perceptions was how god-awful would something have to be if you had to advertise it, because in their mind if it’s on sale we’re buying it, okay? We’re buying it in every size because we know we have some family member who it will fit. And you quickly figured out that even in the Soviet Union they did understand brands because they—it’s funny, they would look at the bottom of something, and this was done in Factory 45375, okay, versus 45376, this one’s better. They had a… So, you could see that it wasn’t going to be too much of a click. It was pre-internet, so they didn’t have the window to the world, like they couldn’t talk about a lot of brands. They knew the famous brands, but they didn’t know anything else, really. They had some communication, but it was still pretty clamped down when I first got here, so it was a very foreign concept.
Daniel Satinsky: They knew Levi’s, for instance, because—
John Rose: Right, exactly.
Daniel Satinsky: —there was a big market, black market in that in the Soviet Union.
John Rose: Right, and Pepsi had been here for some time, since Nixon, so there was a hint of things. And because it started, had just started opening up and people were just starting to travel, they were starting to get some sense of things. Of course, the other joke that I used to tell in those days was—you’ve probably heard this—which is the Russian space agency is holding a press conference—have you heard this?
Daniel Satinsky: No.
John Rose: So, the guy goes, he’s talking about the space agency. He says first we’re going to go to the moon, then we’re going to go to Mars, and we’re looking at Jupiter. And then a reporter raises his hand, and he goes, when can we go to Paris?
Daniel Satinsky: [Laughs.]
John Rose: These are the stories you’re telling in those days, when I was doing forums for McGraw Hill in the early days, when they’re talking about business in the Soviet Union and all that kind of stuff, these are the kind of anecdotes I’d be telling in those days. But a lot of people hear it. I work with a lot of young people. They don’t remember any of this. Most of our staff is 25 years old and younger, and they don’t remember any of this stuff.
Daniel Satinsky: They grew up in a different country.
John Rose: A totally different time, and they were teens by the time the internet was well in place, so they don’t get any of that stuff. And they don’t look at history.
Daniel Satinsky: Yeah. But I’m still not sure I know, you know—
John Rose: To answer your question. I didn’t answer your question, really. My motivation was a couple of things. Business opportunity, just the idea of doing something so offbeat. I mean, people would look at you crazy. I mean, nobody was traveling. Many Americans weren’t even traveling very much at that time anyway, I mean, you think about it, I mean, relatively speaking. And the idea of just moving away from home, never mind going to the Soviet Union. And so there was that, just trying to do something that’s so totally different.
I think the other thing was I certainly saw the inevitability of this business. In other words, you had zero advertising. It’s coming. It’s coming. And we can be part of it. And now it’s billions of dollars’ worth of business. At that time, it was zero. And then I think the other thing was that very quickly we were getting… I mean, we worked for some pretty good-sized brands in the States, but suddenly we’re handling all of Coca-Cola. It’s not as big as the Coca-Cola account in the United States, but we’re doing all of it. We’re doing all of Sony. And we’re working with smaller teams on their side, so the decision-making is really fast.
So, we got a chance to do—so very quickly I got back to my creative roots, because I started as a writer, but then as you build a business you suddenly, now you have teams of people and you’re moving further and further away from the thing that was fascinating about my business, which is creating things, creating ads, communicating, writing commercials, producing commercials. And so suddenly I’m here and I don’t have that facility, I have to do it all again. So, we started, you know, so I think that was also part of it.
And then also we could…we had the facility back in Boston, so we could even do these little, I used to call it a magic trick. I could go into a client—I could go to Sony in the morning Moscow time; I could have a meeting—or even let’s say the end of the day. I could be there at the end of the day, I can get a brief, okay, we have to get some commercials on the air in the next two or three weeks, I could get back to my office, I could write a couple of spots, I could send them back to Boston to one of my art directors, he could storyboard them.
Now the only communication we had was fax machine, so he would draw frame by frame, okay? The next morning, I would come into my office, there would be a roll of fax paper on the floor. We would quickly take it, okay, I had these big blackboards, and I already put all the type, all the copy, all the text in place, and I’d take all of his pictures for the storyboard in place, bang, bang, bang, bang, bang. I could be back at the client’s office at 10:00 a.m., and we’d have the spot approved in less than 24 hours.
It never happened before to me in the States, since those days it has never happened again because now you have committees and everyone. But before it was—I loved the opportunity to, you know, creativity works when it works fast. Creativity, like fish, starts to smell after a few days. Everybody’s looking for what’s wrong with it. But if you have to run quickly, you may make some mistakes, but it has a little bit more of a purity to it, and the ideas just go. And because the numbers, the money wasn’t so huge, they had authority locally, and they didn’t have to go back to layers and layers and layers. And so we turned out a lot of good creative stuff very quickly. And suddenly we’re doing more award-winning work, and it’s coming out of Russia.
Daniel Satinsky: Wow. And this stuff that you were turning out was for foreign companies in the Russian market, is that…?
John Rose: Yeah, early days there were really no consumer product Russian companies, right, so these were international companies. Like I said, it started with Kodak. For Kodak we were doing a lot of print work and things like that. There weren’t a lot of magazines to publish in, but there were some newspapers we started early advertising. One of the things—well, if you’re looking at other things that I was looking at—we did a lot of firsts, meaning we did the first radio spots, we did the first television ads.
We literally did the first outdoor advertising. In those early days the first big walls that you saw for Coca-Cola, or for Baskin-Robbins, or any of those other big billboards in those very early days, that was all us. And there was no billboard company to call. We had to get engineering, we had to get city rights, we had to get it constructed, we had to do the whole thing, get it up there. It had to be hand painted because we didn’t even have, in those days the technologies for films and papers and things like that, no big print facility. All hand painted stuff and get it up there. Metro, the trolley cars, we had to go down and teach them how to first put film on all the trolleys and paint. It’s like almost a reductive process. You spray it, pull it off, spray it.
And we did all of that stuff for Coca-Cola brands like Fanta and things like that, or Baskin-Robbins or companies like that. So, there were a lot of firsts. We did the first sweepstakes for Sony that was ever here. Not that it was the first in the world, but it was the first here, and as far as they were concerned it was the first in the world.
Daniel Satinsky: Right. What did you know about Russia when you landed? I mean, you’re advertising to a set of people you don’t know anything about, right?
John Rose: Right. Yeah. Before I started coming, as soon as it was on my radar, and my partner was doing the first couple of trips in, like I said, late ’88, early ’89, and then I came over I think spring of ’89, by that time I was getting…I was starting to do my reconnaissance and do my homework as much as I could, hearing his stories. Remember, we were getting a magazine going. I was learning a lot from the newspapers and the publishers, all these adjunct industries to marketing—publishing, printing, film—because there was Mosfilm* and places like that, which is where a lot of our early commercials, so we were adapting what they had available to us. Radio was nascent, but we gripped that pretty quickly.
As soon as they had their—all this was happening at the same time as the permissions were being granted, right? The business model was changing. We could suddenly own 100% of the business, because in previous years it was all joint ventures minority, then equal, then majority, and then full ownership. All this stuff was evolving, and all of the permits were being granted to the media to run advertising. And so we were sort of able to sort of piece that together.
You’re playing sort of teacher, educator at the same time. I was even speaking at universities in those days to try to, you know, looking to see if I can find some people with some insight. You’d have to be very flexible. I remember, like, for example, we had Merck Sharp & Dohme. Well, who am I going to get for an account manager on that? Nobody that knows any advertising, but at least I can get somebody who knows medicine. I hired a doctor who could make a hell of a lot more money working for me as an account director or account manager than she could as a physician in those days.
Daniel Satinsky: Yeah, right.
John Rose: And so you’d go with that. You’d hire people out of printing houses to work on production. You’d hire people out of the film industry or TV for production. And you’d teach them. And so it was a lot of teaching.
And then—just to answer your other question—as far as how to communicate to the audience, we did a lot of early research, and I surrounded myself with as many people that I thought I could trust who I felt like I had indoctrinated, so that I thought that they could grasp concepts. And then there’s a little back and forth on how to then write to that. But it’s just, I guess, a skill set that I adopted. I have to do that in a lot of languages now.
Daniel Satinsky: How did you find those people? They had to speak English, right, because you didn’t speak Russian.
John Rose: Right. Yeah, they had to speak English. One of the first people was… As a result of us working on Moskovskaya Pravda, on Moscow Business, Gosconcert*—do you know who Gosconcert is?
Daniel Satinsky: Yeah.
John Rose: Remember them? They were part of the Ministry of Culture. If Billy Joel came to Moscow, that was Gosconcert, if the Red Army Chorus went to London, that was Gosconcert. They were that, anything that had to do with music. They wanted to start a music magazine, so we helped them start to put together a music magazine. And we had a great editor from the States that came over, and we helped them get going. It didn’t actually end up going anywhere, but we started getting that going.
But when we started working with Gosconcert, they needed to assign someone to us as sort of an intermediary and translator, and so they found this girl who didn’t want to work with us at all. But they literally threatened—I hear this story a lot, and I’ll tell you why in a minute. They threatened her that they were going to fire her if she didn’t work with us. So, she worked with us as that, and we started working with them on the magazine, and then I asked her if she, you know, as I see that the agency business has an opportunity.
Because first it was all about the magazine. Then I realized well, if I can make something happen here, and I’ve got Coca-Cola now, and I’ve got Kodak, I need to start to staff.
And I found this, and I asked her, because I’d been working with her, and she seemed to get it. She seemed to understand. She also had some experience with one of the first private companies here, and so she was savvy. She didn’t really understand advertising at the time she said yes, but she said yes. And so she was my assistant for some time, and then as things grew, she became higher up in the hierarchy, and today she still is now the general director of the agency.
Daniel Satinsky: Wow.
John Rose: So, she grew up in the whole business, and so she helped pull that along, and I trusted her. And then I also married her. [Laughs.]
Daniel Satinsky: So, you did trust her.
John Rose: Along the way. Along the way I trusted her enough. But she helped me. Then, you know, we were able to recruit. She’s very good with all of that. And she was able to help bring in the right people. And she had a good ear for seeing language as I tried to evolve her. Because there was a very stiff—there’s a stiffness in the language in those—early on there was no play. There was no flexibility. You couldn’t pull or tug it. And I was trying to, and so—but it took a long time of working with that to try to, you know, we’d bounce things—it would take forever to write headlines, just to try to get some sense of creativity and a little bit of texture to it. You’re a writer, you understand.
It’s also the struggle of writers to speak other languages because you want to be so precise in your language. You don’t want to be speaking in pidgin language. You want to be very precise, especially in the written word. And so you have to really massage and really work it, and you have to build a certain trust with people. And then you have to test that copy, that text in front of a number of other people. And over time you start to get a sense of who you can trust to write stuff. It’s still a challenge, but you learn a certain finesse in how to manage it and work with creative people.
Daniel Satinsky: Yeah. And so personally you must have had to start studying Russian at the beginning in order to engage in that kind of back and forth.
John Rose: Yeah. I mean, I’m still terrible, but I…you would think after all these years, but no. And my son—and we have a son together who speaks fluent Russian. Anyways. But yeah, I started studying in Boston. They had a language school in Boston, and I started studying there. And then I had several teachers here. Just not enough of it sticks. But I get around, and I can get along. I’ve served on several boards here where nobody speaks English, so I manage to get along.
I usually have some interpreter there to help me through the business bits, because business Russian and Russian Russian can be very different things. And of course, during my time here words have been introduced into the vernacular because a lot of the terms that we use in my business did not exist. Some of them have been completely just transliterated, and others have been pieced together from whatever Russian way some academic has decided it should be.
Daniel Satinsky: Yeah. But in the process, you’ve learned what the sensibilities were of the Russian consumer.
John Rose: Yeah, I think that what you really quickly learn is it’s not as daunting as you think. Because I’ve had to work in other languages, too. And what I’ve learned is to try to focus on the things that make us different, not the things that make us the same, because that means you can eliminate. Ninety-five percent it’s all the same. I mean, from culture to culture there’s a lot that’s the same, because what motivates people is pretty much the same.
I mean, they may be at a different level of maturity from market to market, and certainly sense of humor can be quite different, but a lot of what motivates people is pretty similar, so you very quickly try to focus on just those things that are different, And I’ve found that was my shorthand to understanding a culture and being able to work in it. Because it’s not just Russia, right? I mean, we work across the CIS, Ukraine, etc., so there are a lot of subtleties there.
A few years ago, we went into Cuba, so I’m working there. There’s a little bit of a Russian Cuban thing going on, so we’re doing quite a lot in Spanish language, which I also had never done before. A little easier for me. I studied that when I was younger.
Daniel Satinsky: I’ve seen the pictures of you with the cigars on your Facebook page.
John Rose: Yeah.
Daniel Satinsky: Just as an aside, how do you get into Cuba with a U.S. passport?
John Rose: The first words in Spanish that I relearned was “don’t stamp my passport.” [Laughs.]
Daniel Satinsky: [Laughs.]
John Rose: Also, I learned how to say I’m Canadian.
Daniel Satinsky: Ah, okay. That’s good.
John Rose: But these are early days. In other words, in 2002—2002 was my first trip to Cuba, and it was my brother and I. And my brother was living in England. He actually had worked in Russia, too. He’s a lawyer. But he was living in England and still lives in England. But he had a flat in London when he first moved there, and he walked into a restaurant that was kind of a club, private club kind of restaurant, and so he really enjoyed his time there, had dinner, and then said how can I join. And the owner happened to be right behind him, and he says you’re a member; I’ll send you a bill.
And he became a colorful character that’s become a good friend of ours. And he led trips to Cuba every year with a small group of British guys. And so, my brother said why don’t we go. And I’ll try to keep this short. He said why don’t we go. And I said well, you know. We were talking about this. Like well, Chris, you know, I’m not a lawyer, you’re a lawyer, it sounds like you have more to lose than I do, but we both live out of the country. So, we knew that we’re not trying to leave from the U.S., so we don’t have to do any of that stuff. We’re going to come from London, so there’s—
Daniel Satinsky: And you’re going to come back there, too.
John Rose: I think it was Moscow Business.
Daniel Satinsky: Moscow Business, that’s it.
John Rose: Right. I think that’s how we first came across each other. And that was really, really early days. We were just starting to come over. Before we even launched the agency over here, we somehow got involved with…there was a—since I know you’re looking for some of this historical perspective I’ll draw it out a little but stop me any time.
Daniel Satinsky: Absolutely.
John Rose: The way we came into this was that my partner, one of my partners at the time ran into some Russians on a plane. This was late ’88 maybe, early ’89. And this is as the media here under the Soviet Union were told you’re on your own, go figure out how to make money, because you’ve got these massive printing facilities, you’re your own little industry, but you don’t make any money. And so he met some Russians on a plane that were working for Moskovskaya Pravda*, a newspaper, and they had permission to start the first magazine that could accept advertising.
And that, through various conversations, because he said we can help you—because in those days, this is all pre-internet, the agency business was a lot about print. We did a lot of magazines, a lot of publications. We did a lot of tourism and travel, so we were handling magazines for the city of Boston and for various corporations, and all of that kind of stuff. So, we can help you out. And so we started consulting with them. And out of that came a joint venture to create Moscow Business with that newspaper, with Moskovskaya Pravda.
Daniel Satinsky: Okay.
John Rose: That’s how that came about.
Daniel Satinsky: Okay. And you had an agency here in Boston.
John Rose: Right, exactly. I started an agency in 1984, and then we grew up organically and through a series of mergers to become an agency that ultimately became Friedman & Rose, and then Friedman & Rose came to Moscow, and that’s how I started doing this stuff. My partner, who was much older and Czechoslovakian—he’s no longer with us—he had no real love for the Russians. He made a couple of trips and then said I’m out. And we had a client in Boston. One of our clients was Kodak at the time and they said we’re interested in what you’re doing over there, one of our divisions makes large color management systems, and we’d love to talk to some of these publishers and printers and people that you’re talking to, maybe you could make some introductions.
And we came over during, what was it, USA 89, the big trade show and all that stuff. And so we started doing that, and that’s the couple of trips that I made with my partner. And then the way we brought the agency over was in addition to helping Kodak out—and they were a Boston-based client, and we were sort of giving them an overture to look at things here—I found out that Coca-Cola was opening their first bottling plant, so I knocked on their door, and suddenly we became Coca-Cola’s first agency.
Daniel Satinsky: Oh, wow.
John Rose: And then Merck Sharp & Dohme. So, we had Coke, we had Merck Sharp & Dohme, now Merck, we had a bit of Kodak, and then the next big break was—well, the agency environment at that time was really Young & Rubicam, Y&R—I don’t know if you know these agency names—but big old guard agency, Y&R, Young & Rubicam had a joint venture with Sovero, which is another large publishing group here in Soviet times*. And they weren’t really doing agency things yet, but they were just sort of trying to feel their way around.
There was a professor—Ogilvy, at that time Ogilvy & Mather, another big agency, was trying to make some inroads here, and they somehow got involved with some professor who also didn’t know very much outside of the academic sphere of marketing. And little old us came in, and suddenly we were the only ones really doing anything quickly on the ground.
Daniel Satinsky: Wow. ’88 and ’89, this was right with perestroika?
John Rose: Yeah, this would be like late ’89 when we really started launching the agency services for real locally. We were the first independent agency. We were not part of a big network at the time, and arguably—I don’t know, you can debate about who was the first actual agency, but we were certainly there at the beginning. In fact, even before BBDO and other famous agencies came over I briefed them. I talked to them before they came over because I was interested in getting more things going. We launched the local advertising association and things like that.
But the big break for us was Y&R, the only account that they got, and they had it for less than a year, was Sony. It was an international account. And for whatever reason, Sony decided they weren’t too happy, and they put it up for review, and we won it. And so then suddenly we had Coke and Merck and Sony, and on the back of that I built an agency here, and we kept growing in Boston, out of Boston, and we had a little satellite in New Hampshire. And then we just sort of built it out from there. I started going back and forth every two weeks from Boston to here on that old Lufthansa flight that used to have to sit for six, seven hours at the airport in Frankfurt. Remember in those days?
Daniel Satinsky: Yeah, I know that flight, yep.
John Rose: And so I did that for a number of years. And then we ended up actually selling the agency. We sold it and got it back. We sold it to a French group—again, this is all alphabet city to you, I’m sure—but BDDP. And then they got acquired—we created an affiliation, they were buying us, it was on an [international] basis, so it’s in phases. And they got bought by a British agency which then was taken over by Omnicom, so suddenly we’re part of Omnicom. And then they wanted to merge us with another agency, and we had an out clause, so we got out. Got to keep some of the money, which was even better. And we had an escape clause, and we became independent again. That was around ’95. And then we’ve been independent ever since.
Daniel Satinsky: So, in that period before you were independent, you had at some point decided to stay there in Russia full-time?
John Rose: Well, I was going back and forth, and my partner, who was older, he doesn’t want to do anymore traveling, and so the original thought was well, okay, I’m young and eager. I was about 30 at the time. And he could sort of hold down the fort. We had a big team in Boston. I could use those resources, and I could come over here and start something up. So, like everybody else, I worked out of a hotel room for a little while, like everybody. And then got DOD permission to bring over laptops and things like that. And then finally opened up an office inside of a hotel, and we lived through the coups and—
Daniel Satinsky: Which hotel?
John Rose: We went to the Sovietskaya, a small hotel, like…it’s central, but it was a small hotel. It’s funny because it was the first hotel that they had brought me to in my first trip when I landed in Moscow in ’89, and when I landed in Moscow in ’89 it was night, it was raining, my first step into the Soviet Union, didn’t even understand Cyrillic at the time, couldn’t even read… And brought me to this hotel, which is a very Soviet—I mean, Sovietskaya, very Soviet hotel. I remember they gave me a little room. I had brought our CFO over and we were starting to put some things together, and then they said we have a much better room for you tomorrow.
And I remember the next day telling our CFO listen, I’ll go check out the room, it’s a suite for us. And I go down and I get the key, and I go up, and I go down this long, long corridor, because everything’s on these big corridors, okay, and I get to the end and there’s a double door, and I get to the end and there’s a double door, and I open up the double door. There’s no bedroom or anything. I see double door, double door. I open up another double door, it’s a dining room, okay, huge table.
There’s a grand piano at one end that I can barely see as I’m turning on the lights, and double door, double door, double door. Open up another double door there’s a big living room, okay, I mean, the ceilings are enormous, there’s huge pictures of Stalin, and an enormous couch and desks and so forth, and I still haven’t found the bedroom yet. I have to go back around through the other double doors. I finally find the bedrooms and the bathrooms. It was just enormous.
Daniel Satinsky: Wow.
John Rose: And so this happened to be…so it was just incredible. It was the kind of room where, if the doorbell rang and you were on the phone, you couldn’t get to the door before they started walking away, or vice versa. And then years later that room became our office. We pulled all the furniture out of it, and we put desks in there, and that’s where we were when the first coup, when they were shooting, when Yeltsin was out in front of the White House and the tanks were there and everything, that’s where we were ensconced.
Daniel Satinsky: Wow, wow. And so, when you went, was your motivation that this was a business opportunity, or was this an adventure, or was this a way to participate in history? I mean, what were you thinking?
John Rose: I don’t know that I had any sense of history yet. To think of something as historical, that’s in hindsight, I guess. But going over it was certainly exciting. I grasped the inevitability of the market. In other words, here’s a market that has zero advertising, okay? The anecdote would be at the time when I was coming over here, and when you were here in those early days there were lines for everything, right? People were standing in line to get anything. The joke was you’d get in line and then figure out why you’re standing in line.
Daniel Satinsky: Right.
John Rose: And so when I was first trying to explain advertising, the Russian perceptions was how god-awful would something have to be if you had to advertise it, because in their mind if it’s on sale we’re buying it, okay? We’re buying it in every size because we know we have some family member who it will fit. And you quickly figured out that even in the Soviet Union they did understand brands because they—it’s funny, they would look at the bottom of something, and this was done in Factory 45375, okay, versus 45376, this one’s better. They had a… So, you could see that it wasn’t going to be too much of a click. It was pre-internet, so they didn’t have the window to the world, like they couldn’t talk about a lot of brands. They knew the famous brands, but they didn’t know anything else, really. They had some communication, but it was still pretty clamped down when I first got here, so it was a very foreign concept.
Daniel Satinsky: They knew Levi’s, for instance, because—
John Rose: Right, exactly.
Daniel Satinsky: —there was a big market, black market in that in the Soviet Union.
John Rose: Right, and Pepsi had been here for some time, since Nixon, so there was a hint of things. And because it started, had just started opening up and people were just starting to travel, they were starting to get some sense of things. Of course, the other joke that I used to tell in those days was—you’ve probably heard this—which is the Russian space agency is holding a press conference—have you heard this?
Daniel Satinsky: No.
John Rose: So, the guy goes, he’s talking about the space agency. He says first we’re going to go to the moon, then we’re going to go to Mars, and we’re looking at Jupiter. And then a reporter raises his hand, and he goes, when can we go to Paris?
Daniel Satinsky: [Laughs.]
John Rose: These are the stories you’re telling in those days, when I was doing forums for McGraw Hill in the early days, when they’re talking about business in the Soviet Union and all that kind of stuff, these are the kind of anecdotes I’d be telling in those days. But a lot of people hear it. I work with a lot of young people. They don’t remember any of this. Most of our staff is 25 years old and younger, and they don’t remember any of this stuff.
Daniel Satinsky: They grew up in a different country.
John Rose: A totally different time, and they were teens by the time the internet was well in place, so they don’t get any of that stuff. And they don’t look at history.
Daniel Satinsky: Yeah. But I’m still not sure I know, you know—
John Rose: To answer your question. I didn’t answer your question, really. My motivation was a couple of things. Business opportunity, just the idea of doing something so offbeat. I mean, people would look at you crazy. I mean, nobody was traveling. Many Americans weren’t even traveling very much at that time anyway, I mean, you think about it, I mean, relatively speaking. And the idea of just moving away from home, never mind going to the Soviet Union. And so there was that, just trying to do something that’s so totally different.
I think the other thing was I certainly saw the inevitability of this business. In other words, you had zero advertising. It’s coming. It’s coming. And we can be part of it. And now it’s billions of dollars’ worth of business. At that time, it was zero. And then I think the other thing was that very quickly we were getting… I mean, we worked for some pretty good-sized brands in the States, but suddenly we’re handling all of Coca-Cola. It’s not as big as the Coca-Cola account in the United States, but we’re doing all of it. We’re doing all of Sony. And we’re working with smaller teams on their side, so the decision-making is really fast.
So, we got a chance to do—so very quickly I got back to my creative roots, because I started as a writer, but then as you build a business you suddenly, now you have teams of people and you’re moving further and further away from the thing that was fascinating about my business, which is creating things, creating ads, communicating, writing commercials, producing commercials. And so suddenly I’m here and I don’t have that facility, I have to do it all again. So, we started, you know, so I think that was also part of it.
And then also we could…we had the facility back in Boston, so we could even do these little, I used to call it a magic trick. I could go into a client—I could go to Sony in the morning Moscow time; I could have a meeting—or even let’s say the end of the day. I could be there at the end of the day, I can get a brief, okay, we have to get some commercials on the air in the next two or three weeks, I could get back to my office, I could write a couple of spots, I could send them back to Boston to one of my art directors, he could storyboard them.
Now the only communication we had was fax machine, so he would draw frame by frame, okay? The next morning, I would come into my office, there would be a roll of fax paper on the floor. We would quickly take it, okay, I had these big blackboards, and I already put all the type, all the copy, all the text in place, and I’d take all of his pictures for the storyboard in place, bang, bang, bang, bang, bang. I could be back at the client’s office at 10:00 a.m., and we’d have the spot approved in less than 24 hours.
It never happened before to me in the States, since those days it has never happened again because now you have committees and everyone. But before it was—I loved the opportunity to, you know, creativity works when it works fast. Creativity, like fish, starts to smell after a few days. Everybody’s looking for what’s wrong with it. But if you have to run quickly, you may make some mistakes, but it has a little bit more of a purity to it, and the ideas just go. And because the numbers, the money wasn’t so huge, they had authority locally, and they didn’t have to go back to layers and layers and layers. And so we turned out a lot of good creative stuff very quickly. And suddenly we’re doing more award-winning work, and it’s coming out of Russia.
Daniel Satinsky: Wow. And this stuff that you were turning out was for foreign companies in the Russian market, is that…?
John Rose: Yeah, early days there were really no consumer product Russian companies, right, so these were international companies. Like I said, it started with Kodak. For Kodak we were doing a lot of print work and things like that. There weren’t a lot of magazines to publish in, but there were some newspapers we started early advertising. One of the things—well, if you’re looking at other things that I was looking at—we did a lot of firsts, meaning we did the first radio spots, we did the first television ads.
We literally did the first outdoor advertising. In those early days the first big walls that you saw for Coca-Cola, or for Baskin-Robbins, or any of those other big billboards in those very early days, that was all us. And there was no billboard company to call. We had to get engineering, we had to get city rights, we had to get it constructed, we had to do the whole thing, get it up there. It had to be hand painted because we didn’t even have, in those days the technologies for films and papers and things like that, no big print facility. All hand painted stuff and get it up there. Metro, the trolley cars, we had to go down and teach them how to first put film on all the trolleys and paint. It’s like almost a reductive process. You spray it, pull it off, spray it.
And we did all of that stuff for Coca-Cola brands like Fanta and things like that, or Baskin-Robbins or companies like that. So, there were a lot of firsts. We did the first sweepstakes for Sony that was ever here. Not that it was the first in the world, but it was the first here, and as far as they were concerned it was the first in the world.
Daniel Satinsky: Right. What did you know about Russia when you landed? I mean, you’re advertising to a set of people you don’t know anything about, right?
John Rose: Right. Yeah. Before I started coming, as soon as it was on my radar, and my partner was doing the first couple of trips in, like I said, late ’88, early ’89, and then I came over I think spring of ’89, by that time I was getting…I was starting to do my reconnaissance and do my homework as much as I could, hearing his stories. Remember, we were getting a magazine going. I was learning a lot from the newspapers and the publishers, all these adjunct industries to marketing—publishing, printing, film—because there was Mosfilm* and places like that, which is where a lot of our early commercials, so we were adapting what they had available to us. Radio was nascent, but we gripped that pretty quickly.
As soon as they had their—all this was happening at the same time as the permissions were being granted, right? The business model was changing. We could suddenly own 100% of the business, because in previous years it was all joint ventures minority, then equal, then majority, and then full ownership. All this stuff was evolving, and all of the permits were being granted to the media to run advertising. And so we were sort of able to sort of piece that together.
You’re playing sort of teacher, educator at the same time. I was even speaking at universities in those days to try to, you know, looking to see if I can find some people with some insight. You’d have to be very flexible. I remember, like, for example, we had Merck Sharp & Dohme. Well, who am I going to get for an account manager on that? Nobody that knows any advertising, but at least I can get somebody who knows medicine. I hired a doctor who could make a hell of a lot more money working for me as an account director or account manager than she could as a physician in those days.
Daniel Satinsky: Yeah, right.
John Rose: And so you’d go with that. You’d hire people out of printing houses to work on production. You’d hire people out of the film industry or TV for production. And you’d teach them. And so it was a lot of teaching.
And then—just to answer your other question—as far as how to communicate to the audience, we did a lot of early research, and I surrounded myself with as many people that I thought I could trust who I felt like I had indoctrinated, so that I thought that they could grasp concepts. And then there’s a little back and forth on how to then write to that. But it’s just, I guess, a skill set that I adopted. I have to do that in a lot of languages now.
Daniel Satinsky: How did you find those people? They had to speak English, right, because you didn’t speak Russian.
John Rose: Right. Yeah, they had to speak English. One of the first people was… As a result of us working on Moskovskaya Pravda, on Moscow Business, Gosconcert*—do you know who Gosconcert is?
Daniel Satinsky: Yeah.
John Rose: Remember them? They were part of the Ministry of Culture. If Billy Joel came to Moscow, that was Gosconcert, if the Red Army Chorus went to London, that was Gosconcert. They were that, anything that had to do with music. They wanted to start a music magazine, so we helped them start to put together a music magazine. And we had a great editor from the States that came over, and we helped them get going. It didn’t actually end up going anywhere, but we started getting that going.
But when we started working with Gosconcert, they needed to assign someone to us as sort of an intermediary and translator, and so they found this girl who didn’t want to work with us at all. But they literally threatened—I hear this story a lot, and I’ll tell you why in a minute. They threatened her that they were going to fire her if she didn’t work with us. So, she worked with us as that, and we started working with them on the magazine, and then I asked her if she, you know, as I see that the agency business has an opportunity.
Because first it was all about the magazine. Then I realized well, if I can make something happen here, and I’ve got Coca-Cola now, and I’ve got Kodak, I need to start to staff.
And I found this, and I asked her, because I’d been working with her, and she seemed to get it. She seemed to understand. She also had some experience with one of the first private companies here, and so she was savvy. She didn’t really understand advertising at the time she said yes, but she said yes. And so she was my assistant for some time, and then as things grew, she became higher up in the hierarchy, and today she still is now the general director of the agency.
Daniel Satinsky: Wow.
John Rose: So, she grew up in the whole business, and so she helped pull that along, and I trusted her. And then I also married her. [Laughs.]
Daniel Satinsky: So, you did trust her.
John Rose: Along the way. Along the way I trusted her enough. But she helped me. Then, you know, we were able to recruit. She’s very good with all of that. And she was able to help bring in the right people. And she had a good ear for seeing language as I tried to evolve her. Because there was a very stiff—there’s a stiffness in the language in those—early on there was no play. There was no flexibility. You couldn’t pull or tug it. And I was trying to, and so—but it took a long time of working with that to try to, you know, we’d bounce things—it would take forever to write headlines, just to try to get some sense of creativity and a little bit of texture to it. You’re a writer, you understand.
It’s also the struggle of writers to speak other languages because you want to be so precise in your language. You don’t want to be speaking in pidgin language. You want to be very precise, especially in the written word. And so you have to really massage and really work it, and you have to build a certain trust with people. And then you have to test that copy, that text in front of a number of other people. And over time you start to get a sense of who you can trust to write stuff. It’s still a challenge, but you learn a certain finesse in how to manage it and work with creative people.
Daniel Satinsky: Yeah. And so personally you must have had to start studying Russian at the beginning in order to engage in that kind of back and forth.
John Rose: Yeah. I mean, I’m still terrible, but I…you would think after all these years, but no. And my son—and we have a son together who speaks fluent Russian. Anyways. But yeah, I started studying in Boston. They had a language school in Boston, and I started studying there. And then I had several teachers here. Just not enough of it sticks. But I get around, and I can get along. I’ve served on several boards here where nobody speaks English, so I manage to get along.
I usually have some interpreter there to help me through the business bits, because business Russian and Russian Russian can be very different things. And of course, during my time here words have been introduced into the vernacular because a lot of the terms that we use in my business did not exist. Some of them have been completely just transliterated, and others have been pieced together from whatever Russian way some academic has decided it should be.
Daniel Satinsky: Yeah. But in the process, you’ve learned what the sensibilities were of the Russian consumer.
John Rose: Yeah, I think that what you really quickly learn is it’s not as daunting as you think. Because I’ve had to work in other languages, too. And what I’ve learned is to try to focus on the things that make us different, not the things that make us the same, because that means you can eliminate. Ninety-five percent it’s all the same. I mean, from culture to culture there’s a lot that’s the same, because what motivates people is pretty much the same.
I mean, they may be at a different level of maturity from market to market, and certainly sense of humor can be quite different, but a lot of what motivates people is pretty similar, so you very quickly try to focus on just those things that are different, And I’ve found that was my shorthand to understanding a culture and being able to work in it. Because it’s not just Russia, right? I mean, we work across the CIS, Ukraine, etc., so there are a lot of subtleties there.
A few years ago, we went into Cuba, so I’m working there. There’s a little bit of a Russian Cuban thing going on, so we’re doing quite a lot in Spanish language, which I also had never done before. A little easier for me. I studied that when I was younger.
Daniel Satinsky: I’ve seen the pictures of you with the cigars on your Facebook page.
John Rose: Yeah.
Daniel Satinsky: Just as an aside, how do you get into Cuba with a U.S. passport?
John Rose: The first words in Spanish that I relearned was “don’t stamp my passport.” [Laughs.]
Daniel Satinsky: [Laughs.]
John Rose: Also, I learned how to say I’m Canadian.
Daniel Satinsky: Ah, okay. That’s good.
John Rose: But these are early days. In other words, in 2002—2002 was my first trip to Cuba, and it was my brother and I. And my brother was living in England. He actually had worked in Russia, too. He’s a lawyer. But he was living in England and still lives in England. But he had a flat in London when he first moved there, and he walked into a restaurant that was kind of a club, private club kind of restaurant, and so he really enjoyed his time there, had dinner, and then said how can I join. And the owner happened to be right behind him, and he says you’re a member; I’ll send you a bill.
And he became a colorful character that’s become a good friend of ours. And he led trips to Cuba every year with a small group of British guys. And so, my brother said why don’t we go. And I’ll try to keep this short. He said why don’t we go. And I said well, you know. We were talking about this. Like well, Chris, you know, I’m not a lawyer, you’re a lawyer, it sounds like you have more to lose than I do, but we both live out of the country. So, we knew that we’re not trying to leave from the U.S., so we don’t have to do any of that stuff. We’re going to come from London, so there’s—
Daniel Satinsky: And you’re going to come back there, too.
John Rose: And we’re going to come back to London, so that makes it a lot easier right from the beginning. We learned that the Cubans are very happy to see us. Right away they were very happy. And when you ask them not to stamp your passport, they don’t stamp your passport. And they kind of knew the game. So, that’s how we went for many years. Then when they changed the laws, as the laws evolved, I fell under some general licenses, so I’ve been going there legally.
We’ve actually acquired a media group there, so that that’s one of the general licenses that even still exist, even after the Trump changes. I mean, I can’t open—and also, I had a Russian company to bring there, so the Russian company signs off on things. I’m not technically running a marketing group there, which is still a little iffy.
But there are many businesses—internet, and telecom, and banking—that all have general licenses. I ran a huge…I’ve run huge…we ran a huge festival there across all of Havana. We’ve done some very big things in Cuba working with the government. I’ve worked with the Ministry of Tourism & Culture. We’ve gotten very embedded in Cuba. It’s all sort of on pause because of COVID, but we’ve done some big things there. One of them was a documentary. I’ll send you a link. And so, we’ve not had too many problems.
The only Russian link, to bring you back to Russia, is that I’ve had more cooperation with the Russian government in Cuba because at the embassy they have nothing to do. So, the Russians in Cuba have been so much easier to work with, and they’ve been very helpful in Havana, and more than they’ve ever helped me here.
Daniel Satinsky: Huh. So, back to what you said about how you evaluate based on difference. Do you remember some of the key differences that you noted when you began, peculiarities about Russians that you remember?
John Rose: Well, I think that the first thing I think all of us learn is that it’s a “nyet” mentality, meaning it’s no before it’s yes. It’s always the—there’s a glass is half empty approach here that I think is part of the culture. We certainly learned it a lot in the research. If we’re trying to present a focus group a commercial or something like that, or packaging or something, it’s always what’s wrong with it first. It’s always to the negative.
The real quick thing we learned is in the States, from a business perspective, we could do a lot on the phone. You and I could have never met. I could be in Boston, you could be in New York, and we could have a phone relationship for years and get business done. And in Russia that would never happen. If you had met somebody before over the phone, I mean, you couldn’t make anything happen. You had to go there, and you had to talk and communicate, and everything is impossible until you talk it through.
I went through the same thing in Cuba, by the way. My wife looks at Cuba as sort of a mini–Soviet Union because they adopted a lot of the same ways. Everything is no. Everything is no, no, it’s impossible. Impossible until you sit down and you talk, and suddenly every, you know, it’s amazing how the whole thing can turn around. So, that’s what Russia was like. It’s like no, no, no, no, no until it’s yes.
And also just out of, you know, not…they didn’t know the industry, they didn’t know the business. Not only did they not know my business, they didn’t know business. There’s no sense of those early days, and so it was just that’s no, that’s not going to happen. They’re so used to everybody—I think they were so used to the system saying no to them that they adopted saying no to everybody else. If that makes sense. And so we had to get past that. And I think there it was just me being a little bullish. You know, I’ve just got to go we’re going to do it, we’ll find a way. They didn’t understand that until you keep pushing and pushing and pushing. And suddenly they’d turn around, you know, they’d turn around.
I had a card-carrying communist—I’ve done the same thing here and there—communists, members of the Communist Party, and it’s like they’re so anathema to capitalism, and commercialism and all this stuff. Suddenly, if you turn one of those people around, and suddenly they’re like they understand it completely, and they’re starting to offer you headline ideas. You’ve turned them around psychologically and they start to realize it’s not the enemy. Which was also that part of it, you know. This whole thing of capitalism and commercialism and advertising, it was all a very foreign concept. That took a while.
Daniel Satinsky: Right. And when you were doing your initial advertising, was it in the Soviet and successor media, or was it new media that was developing, and you were relating to?
John Rose: New media didn’t really develop very quickly. Early on there was also licensing and practical issues behind that. They kept a pretty tight lid on that. That was the last thing they wanted to give up. And so…but they did start allowing ads. And so no, we started placing commercials on those same channels. Remember the TV, when it would, like, if they ran out of programming the clock would come on the screen? And just finish out the hour.
Daniel Satinsky: Yes. Yeah, I remember that.
John Rose: So, we quickly said, you know, instead of that, how would you like to make some money? Mm, okay. Russians understood that quickly. And so we started placing ads on TV for Sony and Kodak, and there was somebody else early on, too. Oh, we started doing a lot of pharmaceutical work. We got Merck, and then some of the other pharmaceutical companies were also very quick to come in, so we started doing a lot of that work. Anyway. And then the radio stations had the same kind of conversation.
The newspapers were more quick because…but they were really thin. I don’t know if you remember Soviet newspapers. They weren’t very thick newspapers. They published whatever. They filled all their pages. So, it took a little bit of work there because they had to free up space, so they had to… But we quickly found out that they weren’t married to a lot of what they were putting in there. They had a lot of filler. They were having a hard time actually filling it out, and so we realized quickly that we can work with them.
And then, of course, the trolley guys, they were very happy to start—I mean, you know, we’ll come down, we’ll paint it for them, we’ll put that message on and give them money—great. Billboards the same thing. There’s always somebody to give money to. It was a lot of work. Now I can make a phone call. But it was that. And we also did a lot of the first research, too, so that helped us to understand.
Daniel Satinsky: You were forming the industry.
John Rose: Yeah, yeah. No, we did it. We did it. We were, you know. No, we’re in the history books here. I mean, we started with that. We started the International Advertising Association here. We’re founding members of the American Chamber of Commerce here. Just because we’re the first ones here, among the first wave here.
Daniel Satinsky: Right. And so when you say “we,” how big were you at that time? How many staff did you have?
John Rose: Well, we had about… I think in Boston we had maybe 25, 27 people, and a few more people in a little satellite up in New Hampshire, because we were handling a lot of ski resorts. And then here, within the first year I think we had about a dozen people or so, and then it grew up from there. And also, we started as an advertising agency here pretty purely, and then we started to build out other services, public relations in particular, and public relations became a big part of the business.
Daniel Satinsky: And that was again for foreign companies and…?
John Rose: Yeah, exactly. I mean, I remember writing an article for the old Moscow Tribune where I was just basically talking about how public relations in Russia began at the KGB. There was a propaganda department. And early on PR had a hard road because they learned about advertising, so now their only thinking about communication was pay me and I’ll deliver that information. So, PR is not that. PR is more of a, you know, we give you a story, there’s a little bit of pull and tug. Obviously, it has to be newsworthy, not entirely commercial, that kind of balance. They didn’t get that at all. They didn’t get that at all. And in fact, in my article, I joked that if there was a fire somebody from a newspaper would be running around and going who’s going to pay me to write about this fire.
Daniel Satinsky: Ah, okay.
John Rose: Because Sony pays me to talk about their stereos, you should pay me to talk about this. But it evolved, it evolved. And again, that was a big nyet—we’re never going to get media to write about things for free. I’m going yes, you are. We will. Trust me on this, we’re going to get there, we’re going to do this.
And that has been, by the way, every time we tried to evolve the business, from advertising to PR, to once we started embracing the internet in Russia, to social media, to digital advertising, to all the things that we do, to influencers, every time it’s—because I’m trying to get ahead of the game. It’s one thing after everybody sees it being done. That’s easy. But at the beginning when you’re trying to explain this is what’s about to come, and we have to be ahead of this curve, you’ve got to take our people and you’ve got to go no, it’s going to happen, trust me, I’ll show you. But no matter how many times I’ve been right before, that is nothing to the Russians.
Daniel Satinsky: I see. Okay. Yeah. Because it’s the first no. You have to get through two or three nos.
Daniel Satinsky: It’s something new. Yeah, and I get it. I mean, everybody’s resistant to change. That’s a position for almost anyone. That’s a default. But for Russians it seems to be particularly acute, in my experience. Less and less. I mean, obviously we’ve got a whole generational shift here now, and we’ve got some bright people now. Now you’re hiring and they’ve had experience, and they’ve been at three agencies, and now it’s a different game, you know, they’ve had a sense of it. And of course, that can be good or bad. Sometimes they take baggage from other agencies, too. But for the most part at least they understand the game, you’re not teaching them from step one.
And more importantly, they grew up exposed to it. Remember that the people I was trying to get to do it had no experience of inhabiting it. They didn’t see it. So, everything was just, you know, I had to bring lots of examples, show them lots of materials, really make them understand why this was necessary and get them to understand once there’s a competitive frame—I mean, if you have a monopoly and everything maybe not so much, but once there’s a competitive frame, once there’s a Pepsi and a Coke… So, when they were talking about the Cola wars in the Soviet Union, we were on the Coke side.
Daniel Satinsky: Right. And when did you start to see Russian agencies, Russians that mirrored your kind of work?
John Rose: Pretty quickly. It mostly came from the media side. Russians, like a lot of—the culture, like many cultures in this part of the world, adapt to a trading mentality before they can adapt to a nonlinear thinking approach. In other words, the creative side of the business was harder for them, I think, and it’s just generally harder for people to grasp. How do you create an ad? Even if you grow up in the States there’s a learning curve there. But buying and selling something, okay, there’s a TV station there, I buy it for one price, and I get a commission from this client here, okay. I mean, you know, buying stuff—
Daniel Satinsky: That part you get.
John Rose: They get that. So, they quickly grasped that, and Russians really went quickly. And of course it went the Russian way, and it got very corrupt, people got killed, all that—the same story like in everything else. And so that’s where the companies grew up, is to become media brokers more than anything else, okay? They call themselves agencies, and they would try to piece things together, but that could work for, even for a multinational, to a certain extent, if they’re adapting everything, and all they have to do is get somebody to place it.
So, there could have been competition at that level, but for the most part the international companies didn’t want to have a whole lot to do with the Russian agencies because too many obstacles, from language to everything else, to just a sensibility about, you know what—they didn’t know what strategy was. They didn’t know how to build a marketing plan. They didn’t understand all the groundwork. They only saw what came out the other end, and the transaction. And a lot of people got into the business, like a lot of Russians who got into a lot of businesses in those days. It really had nothing to do with their love. In other words, they had no passion for it. It was a business that they identified as something that they could do and make money.
Daniel Satinsky: And make some money, yeah.
John Rose: Right. It could easily have been any other business. And that’s why you saw a lot of Russians moving from business to business. It didn’t matter because they didn’t grasp career or anything other than a means to an end of making money. There was no sense of I’m working for myself, for my betterment. There was no self-actualization and any of that, right? I mean, everybody had a job. They had to have a job. To get a better job they had to belong to the party. There was all of that in their minds.
So, early days it was difficult to get people to—it was hard to identify people who could love advertising, and one of the things I had to do was make them love it, working for me. And our competition, I think part of our early success was companies, especially international companies, they saw no passion there, they saw no understanding. There was no experience. Who are they going to give their money to? So, that was our early benefit. But yes, they certainly came up, and then of course now it’s big.
Daniel Satinsky: So, give me some rough time frames for how that industry has matured. In other words, when did—I understand in the beginning stages what you’re describing, but say by ’95, ’97, 2000. When did you see that you began to feel like wait a minute, this is a robust industry in Russia?
John Rose: It became, I’d say it started to become very competitive in the mid ‘90s, like ’95, ’96, ’97, somewhere in there. When you no longer knew who everybody was, you know what I mean? It’s like when suddenly you’re going who? Some little group out of where? I don’t know. Suddenly you started seeing people, because it was growing quick. And it’s all around you. That’s the other thing, is that people are seeing. The evidence of our work is everywhere, and so people wanted to get in on that.
And it’s a service business, which means low, at least what’s perceived to be a low threshold of entry, right? You’re not running inventory. You can run an office out of the middle of nowhere, at least in those early days. There was that ease of getting into it. So, I think that’s what attracted people. So, yeah, it started getting very competitive there.
And of course the other thing that happened was that all the multinationals were coming in. And so I would say that if you were to interview some of the other agencies, guys that were here at that time, the big guns that were coming in, we were their training ground. They would come in, offer our people twice as much, and we had trained them up for them. And off they went. We ended up with a lot of alumni—we stayed friendly with pretty much everybody, but a lot of our early people got into very high-powered positions at other agencies because they had no one else. They didn’t want to go through what we went through.
Daniel Satinsky: Yeah, I see.
John Rose: So, we were training people up. And in those days, you would just, you’d pick the handful of people that you want to retain and put some golden handcuffs around them, but you can’t keep everybody. And so there would be a churn. That’s when you could feel it. It’s right around that time, because it wasn’t just the locals. In fact, the early competition for us was never really the locals, it was the other international agencies, and especially the big networks, because they could come in, and they’re mostly competing with us… Actually, early on they were competing more for talent than they were for accounts because most of them were coming in with business that they had international contracts on, so they were competing for talent. They were competing for talent, and they were also making the market more expensive because there was more demand, so they were making media more expensive.
So, if you try to get a sense of the dynamic, that’s what’s happening, is that competition for talent, media now is becoming more expensive because there’s more companies, more agencies, but an international thing. The Russian agencies were coming up, and they were nibbling, but they didn’t get to become a real force, I think, until the ‘90s. But they were getting big. On the media side they were getting muscle. And then once they had a certain amount of muscle on the media side they could build up their muscle on the creative side. Because now they’re making money. Now they can—
Daniel Satinsky: Uh-huh. Who had muscle on the media side? Who specifically would you think of?
John Rose: I’ll have to go back and look. None of them are here anymore.
Daniel Satinsky: Oh, that’s okay if you don’t remember off the top of your head.
John Rose: I can’t remember all the names, but I can…if you need some blanks to be filled in, Galina will have a better memory than I will.
Daniel Satinsky: So, what happens in 1998?
John Rose: A lot of them had been absorbed. A lot of them had been absorbed. The companies are international companies, and lots of partnerships came in. A lot of these agencies then linked in with international companies, just like we did. Like I said, we sold in ’95 and then ended up getting it back. So, a lot of agencies were making deals, just like they came after us, too.
Daniel Satinsky: Okay. But you became independent again in ’95, and you’ve remained that way, right?
John Rose: In ’98. From ’95…’95 we started our affiliation. Then the purchase kicked in, and then in ’98 we got out just ahead of the first crisis, which happened August 17, 1998.
Daniel Satinsky: Right. And that crisis, as I remember, brought a massive exodus of expats and these predictions of the end of the expansion of Western business there.
John Rose: Right. That was the first purge. And it was dramatic. The reason why I can remember the date so vividly is because I was in St. Petersburg, and we were launching RJR’s first tobacco factory in St. Petersburg, and we’re sitting at the palace, okay, where we’d just done a launch, and we’re hearing, we’re getting calls from our people about suddenly all the ATM machines don’t work, there’s no way to get cash. The supermarkets are being raided. People are hoarding stuff.
It all happened very quickly. The banks weren’t recog—our accountants are calling—the banks aren’t recognizing our wires. And there’s a massive devaluation of currency, so you’re just watching your money sit there. Because in those days, even if you were bringing in money in dollars, they’d immediately convert it into rubles. It was a forced conversion. And you’d just watch it shrink. And so it was a…it got very difficult very, very quickly.
Daniel Satinsky: Yeah. And at that time did you consider leaving, closing up shop?
John Rose: No. You know, again, I’d like to think I was really insightful. I think I had a sense that we had enough momentum, when I looked around at our clients and I saw what could we retain and everything. And we all knew that it was going to be tough because we’re all in the same boat. And at that time, we’re still small enough that I’m very friendly with all the GMs of the client companies. You’re talking to them, most of them are expats, and you go, you know, we’re going to stick this out, but we’re going to be looking at who’s going to live and die.
Like, for example, because suddenly their distribution networks were in turmoil, and literally I’m sitting—I remember sitting at GlaxoSmithKline, and he’s looking at his distribution network, and he’s going who are we going to save? Because we’re going to have to extend credit to somebody, because none of them can afford to pay us anymore. Who are we going to salvage out of this? And looking at channels. And I remember all of that kind of stuff. It was difficult times for everybody.
And of course, we’re also in a tricky position of stewarding clients’ funds, because money is coming through us, so at any moment in time we could be managing millions of dollars for clients, and so if that got frozen… Now, fortunately they didn’t hit us at the worst time, but they hit us, and there was a lot of money sitting in a bank. But on the magnitude of hundreds of thousands, not millions, because I remember vividly, because we had just done some big campaigns, and the money had just gone out the door, so it wasn’t our problem. It was stuck in somebody else’s bank, but it wasn’t our problem.
Daniel Satinsky: Right, not in yours.
John Rose: But the only thing we managed to do was I said…because they weren’t honoring any wire transfers. You could send a wire transfer to a bank; they wouldn’t send the money anywhere, so you couldn’t pay anybody. But I knew that the tax inspector could take the money if they wanted it, so I had our accountants call the tax inspector and say what if we wanted to prepay our taxes? First of all, they’d never heard of any of this before. So, what if we wanted to prepay our taxes—and looked at our bank account—by this much?
And that took some communicating internally because I’m going, because we’re being taxed based on our overall income, which was coming in in dollars, but I have to pay it out in rubles, and the future value of those rubles, based on the dollar percentage, was going to just go like this. [Downward gesture.] So, I said if I could turn this into an asset and freeze it before it diminishes, because ultimately it went down to like 20% or 30% of what it was, then I’ll be able to preserve that, and we have other capital outside of the country. I’m going what if they did that? And they accepted those terms. And we prepaid all of that in taxes. We were paid for taxes for years because we just prepaid it, and they locked it in, and we managed to salvage at least 65, 70% of the capital.
Daniel Satinsky: That’s creative. That was very creative, yeah.
John Rose: And I told the same thing to the Y&R guys, and so forth, and apparently, they did the same thing right after that, after I got it done first. And then they…several other companies fell in suit, and they did it. The tax authorities were very happy.
Daniel Satinsky: Right. So, there’s a question I want to ask you, and then I want to come back to this 1998 point. Did you ever have to deal with the issue of krysha*( The roof, Mafia) for yourself?
John Rose: Kind of, but not really. Let me—it’s a funny thing. We bumped up against it with—I mean, because our clients were constantly being, you know. Although they were multinationals. They didn’t get too much, but occasionally they would get assaulted here or there with odd things, especially if they were dealing with their retailers, and like more of their distribution and things like that. But Galina, our general director, my wife, we were approached at one point, she was approached by some guy—it’s classic racketeering kind of thing—saying I’d like to talk to you about your security. [Laughs.] And it looks like you’ve got things to protect, although once they were in, they don’t quite understand our business. It’s not so easy to muscle in on us, right?
Daniel Satinsky: Right.
John Rose: But we’d been in business for years by then, three or four years, and so Galina just said one thing, which was do you really think we lasted this long without our own krysha? Which was brilliant, brilliant—
Daniel Satinsky: Brilliant.
John Rose: Because he had to go away going oh, my god. This was during what I used to call the “disorganized crime” period, and he had to go away wondering whose toes he was about to step on and was it really worth it to him for this business that he doesn’t understand what we even make. And he went away, and we were never approached again. Funnily enough.
Daniel Satinsky: I had a similar circumstance. I don’t want to tell my own stories, because I want to hear yours, but…
John Rose: I’m happy to hear it.
Daniel Satinsky: I opened a business center in Yaroslavl, in the Intourist Hotel in Yaroslavl in 1995, and in those days there was no fax machine, publicly available fax machine or any internet connection for people traveling, so we thought oh, okay, we’ll put this in this hotel. And the hotel manager was very happy to do that. And I had another partner who was then later the general counsel for the KHL, so those were my partners. So, the first day the door opened, there was this Chechen guy comes in a sharkskin suit, very well dressed, comes and says who’s the owner? I was there. He says if you don’t have a partner, I am your partner. And I said go talk to this guy and this guy. I never saw him again; he never bothered me. There was a system there that you had to conform to in some way. It didn’t necessarily mean you had to be paying off people all the time, but there was a system.
John Rose: Oh, yeah. No, and it got—I mean, I know a number of people that had horrible things happen to them, and we all knew Paul Tatum, who got gunned down. It was kind of a fact of life. But we never really had too many problems. We started to see more issues happening in media, and frankly after about ’98, ’99 we jettisoned the media buying part of our business and spun it off. We took our media team, or the head of that team in particular, he was very interested in starting his own business anyway, so we just sort of backed him, and spun that all off, and put it as a separate thing so that it could be a black box, quite frankly, because it was becoming troublesome.
Because there was not a lot of oversight over me, but I didn’t want to be in the middle of anything that would get dirty. I knew that there was dirt on the other side of it, and I didn’t really want to be there. I needed to try to create some remove from myself. So, that’s why we ended up doing that. We still did media planning, and we still do everything else. And to this day, now we’re back into a little bit of it, especially because it’s digital and everything else. But we still, basically we work through this group that we set up, or that he set up and we own a piece of, and that’s been clean. Our hands have been clean in it. But it was messy.
Daniel Satinsky: Right, which I think was a general approach among many people in those days, where the Russian partner took care of participating in agencies and things like that, right?
John Rose: Yeah, I mean, like I said, that was our only real experience on the business side. And even for personal safety issues, I’ve never really had a problem. I mean, other than to say that, you know, yeah, somebody blew themselves up in front of my building.
Somebody got gunned down in front of us, things like that. But personally, I’ve never been… You know what I mean, I’ve been witness to things, okay, and all of that, and we lost like eight bankers one week I remember. But I’ve never had any real issues here. And most of the people I know have not.
And it still apparently happens from time to time. A friend of mine, or a guy I became friendly with, it’s a French guy who became the head of Chanel here, and he got attacked. He got mugged. This was just a year ago or a year and a half ago. As the head of Chanel. He’s got, you know. And I think that soured him on the business and he ended up leaving the market. So, it still goes on. But I think that just goes on in big cities, you know. I’m not sure it’s endemic to here.
Daniel Satinsky: Yeah. So, did you see the attitude among Russians change towards foreigners, and particularly towards Americans over the course of at least through the ‘90s, and then again in the 2000s? Which I think is kind of a separate period.
John Rose: Well, early on there was clearly a fascination with Americans and with Westerners in general, and certainly more… Early on there was, I wouldn’t say humility. Russians are not known for their humility. But they had it in check, and so they were more willing to learn. I think that what happened here is that at a certain point it’s like a little knowledge is a dangerous thing kind of an approach. So, I think that it wasn’t…I don’t think that we went through a really nasty—at least in business—we didn’t go through any nasty anti-American sentiment that I experienced, but I do think it was hey, we don’t need you guys as much as we needed you before. We don’t need you anymore, in some cases.
I think it was more of a, you know, it just made sense. They felt that they’d learned enough. So, that’s why you started to see—and then after they started to prove themselves. And also, by the way, during those heated periods, everybody was a genius, too. They knew what they knew, which wasn’t enough to get you through a bad time, but in a superheated economy you’re making money, you must be a genius, you must have learned everything you need to know. In fact, you probably know more than they know now. And that’s the kind of attitude that I think became pervasive, because the arrogance grew way up. And of course, also the whole Soviet structure fell away. When we were having our early meetings at the Mezhdunarodnaya, the InterContinental Hotel, right? Remember the place with the big rooster in the middle of the…?
We’ve actually acquired a media group there, so that that’s one of the general licenses that even still exist, even after the Trump changes. I mean, I can’t open—and also, I had a Russian company to bring there, so the Russian company signs off on things. I’m not technically running a marketing group there, which is still a little iffy.
But there are many businesses—internet, and telecom, and banking—that all have general licenses. I ran a huge…I’ve run huge…we ran a huge festival there across all of Havana. We’ve done some very big things in Cuba working with the government. I’ve worked with the Ministry of Tourism & Culture. We’ve gotten very embedded in Cuba. It’s all sort of on pause because of COVID, but we’ve done some big things there. One of them was a documentary. I’ll send you a link. And so, we’ve not had too many problems.
The only Russian link, to bring you back to Russia, is that I’ve had more cooperation with the Russian government in Cuba because at the embassy they have nothing to do. So, the Russians in Cuba have been so much easier to work with, and they’ve been very helpful in Havana, and more than they’ve ever helped me here.
Daniel Satinsky: Huh. So, back to what you said about how you evaluate based on difference. Do you remember some of the key differences that you noted when you began, peculiarities about Russians that you remember?
John Rose: Well, I think that the first thing I think all of us learn is that it’s a “nyet” mentality, meaning it’s no before it’s yes. It’s always the—there’s a glass is half empty approach here that I think is part of the culture. We certainly learned it a lot in the research. If we’re trying to present a focus group a commercial or something like that, or packaging or something, it’s always what’s wrong with it first. It’s always to the negative.
The real quick thing we learned is in the States, from a business perspective, we could do a lot on the phone. You and I could have never met. I could be in Boston, you could be in New York, and we could have a phone relationship for years and get business done. And in Russia that would never happen. If you had met somebody before over the phone, I mean, you couldn’t make anything happen. You had to go there, and you had to talk and communicate, and everything is impossible until you talk it through.
I went through the same thing in Cuba, by the way. My wife looks at Cuba as sort of a mini–Soviet Union because they adopted a lot of the same ways. Everything is no. Everything is no, no, it’s impossible. Impossible until you sit down and you talk, and suddenly every, you know, it’s amazing how the whole thing can turn around. So, that’s what Russia was like. It’s like no, no, no, no, no until it’s yes.
And also just out of, you know, not…they didn’t know the industry, they didn’t know the business. Not only did they not know my business, they didn’t know business. There’s no sense of those early days, and so it was just that’s no, that’s not going to happen. They’re so used to everybody—I think they were so used to the system saying no to them that they adopted saying no to everybody else. If that makes sense. And so we had to get past that. And I think there it was just me being a little bullish. You know, I’ve just got to go we’re going to do it, we’ll find a way. They didn’t understand that until you keep pushing and pushing and pushing. And suddenly they’d turn around, you know, they’d turn around.
I had a card-carrying communist—I’ve done the same thing here and there—communists, members of the Communist Party, and it’s like they’re so anathema to capitalism, and commercialism and all this stuff. Suddenly, if you turn one of those people around, and suddenly they’re like they understand it completely, and they’re starting to offer you headline ideas. You’ve turned them around psychologically and they start to realize it’s not the enemy. Which was also that part of it, you know. This whole thing of capitalism and commercialism and advertising, it was all a very foreign concept. That took a while.
Daniel Satinsky: Right. And when you were doing your initial advertising, was it in the Soviet and successor media, or was it new media that was developing, and you were relating to?
John Rose: New media didn’t really develop very quickly. Early on there was also licensing and practical issues behind that. They kept a pretty tight lid on that. That was the last thing they wanted to give up. And so…but they did start allowing ads. And so no, we started placing commercials on those same channels. Remember the TV, when it would, like, if they ran out of programming the clock would come on the screen? And just finish out the hour.
Daniel Satinsky: Yes. Yeah, I remember that.
John Rose: So, we quickly said, you know, instead of that, how would you like to make some money? Mm, okay. Russians understood that quickly. And so we started placing ads on TV for Sony and Kodak, and there was somebody else early on, too. Oh, we started doing a lot of pharmaceutical work. We got Merck, and then some of the other pharmaceutical companies were also very quick to come in, so we started doing a lot of that work. Anyway. And then the radio stations had the same kind of conversation.
The newspapers were more quick because…but they were really thin. I don’t know if you remember Soviet newspapers. They weren’t very thick newspapers. They published whatever. They filled all their pages. So, it took a little bit of work there because they had to free up space, so they had to… But we quickly found out that they weren’t married to a lot of what they were putting in there. They had a lot of filler. They were having a hard time actually filling it out, and so we realized quickly that we can work with them.
And then, of course, the trolley guys, they were very happy to start—I mean, you know, we’ll come down, we’ll paint it for them, we’ll put that message on and give them money—great. Billboards the same thing. There’s always somebody to give money to. It was a lot of work. Now I can make a phone call. But it was that. And we also did a lot of the first research, too, so that helped us to understand.
Daniel Satinsky: You were forming the industry.
John Rose: Yeah, yeah. No, we did it. We did it. We were, you know. No, we’re in the history books here. I mean, we started with that. We started the International Advertising Association here. We’re founding members of the American Chamber of Commerce here. Just because we’re the first ones here, among the first wave here.
Daniel Satinsky: Right. And so when you say “we,” how big were you at that time? How many staff did you have?
John Rose: Well, we had about… I think in Boston we had maybe 25, 27 people, and a few more people in a little satellite up in New Hampshire, because we were handling a lot of ski resorts. And then here, within the first year I think we had about a dozen people or so, and then it grew up from there. And also, we started as an advertising agency here pretty purely, and then we started to build out other services, public relations in particular, and public relations became a big part of the business.
Daniel Satinsky: And that was again for foreign companies and…?
John Rose: Yeah, exactly. I mean, I remember writing an article for the old Moscow Tribune where I was just basically talking about how public relations in Russia began at the KGB. There was a propaganda department. And early on PR had a hard road because they learned about advertising, so now their only thinking about communication was pay me and I’ll deliver that information. So, PR is not that. PR is more of a, you know, we give you a story, there’s a little bit of pull and tug. Obviously, it has to be newsworthy, not entirely commercial, that kind of balance. They didn’t get that at all. They didn’t get that at all. And in fact, in my article, I joked that if there was a fire somebody from a newspaper would be running around and going who’s going to pay me to write about this fire.
Daniel Satinsky: Ah, okay.
John Rose: Because Sony pays me to talk about their stereos, you should pay me to talk about this. But it evolved, it evolved. And again, that was a big nyet—we’re never going to get media to write about things for free. I’m going yes, you are. We will. Trust me on this, we’re going to get there, we’re going to do this.
And that has been, by the way, every time we tried to evolve the business, from advertising to PR, to once we started embracing the internet in Russia, to social media, to digital advertising, to all the things that we do, to influencers, every time it’s—because I’m trying to get ahead of the game. It’s one thing after everybody sees it being done. That’s easy. But at the beginning when you’re trying to explain this is what’s about to come, and we have to be ahead of this curve, you’ve got to take our people and you’ve got to go no, it’s going to happen, trust me, I’ll show you. But no matter how many times I’ve been right before, that is nothing to the Russians.
Daniel Satinsky: I see. Okay. Yeah. Because it’s the first no. You have to get through two or three nos.
Daniel Satinsky: It’s something new. Yeah, and I get it. I mean, everybody’s resistant to change. That’s a position for almost anyone. That’s a default. But for Russians it seems to be particularly acute, in my experience. Less and less. I mean, obviously we’ve got a whole generational shift here now, and we’ve got some bright people now. Now you’re hiring and they’ve had experience, and they’ve been at three agencies, and now it’s a different game, you know, they’ve had a sense of it. And of course, that can be good or bad. Sometimes they take baggage from other agencies, too. But for the most part at least they understand the game, you’re not teaching them from step one.
And more importantly, they grew up exposed to it. Remember that the people I was trying to get to do it had no experience of inhabiting it. They didn’t see it. So, everything was just, you know, I had to bring lots of examples, show them lots of materials, really make them understand why this was necessary and get them to understand once there’s a competitive frame—I mean, if you have a monopoly and everything maybe not so much, but once there’s a competitive frame, once there’s a Pepsi and a Coke… So, when they were talking about the Cola wars in the Soviet Union, we were on the Coke side.
Daniel Satinsky: Right. And when did you start to see Russian agencies, Russians that mirrored your kind of work?
John Rose: Pretty quickly. It mostly came from the media side. Russians, like a lot of—the culture, like many cultures in this part of the world, adapt to a trading mentality before they can adapt to a nonlinear thinking approach. In other words, the creative side of the business was harder for them, I think, and it’s just generally harder for people to grasp. How do you create an ad? Even if you grow up in the States there’s a learning curve there. But buying and selling something, okay, there’s a TV station there, I buy it for one price, and I get a commission from this client here, okay. I mean, you know, buying stuff—
Daniel Satinsky: That part you get.
John Rose: They get that. So, they quickly grasped that, and Russians really went quickly. And of course it went the Russian way, and it got very corrupt, people got killed, all that—the same story like in everything else. And so that’s where the companies grew up, is to become media brokers more than anything else, okay? They call themselves agencies, and they would try to piece things together, but that could work for, even for a multinational, to a certain extent, if they’re adapting everything, and all they have to do is get somebody to place it.
So, there could have been competition at that level, but for the most part the international companies didn’t want to have a whole lot to do with the Russian agencies because too many obstacles, from language to everything else, to just a sensibility about, you know what—they didn’t know what strategy was. They didn’t know how to build a marketing plan. They didn’t understand all the groundwork. They only saw what came out the other end, and the transaction. And a lot of people got into the business, like a lot of Russians who got into a lot of businesses in those days. It really had nothing to do with their love. In other words, they had no passion for it. It was a business that they identified as something that they could do and make money.
Daniel Satinsky: And make some money, yeah.
John Rose: Right. It could easily have been any other business. And that’s why you saw a lot of Russians moving from business to business. It didn’t matter because they didn’t grasp career or anything other than a means to an end of making money. There was no sense of I’m working for myself, for my betterment. There was no self-actualization and any of that, right? I mean, everybody had a job. They had to have a job. To get a better job they had to belong to the party. There was all of that in their minds.
So, early days it was difficult to get people to—it was hard to identify people who could love advertising, and one of the things I had to do was make them love it, working for me. And our competition, I think part of our early success was companies, especially international companies, they saw no passion there, they saw no understanding. There was no experience. Who are they going to give their money to? So, that was our early benefit. But yes, they certainly came up, and then of course now it’s big.
Daniel Satinsky: So, give me some rough time frames for how that industry has matured. In other words, when did—I understand in the beginning stages what you’re describing, but say by ’95, ’97, 2000. When did you see that you began to feel like wait a minute, this is a robust industry in Russia?
John Rose: It became, I’d say it started to become very competitive in the mid ‘90s, like ’95, ’96, ’97, somewhere in there. When you no longer knew who everybody was, you know what I mean? It’s like when suddenly you’re going who? Some little group out of where? I don’t know. Suddenly you started seeing people, because it was growing quick. And it’s all around you. That’s the other thing, is that people are seeing. The evidence of our work is everywhere, and so people wanted to get in on that.
And it’s a service business, which means low, at least what’s perceived to be a low threshold of entry, right? You’re not running inventory. You can run an office out of the middle of nowhere, at least in those early days. There was that ease of getting into it. So, I think that’s what attracted people. So, yeah, it started getting very competitive there.
And of course the other thing that happened was that all the multinationals were coming in. And so I would say that if you were to interview some of the other agencies, guys that were here at that time, the big guns that were coming in, we were their training ground. They would come in, offer our people twice as much, and we had trained them up for them. And off they went. We ended up with a lot of alumni—we stayed friendly with pretty much everybody, but a lot of our early people got into very high-powered positions at other agencies because they had no one else. They didn’t want to go through what we went through.
Daniel Satinsky: Yeah, I see.
John Rose: So, we were training people up. And in those days, you would just, you’d pick the handful of people that you want to retain and put some golden handcuffs around them, but you can’t keep everybody. And so there would be a churn. That’s when you could feel it. It’s right around that time, because it wasn’t just the locals. In fact, the early competition for us was never really the locals, it was the other international agencies, and especially the big networks, because they could come in, and they’re mostly competing with us… Actually, early on they were competing more for talent than they were for accounts because most of them were coming in with business that they had international contracts on, so they were competing for talent. They were competing for talent, and they were also making the market more expensive because there was more demand, so they were making media more expensive.
So, if you try to get a sense of the dynamic, that’s what’s happening, is that competition for talent, media now is becoming more expensive because there’s more companies, more agencies, but an international thing. The Russian agencies were coming up, and they were nibbling, but they didn’t get to become a real force, I think, until the ‘90s. But they were getting big. On the media side they were getting muscle. And then once they had a certain amount of muscle on the media side they could build up their muscle on the creative side. Because now they’re making money. Now they can—
Daniel Satinsky: Uh-huh. Who had muscle on the media side? Who specifically would you think of?
John Rose: I’ll have to go back and look. None of them are here anymore.
Daniel Satinsky: Oh, that’s okay if you don’t remember off the top of your head.
John Rose: I can’t remember all the names, but I can…if you need some blanks to be filled in, Galina will have a better memory than I will.
Daniel Satinsky: So, what happens in 1998?
John Rose: A lot of them had been absorbed. A lot of them had been absorbed. The companies are international companies, and lots of partnerships came in. A lot of these agencies then linked in with international companies, just like we did. Like I said, we sold in ’95 and then ended up getting it back. So, a lot of agencies were making deals, just like they came after us, too.
Daniel Satinsky: Okay. But you became independent again in ’95, and you’ve remained that way, right?
John Rose: In ’98. From ’95…’95 we started our affiliation. Then the purchase kicked in, and then in ’98 we got out just ahead of the first crisis, which happened August 17, 1998.
Daniel Satinsky: Right. And that crisis, as I remember, brought a massive exodus of expats and these predictions of the end of the expansion of Western business there.
John Rose: Right. That was the first purge. And it was dramatic. The reason why I can remember the date so vividly is because I was in St. Petersburg, and we were launching RJR’s first tobacco factory in St. Petersburg, and we’re sitting at the palace, okay, where we’d just done a launch, and we’re hearing, we’re getting calls from our people about suddenly all the ATM machines don’t work, there’s no way to get cash. The supermarkets are being raided. People are hoarding stuff.
It all happened very quickly. The banks weren’t recog—our accountants are calling—the banks aren’t recognizing our wires. And there’s a massive devaluation of currency, so you’re just watching your money sit there. Because in those days, even if you were bringing in money in dollars, they’d immediately convert it into rubles. It was a forced conversion. And you’d just watch it shrink. And so it was a…it got very difficult very, very quickly.
Daniel Satinsky: Yeah. And at that time did you consider leaving, closing up shop?
John Rose: No. You know, again, I’d like to think I was really insightful. I think I had a sense that we had enough momentum, when I looked around at our clients and I saw what could we retain and everything. And we all knew that it was going to be tough because we’re all in the same boat. And at that time, we’re still small enough that I’m very friendly with all the GMs of the client companies. You’re talking to them, most of them are expats, and you go, you know, we’re going to stick this out, but we’re going to be looking at who’s going to live and die.
Like, for example, because suddenly their distribution networks were in turmoil, and literally I’m sitting—I remember sitting at GlaxoSmithKline, and he’s looking at his distribution network, and he’s going who are we going to save? Because we’re going to have to extend credit to somebody, because none of them can afford to pay us anymore. Who are we going to salvage out of this? And looking at channels. And I remember all of that kind of stuff. It was difficult times for everybody.
And of course, we’re also in a tricky position of stewarding clients’ funds, because money is coming through us, so at any moment in time we could be managing millions of dollars for clients, and so if that got frozen… Now, fortunately they didn’t hit us at the worst time, but they hit us, and there was a lot of money sitting in a bank. But on the magnitude of hundreds of thousands, not millions, because I remember vividly, because we had just done some big campaigns, and the money had just gone out the door, so it wasn’t our problem. It was stuck in somebody else’s bank, but it wasn’t our problem.
Daniel Satinsky: Right, not in yours.
John Rose: But the only thing we managed to do was I said…because they weren’t honoring any wire transfers. You could send a wire transfer to a bank; they wouldn’t send the money anywhere, so you couldn’t pay anybody. But I knew that the tax inspector could take the money if they wanted it, so I had our accountants call the tax inspector and say what if we wanted to prepay our taxes? First of all, they’d never heard of any of this before. So, what if we wanted to prepay our taxes—and looked at our bank account—by this much?
And that took some communicating internally because I’m going, because we’re being taxed based on our overall income, which was coming in in dollars, but I have to pay it out in rubles, and the future value of those rubles, based on the dollar percentage, was going to just go like this. [Downward gesture.] So, I said if I could turn this into an asset and freeze it before it diminishes, because ultimately it went down to like 20% or 30% of what it was, then I’ll be able to preserve that, and we have other capital outside of the country. I’m going what if they did that? And they accepted those terms. And we prepaid all of that in taxes. We were paid for taxes for years because we just prepaid it, and they locked it in, and we managed to salvage at least 65, 70% of the capital.
Daniel Satinsky: That’s creative. That was very creative, yeah.
John Rose: And I told the same thing to the Y&R guys, and so forth, and apparently, they did the same thing right after that, after I got it done first. And then they…several other companies fell in suit, and they did it. The tax authorities were very happy.
Daniel Satinsky: Right. So, there’s a question I want to ask you, and then I want to come back to this 1998 point. Did you ever have to deal with the issue of krysha*( The roof, Mafia) for yourself?
John Rose: Kind of, but not really. Let me—it’s a funny thing. We bumped up against it with—I mean, because our clients were constantly being, you know. Although they were multinationals. They didn’t get too much, but occasionally they would get assaulted here or there with odd things, especially if they were dealing with their retailers, and like more of their distribution and things like that. But Galina, our general director, my wife, we were approached at one point, she was approached by some guy—it’s classic racketeering kind of thing—saying I’d like to talk to you about your security. [Laughs.] And it looks like you’ve got things to protect, although once they were in, they don’t quite understand our business. It’s not so easy to muscle in on us, right?
Daniel Satinsky: Right.
John Rose: But we’d been in business for years by then, three or four years, and so Galina just said one thing, which was do you really think we lasted this long without our own krysha? Which was brilliant, brilliant—
Daniel Satinsky: Brilliant.
John Rose: Because he had to go away going oh, my god. This was during what I used to call the “disorganized crime” period, and he had to go away wondering whose toes he was about to step on and was it really worth it to him for this business that he doesn’t understand what we even make. And he went away, and we were never approached again. Funnily enough.
Daniel Satinsky: I had a similar circumstance. I don’t want to tell my own stories, because I want to hear yours, but…
John Rose: I’m happy to hear it.
Daniel Satinsky: I opened a business center in Yaroslavl, in the Intourist Hotel in Yaroslavl in 1995, and in those days there was no fax machine, publicly available fax machine or any internet connection for people traveling, so we thought oh, okay, we’ll put this in this hotel. And the hotel manager was very happy to do that. And I had another partner who was then later the general counsel for the KHL, so those were my partners. So, the first day the door opened, there was this Chechen guy comes in a sharkskin suit, very well dressed, comes and says who’s the owner? I was there. He says if you don’t have a partner, I am your partner. And I said go talk to this guy and this guy. I never saw him again; he never bothered me. There was a system there that you had to conform to in some way. It didn’t necessarily mean you had to be paying off people all the time, but there was a system.
John Rose: Oh, yeah. No, and it got—I mean, I know a number of people that had horrible things happen to them, and we all knew Paul Tatum, who got gunned down. It was kind of a fact of life. But we never really had too many problems. We started to see more issues happening in media, and frankly after about ’98, ’99 we jettisoned the media buying part of our business and spun it off. We took our media team, or the head of that team in particular, he was very interested in starting his own business anyway, so we just sort of backed him, and spun that all off, and put it as a separate thing so that it could be a black box, quite frankly, because it was becoming troublesome.
Because there was not a lot of oversight over me, but I didn’t want to be in the middle of anything that would get dirty. I knew that there was dirt on the other side of it, and I didn’t really want to be there. I needed to try to create some remove from myself. So, that’s why we ended up doing that. We still did media planning, and we still do everything else. And to this day, now we’re back into a little bit of it, especially because it’s digital and everything else. But we still, basically we work through this group that we set up, or that he set up and we own a piece of, and that’s been clean. Our hands have been clean in it. But it was messy.
Daniel Satinsky: Right, which I think was a general approach among many people in those days, where the Russian partner took care of participating in agencies and things like that, right?
John Rose: Yeah, I mean, like I said, that was our only real experience on the business side. And even for personal safety issues, I’ve never really had a problem. I mean, other than to say that, you know, yeah, somebody blew themselves up in front of my building.
Somebody got gunned down in front of us, things like that. But personally, I’ve never been… You know what I mean, I’ve been witness to things, okay, and all of that, and we lost like eight bankers one week I remember. But I’ve never had any real issues here. And most of the people I know have not.
And it still apparently happens from time to time. A friend of mine, or a guy I became friendly with, it’s a French guy who became the head of Chanel here, and he got attacked. He got mugged. This was just a year ago or a year and a half ago. As the head of Chanel. He’s got, you know. And I think that soured him on the business and he ended up leaving the market. So, it still goes on. But I think that just goes on in big cities, you know. I’m not sure it’s endemic to here.
Daniel Satinsky: Yeah. So, did you see the attitude among Russians change towards foreigners, and particularly towards Americans over the course of at least through the ‘90s, and then again in the 2000s? Which I think is kind of a separate period.
John Rose: Well, early on there was clearly a fascination with Americans and with Westerners in general, and certainly more… Early on there was, I wouldn’t say humility. Russians are not known for their humility. But they had it in check, and so they were more willing to learn. I think that what happened here is that at a certain point it’s like a little knowledge is a dangerous thing kind of an approach. So, I think that it wasn’t…I don’t think that we went through a really nasty—at least in business—we didn’t go through any nasty anti-American sentiment that I experienced, but I do think it was hey, we don’t need you guys as much as we needed you before. We don’t need you anymore, in some cases.
I think it was more of a, you know, it just made sense. They felt that they’d learned enough. So, that’s why you started to see—and then after they started to prove themselves. And also, by the way, during those heated periods, everybody was a genius, too. They knew what they knew, which wasn’t enough to get you through a bad time, but in a superheated economy you’re making money, you must be a genius, you must have learned everything you need to know. In fact, you probably know more than they know now. And that’s the kind of attitude that I think became pervasive, because the arrogance grew way up. And of course, also the whole Soviet structure fell away. When we were having our early meetings at the Mezhdunarodnaya, the InterContinental Hotel, right? Remember the place with the big rooster in the middle of the…?
Daniel Satinsky: Yeah, the Hammer, Armand Hammer building, right?
John Rose: So, I could walk right into that hotel. A Russian would get stopped at the door. Okay? And when Galina one time was coming in to meet me, they took her into an interrogation room. It’s like you must be a hooker coming into an international hotel. And every Russian that came in had to show ID and blah-blah-blah. All I had to do was speak a few words of English and they don’t even look at you. That flipped right around, okay? Because early on we had all the money, they had no power. Now they have all the power and the money, and it’s changed dramatically that way.
I think as different kinds of businesses expanded, we got another wave of expats coming in because they needed different kinds of specialization, more sophisticated banking, especially investment banking, and learning how to manage markets, and the stock market grew. They needed to bring in a lot of finance professions, a lot of real estate professions, a lot of other kinds of people that started coming in, and that was the second wave.
But the first wave was—and more brands—but the first wave was the big multinational brands, the service companies, the lawyers, the accountants, the advertising guys. We were all sort of on the front line. And then you went through a couple of waves, depending on what the country needed and how it was evolving.
Daniel Satinsky: And so the financial guys, so that must be ’95, ’96, ’97, somewhere in that area, right?
John Rose: Yeah, heading into the 2000s. That’s when it really started getting hot. And also, companies were starting to—Russian companies were starting to go public on international exchanges, and that became a frenzy. I don’t know if you read any of those prospectuses of a company going public, a Russian company going public in those days, but they would go and this guy’s been to jail, and this guy’s been to prison, and this guy did this, and nobody cared. It’s all laid out for you if you wanted to read through it. Probably nobody even read it. But here it is, and it’s going to go public, and it’s going to be this, and you’re going to make a bunch of money. It’s all speculative.
Daniel Satinsky: All ADRs at first, right?
John Rose: ADRs at first and then direct listings. Let’s see, this would have been a little bit later, early 2000s, because I, in addition to the agency, there were certain companies that needed more internal expertise—marketing, PR, investor relations, financial communications—and there weren’t a lot of people in the market to do it. And so I got asked a few times to sort of be an outsourced executive, so I would split my time. And so, for example, do you remember Golden Telecom here?
Daniel Satinsky: Yeah.
John Rose: Well, Golden Telecom came out of several different other companies that were here in telecom, and they put those assets together, and they created Golden Telecom. And I was brought in at that time. So, I became this guy that taught companies how to walk and talk like a public company and how to communicate with investors. Even though they had a bunch of international people in various stages of it, they didn’t have enough muscle to be able to put it all together, so I suddenly became that guy, so I did that for a couple. So, trading on the NASDAQ or trading on the London Stock Exchange, I’m the guy writing the governance thing, I’m the guy writing annual reports, I’m the guy talking to investors, I’m the guy putting together the road shows, to teach you how to do public company [things].
Daniel Satinsky: And those were Russian companies. They were calling for your expertise
John Rose: Yeah, Russian companies or Russian companies that may have listed, like, for example, it’s a Russian company, but it’s really incorporated in the Netherlands going on the London Stock Exchange. But yes, it’s basically Russian assets being bundled up or otherwise packaged and then put on the exchange. I also went to work…I also was on—I’ve been on boards of investment banks, so I got to see inside a lot of dealmaking. And during a time when they’re throwing lots of money around. It was just an incredible time when, you know, it’s too much money for the caliber of the people that were managing it.
Daniel Satinsky: And so where are any nodal points in how this begins to change? ’98 is a nodal point in some ways. When else?
John Rose: Well, ’98 was a big wake-up call because that was a big pullback. But as a result of that, when the internet bubble in the rest of the world sort of exploded, we weren’t there yet. We were not in the middle of all that yet, so we didn’t suffer from that pullback, so Russia had a chance to sort of advance a little bit.
The other thing that happened, I think, out of ’98 was that it was the first time Russian brands had an opportunity. So, suddenly companies you may not have heard of, but like Wimm-Bill-Dann was a company that became a big juice and milk producer. It never would have happened before because suddenly international brands weren’t trading with some of these distributors and there was a pause in the market, and imports weren’t coming in to the same degree, and suddenly they were becoming much more expensive because of the exchange rates, and so that created an opportunity.
Which is the same kind of opportunity that was created recently with the sanctions, where you create a vacuum, and Russians are very good at filling vacuums, and they will come in and fill that in. So, brands started growing up this last wave with the sanctions, because remember, we have sanctions against Russia, but then Russia goes well, you sanctioned me, we’ll sanction you. Which only hurts the rest of us. You’re going to sanction our people on, you know, some of our people, they can’t travel to the United States anymore, or you can’t do business with their bank, well then we’re not going to buy anymore French cheese, and we’re not going to buy anymore U.S. meat, and we’re not going to buy more this or that. But of course us living here, we’re the only ones that suffer.
And there’s a Russian expression—you’ll like this—when…how does that go? When we bomb…when they bomb…how does it work? All I know is it ends with we bomb Voronezh. I can’t remember the exact translation. But basically, it’s sort of like you poke out one eye, we’ll just poke out the other one, you know, what are we doing? You’re hurting us here; we’re just going to hurt ourselves here. It’s like that.
Daniel Satinsky: Yeah.
John Rose: And it’s kind of a crazy situation. But what that did was suddenly now there’s Russian cheeses, now there’s Russian produce. There are other brands coming from other parts of the world. It’s not a U.S. centric phenomenon anymore, or just a Europe centric phenomenon. The Chinese are here, and everybody else is here now, and other brands are building up, and there’s more sophisticated understanding of how capital works here, and banking has become a different thing. These catastrophes have definitely created opportunities for the Russians that may not have happened if they hadn’t had these little interruptions.
Daniel Satinsky: Right. And so from your point of view—consider when this book gets read it will be read mostly by Americans, and there’s very little knowledge of Russia currently in the U.S., and I would say people would say that there’s not really a market economy in Russia, that it’s authoritarian and dominated by state owned or state dominated industry. What would you say about that?
John Rose: I would say that they have no clue of how sophisticated this market has gotten, especially in the last seven to eight to nine years. I would go there are some things that are easier to do here than there are in the States. Before you had, you know, you were able to pay for your parking meter by phone in the United States we could do it here for years. Public transportation. The city has been cleaned up, at least as far as Moscow is concerned. I know Moscow is not a microcosm, but Moscow is 14 million people.
Daniel Satinsky: The most visible, yeah.
John Rose: And most major cities are like Moscow, and they have another 12 with a population over a million, 13, and so all the major cities are more or less like this now. If you talk to the kind of marketers that we deal with, it’s very sophisticated. Home delivery of everything. I can get a vaccine. I just got it yesterday. I can get testing. I’ve been able to get testing for six months. Somebody comes to my house if I want them to.
I can get just about anything I want to get here now. It wasn’t like that not too long ago. I used to complain about I can’t get decent meat anymore, beef. Now I can. It’s as good as anything I used to smuggle in from the United States for all these years. And I think I’ve got great—you know when I got my first appreciation of Russia was when I started going to Cuba, because I used to travel out of Russia to go I gotta get out of Russia, because it was always, this was a reflex. And I was always traveling, so my bags were always packed. I started going to Cuba, I couldn’t wait to come back to Russia. It was so much easier here. Cuba, you have no idea how farther back it is. It’s a great place to visit, but I’m starting to do business and had an apartment.
I was actually, at one time, a resident in Russia and a resident in Cuba, with an American passport. Got asked a lot of questions. Okay? Because I was doing everything officially. I was staying in an official flat there, and I was going back and forth. But suddenly, when you have to buy eggs, it’s no longer a vacation, and you learn everything is different. So, it became a new appreciation here. And then because I travel all the time I always think about buying stuff when I’m traveling. If I’m going to need some clothes, that’s on my list of things to do when I’m traveling, we’ll go shopping. That’s part of the process. Bring stuff back from the States and things, just like I did in the earlier stage, crates of stuff coming back.
Now that we’ve been on lockdown, and I’ve been stuck here since last March, I’ve learned how to navigate in Russia and found that wow, there’s a lot of stuff that I’ve been bringing back that it’s very readily available here now. And they’ve really stepped up. We have everything delivered, groceries, everything is delivered. It’s a very sophisticated media market, very sophisticated distribution channels.
More and more companies are coming here. We’re talking to companies today, big companies you would know that have never been here yet that are coming now. And fast food, etc. is becoming more of a phenomenon beyond the Wendy’s and the McDonald’s and things like that. It’s getting much more sophisticated. Papa John’s is a client of ours. They’ve got a couple hundred units here already. If you’re talking to somebody, an American, you go you could live quite comfortably here. You would be fine. You would not feel a sense that you’re in some third world country, which is probably what they think it is.
As an ordinary businessperson you’ll find that there’s still a difficult bureaucracy, you’ll find that there’s still a lot of corruption, but that’s in a lot of places. You’ll find that, and if you’re at high levels, yeah, you might find things onerous. A friend of ours just was, you know, EBRD, he was locked up and then on house arrest for a long time. He was being pressured out of some money. It was all concocted. And those things happen. If they want you, they’ll get you. You just read about Navalny coming back, and what an idiot. I don’t know why the hell he came back. But so, things can happen to you. Things can happen to you. But if you’re coming here and you’re doing ordinary business, and you’ve got a decent partner, you can learn the ropes, or you know someone who knows the ropes, it’s not a hard place to do business. It’s really not that difficult.
Daniel Satinsky: And your clients are primarily foreign companies at this point, or not?
John Rose: Yeah. Yeah, they’ve always been mostly multinational companies. And occasionally, yeah, we’re working for a Russian group here or there. Usually, it’s like some kind of association kind of a thing. We’ll get a project like energy drinks were under assault, and so Coke, Pepsi, Red Bull, etc. put together a little confederate, and they hired us to work on their issue management project, things like that. So, it’s an association, but it’s still international companies. Or we’ll work for the Russian hockey league or something like that, we’ll do things like that.
But most of our stuff is more mainstream, packaged goods. The reason why we’ve done pretty well during the pandemic is some of the businesses that were hit hardest had become a smaller percentage of our business. We used to be a lot of tourism and travel. That’s a small percentage of our business now. Now most of our business is in consumer packaged goods, and food, particularly, so like tabasco, companies like that. Or a lot of European, Italian brands that you may or may not know. You would know them, but… But a lot of food brands.
And then gaming. Hardware, gaming, mobile gaming companies. Entertainment, like we work for BBC for their programming side, Dr. Who and things like that we manage all of the programming side, the entertainment side. Also did fine during COVID. Or we do a lot of entertainment, children’s entertainment, and cartoons, and all sorts of other content products, and restaurants. The restaurants that deliver, like Papa John’s, so they did okay. You know, things like that. Some luxury goods.
Daniel Satinsky: How big is your agency now?
John Rose: There’s about 42, I think, people here now—42, 43. It’s not enormous, but substantial for what we do. And then we do, you know, we have a lot of people in the field, we say. And we’ve got a lot of freelancers, a lot of people that have to do with promotional. I mean, we may have several hundred people, before COVID, in the field doing promotional work and things like that, so we’ve got teams that come over, all that kind of stuff. There’s a lot of ancillary stuff like that.
Daniel Satinsky: And you’ve been doing all your work remotely through the pandemic?
John Rose: Yeah, I mean, we adapted pretty quickly. We put everybody at home in the very early stage before the lockdown, so last March. Everybody adapted pretty quickly to it.
Daniel Satinsky: Huh. Yeah, well, I live in a place where people are not adapting, so yeah.
John Rose: Yeah, it was tricky. I mean, we were shooting—I mean, we had to continue shooting spots and content during COVID, so we actually got out, like in April we had like the first spots out, so we got actually quite a lot of publicity just because we were actually able to do it. How did you do it? We had to do a “making of” to show how we managed to stay inside of apartments and do everything through Zoom, basically, and find a director of photography whose live-in girlfriend happens to be a makeup artist. It’s all that kind of stuff and work out of another apartment in his building. It was a bit of a tricky bit, but we managed to adapt.
We’re not doing a lot of live stuff. Our events business, of course, has dried up quite a lot, because we’re not doing a lot of live things, but that’s coming back, too, because Russia’s, you know, people are—things are open here, essentially. By mandate 30% of staff have to be at home in businesses that can do that. Not in retail, necessarily, but certainly in other office businesses. By mandate. And there is a bit of a curfew for restaurants at night, I think at 11:00 or something like that. But I think that’s being lifted.
I went for the vaccine yesterday, for Sputnik, which a lot of us were resisting quite a lot. And in fact, even when we get there they’re going why are you getting Sputnik? Some of the people there don’t understand why we’re getting Sputnik. It’s like why don’t you get Pfizer? I go well, if Pfizer was here, I wouldn’t be here. But we can’t get any of that, and we’re not going to be able to get it for some time, we’re told. And so, we just sort of…we did some investigation, we talked to some people at AstraZeneca and things like that, and they just said yeah, it’s safe enough, and in a few weeks you’ll know whether you have antibodies, so we did that.
But the experience was they’ve opened up a lot of centers. They’re putting it out through their traditional state-run medical centers, and some of the private international ones, like European Medical Center and things like that, although they’re charging—the vaccine is free, but it costs you 670 euro for the pre consultation, the post consultation.
Daniel Satinsky: Whoa.
John Rose: So, we decided hey, they opened up a center in GUM*, so four of us walked over to GUM, and upstairs on the third floor—and you’ve been to GUM. You know it’s all, you know. It’s all been redone and beautiful. And on the third floor they built a purpose—it’s a purpose-built little center with four doctors there, all painted beautifully and everything like that. They took us in. You wait in line, but you wait a little bit. They bring you through. They’ve got volunteers out there working the line, making sure everybody stays in order. And when it’s all over they give you ice cream. [Laughs.]
Daniel Satinsky: Wow. And it didn’t cost you 670 euros?
John Rose: Zero. Even expats, zero. You show a passport; you get your vaccine. Anyone over 18.
Daniel Satinsky: Yeah. Well, I’m hoping that by April, I’ll get it, but that’s what I’m looking at.
John Rose: My brother is in England, and he says I’m on a list; I’m looking at maybe June. And I’m going Biden’s going to have a hundred million people vaccinated in his first 100 days, the U.K. population is only 60, you were the first guys to start, what’s going on?
Daniel Satinsky: Yeah. Well, there’s a lot of unexplained what’s going on, so a lot of incompetence in this world among people who have made their reputation being competent, you know. There’s no can-do attitude here in America, it’s no. Anyway, I don’t want to go there. That’s a rabbit hole.
John Rose: I understand.
Daniel Satinsky: I think…so first of all, I want to thank you for doing this, and what I’m sort of learning through all the interviews that I do, and I’m trying not to let my preconceived notions dictate what’s going to come out of this. I’m trying to rely on people, and your impressions, and your experience. And so probably, there’s a good chance I may want to come back to you at some point and ask you some more pointed questions and trying to put some definite dates or names or something, if that’s okay with you.
John Rose: No problem, because…no problem at all. I’m not sure I answered—I just put on my glasses just to read through the questions you sent me before, and I’d started to scribble some things down. I just want to see if there’s anything there that was…that we didn’t…that we didn’t quite cover.
You had asked if Russia ended up rejecting the U.S. model or things like that. I’m not sure we answered that quite well enough. I think that part of it was, like I said, I think that the Russians were very good at assimilating as much information as they could from the various sources, certainly early on mostly American. I don’t know that I can say that it’s mostly American anymore. I think it’s a lot of influencers here now, and I think that they’ve adopted, and I think that they sort of pick and choose what they think they need.
And I think that, you know, like when I was talking about the time when companies were going public, I think if you’re trying to create a company that’s going to go onto the public markets, I think they look more towards the U.S. because it’s the most stringent market, and they figure if they can, especially if they’re going to go on a market in the U.S. But essentially the bar is set the same. I think that’s when they start to look outward and go we need to look like that, and we need to act like that, and how do we manage to get up to that.
So, I wouldn’t say that they’ve rejected the U.S. model. I just think that they’ve adopted as much of it as they could and they’ve sort of…they’re trying to create their own model, which has a lot of different kinds of influences, both East and West. And I think whatever suited them. And it depends on the kind of business. I think that in my business there’s a lot of U.S. modeling because it’s kind of where this business originated. Advertising began there. It’s where the most progressive brands come from, for the most part, the biggest brands, and so I think that drives a lot of it.
And so, if there’s a U.S. centric thing that persists here, it’s because there’s a lot of big U.S. companies that have managed to become very big companies here, and out of their ranks came a lot of Russians who then worked for other companies, whether they’re Russian or whatever. So, I think we managed to pollinate the market pretty well, you know what I mean? So, I think it’s there. And then it’s a bit of a stew. Your primary ingredient is probably most, a lot of the U.S. stuff, and then bits and bobs from different other resources.
Daniel Satinsky: Uh-huh, yeah. So, despite all the political difficulties, the U.S. brands and companies are still in that market because it’s a good market for them, I’m assuming.
John Rose: Yeah. No, absolutely. No, Russia is, as far as any of the companies that have really made a go of it here, Russia generally, very quickly becomes their biggest market in Europe. They very quickly realize that they have to run things, that it’s the tail wagging the dog if they think that they’re running it from another staging point in Europe. They would look at Eastern Europe and Russia, and they’re going to put their headquarters in Hungary, and I go, well, that’s just, you know, it’s like you’re going to run a business across the United States and you’re going to base it in Kansas. Well, maybe not. You might want to rethink that.
Maybe today. Maybe today in our new normal. Maybe it doesn’t matter where anything is based anymore, I don’t know. But certainly, when you have physical product that needs to move from one place to another, I think a lot more companies are creating a base in Russia and then starting to export out of Russia to other parts of Europe versus the other way around.
Daniel Satinsky: Interesting. So, it’s more a process of assimilation than rejection.
John Rose: Yeah. I think they’ve taken on what they think they need. And I think that depending on what business it is they’re in different levels of sophistication in their knowledge there. And you can see that in the complexion of the companies, in that a company that has a lot of expats in it, you know the Russians haven’t learned enough yet. In a company where you see less international, less expats, you go okay, that’s owned by a multinational, that means—you know, once you see that it’s a Russian general director for a multinational company, they have come a long way in it because they’ve been scrutinized, they’ve been indoctrinated, and now they’ve been recognized.
Daniel Satinsky: Right. Interesting. You don’t have much interaction with smaller businesses, do you?
John Rose: No, we do. And I’m also always helping, it seems, smaller companies, because everybody’s, you know, there’s a lot of startups, so we hear from a lot of startup businesses. And some of them we can help, some of them we can’t. Some of them can afford us, some of them can’t. Some of them we’ll bend a little bit because it creates some other opportunity. But a lot of times it’s a friend of mine who’s a client from something else, and somebody that he knows has got this thing that’s going, so you’d be surprised at how many little businesses I end up supporting, or that we end up interacting with. But you need that kind of perspective?
Daniel Satinsky: No, I’m just curious about, I mean, my sense of the Russian economy is it’s top heavy with larger companies and that smaller companies have a very hard time breaking through that, so is that…?
John Rose: No, that’s absolutely, you’re absolutely correct, and I think that we’re going to, like in many parts of the world now because of COVID you’re going to see a lot of them failing. We see a lot of empty stores. Like I would look at certain businesses. Like, for example, the restaurant business here, and virtually every other country.
The restaurant business, the backbone of the restaurant business is small Mom and Pops, okay? It’s a single owner, small restaurant. Maybe they became more successful and they’re a good size restaurant, or maybe they have a couple of places. That’s pretty much everywhere in the world like that except for here. For many, many years you couldn’t find a restaurant that was owed by an owner-operator. There was no foodie, there was no chef at the top of it. It was Novikov, okay, who, yeah, he’s kind of a food guy, but really he’s more of an entrepreneur, and his restaurants looked better than they tasted.
Daniel Satinsky: [Laughs.]
John Rose: And he was very—and when I say look, I mean from the décor to the beautiful long-legged blondes walking in the door with their sugar daddy. And then as they became successful he would bring in chefs, international chefs, and they would beef these things up. And then inevitably the international chef would go to the next place or whatever. And there was no little restaurant like a chef going I’m going to open up my own place kind of thing, because the bureaucracy of opening a small business here is formidable.
It’s difficult to open up a small business. You have to operate like a bigger business. You instantly have to have people involved. And you have a legal liability and criminal liability that you don’t have in other parts of the world. A general director and chief accountant of a Russian company have criminal liability. They’re not protected by a corporate veil. So, it’s more difficult. And taxation is more cumbersome, and just everything that you have to do to be able to… A lot of people are still pushing a lot of paper. As sophisticated as it’s become on one end, there’s still a lot of bureaucratic nonsense that, it’s all rubber stamping. There’s still rubber stamping. Just the fact that there’s rubber stamping says it all, as far as I’m concerned.
Daniel Satinsky: Right, the pechat, yeah.
John Rose: Exactly, exactly.
Daniel Satinsky: Then there were people who came in who had skills who filled the void, but who—you know, there’s a story here which is that we Americans have had this huge influence on Russia, where Americans have a hemorrhage if there’s Facebook ads by Russians interfering in American life. And yet we…I don’t want to say interfere—have shaped a lot of how the modern Russia is. And that shaping, that participation, is an untold, at least in the U.S., an untold story, unknown story. And that’s kind of the story I want to be focusing on.
John Rose: Yeah, I think that…yeah, I mean, two things. One is it would be great if you can reverse the perception that a few bad actors have created for Russians in the United States right now. And when I say, I mean, it’s—and I’m relatively certain there’s government behind it, but it’s not who the rest of the country is. I think for Americans it’s probably very difficult for them to detach the government from the people. I think Americans are very bad at being able to figure that out. I see that same thing in Cuba. Cuba, like these terrible people. Yeah, but most of the people are living and trying to survive. The people aren’t doing this. And so I think if you can go any ways to reverse that perception, I really would applaud it.
But I think that Americans forget that we are exporters of our culture. I see it in my business predominantly, right? We export culture. This goes back to Coca-Cola became a global phenomenon because it would create mobile bottling plants that would run with the troops as we were advancing across battlefields. They would be behind. When they set up a posting you’d have mobile bottling units where they bring in syrup and then they do the carbonation locally, and they would create and bottle Coca-Cola, because it was so important to have that culture. They always made sure the troops could get their Camel cigarettes because brands are part of how we export culture, the American culture, across the globe. This is how we’ve done it, between brands and entertainment. So, I mean, Russians are watching Hollywood movies—
Daniel Satinsky: Brands, and what was the last part?
John Rose: Entertainment.
Daniel Satinsky: Ah, brands and entertainment.
John Rose: Which is another way of saying brands. I mean, the U.S. brand of entertainment and moviemaking and so forth is the predominant movie brand in the world. The Indians talk about their Bollywood, but other than that, okay, really, we are the chief exporter of entertainment around the world. Which we’re also seeing play out in gaming, although the Chinese and the Japanese have certainly played their role. But a lot of it is based on the U.S. concept of entertainment—their battles, their Westerns, their robots, things that we created.
And so I would say that beyond the people, we’re just really conduits for advancing this culture that we bring with us that is all made up of all these things, because we’re a consumer nation, right? When we travel, this is what we bring along. And so when we’re here and we’re bringing in these brands, one of the first things we look at when we’re looking at a brand is—I mean, there’s really only about a half a dozen different directions that communications goes, okay? One of them is territory. So, in other words the territory, if it matches up with the brand profile, for example, Swiss watch. You wouldn’t say Polish watch, but you could say Polish sausage.
Daniel Satinsky: Yeah, exactly.
John Rose: So, there are certain—every nation has its things, okay, that you can do. And America has a lot. It’s Coca-Cola. A lot of these brands that came here, that’s what we were exporting, was culture. And it’s become an association with our Americanism. We even do it ourselves—as American as apple pie, okay, it’s like Coca-Cola. One comedian was joking, was like, you know, I think Lewis Black was saying in Italy Jesus is like the Coca-Cola of religion.
Daniel Satinsky: [Laughs.]
John Rose: Like Christianity is like the Coca-Cola of religion, because you’re trying to draw that parallel of that’s how big it is, okay, it’s a brand. And I think that that’s something that might be worth communicating, is that it’s not just us being here, it’s everything that we represent being here. And in our suitcase, our virtual suitcase, our figurative suitcase is the brands and all the other things that make up the culture, entertainment, that make up the culture of the United States.
Daniel Satinsky: Right. No, that’s very important, and yeah, it’s very important, and part of the—
John Rose: And look up the Coca-Cola story because it’s actually very poignant, I think, because that sort of leads the battle charge. And I think that very quickly Russians, when they were asking for, you know, when you travel and when you’re asking for things they went from category of item, bring me, say, blue jeans, to bring me Levi’s 501s. I want not just a stereo, I want a Sony Walkman XXX. It’s very quick for people to grasp the brands and how much that is part of the culture.
Daniel Satinsky: Yeah. No, that’s very important. So, as I say, I think that initially the book was about America’s attempt to remake Russia through forming the new business, new institutions, helping to write the constitution and the land code, the corporate codes. All those things were U.S. consultants—the stock market. And the perception that I started with was well, there was a certain point where Russia started to say stop telling us how to live, and that was a pushback against those institutions. But I’m now coming to the belief that it was an assimilation and a moving on from it rather than a rejection.
John Rose: Exactly. Listen, you can only chew gum so long before the taste goes away, right? I think that they got that. And as I said, I think it was sort of a hopscotch thing where certain industries early on, and they learned what they learned there, and then when they had to get to other industries and other sophistication, people kept coming here in waves, right? They left in waves, they come in waves. So, it depends on what’s going on.
Like right now, obviously, fast food over the past number of years has been growing, and there’s more and more brands coming here, so you see them wanting to bring in more expertise. They’re not finding it all on the ground. They’re bringing in other expertise, other people are coming in. And then they’ll get tired of those, and they’ll go away. And whether it was warehousing, suddenly we need to know about warehousing, and sophistication there, or a million different areas of tech that you have various specializations that you need people to come in. And so people come in in waves.
I don’t think that there was a mass exodus unless it was indicated by something that happened, something that occurred like a crisis, a financial crisis or whatever. That’s when people have left, when the market took some sort of a sideways shift, and then by necessity the Russians stepped up. That’s one part of it. Those are some of the bigger hiccups. And then over time just the slow assimilation. And then also the international companies are going this expat costs me a hell of a lot more money than this Russian guy, and at a certain point they go we don’t need to do this anymore, I’m not going to pay this package. Before we were getting like, you know, what do they call it, not war pay. What is it?
Daniel Satinsky: Oh, hazard pay.
John Rose: Hazard pay, right. They were getting a big package, hazard pay, relocation, housing, drivers, everything, schooling. Those packages got to become enormous and unwieldy, and so at a certain point that breaks. So, there’s a number of different influencers, I think, or drivers, let’s say, that I think have changed the complexion of the workforce here.
Daniel Satinsky: Right. Well, there’s also a connection in the mind between accepting U.S. brands, accepting a market economy and accepting the political values, that that connection doesn’t exist. And so that’s part of the perception here of who lost Russia. When in fact, you know, I mean, there’s a disconnect there. I’m not sure how far I can go in that. I’m more interested in showing the ongoing influence and the inflection points of that. But I think that’s part of the perception from the U.S. If you don’t agree with us politically, that means something else about how you live on a day-to-day basis.
John Rose: Sure. I think that…well, I think that…I mean, there is a lot of corruption here. I think that there’s not as much corruption in the United States, but I think people tend to lie to themselves about how much corruption there is in the United States. And everywhere else, for that matter. So, in other words, it’s not specific to Russia. There’s a bit of that. There is some, you know, all sorts of other cultural things. I mean, you know, like we work with places, companies like Starbucks. Okay, well, if Starbucks takes a position on gay rights in the United States, how do we handle that here? That’s difficult. When we had Samsung, we handled Samsung for 20 years we handled Samsung, and we’ve gone through five Olympics with them, and we did Sochi. And at that time there was a lot of…and remember that in addition to managing all of their PR and all the rest of the things we do for them, we have to scenario out what will happen if there’s a terrorist attack at Sochi, and what will that impact be on that brand.
But part of it was also well, there was a lot of gay rights issues at that time, and Pussy Riot and all the rest of those things are happening. And we have to figure out how are we going to deal with that without losing…while being faithful to the brand, because in other words, if Starbucks says we stand for this, we stand for it everywhere. But then we have to somehow interpret it on the ground in Russia without it inflaming the local government. Not so much the people, but the government.
Daniel Satinsky: Yeah.
John Rose: And so there’s a lot of that kind of thing. But culturally, like I said when I was saying earlier before, when I said how to learn a new culture, focus on the things that are different, because most things are the same. I think you’ll find that if you spend enough time with Russians, you’re going to find most things are the same. They have the same kinds of needs and wants. And I think the problem with America is that not enough people travel, so they don’t see it up close and personal. You can’t explain—it’s hard to explain Russia. I mean, good luck to you. It’s hard to explain Russia if you have never been to Russia. I mean, it’s really hard.
Because I think that’s what it is, is that—and the reason why it’s hard to explain a lot of countries if you don’t have the experience is because we are so much the same, but you try and identify those things that make you different, and sometimes that exhibits itself in negatives. And so that’s what gets blown up. You’re only hearing about the bad stuff. If people in the United States are only hearing about how Russia interfered with the U.S. election, that’s all they hear—
Daniel Satinsky: That’s all they hear, yeah.
John Rose: Then that’s what they think.
Daniel Satinsky: Yeah. And there was a period in the late Soviet period of a lot of citizen diplomacy and a lot of travel back and forth in the ‘90s, a huge amount of travel back and forth, which doesn’t exist. I mean, absent COVID it just stopped with the Ukraine crisis, and to a certain extent a little bit before that, but still, the student exchanges, the church groups, or the police association exchanges, all that stuff stopped. And there was a lot of it in the earlier period, so I think it was a lot easier to make that separation between government and people.
John Rose: Of course, even that was a drop in the water, a drop in the bucket, really, because there wasn’t a lot of mass tourism. The visa issue was always a big thing. Which, by the way, I didn’t check up on it, but they should have just dropped, they should have just started the e-visa across the country now. They were testing an e-visa in St. Petersburg and a couple of regions, and as of January 1st—and I haven’t gone back to check if it’s actually enacted—but you should be able to get an e-visa for any country except for right now the U.S., U.K., or Canada, I think, because of this no…
But COVID, they may have changed their mind about that, but they were kind of adamant about until there’s more reciprocity with the U.S. and Canada and the U.K. they weren’t going to do it. But they were making a big push for tourism and making it easier. And that just all went away with the pandemic.
Daniel Satinsky: Yeah. Well, hopefully we’ll come out of that at some point, but still, yeah. Well, you know, look, the whole world may be different, but I’m just sort of plodding along on this because it’s something that was part of my life and part of a story that I think is worth telling.
John Rose: You have a perspective. You have a perspective that you can communicate. Write what you know.
Daniel Satinsky: Yeah. That’s right.
John Rose: So, I could walk right into that hotel. A Russian would get stopped at the door. Okay? And when Galina one time was coming in to meet me, they took her into an interrogation room. It’s like you must be a hooker coming into an international hotel. And every Russian that came in had to show ID and blah-blah-blah. All I had to do was speak a few words of English and they don’t even look at you. That flipped right around, okay? Because early on we had all the money, they had no power. Now they have all the power and the money, and it’s changed dramatically that way.
I think as different kinds of businesses expanded, we got another wave of expats coming in because they needed different kinds of specialization, more sophisticated banking, especially investment banking, and learning how to manage markets, and the stock market grew. They needed to bring in a lot of finance professions, a lot of real estate professions, a lot of other kinds of people that started coming in, and that was the second wave.
But the first wave was—and more brands—but the first wave was the big multinational brands, the service companies, the lawyers, the accountants, the advertising guys. We were all sort of on the front line. And then you went through a couple of waves, depending on what the country needed and how it was evolving.
Daniel Satinsky: And so the financial guys, so that must be ’95, ’96, ’97, somewhere in that area, right?
John Rose: Yeah, heading into the 2000s. That’s when it really started getting hot. And also, companies were starting to—Russian companies were starting to go public on international exchanges, and that became a frenzy. I don’t know if you read any of those prospectuses of a company going public, a Russian company going public in those days, but they would go and this guy’s been to jail, and this guy’s been to prison, and this guy did this, and nobody cared. It’s all laid out for you if you wanted to read through it. Probably nobody even read it. But here it is, and it’s going to go public, and it’s going to be this, and you’re going to make a bunch of money. It’s all speculative.
Daniel Satinsky: All ADRs at first, right?
John Rose: ADRs at first and then direct listings. Let’s see, this would have been a little bit later, early 2000s, because I, in addition to the agency, there were certain companies that needed more internal expertise—marketing, PR, investor relations, financial communications—and there weren’t a lot of people in the market to do it. And so I got asked a few times to sort of be an outsourced executive, so I would split my time. And so, for example, do you remember Golden Telecom here?
Daniel Satinsky: Yeah.
John Rose: Well, Golden Telecom came out of several different other companies that were here in telecom, and they put those assets together, and they created Golden Telecom. And I was brought in at that time. So, I became this guy that taught companies how to walk and talk like a public company and how to communicate with investors. Even though they had a bunch of international people in various stages of it, they didn’t have enough muscle to be able to put it all together, so I suddenly became that guy, so I did that for a couple. So, trading on the NASDAQ or trading on the London Stock Exchange, I’m the guy writing the governance thing, I’m the guy writing annual reports, I’m the guy talking to investors, I’m the guy putting together the road shows, to teach you how to do public company [things].
Daniel Satinsky: And those were Russian companies. They were calling for your expertise
John Rose: Yeah, Russian companies or Russian companies that may have listed, like, for example, it’s a Russian company, but it’s really incorporated in the Netherlands going on the London Stock Exchange. But yes, it’s basically Russian assets being bundled up or otherwise packaged and then put on the exchange. I also went to work…I also was on—I’ve been on boards of investment banks, so I got to see inside a lot of dealmaking. And during a time when they’re throwing lots of money around. It was just an incredible time when, you know, it’s too much money for the caliber of the people that were managing it.
Daniel Satinsky: And so where are any nodal points in how this begins to change? ’98 is a nodal point in some ways. When else?
John Rose: Well, ’98 was a big wake-up call because that was a big pullback. But as a result of that, when the internet bubble in the rest of the world sort of exploded, we weren’t there yet. We were not in the middle of all that yet, so we didn’t suffer from that pullback, so Russia had a chance to sort of advance a little bit.
The other thing that happened, I think, out of ’98 was that it was the first time Russian brands had an opportunity. So, suddenly companies you may not have heard of, but like Wimm-Bill-Dann was a company that became a big juice and milk producer. It never would have happened before because suddenly international brands weren’t trading with some of these distributors and there was a pause in the market, and imports weren’t coming in to the same degree, and suddenly they were becoming much more expensive because of the exchange rates, and so that created an opportunity.
Which is the same kind of opportunity that was created recently with the sanctions, where you create a vacuum, and Russians are very good at filling vacuums, and they will come in and fill that in. So, brands started growing up this last wave with the sanctions, because remember, we have sanctions against Russia, but then Russia goes well, you sanctioned me, we’ll sanction you. Which only hurts the rest of us. You’re going to sanction our people on, you know, some of our people, they can’t travel to the United States anymore, or you can’t do business with their bank, well then we’re not going to buy anymore French cheese, and we’re not going to buy anymore U.S. meat, and we’re not going to buy more this or that. But of course us living here, we’re the only ones that suffer.
And there’s a Russian expression—you’ll like this—when…how does that go? When we bomb…when they bomb…how does it work? All I know is it ends with we bomb Voronezh. I can’t remember the exact translation. But basically, it’s sort of like you poke out one eye, we’ll just poke out the other one, you know, what are we doing? You’re hurting us here; we’re just going to hurt ourselves here. It’s like that.
Daniel Satinsky: Yeah.
John Rose: And it’s kind of a crazy situation. But what that did was suddenly now there’s Russian cheeses, now there’s Russian produce. There are other brands coming from other parts of the world. It’s not a U.S. centric phenomenon anymore, or just a Europe centric phenomenon. The Chinese are here, and everybody else is here now, and other brands are building up, and there’s more sophisticated understanding of how capital works here, and banking has become a different thing. These catastrophes have definitely created opportunities for the Russians that may not have happened if they hadn’t had these little interruptions.
Daniel Satinsky: Right. And so from your point of view—consider when this book gets read it will be read mostly by Americans, and there’s very little knowledge of Russia currently in the U.S., and I would say people would say that there’s not really a market economy in Russia, that it’s authoritarian and dominated by state owned or state dominated industry. What would you say about that?
John Rose: I would say that they have no clue of how sophisticated this market has gotten, especially in the last seven to eight to nine years. I would go there are some things that are easier to do here than there are in the States. Before you had, you know, you were able to pay for your parking meter by phone in the United States we could do it here for years. Public transportation. The city has been cleaned up, at least as far as Moscow is concerned. I know Moscow is not a microcosm, but Moscow is 14 million people.
Daniel Satinsky: The most visible, yeah.
John Rose: And most major cities are like Moscow, and they have another 12 with a population over a million, 13, and so all the major cities are more or less like this now. If you talk to the kind of marketers that we deal with, it’s very sophisticated. Home delivery of everything. I can get a vaccine. I just got it yesterday. I can get testing. I’ve been able to get testing for six months. Somebody comes to my house if I want them to.
I can get just about anything I want to get here now. It wasn’t like that not too long ago. I used to complain about I can’t get decent meat anymore, beef. Now I can. It’s as good as anything I used to smuggle in from the United States for all these years. And I think I’ve got great—you know when I got my first appreciation of Russia was when I started going to Cuba, because I used to travel out of Russia to go I gotta get out of Russia, because it was always, this was a reflex. And I was always traveling, so my bags were always packed. I started going to Cuba, I couldn’t wait to come back to Russia. It was so much easier here. Cuba, you have no idea how farther back it is. It’s a great place to visit, but I’m starting to do business and had an apartment.
I was actually, at one time, a resident in Russia and a resident in Cuba, with an American passport. Got asked a lot of questions. Okay? Because I was doing everything officially. I was staying in an official flat there, and I was going back and forth. But suddenly, when you have to buy eggs, it’s no longer a vacation, and you learn everything is different. So, it became a new appreciation here. And then because I travel all the time I always think about buying stuff when I’m traveling. If I’m going to need some clothes, that’s on my list of things to do when I’m traveling, we’ll go shopping. That’s part of the process. Bring stuff back from the States and things, just like I did in the earlier stage, crates of stuff coming back.
Now that we’ve been on lockdown, and I’ve been stuck here since last March, I’ve learned how to navigate in Russia and found that wow, there’s a lot of stuff that I’ve been bringing back that it’s very readily available here now. And they’ve really stepped up. We have everything delivered, groceries, everything is delivered. It’s a very sophisticated media market, very sophisticated distribution channels.
More and more companies are coming here. We’re talking to companies today, big companies you would know that have never been here yet that are coming now. And fast food, etc. is becoming more of a phenomenon beyond the Wendy’s and the McDonald’s and things like that. It’s getting much more sophisticated. Papa John’s is a client of ours. They’ve got a couple hundred units here already. If you’re talking to somebody, an American, you go you could live quite comfortably here. You would be fine. You would not feel a sense that you’re in some third world country, which is probably what they think it is.
As an ordinary businessperson you’ll find that there’s still a difficult bureaucracy, you’ll find that there’s still a lot of corruption, but that’s in a lot of places. You’ll find that, and if you’re at high levels, yeah, you might find things onerous. A friend of ours just was, you know, EBRD, he was locked up and then on house arrest for a long time. He was being pressured out of some money. It was all concocted. And those things happen. If they want you, they’ll get you. You just read about Navalny coming back, and what an idiot. I don’t know why the hell he came back. But so, things can happen to you. Things can happen to you. But if you’re coming here and you’re doing ordinary business, and you’ve got a decent partner, you can learn the ropes, or you know someone who knows the ropes, it’s not a hard place to do business. It’s really not that difficult.
Daniel Satinsky: And your clients are primarily foreign companies at this point, or not?
John Rose: Yeah. Yeah, they’ve always been mostly multinational companies. And occasionally, yeah, we’re working for a Russian group here or there. Usually, it’s like some kind of association kind of a thing. We’ll get a project like energy drinks were under assault, and so Coke, Pepsi, Red Bull, etc. put together a little confederate, and they hired us to work on their issue management project, things like that. So, it’s an association, but it’s still international companies. Or we’ll work for the Russian hockey league or something like that, we’ll do things like that.
But most of our stuff is more mainstream, packaged goods. The reason why we’ve done pretty well during the pandemic is some of the businesses that were hit hardest had become a smaller percentage of our business. We used to be a lot of tourism and travel. That’s a small percentage of our business now. Now most of our business is in consumer packaged goods, and food, particularly, so like tabasco, companies like that. Or a lot of European, Italian brands that you may or may not know. You would know them, but… But a lot of food brands.
And then gaming. Hardware, gaming, mobile gaming companies. Entertainment, like we work for BBC for their programming side, Dr. Who and things like that we manage all of the programming side, the entertainment side. Also did fine during COVID. Or we do a lot of entertainment, children’s entertainment, and cartoons, and all sorts of other content products, and restaurants. The restaurants that deliver, like Papa John’s, so they did okay. You know, things like that. Some luxury goods.
Daniel Satinsky: How big is your agency now?
John Rose: There’s about 42, I think, people here now—42, 43. It’s not enormous, but substantial for what we do. And then we do, you know, we have a lot of people in the field, we say. And we’ve got a lot of freelancers, a lot of people that have to do with promotional. I mean, we may have several hundred people, before COVID, in the field doing promotional work and things like that, so we’ve got teams that come over, all that kind of stuff. There’s a lot of ancillary stuff like that.
Daniel Satinsky: And you’ve been doing all your work remotely through the pandemic?
John Rose: Yeah, I mean, we adapted pretty quickly. We put everybody at home in the very early stage before the lockdown, so last March. Everybody adapted pretty quickly to it.
Daniel Satinsky: Huh. Yeah, well, I live in a place where people are not adapting, so yeah.
John Rose: Yeah, it was tricky. I mean, we were shooting—I mean, we had to continue shooting spots and content during COVID, so we actually got out, like in April we had like the first spots out, so we got actually quite a lot of publicity just because we were actually able to do it. How did you do it? We had to do a “making of” to show how we managed to stay inside of apartments and do everything through Zoom, basically, and find a director of photography whose live-in girlfriend happens to be a makeup artist. It’s all that kind of stuff and work out of another apartment in his building. It was a bit of a tricky bit, but we managed to adapt.
We’re not doing a lot of live stuff. Our events business, of course, has dried up quite a lot, because we’re not doing a lot of live things, but that’s coming back, too, because Russia’s, you know, people are—things are open here, essentially. By mandate 30% of staff have to be at home in businesses that can do that. Not in retail, necessarily, but certainly in other office businesses. By mandate. And there is a bit of a curfew for restaurants at night, I think at 11:00 or something like that. But I think that’s being lifted.
I went for the vaccine yesterday, for Sputnik, which a lot of us were resisting quite a lot. And in fact, even when we get there they’re going why are you getting Sputnik? Some of the people there don’t understand why we’re getting Sputnik. It’s like why don’t you get Pfizer? I go well, if Pfizer was here, I wouldn’t be here. But we can’t get any of that, and we’re not going to be able to get it for some time, we’re told. And so, we just sort of…we did some investigation, we talked to some people at AstraZeneca and things like that, and they just said yeah, it’s safe enough, and in a few weeks you’ll know whether you have antibodies, so we did that.
But the experience was they’ve opened up a lot of centers. They’re putting it out through their traditional state-run medical centers, and some of the private international ones, like European Medical Center and things like that, although they’re charging—the vaccine is free, but it costs you 670 euro for the pre consultation, the post consultation.
Daniel Satinsky: Whoa.
John Rose: So, we decided hey, they opened up a center in GUM*, so four of us walked over to GUM, and upstairs on the third floor—and you’ve been to GUM. You know it’s all, you know. It’s all been redone and beautiful. And on the third floor they built a purpose—it’s a purpose-built little center with four doctors there, all painted beautifully and everything like that. They took us in. You wait in line, but you wait a little bit. They bring you through. They’ve got volunteers out there working the line, making sure everybody stays in order. And when it’s all over they give you ice cream. [Laughs.]
Daniel Satinsky: Wow. And it didn’t cost you 670 euros?
John Rose: Zero. Even expats, zero. You show a passport; you get your vaccine. Anyone over 18.
Daniel Satinsky: Yeah. Well, I’m hoping that by April, I’ll get it, but that’s what I’m looking at.
John Rose: My brother is in England, and he says I’m on a list; I’m looking at maybe June. And I’m going Biden’s going to have a hundred million people vaccinated in his first 100 days, the U.K. population is only 60, you were the first guys to start, what’s going on?
Daniel Satinsky: Yeah. Well, there’s a lot of unexplained what’s going on, so a lot of incompetence in this world among people who have made their reputation being competent, you know. There’s no can-do attitude here in America, it’s no. Anyway, I don’t want to go there. That’s a rabbit hole.
John Rose: I understand.
Daniel Satinsky: I think…so first of all, I want to thank you for doing this, and what I’m sort of learning through all the interviews that I do, and I’m trying not to let my preconceived notions dictate what’s going to come out of this. I’m trying to rely on people, and your impressions, and your experience. And so probably, there’s a good chance I may want to come back to you at some point and ask you some more pointed questions and trying to put some definite dates or names or something, if that’s okay with you.
John Rose: No problem, because…no problem at all. I’m not sure I answered—I just put on my glasses just to read through the questions you sent me before, and I’d started to scribble some things down. I just want to see if there’s anything there that was…that we didn’t…that we didn’t quite cover.
You had asked if Russia ended up rejecting the U.S. model or things like that. I’m not sure we answered that quite well enough. I think that part of it was, like I said, I think that the Russians were very good at assimilating as much information as they could from the various sources, certainly early on mostly American. I don’t know that I can say that it’s mostly American anymore. I think it’s a lot of influencers here now, and I think that they’ve adopted, and I think that they sort of pick and choose what they think they need.
And I think that, you know, like when I was talking about the time when companies were going public, I think if you’re trying to create a company that’s going to go onto the public markets, I think they look more towards the U.S. because it’s the most stringent market, and they figure if they can, especially if they’re going to go on a market in the U.S. But essentially the bar is set the same. I think that’s when they start to look outward and go we need to look like that, and we need to act like that, and how do we manage to get up to that.
So, I wouldn’t say that they’ve rejected the U.S. model. I just think that they’ve adopted as much of it as they could and they’ve sort of…they’re trying to create their own model, which has a lot of different kinds of influences, both East and West. And I think whatever suited them. And it depends on the kind of business. I think that in my business there’s a lot of U.S. modeling because it’s kind of where this business originated. Advertising began there. It’s where the most progressive brands come from, for the most part, the biggest brands, and so I think that drives a lot of it.
And so, if there’s a U.S. centric thing that persists here, it’s because there’s a lot of big U.S. companies that have managed to become very big companies here, and out of their ranks came a lot of Russians who then worked for other companies, whether they’re Russian or whatever. So, I think we managed to pollinate the market pretty well, you know what I mean? So, I think it’s there. And then it’s a bit of a stew. Your primary ingredient is probably most, a lot of the U.S. stuff, and then bits and bobs from different other resources.
Daniel Satinsky: Uh-huh, yeah. So, despite all the political difficulties, the U.S. brands and companies are still in that market because it’s a good market for them, I’m assuming.
John Rose: Yeah. No, absolutely. No, Russia is, as far as any of the companies that have really made a go of it here, Russia generally, very quickly becomes their biggest market in Europe. They very quickly realize that they have to run things, that it’s the tail wagging the dog if they think that they’re running it from another staging point in Europe. They would look at Eastern Europe and Russia, and they’re going to put their headquarters in Hungary, and I go, well, that’s just, you know, it’s like you’re going to run a business across the United States and you’re going to base it in Kansas. Well, maybe not. You might want to rethink that.
Maybe today. Maybe today in our new normal. Maybe it doesn’t matter where anything is based anymore, I don’t know. But certainly, when you have physical product that needs to move from one place to another, I think a lot more companies are creating a base in Russia and then starting to export out of Russia to other parts of Europe versus the other way around.
Daniel Satinsky: Interesting. So, it’s more a process of assimilation than rejection.
John Rose: Yeah. I think they’ve taken on what they think they need. And I think that depending on what business it is they’re in different levels of sophistication in their knowledge there. And you can see that in the complexion of the companies, in that a company that has a lot of expats in it, you know the Russians haven’t learned enough yet. In a company where you see less international, less expats, you go okay, that’s owned by a multinational, that means—you know, once you see that it’s a Russian general director for a multinational company, they have come a long way in it because they’ve been scrutinized, they’ve been indoctrinated, and now they’ve been recognized.
Daniel Satinsky: Right. Interesting. You don’t have much interaction with smaller businesses, do you?
John Rose: No, we do. And I’m also always helping, it seems, smaller companies, because everybody’s, you know, there’s a lot of startups, so we hear from a lot of startup businesses. And some of them we can help, some of them we can’t. Some of them can afford us, some of them can’t. Some of them we’ll bend a little bit because it creates some other opportunity. But a lot of times it’s a friend of mine who’s a client from something else, and somebody that he knows has got this thing that’s going, so you’d be surprised at how many little businesses I end up supporting, or that we end up interacting with. But you need that kind of perspective?
Daniel Satinsky: No, I’m just curious about, I mean, my sense of the Russian economy is it’s top heavy with larger companies and that smaller companies have a very hard time breaking through that, so is that…?
John Rose: No, that’s absolutely, you’re absolutely correct, and I think that we’re going to, like in many parts of the world now because of COVID you’re going to see a lot of them failing. We see a lot of empty stores. Like I would look at certain businesses. Like, for example, the restaurant business here, and virtually every other country.
The restaurant business, the backbone of the restaurant business is small Mom and Pops, okay? It’s a single owner, small restaurant. Maybe they became more successful and they’re a good size restaurant, or maybe they have a couple of places. That’s pretty much everywhere in the world like that except for here. For many, many years you couldn’t find a restaurant that was owed by an owner-operator. There was no foodie, there was no chef at the top of it. It was Novikov, okay, who, yeah, he’s kind of a food guy, but really he’s more of an entrepreneur, and his restaurants looked better than they tasted.
Daniel Satinsky: [Laughs.]
John Rose: And he was very—and when I say look, I mean from the décor to the beautiful long-legged blondes walking in the door with their sugar daddy. And then as they became successful he would bring in chefs, international chefs, and they would beef these things up. And then inevitably the international chef would go to the next place or whatever. And there was no little restaurant like a chef going I’m going to open up my own place kind of thing, because the bureaucracy of opening a small business here is formidable.
It’s difficult to open up a small business. You have to operate like a bigger business. You instantly have to have people involved. And you have a legal liability and criminal liability that you don’t have in other parts of the world. A general director and chief accountant of a Russian company have criminal liability. They’re not protected by a corporate veil. So, it’s more difficult. And taxation is more cumbersome, and just everything that you have to do to be able to… A lot of people are still pushing a lot of paper. As sophisticated as it’s become on one end, there’s still a lot of bureaucratic nonsense that, it’s all rubber stamping. There’s still rubber stamping. Just the fact that there’s rubber stamping says it all, as far as I’m concerned.
Daniel Satinsky: Right, the pechat, yeah.
John Rose: Exactly, exactly.
Daniel Satinsky: Then there were people who came in who had skills who filled the void, but who—you know, there’s a story here which is that we Americans have had this huge influence on Russia, where Americans have a hemorrhage if there’s Facebook ads by Russians interfering in American life. And yet we…I don’t want to say interfere—have shaped a lot of how the modern Russia is. And that shaping, that participation, is an untold, at least in the U.S., an untold story, unknown story. And that’s kind of the story I want to be focusing on.
John Rose: Yeah, I think that…yeah, I mean, two things. One is it would be great if you can reverse the perception that a few bad actors have created for Russians in the United States right now. And when I say, I mean, it’s—and I’m relatively certain there’s government behind it, but it’s not who the rest of the country is. I think for Americans it’s probably very difficult for them to detach the government from the people. I think Americans are very bad at being able to figure that out. I see that same thing in Cuba. Cuba, like these terrible people. Yeah, but most of the people are living and trying to survive. The people aren’t doing this. And so I think if you can go any ways to reverse that perception, I really would applaud it.
But I think that Americans forget that we are exporters of our culture. I see it in my business predominantly, right? We export culture. This goes back to Coca-Cola became a global phenomenon because it would create mobile bottling plants that would run with the troops as we were advancing across battlefields. They would be behind. When they set up a posting you’d have mobile bottling units where they bring in syrup and then they do the carbonation locally, and they would create and bottle Coca-Cola, because it was so important to have that culture. They always made sure the troops could get their Camel cigarettes because brands are part of how we export culture, the American culture, across the globe. This is how we’ve done it, between brands and entertainment. So, I mean, Russians are watching Hollywood movies—
Daniel Satinsky: Brands, and what was the last part?
John Rose: Entertainment.
Daniel Satinsky: Ah, brands and entertainment.
John Rose: Which is another way of saying brands. I mean, the U.S. brand of entertainment and moviemaking and so forth is the predominant movie brand in the world. The Indians talk about their Bollywood, but other than that, okay, really, we are the chief exporter of entertainment around the world. Which we’re also seeing play out in gaming, although the Chinese and the Japanese have certainly played their role. But a lot of it is based on the U.S. concept of entertainment—their battles, their Westerns, their robots, things that we created.
And so I would say that beyond the people, we’re just really conduits for advancing this culture that we bring with us that is all made up of all these things, because we’re a consumer nation, right? When we travel, this is what we bring along. And so when we’re here and we’re bringing in these brands, one of the first things we look at when we’re looking at a brand is—I mean, there’s really only about a half a dozen different directions that communications goes, okay? One of them is territory. So, in other words the territory, if it matches up with the brand profile, for example, Swiss watch. You wouldn’t say Polish watch, but you could say Polish sausage.
Daniel Satinsky: Yeah, exactly.
John Rose: So, there are certain—every nation has its things, okay, that you can do. And America has a lot. It’s Coca-Cola. A lot of these brands that came here, that’s what we were exporting, was culture. And it’s become an association with our Americanism. We even do it ourselves—as American as apple pie, okay, it’s like Coca-Cola. One comedian was joking, was like, you know, I think Lewis Black was saying in Italy Jesus is like the Coca-Cola of religion.
Daniel Satinsky: [Laughs.]
John Rose: Like Christianity is like the Coca-Cola of religion, because you’re trying to draw that parallel of that’s how big it is, okay, it’s a brand. And I think that that’s something that might be worth communicating, is that it’s not just us being here, it’s everything that we represent being here. And in our suitcase, our virtual suitcase, our figurative suitcase is the brands and all the other things that make up the culture, entertainment, that make up the culture of the United States.
Daniel Satinsky: Right. No, that’s very important, and yeah, it’s very important, and part of the—
John Rose: And look up the Coca-Cola story because it’s actually very poignant, I think, because that sort of leads the battle charge. And I think that very quickly Russians, when they were asking for, you know, when you travel and when you’re asking for things they went from category of item, bring me, say, blue jeans, to bring me Levi’s 501s. I want not just a stereo, I want a Sony Walkman XXX. It’s very quick for people to grasp the brands and how much that is part of the culture.
Daniel Satinsky: Yeah. No, that’s very important. So, as I say, I think that initially the book was about America’s attempt to remake Russia through forming the new business, new institutions, helping to write the constitution and the land code, the corporate codes. All those things were U.S. consultants—the stock market. And the perception that I started with was well, there was a certain point where Russia started to say stop telling us how to live, and that was a pushback against those institutions. But I’m now coming to the belief that it was an assimilation and a moving on from it rather than a rejection.
John Rose: Exactly. Listen, you can only chew gum so long before the taste goes away, right? I think that they got that. And as I said, I think it was sort of a hopscotch thing where certain industries early on, and they learned what they learned there, and then when they had to get to other industries and other sophistication, people kept coming here in waves, right? They left in waves, they come in waves. So, it depends on what’s going on.
Like right now, obviously, fast food over the past number of years has been growing, and there’s more and more brands coming here, so you see them wanting to bring in more expertise. They’re not finding it all on the ground. They’re bringing in other expertise, other people are coming in. And then they’ll get tired of those, and they’ll go away. And whether it was warehousing, suddenly we need to know about warehousing, and sophistication there, or a million different areas of tech that you have various specializations that you need people to come in. And so people come in in waves.
I don’t think that there was a mass exodus unless it was indicated by something that happened, something that occurred like a crisis, a financial crisis or whatever. That’s when people have left, when the market took some sort of a sideways shift, and then by necessity the Russians stepped up. That’s one part of it. Those are some of the bigger hiccups. And then over time just the slow assimilation. And then also the international companies are going this expat costs me a hell of a lot more money than this Russian guy, and at a certain point they go we don’t need to do this anymore, I’m not going to pay this package. Before we were getting like, you know, what do they call it, not war pay. What is it?
Daniel Satinsky: Oh, hazard pay.
John Rose: Hazard pay, right. They were getting a big package, hazard pay, relocation, housing, drivers, everything, schooling. Those packages got to become enormous and unwieldy, and so at a certain point that breaks. So, there’s a number of different influencers, I think, or drivers, let’s say, that I think have changed the complexion of the workforce here.
Daniel Satinsky: Right. Well, there’s also a connection in the mind between accepting U.S. brands, accepting a market economy and accepting the political values, that that connection doesn’t exist. And so that’s part of the perception here of who lost Russia. When in fact, you know, I mean, there’s a disconnect there. I’m not sure how far I can go in that. I’m more interested in showing the ongoing influence and the inflection points of that. But I think that’s part of the perception from the U.S. If you don’t agree with us politically, that means something else about how you live on a day-to-day basis.
John Rose: Sure. I think that…well, I think that…I mean, there is a lot of corruption here. I think that there’s not as much corruption in the United States, but I think people tend to lie to themselves about how much corruption there is in the United States. And everywhere else, for that matter. So, in other words, it’s not specific to Russia. There’s a bit of that. There is some, you know, all sorts of other cultural things. I mean, you know, like we work with places, companies like Starbucks. Okay, well, if Starbucks takes a position on gay rights in the United States, how do we handle that here? That’s difficult. When we had Samsung, we handled Samsung for 20 years we handled Samsung, and we’ve gone through five Olympics with them, and we did Sochi. And at that time there was a lot of…and remember that in addition to managing all of their PR and all the rest of the things we do for them, we have to scenario out what will happen if there’s a terrorist attack at Sochi, and what will that impact be on that brand.
But part of it was also well, there was a lot of gay rights issues at that time, and Pussy Riot and all the rest of those things are happening. And we have to figure out how are we going to deal with that without losing…while being faithful to the brand, because in other words, if Starbucks says we stand for this, we stand for it everywhere. But then we have to somehow interpret it on the ground in Russia without it inflaming the local government. Not so much the people, but the government.
Daniel Satinsky: Yeah.
John Rose: And so there’s a lot of that kind of thing. But culturally, like I said when I was saying earlier before, when I said how to learn a new culture, focus on the things that are different, because most things are the same. I think you’ll find that if you spend enough time with Russians, you’re going to find most things are the same. They have the same kinds of needs and wants. And I think the problem with America is that not enough people travel, so they don’t see it up close and personal. You can’t explain—it’s hard to explain Russia. I mean, good luck to you. It’s hard to explain Russia if you have never been to Russia. I mean, it’s really hard.
Because I think that’s what it is, is that—and the reason why it’s hard to explain a lot of countries if you don’t have the experience is because we are so much the same, but you try and identify those things that make you different, and sometimes that exhibits itself in negatives. And so that’s what gets blown up. You’re only hearing about the bad stuff. If people in the United States are only hearing about how Russia interfered with the U.S. election, that’s all they hear—
Daniel Satinsky: That’s all they hear, yeah.
John Rose: Then that’s what they think.
Daniel Satinsky: Yeah. And there was a period in the late Soviet period of a lot of citizen diplomacy and a lot of travel back and forth in the ‘90s, a huge amount of travel back and forth, which doesn’t exist. I mean, absent COVID it just stopped with the Ukraine crisis, and to a certain extent a little bit before that, but still, the student exchanges, the church groups, or the police association exchanges, all that stuff stopped. And there was a lot of it in the earlier period, so I think it was a lot easier to make that separation between government and people.
John Rose: Of course, even that was a drop in the water, a drop in the bucket, really, because there wasn’t a lot of mass tourism. The visa issue was always a big thing. Which, by the way, I didn’t check up on it, but they should have just dropped, they should have just started the e-visa across the country now. They were testing an e-visa in St. Petersburg and a couple of regions, and as of January 1st—and I haven’t gone back to check if it’s actually enacted—but you should be able to get an e-visa for any country except for right now the U.S., U.K., or Canada, I think, because of this no…
But COVID, they may have changed their mind about that, but they were kind of adamant about until there’s more reciprocity with the U.S. and Canada and the U.K. they weren’t going to do it. But they were making a big push for tourism and making it easier. And that just all went away with the pandemic.
Daniel Satinsky: Yeah. Well, hopefully we’ll come out of that at some point, but still, yeah. Well, you know, look, the whole world may be different, but I’m just sort of plodding along on this because it’s something that was part of my life and part of a story that I think is worth telling.
John Rose: You have a perspective. You have a perspective that you can communicate. Write what you know.
Daniel Satinsky: Yeah. That’s right.
"Moscow Truth", one of the first daily newspapers in Moscow (since 1918)
Vneshtorgreklama—Foreign Trade Advertising
State Concert Association of the USSR
Moscow Films, a film studio founded in 1924
A shopping center in Moscow, "State department store"
Profiteers
The roof, Mafia
