About
About
Robert Courtney is an American CEO, healthcare entrepreneur and lawyer. He moved to Moscow in late 1992 to lead the American Medical Center, the country’s first Western-style healthcare clinic, and then spearheaded expansions in Russia, the CIS, and Central Europe. He later founded US Dental Care, introducing modern dentistry to the Russian market.
Over the following decades, he co-founded and helped manage a range of businesses across Russia and the CIS, including Century 21 Real Estate, Le Pain Quotidien, and Newbridge Group, a market entry consultancy that supported clients such as KFC in concluding its joint venture with and subsequent acquisition of Russian brand Rostik’s.
An early board member of United Way Russia, he helped introduce Western models of charitable giving to the country. He is a founding board member and long-serving executive committee member of the American Chamber of Commerce in Russia. Since the early 90s, AmCham has played a central role in regulatory engagement, U.S.–Russia commercial dialogue, and advocacy for Russia’s WTO accession. He continues to serve on the AmCham board and chairs the Advisory Council of the University of South Florida’s Institute on Russian, European and Eurasian Studies.
Over the following decades, he co-founded and helped manage a range of businesses across Russia and the CIS, including Century 21 Real Estate, Le Pain Quotidien, and Newbridge Group, a market entry consultancy that supported clients such as KFC in concluding its joint venture with and subsequent acquisition of Russian brand Rostik’s.
An early board member of United Way Russia, he helped introduce Western models of charitable giving to the country. He is a founding board member and long-serving executive committee member of the American Chamber of Commerce in Russia. Since the early 90s, AmCham has played a central role in regulatory engagement, U.S.–Russia commercial dialogue, and advocacy for Russia’s WTO accession. He continues to serve on the AmCham board and chairs the Advisory Council of the University of South Florida’s Institute on Russian, European and Eurasian Studies.
Robert Courtney: Do you want the color commentary? A comment of war stories that sort of punctuate or illustrate a point, or you would just rather have pure sort of intellectual comment?
Daniel Satinsky: No-no-no. I think war stories really illustrate things and make things come alive, and I think that the things that—they’re the things that you remember, like all of us, right? There are things that have a great significance, I think. And so, I mean, I want the outline of what you did and what it says here, but as you were saying, what you were thinking at the time, and some of the experiences that came as a result of that thinking, and in the process how we all changed by those experiences. So, that’s kind of the overall way I want to approach this. So, let me just kind of start this by saying how did you get to Russia? Did you have a long-term interest in Russia? Did you study Russian or some other path that got you there, and when?
Robert Courtney: I think it’s fair to say that Russia found me before I really found it. Specifically, the job that took me there found me rather than me seeking it out. To set the context, I was working for a consulting firm in Los Angeles. I was its vice president. And we focused on trans-Pacific trade relationship building, and to a limited extent investment boutique type of work, transaction facilitation, really. And generally our focus was West Coast of the U.S. and Japan, Taiwan, Hong Kong. Not so much Mainland China at that point. And there was an interesting migration of interest into the Primorsky Krai area of Eastern Russia, and we started getting involved in U.S. side clients interested in that part of the world, and some Japanese clients. I remember giving a talk to a conference in Long Beach about the economic opportunities.
Daniel Satinsky: What year would that be?
Robert Courtney: This would have been 1990, 1991—closer to ’91. And interesting, one of our sort of informal clients was a guy named Paul Tatum. Do you remembering him setting up—
Daniel Satinsky: Oh, yes, I do. Absolutely.
Robert Courtney: And he told us some intriguing stories about how business was blossoming in Moscow. And this was—Moscow was off my radar of interest until I got a call from a former business school—this is Thunderbird—professor who was on the board of the former Hospital Corporation of America’s international division, which had gone private as a result of a 1989 LBO, and this was one of the assets that was sold off to pay down some of that debt.
So, this gentleman, also a lawyer like me, also named Bob like me, said hey, I just want to let you know that our company is looking to set up a network of American medical centers in Russia, and they’re looking for a president, would you be interested? And I said no, I don’t see myself having an interest in moving to and living in Russia. I’m enjoying California, I’m enjoying the Pacific markets that we’re doing business in. He said do me a favor—fly to Stamford, Connecticut and meet the chairman. So, I did that, and I did it twice, I may have done it three times. And I kept trying to say no to this guy, and he wouldn’t let me, and he ultimately talked me into it. This was the last quarter of 1992.
Daniel Satinsky: 1992, oh. The last quarter of 1992.
Robert Courtney: Right.
Daniel Satinsky: So, it was right as the Soviet Union was breaking up, or before. I’m sorry, I’m blanking on the dates again.
Robert Courtney: I guess perestroika, we’d peg its start in around ’89, but in ’91 was when the Gorbachev coup happened.
Daniel Satinsky: Right, and then December of 1991 was the breakup, so—
Robert Courtney: Right.
Daniel Satinsky: —you were about a year later. You were right at the peak of the beginnings of privatization, right?
Robert Courtney: That’s right.
Daniel Satinsky: Yeah. Okay. I’m sorry, I interrupted you.
Robert Courtney: No-no, that’s—I mean, that’s the long answer to the question of, you know, who founded—
Daniel Satinsky: So, why were they interested in Russia? Why was the Hospital Corporation of America international division interested in Russia?
Robert Courtney: Its business footprint, the international version, was pretty wide. It stretched from very modernized health systems in the U.K. to much less so in Saudi Arabia, Singapore, and a few other places in which they managed principally inpatient facilities, but also some clinics and outpatient.
But Dennis Sokol, who was the chair, had other business interests in Russia, and he put together a consortium of large multinational companies, in the context of which it became obvious to him that there was going to be an influx of expatriates who were going to demand Western style healthcare, and there was nobody providing that. In fact, the country was 40 or 50 years behind the ability to provide that. The quality of medical care then was very, very primitive by U.S. or some European standards. So, he decided to create this, and had gotten down the road a bit, and wanted to recruit somebody to run it, and that somebody turned out to be me.
Daniel Satinsky: So, he wanted you because of your managerial expertise, and as a lawyer you understood some of what he wanted done here?
Robert Courtney: Well, the truth be told, I did not think I was his best pick for this job, and as part of saying no, and part of my reason for saying no, I said—I remember this part—I said Dennis, yeah, I’ve got all this experience, a lot of it’s healthcare—I was a healthcare lawyer. We did healthcare deals across the Pacific, etc. but I’ve never managed a P&L. And he said—I’ll try to imitate his voice—he said, Bobby, I think you’ve got the chutzpah to do this. I think you ought to do it. [Laughs.]
Daniel Satinsky: [Laughs.] Okay. And so when did you first go to Russia then? You accepted the job, and then marched off to—did he have anything already set up for you to step into or you just whole green fields moving to Moscow?
Robert Courtney: Had the premises. Equipment was being set up. Operations were commencing. But it was still somewhat unstructured and just needed some management. I was not ill-suited to running it, I just didn’t think I was the best candidate.
Didn’t yet speak Russian. But you asked the question when. This was the fourth quarter of ’92. And my first trip there was a scouting expedition, and looking at housing, and kind of kicking the tires, and the opportunity to make sure I didn’t want to veto it at the last minute. But I went ahead and moved over in the early weeks of January ’93.
Daniel Satinsky: ’93. And did you move by yourself or did you have family?
Robert Courtney: I did not have family. I was still single. Did not get married until 2011, so the great… And then I moved from Moscow to Florida in 2019. But still have a business there that is not healthcare related. So, I guess tying it back to your timing point, so I was single, and for the majority of my years in Moscow I was single, and that gave me some exposure culturally to things that a lot of the family guys or women didn’t experience.
Daniel Satinsky: So, you went over. Who arranged—you arranged your own housing? How did you figure out where to live and how to get started?
Robert Courtney: The company had sort of a fly-in flat, and that was my initial apartment for a couple moths until, together with colleagues, you know, staff, we sourced something that was sort of more suitable.
Daniel Satinsky: Where did you end up living?
Robert Courtney: If you know Frunzenskaya Naberezhnaya, the Frunzenskaya Embankment.
Daniel Satinsky: Yeah, yeah.
Robert Courtney: Right there. Right on the sixth floor. A beautiful view of the river.
Daniel Satinsky: Was it a rehabbed apartment or…?
Robert Courtney: It’s a good point. You know, there weren’t many Western renovated apartments in those days. This was a very nice version of a classic Soviet style apartment. It was well furnished. It was old style wallpaper, old style everything, but in very good condition, and sizable for a single guy.
Daniel Satinsky: So, back to the operations. Did you bring American doctors over? Do you hire Russian doctors? How did you sort of organize operations?
Robert Courtney: So, the model was that the local doctors were not yet of the caliber to give the Western quality medical care that the expatriate teams were looking for. And we operated on a membership model. In order to attract them to be reliant on us, we had to bring in expatriate doctors, and we did that from the U.S., from Canada, from the U.K., from South Africa. In some cases they were first timers abroad, in some cases they were seasoned expats who had come from other markets. For the top nursing teams we did the same thing, and for the rest of the staff we had a team of Russian doctors, Russian lab techs, Russian X-ray technicians, and this sort of thing, and then a number of administrative people.
Daniel Satinsky: So, how many did you bring over? How many doctors?
Robert Courtney: We had six or seven doctors at any one time, so it was a pretty substantial operation. And we had emergency care at night. We had to create repatriation capabilities, and we had to create, since we were essentially a primary care and urgent care facility, we had to create the ability to take care of people who needed to be hospitalized and needed serious surgeries.
There was, at the time, a network of Kremlin hospitals and polyclinics that had the best care Russia could offer, and we made arrangements with those limited-access facilities to admit our patients on request, and the arrangement was that our doctors would sort of co-treat the patients, partly to assure that there was accurate translation, partly to assure proper follow-up, and certainly to assure that they had the right supplies of medications, and antibiotics, and bandages, and that sort of thing, which were in somewhat short supply even in those facilities.
Daniel Satinsky: Right. And so where was your center located?
Robert Courtney: The International Business Center that [Armand] Hammer set up just off the river there.
Daniel Satinsky: Oh, at the Mezh, yeah?
Robert Courtney: Yeah. And kind of at right angles to it and right angles to the Russian White House, so we were a five minute walk from each of those.
Daniel Satinsky: Okay, so overall how big a staff did you have?
Robert Courtney: Oh. Forty.
Daniel Satinsky: Forty? And how many…and you had inpatient, in-house sort of treatment facilities, right, for how man? For five, six people?
Robert Courtney: We had a few overnight beds for stabilization, but if anybody needed something more than that we would get them admitted under supervisory care by us into the Kremlin hospitals.
Daniel Satinsky: Okay. And so I assume you had to get certified by Russian authorities?
Robert Courtney: Well, that’s a good question, and it’s an example of how things were sort of loosely applied in those days across the board. Frankly, the country was glad to have us. We had to have a licensed facility. We cut some corners, but it was done with really no objection.
Daniel Satinsky: So, you didn’t go through some kind of formal licensing with inspectors showing up periodically from the health ministry and that kind of stuff that some other businesses went through, right?
Robert Courtney: That stuff came later, and as we get down the timeline I ultimately left after a couple years to set up U.S. Dental Care, which was designed to be a chain of dental clinics. And, you know, but by this time the hands out for favors and accelerated treatment and this sort of thing had developed quite nicely. But in the time period you’re just asking me about, maybe a honeymoon period, we can say.
Daniel Satinsky: So, how long did the honeymoon last?
Robert Courtney: We had to do this about six months after I joined, we started the same thing in St. Petersburg. And the culture there was a little wilder West than it was in Moscow, at least in our little bubble. And I suppose I could share an example of that. In order to get facilities licensed you had to have a legal lease. Now since most real estate was still state owned, you couldn’t actually get the right legal lease to support a license application. So, expedience being more important than sort of following all the rules, we agreed to lease a building that was on a state balance, but was actually controlled by a guy who turned out to be a gangster and controlled the casino market in St. Petersburg.
So, here’s how that transaction happened. We agreed on a price. This was mostly done remotely. I had a couple of people in St. Petersburg at this point in a facility on one of the canals in St. Petersburg, very nice. It had formerly been a Finnish medical clinic, was in disrepair, but it had the essential layout and some useful things that we needed to upgrade.
So, we went up for the—or I went up for the closing. I met my local team, which at this point was two young women, an interpreter and a female pediatrician, early 20s, mid 20s. The idea was we would meet at the clinic, we would pay the rent, we would get the keys, shake hands and sign a nominal document. And the price was not first month’s rent, but first year’s rent, in cash.
Daniel Satinsky: In cash, okay. Dollars or rubles?
Robert Courtney: Dollars.
Daniel Satinsky: Dollars.
Robert Courtney: It was dollars then, yeah. I went up there with this cash in my pocket, and we had the meeting. And this guy walks in, the “owner,” and he was about five-foot-two, but he had three huge security guards with him, and a giant Great Dane.
It was in the middle of winter, and in they all walk, and they take off their coats, and everybody does that, and we settle in around the table with the security guys, you know, a little distance off. So, we sit down to go through the last few points of this deal, and we ran up against one which we just violently disagreed over, and we went round and round and round. Tempers flared a bit.
So, he stands up and he walks over to his overcoat and he pulls out a pistol, and he comes back and sits down across from me, and he puts the pistol in the middle of the table, and he says, you want to talk about that some more? So, my stomach and my mouth did two different things. My stomach was churning, but I kept my cool and I kept my position, and we went around again a couple of times. And he smiled, and he pulls out a cigarette, and picks up the pistol and lit his cigarette with it. [Laughs.]
Daniel Satinsky: Oh, wow. [Laughs.]
Robert Courtney: And then he puts his hand out, and we shook hands, and that was the deal.
Daniel Satinsky: And that was the deal.
Robert Courtney: Yeah.
Daniel Satinsky: Fantastic.. And did you see him again after that?
Robert Courtney: Never.
Daniel Satinsky: Yeah. That was it.
Robert Courtney: And we lived happily ever after for even beyond when I left the company. And ultimately the St. Petersburg—this was called the American Medical Center in St. Pete – AMC moved its location. As did the Moscow facility after some years.
Daniel Satinsky: So, who were your clients at these facilities?
Robert Courtney: At that point they were exclusively the expatriates and families of the multinational companies that were coming in. A minority were through the higher management, local management from those companies. The business model recognized that that would shift over time, that we would not forever rely on an expatriate patient base, but we would step by step shift toward a private pay Russian dominated business. And that took some years, but it’s exactly what happened.
Daniel Satinsky: And is that business still in existence?
Robert Courtney: Yes. It moved twice, once during my tenure and once after my tenure, and then ultimately was purchased by, I think it’s Rosno Insurance, and part of the same group that is…not MedEx. I’d have to think for a second. But it’s the premier service for this group of primary care clinics that are many. It’s about 40 facilities.
Daniel Satinsky: I see. And does it still have the same name?
Robert Courtney: Yes.
Daniel Satinsky: Still called the America Medical Center.
Robert Courtney: It’s in small print, but yeah. American Medical Center, yeah.
Daniel Satinsky: Okay. And so did you…so the expat community, people had to become members of your service? It was like a concierge kind of service?
Robert Courtney: It wasn’t a requirement, but since our base client arrangement was with the corporations, we would sign corporate membership agreements with those companies. And that probably provided 75%, 80% of our patients. Anybody could come fee-for-service.
Daniel Satinsky: Right, okay. So, this was part of the growth of the expat community at that time. Do you have any estimate of how big that community was at that point?
Robert Courtney: The numbers are fuzzy because we would try to answer that question in the early years, and it seems like it went from 25, 40 thousand at a point to a couple hundred thousand at another point, and I couldn’t peg a year on the calendar for that.
Daniel Satinsky: Yeah, I’ve asked this same question many times with many different people, and no one seemed to actually have a good sense of it.
So, how many people a week would filter through, do you guess?
Robert Courtney: Well, filter, I wouldn’t call it that word because we were really, really busy.
Daniel Satinsky: Okay.
Robert Courtney: We had a full house from 8:00 in the morning until 8:00 at night, and then we would have an occasional urgency or emergency at night or overnight. I would just have to do some quick math. I’m sure we were seeing 40 patients a day easy.
Daniel Satinsky: And were these diseases or injuries? I mean, did you have like oil field workers flown in from fields?
Robert Courtney: Yes, we absolutely did. Yeah, yeah.
So, I mean, it was everything from just a check-up, a flu, a vaccine for the kids going to school, flu shots on the sort of easy family doctor side to the trauma of a car crash or a fall, or a mugging, that sort of thing. And then to ramp up severity, a heart attack, a diabetic coma, serious stuff, a broken arm, these sorts of things. And some of those would need to be stabilized overnight, some of those would need emergency admission, and some of them would need stabilization and evacuation. And some of them were completely beyond the ability of our facility to handle. I think I shared with you the shooting cases that occurred in Ostankino* in the October ’93 uprising, the fight between Yeltsin and the parliament.
Daniel Satinsky: And you had wounded people who were brought to your facility from that?
Robert Courtney: We had wounded people whose colleagues called us, but those…generally they were picked up by a Moscow ambulance and taken to the Sklifosovsky trauma hospital. And we were called to come there and try to help out.
Daniel Satinsky: What was that like? Can you say more about that? Was that particularly traumatic for you and your doctors, that whole episode?
Robert Courtney: Yeah, it was well beyond the expectation of what any of us, especially me, and for the doctors also, because these were general practitioners, primary care doctors, family doctors, pediatricians, internists, generally young, early 30s, and maybe one had worked in an emergency room in Canada, a bit, so we were wholly unqualified to look after gunshot victims. And there was one gentleman who was a New York Times photojournalist who had been shot through the lung at Ostankino.
And a smart thinking Russian security person put a plastic bag over his chest so that he could breathe through his other lung. But he was bleeding badly, he was taken to Sklifosovsky, and we got the call and we headed over there. And coincidentally, and fortuitously, my father had flown in the day before to visit, and my father was an experienced ER and trauma surgeon. So, I took Dad over there, and together with the Russian docs from the hospital and our people, looked at the images, decided that he needed emergency surgery. They asked my dad to scrub in with him and together they saved his life.
Daniel Satinsky: Wow. And that’s quite a story. I mean—
Robert Courtney: That wasn’t something I imagined when I was interviewing in Stamford, Connecticut, right?
Daniel Satinsky: Right. You were more in the vaccinations and the family colds and so on, right? Was it a…I mean, you were…so you had already been there over a year at that point.
Robert Courtney: No, about nine months—ten months.
Daniel Satinsky: Ten months, okay.
Robert Courtney: This was October ’93, and I had moved over finally in January of ’93.
Daniel Satinsky: That’s right. You had only been there ten months, so was this all a surprise that all this struggle took place? Were you even sort of, I mean, in tune with whatever the politics of the time were?
Robert Courtney: I think I can speak for a lot of people on the ground then that this was a simmering conflict that unfolded over a couple of weeks’ period. So, the parliamentarians were blockaded in the White House. And Yeltsin turned off the power. The whole building would go dark. Some of us would sit in our car across the river in front of the Ukraine Hotel and see cooking fires or smaller fires used just to light the way. And then it heated up and heated up and heated up, but everybody really expected it would just go away. So, when my Dad called me a few days before coming, he said are you sure it’s safe? I said everybody says this is going to blow over, they’ll sort it out.
So, when they all broke out of—when the parliamentarians and their supporters broke out of the White House on that Sunday afternoon in October, it took everybody by surprise. They slowly moved their way up to Ostankino, because you know the power in these kinds of things comes from taking over the communication channel, and in those days Russian Channel 1 and a couple other state channels, they all broadcast from Moscow in this huge tall television tower called Ostankino. So, you take over the tower and you control the message, and that’s a key strategy in an overthrow of a dictatorship type model. But they had plenty of time to prepare, and the presidential troops were inside and ready, and they just mowed down these protestors as they tried to break in to Ostankino. And the almost fatality I described was somebody just watching. He was there to do his job, but there were other sort of silly foreigners who were there as tourists, sort of naïvely thinking this was something that they could watch, and people died.
Daniel Satinsky: No-no-no. I think war stories really illustrate things and make things come alive, and I think that the things that—they’re the things that you remember, like all of us, right? There are things that have a great significance, I think. And so, I mean, I want the outline of what you did and what it says here, but as you were saying, what you were thinking at the time, and some of the experiences that came as a result of that thinking, and in the process how we all changed by those experiences. So, that’s kind of the overall way I want to approach this. So, let me just kind of start this by saying how did you get to Russia? Did you have a long-term interest in Russia? Did you study Russian or some other path that got you there, and when?
Robert Courtney: I think it’s fair to say that Russia found me before I really found it. Specifically, the job that took me there found me rather than me seeking it out. To set the context, I was working for a consulting firm in Los Angeles. I was its vice president. And we focused on trans-Pacific trade relationship building, and to a limited extent investment boutique type of work, transaction facilitation, really. And generally our focus was West Coast of the U.S. and Japan, Taiwan, Hong Kong. Not so much Mainland China at that point. And there was an interesting migration of interest into the Primorsky Krai area of Eastern Russia, and we started getting involved in U.S. side clients interested in that part of the world, and some Japanese clients. I remember giving a talk to a conference in Long Beach about the economic opportunities.
Daniel Satinsky: What year would that be?
Robert Courtney: This would have been 1990, 1991—closer to ’91. And interesting, one of our sort of informal clients was a guy named Paul Tatum. Do you remembering him setting up—
Daniel Satinsky: Oh, yes, I do. Absolutely.
Robert Courtney: And he told us some intriguing stories about how business was blossoming in Moscow. And this was—Moscow was off my radar of interest until I got a call from a former business school—this is Thunderbird—professor who was on the board of the former Hospital Corporation of America’s international division, which had gone private as a result of a 1989 LBO, and this was one of the assets that was sold off to pay down some of that debt.
So, this gentleman, also a lawyer like me, also named Bob like me, said hey, I just want to let you know that our company is looking to set up a network of American medical centers in Russia, and they’re looking for a president, would you be interested? And I said no, I don’t see myself having an interest in moving to and living in Russia. I’m enjoying California, I’m enjoying the Pacific markets that we’re doing business in. He said do me a favor—fly to Stamford, Connecticut and meet the chairman. So, I did that, and I did it twice, I may have done it three times. And I kept trying to say no to this guy, and he wouldn’t let me, and he ultimately talked me into it. This was the last quarter of 1992.
Daniel Satinsky: 1992, oh. The last quarter of 1992.
Robert Courtney: Right.
Daniel Satinsky: So, it was right as the Soviet Union was breaking up, or before. I’m sorry, I’m blanking on the dates again.
Robert Courtney: I guess perestroika, we’d peg its start in around ’89, but in ’91 was when the Gorbachev coup happened.
Daniel Satinsky: Right, and then December of 1991 was the breakup, so—
Robert Courtney: Right.
Daniel Satinsky: —you were about a year later. You were right at the peak of the beginnings of privatization, right?
Robert Courtney: That’s right.
Daniel Satinsky: Yeah. Okay. I’m sorry, I interrupted you.
Robert Courtney: No-no, that’s—I mean, that’s the long answer to the question of, you know, who founded—
Daniel Satinsky: So, why were they interested in Russia? Why was the Hospital Corporation of America international division interested in Russia?
Robert Courtney: Its business footprint, the international version, was pretty wide. It stretched from very modernized health systems in the U.K. to much less so in Saudi Arabia, Singapore, and a few other places in which they managed principally inpatient facilities, but also some clinics and outpatient.
But Dennis Sokol, who was the chair, had other business interests in Russia, and he put together a consortium of large multinational companies, in the context of which it became obvious to him that there was going to be an influx of expatriates who were going to demand Western style healthcare, and there was nobody providing that. In fact, the country was 40 or 50 years behind the ability to provide that. The quality of medical care then was very, very primitive by U.S. or some European standards. So, he decided to create this, and had gotten down the road a bit, and wanted to recruit somebody to run it, and that somebody turned out to be me.
Daniel Satinsky: So, he wanted you because of your managerial expertise, and as a lawyer you understood some of what he wanted done here?
Robert Courtney: Well, the truth be told, I did not think I was his best pick for this job, and as part of saying no, and part of my reason for saying no, I said—I remember this part—I said Dennis, yeah, I’ve got all this experience, a lot of it’s healthcare—I was a healthcare lawyer. We did healthcare deals across the Pacific, etc. but I’ve never managed a P&L. And he said—I’ll try to imitate his voice—he said, Bobby, I think you’ve got the chutzpah to do this. I think you ought to do it. [Laughs.]
Daniel Satinsky: [Laughs.] Okay. And so when did you first go to Russia then? You accepted the job, and then marched off to—did he have anything already set up for you to step into or you just whole green fields moving to Moscow?
Robert Courtney: Had the premises. Equipment was being set up. Operations were commencing. But it was still somewhat unstructured and just needed some management. I was not ill-suited to running it, I just didn’t think I was the best candidate.
Didn’t yet speak Russian. But you asked the question when. This was the fourth quarter of ’92. And my first trip there was a scouting expedition, and looking at housing, and kind of kicking the tires, and the opportunity to make sure I didn’t want to veto it at the last minute. But I went ahead and moved over in the early weeks of January ’93.
Daniel Satinsky: ’93. And did you move by yourself or did you have family?
Robert Courtney: I did not have family. I was still single. Did not get married until 2011, so the great… And then I moved from Moscow to Florida in 2019. But still have a business there that is not healthcare related. So, I guess tying it back to your timing point, so I was single, and for the majority of my years in Moscow I was single, and that gave me some exposure culturally to things that a lot of the family guys or women didn’t experience.
Daniel Satinsky: So, you went over. Who arranged—you arranged your own housing? How did you figure out where to live and how to get started?
Robert Courtney: The company had sort of a fly-in flat, and that was my initial apartment for a couple moths until, together with colleagues, you know, staff, we sourced something that was sort of more suitable.
Daniel Satinsky: Where did you end up living?
Robert Courtney: If you know Frunzenskaya Naberezhnaya, the Frunzenskaya Embankment.
Daniel Satinsky: Yeah, yeah.
Robert Courtney: Right there. Right on the sixth floor. A beautiful view of the river.
Daniel Satinsky: Was it a rehabbed apartment or…?
Robert Courtney: It’s a good point. You know, there weren’t many Western renovated apartments in those days. This was a very nice version of a classic Soviet style apartment. It was well furnished. It was old style wallpaper, old style everything, but in very good condition, and sizable for a single guy.
Daniel Satinsky: So, back to the operations. Did you bring American doctors over? Do you hire Russian doctors? How did you sort of organize operations?
Robert Courtney: So, the model was that the local doctors were not yet of the caliber to give the Western quality medical care that the expatriate teams were looking for. And we operated on a membership model. In order to attract them to be reliant on us, we had to bring in expatriate doctors, and we did that from the U.S., from Canada, from the U.K., from South Africa. In some cases they were first timers abroad, in some cases they were seasoned expats who had come from other markets. For the top nursing teams we did the same thing, and for the rest of the staff we had a team of Russian doctors, Russian lab techs, Russian X-ray technicians, and this sort of thing, and then a number of administrative people.
Daniel Satinsky: So, how many did you bring over? How many doctors?
Robert Courtney: We had six or seven doctors at any one time, so it was a pretty substantial operation. And we had emergency care at night. We had to create repatriation capabilities, and we had to create, since we were essentially a primary care and urgent care facility, we had to create the ability to take care of people who needed to be hospitalized and needed serious surgeries.
There was, at the time, a network of Kremlin hospitals and polyclinics that had the best care Russia could offer, and we made arrangements with those limited-access facilities to admit our patients on request, and the arrangement was that our doctors would sort of co-treat the patients, partly to assure that there was accurate translation, partly to assure proper follow-up, and certainly to assure that they had the right supplies of medications, and antibiotics, and bandages, and that sort of thing, which were in somewhat short supply even in those facilities.
Daniel Satinsky: Right. And so where was your center located?
Robert Courtney: The International Business Center that [Armand] Hammer set up just off the river there.
Daniel Satinsky: Oh, at the Mezh, yeah?
Robert Courtney: Yeah. And kind of at right angles to it and right angles to the Russian White House, so we were a five minute walk from each of those.
Daniel Satinsky: Okay, so overall how big a staff did you have?
Robert Courtney: Oh. Forty.
Daniel Satinsky: Forty? And how many…and you had inpatient, in-house sort of treatment facilities, right, for how man? For five, six people?
Robert Courtney: We had a few overnight beds for stabilization, but if anybody needed something more than that we would get them admitted under supervisory care by us into the Kremlin hospitals.
Daniel Satinsky: Okay. And so I assume you had to get certified by Russian authorities?
Robert Courtney: Well, that’s a good question, and it’s an example of how things were sort of loosely applied in those days across the board. Frankly, the country was glad to have us. We had to have a licensed facility. We cut some corners, but it was done with really no objection.
Daniel Satinsky: So, you didn’t go through some kind of formal licensing with inspectors showing up periodically from the health ministry and that kind of stuff that some other businesses went through, right?
Robert Courtney: That stuff came later, and as we get down the timeline I ultimately left after a couple years to set up U.S. Dental Care, which was designed to be a chain of dental clinics. And, you know, but by this time the hands out for favors and accelerated treatment and this sort of thing had developed quite nicely. But in the time period you’re just asking me about, maybe a honeymoon period, we can say.
Daniel Satinsky: So, how long did the honeymoon last?
Robert Courtney: We had to do this about six months after I joined, we started the same thing in St. Petersburg. And the culture there was a little wilder West than it was in Moscow, at least in our little bubble. And I suppose I could share an example of that. In order to get facilities licensed you had to have a legal lease. Now since most real estate was still state owned, you couldn’t actually get the right legal lease to support a license application. So, expedience being more important than sort of following all the rules, we agreed to lease a building that was on a state balance, but was actually controlled by a guy who turned out to be a gangster and controlled the casino market in St. Petersburg.
So, here’s how that transaction happened. We agreed on a price. This was mostly done remotely. I had a couple of people in St. Petersburg at this point in a facility on one of the canals in St. Petersburg, very nice. It had formerly been a Finnish medical clinic, was in disrepair, but it had the essential layout and some useful things that we needed to upgrade.
So, we went up for the—or I went up for the closing. I met my local team, which at this point was two young women, an interpreter and a female pediatrician, early 20s, mid 20s. The idea was we would meet at the clinic, we would pay the rent, we would get the keys, shake hands and sign a nominal document. And the price was not first month’s rent, but first year’s rent, in cash.
Daniel Satinsky: In cash, okay. Dollars or rubles?
Robert Courtney: Dollars.
Daniel Satinsky: Dollars.
Robert Courtney: It was dollars then, yeah. I went up there with this cash in my pocket, and we had the meeting. And this guy walks in, the “owner,” and he was about five-foot-two, but he had three huge security guards with him, and a giant Great Dane.
It was in the middle of winter, and in they all walk, and they take off their coats, and everybody does that, and we settle in around the table with the security guys, you know, a little distance off. So, we sit down to go through the last few points of this deal, and we ran up against one which we just violently disagreed over, and we went round and round and round. Tempers flared a bit.
So, he stands up and he walks over to his overcoat and he pulls out a pistol, and he comes back and sits down across from me, and he puts the pistol in the middle of the table, and he says, you want to talk about that some more? So, my stomach and my mouth did two different things. My stomach was churning, but I kept my cool and I kept my position, and we went around again a couple of times. And he smiled, and he pulls out a cigarette, and picks up the pistol and lit his cigarette with it. [Laughs.]
Daniel Satinsky: Oh, wow. [Laughs.]
Robert Courtney: And then he puts his hand out, and we shook hands, and that was the deal.
Daniel Satinsky: And that was the deal.
Robert Courtney: Yeah.
Daniel Satinsky: Fantastic.. And did you see him again after that?
Robert Courtney: Never.
Daniel Satinsky: Yeah. That was it.
Robert Courtney: And we lived happily ever after for even beyond when I left the company. And ultimately the St. Petersburg—this was called the American Medical Center in St. Pete – AMC moved its location. As did the Moscow facility after some years.
Daniel Satinsky: So, who were your clients at these facilities?
Robert Courtney: At that point they were exclusively the expatriates and families of the multinational companies that were coming in. A minority were through the higher management, local management from those companies. The business model recognized that that would shift over time, that we would not forever rely on an expatriate patient base, but we would step by step shift toward a private pay Russian dominated business. And that took some years, but it’s exactly what happened.
Daniel Satinsky: And is that business still in existence?
Robert Courtney: Yes. It moved twice, once during my tenure and once after my tenure, and then ultimately was purchased by, I think it’s Rosno Insurance, and part of the same group that is…not MedEx. I’d have to think for a second. But it’s the premier service for this group of primary care clinics that are many. It’s about 40 facilities.
Daniel Satinsky: I see. And does it still have the same name?
Robert Courtney: Yes.
Daniel Satinsky: Still called the America Medical Center.
Robert Courtney: It’s in small print, but yeah. American Medical Center, yeah.
Daniel Satinsky: Okay. And so did you…so the expat community, people had to become members of your service? It was like a concierge kind of service?
Robert Courtney: It wasn’t a requirement, but since our base client arrangement was with the corporations, we would sign corporate membership agreements with those companies. And that probably provided 75%, 80% of our patients. Anybody could come fee-for-service.
Daniel Satinsky: Right, okay. So, this was part of the growth of the expat community at that time. Do you have any estimate of how big that community was at that point?
Robert Courtney: The numbers are fuzzy because we would try to answer that question in the early years, and it seems like it went from 25, 40 thousand at a point to a couple hundred thousand at another point, and I couldn’t peg a year on the calendar for that.
Daniel Satinsky: Yeah, I’ve asked this same question many times with many different people, and no one seemed to actually have a good sense of it.
So, how many people a week would filter through, do you guess?
Robert Courtney: Well, filter, I wouldn’t call it that word because we were really, really busy.
Daniel Satinsky: Okay.
Robert Courtney: We had a full house from 8:00 in the morning until 8:00 at night, and then we would have an occasional urgency or emergency at night or overnight. I would just have to do some quick math. I’m sure we were seeing 40 patients a day easy.
Daniel Satinsky: And were these diseases or injuries? I mean, did you have like oil field workers flown in from fields?
Robert Courtney: Yes, we absolutely did. Yeah, yeah.
So, I mean, it was everything from just a check-up, a flu, a vaccine for the kids going to school, flu shots on the sort of easy family doctor side to the trauma of a car crash or a fall, or a mugging, that sort of thing. And then to ramp up severity, a heart attack, a diabetic coma, serious stuff, a broken arm, these sorts of things. And some of those would need to be stabilized overnight, some of those would need emergency admission, and some of them would need stabilization and evacuation. And some of them were completely beyond the ability of our facility to handle. I think I shared with you the shooting cases that occurred in Ostankino* in the October ’93 uprising, the fight between Yeltsin and the parliament.
Daniel Satinsky: And you had wounded people who were brought to your facility from that?
Robert Courtney: We had wounded people whose colleagues called us, but those…generally they were picked up by a Moscow ambulance and taken to the Sklifosovsky trauma hospital. And we were called to come there and try to help out.
Daniel Satinsky: What was that like? Can you say more about that? Was that particularly traumatic for you and your doctors, that whole episode?
Robert Courtney: Yeah, it was well beyond the expectation of what any of us, especially me, and for the doctors also, because these were general practitioners, primary care doctors, family doctors, pediatricians, internists, generally young, early 30s, and maybe one had worked in an emergency room in Canada, a bit, so we were wholly unqualified to look after gunshot victims. And there was one gentleman who was a New York Times photojournalist who had been shot through the lung at Ostankino.
And a smart thinking Russian security person put a plastic bag over his chest so that he could breathe through his other lung. But he was bleeding badly, he was taken to Sklifosovsky, and we got the call and we headed over there. And coincidentally, and fortuitously, my father had flown in the day before to visit, and my father was an experienced ER and trauma surgeon. So, I took Dad over there, and together with the Russian docs from the hospital and our people, looked at the images, decided that he needed emergency surgery. They asked my dad to scrub in with him and together they saved his life.
Daniel Satinsky: Wow. And that’s quite a story. I mean—
Robert Courtney: That wasn’t something I imagined when I was interviewing in Stamford, Connecticut, right?
Daniel Satinsky: Right. You were more in the vaccinations and the family colds and so on, right? Was it a…I mean, you were…so you had already been there over a year at that point.
Robert Courtney: No, about nine months—ten months.
Daniel Satinsky: Ten months, okay.
Robert Courtney: This was October ’93, and I had moved over finally in January of ’93.
Daniel Satinsky: That’s right. You had only been there ten months, so was this all a surprise that all this struggle took place? Were you even sort of, I mean, in tune with whatever the politics of the time were?
Robert Courtney: I think I can speak for a lot of people on the ground then that this was a simmering conflict that unfolded over a couple of weeks’ period. So, the parliamentarians were blockaded in the White House. And Yeltsin turned off the power. The whole building would go dark. Some of us would sit in our car across the river in front of the Ukraine Hotel and see cooking fires or smaller fires used just to light the way. And then it heated up and heated up and heated up, but everybody really expected it would just go away. So, when my Dad called me a few days before coming, he said are you sure it’s safe? I said everybody says this is going to blow over, they’ll sort it out.
So, when they all broke out of—when the parliamentarians and their supporters broke out of the White House on that Sunday afternoon in October, it took everybody by surprise. They slowly moved their way up to Ostankino, because you know the power in these kinds of things comes from taking over the communication channel, and in those days Russian Channel 1 and a couple other state channels, they all broadcast from Moscow in this huge tall television tower called Ostankino. So, you take over the tower and you control the message, and that’s a key strategy in an overthrow of a dictatorship type model. But they had plenty of time to prepare, and the presidential troops were inside and ready, and they just mowed down these protestors as they tried to break in to Ostankino. And the almost fatality I described was somebody just watching. He was there to do his job, but there were other sort of silly foreigners who were there as tourists, sort of naïvely thinking this was something that they could watch, and people died.
Daniel Satinsky: Yeah. It’s a side note. I just think that in that period of time many foreigners thought of themselves as invincible and outside of normal life, and so therefore we could do whatever we wanted. I think that was not uncommon.
Robert Courtney: It absolutely was. We were sort of greeted and welcomed as sort of kings and princes and all that sort of stuff. And a lot of us, not just Americans, we had…we looked quite down at Russia, Russians, and the systems that we were exposed to. We thought ours were the best, and we said we’re going to turn you into sort of our image.
Daniel Satinsky: Yeah,. You probably felt that way when you got there, right, when you looked around you. Did you visit Russian medical facilities and—
Robert Courtney: Oh, yeah. I have never been sort of a snob, but it was not unobjective to see these facilities and understand that there’s a long way to go here, and we can be part of the modernization process. And within the medical communities we were really, really warmly welcomed.
Daniel Satinsky: Warmly welcomed in the sense of I would love to know what you know, and I’d like the opportunity to advanced professionally, right?
Robert Courtney: Correct.
Daniel Satinsky: So, you…did you start studying Russian, and did you in any way…?
Robert Courtney: I dove into Russian very eagerly. I’ve always had the view, then and since, that you should do everything you can to try to embrace the language of your host country. I did it when I lived in Taiwan with Chinese, did business in Mainland China in Chinese. In Spanish. It was also pre-Russia. I was doing a lot of business in Mexico. So, yeah, I studied the Russian Cyrillic alphabet on the flight over. And I always encouraged people to do that because you’re driving into the city from the airport, and—you’re a Russian speaker, right? There’s so many words that, if you know how to read the letters, they sound like our words.
Daniel Satinsky: Right, right.
Robert Courtney: “Pectopah”
Daniel Satinsky: The “pectopah” was the famous one, when Americans looked at restaurant and said pectopah, so that one I remember very strongly.
Robert Courtney: But I dove head first into very intensive lessons.
Daniel Satinsky: Yeah. Well, so you were not a typical American in the sense that you had a lot of international experience, so you had past opportunities of interacting with other cultures and sort of what it took to interact with another culture, right? I think that’s a fair statement.
Robert Courtney: That’s a fair statement, yeah.
Daniel Satinsky: And so did you…who did you interact with socially as you developed there? I mean, I know there were groups of Americans who played basketball together at the embassy, and there were particular expat restaurants and clubs, and it would be easy to just live within the expat community. And I know many people did. What was your experience? Were you mostly within that community, or did you get outside of it? What was that like?
Robert Courtney: I was part of that in the early days. And it started to evolve as my Russian grew more toward fluency. I referred to this before. As I started having dates with Russian women, as I started to become friendly with my neighbors, and started being included or including Russians in things simply like drinking vodka or going to a cafe for a tea or a coffee or that sort of thing.
But you’re absolutely right when you said sort of atypical, but I thought you were going to say something else, which was that the classic expat arriving to work for a multinational company had a car, and a driver, and a family, and lived outside, and had help in the house.
Daniel Satinsky: Right.
Robert Courtney: And didn’t necessarily need to learn to speak Russian, and in many cases never did. And you know the ability to speak the language is a window onto the culture and the relationship, and it’s the open window onto the hearts of Russians, which is the key.
Daniel Satinsky: Yeah. And you were able to make that transition. Other people never did, so they saw the country in a different way than you saw it.
Robert Courtney: Right. And you know because you’re a speaker, if you’re in a conversation or a negotiation and you can understand what’s being said in Russian, you understand that the way the translation comes back to you has some nuances, or even some mistakes, because you don’t know enough about your translator’s language to know how well he or she understands.
Daniel Satinsky: Right. I’ve learned that translators almost never translate, they paraphrase, and that there’s a lot lost in that.
Robert Courtney: Yeah.
Daniel Satinsky: And so as you began to learn the language, did it change your perception of the systems around you or your initial perception of the country? Did it change that for you?
Robert Courtney: It did. I’m going to repeat the sort of window analogy. Maybe the curtains through which you look through the window, they block you from looking through the window, you know, slowly get more and more open. And what started out as a people, a culture, a language that was rather opaque started to become more and more transparent. And of course there are all these little mini learning experiences along the way that are building blocks to a better understanding of what’s inside a Russian person’s mind and heart and that sort of thing. Like everybody says, you start out not understanding why Russians don’t smile until you figure out that if somebody smiles you’re on the road to his or her heart and a relationship.
And, you know, and to—sorry, we’re not supposed to go present tense—but as I started to visit home and people would say, hi, how are you, or hi. Hi. How are you? Somebody you don’t know who is on the street. And I learned as one of my early lessons in Russia that you really only ask how are you if you really care about the answer.
Daniel Satinsky: Mm-hmm.
Robert Courtney: So, I remember in the early days at the medical center we’d all come in from a weekend Monday morning and I’d say hey, how are you, how was your weekend? And I’ll sort of mash together the answers. You know, they’d look at me seriously and say well, my grandmother had to go to the hospital, and my dog died, and my cat got run over by the car. And I learned not to ask that question in that context, right?
Daniel Satinsky: Right, because you actually got a real answer. It was a real question. It wasn’t a form of greeting.
So, you were at the American Medical Center for how long, three years?
Robert Courtney: No, just over two.
Daniel Satinsky: Over two. And were you beginning to get the language by the time you left there?
Robert Courtney: Most definitely, yeah.
Daniel Satinsky: So, if you don’t mind, why did you leave? And you started this other business or managed the other business, so tell me about that transition.
Robert Courtney: My relationship with the guy who hired me started to sour, and in parallel with that I had…in parallel with my coming to understand that this was not going to be a long-term relationship, my entrepreneurial instincts started to twitch. Mind you, I’d never done anything entrepreneurial before. Adventuresome, to be sure, but there’s a whole basket of risk that comes with doing something on your own.
So, one of the benefits of American Medical Center was I could see that there was a demand for dentistry that we were not filling, so I came up with an idea that was rather obvious, but harder to execute than to imagine, which was to do the same business model, but for dentistry. So, things reached a point with Dennis where we just agreed that this wasn’t going to be…this wasn’t going to work, so I called him up and I said I’m out. We had a big blowup and I said all right, I’m done. And then I had started to prepare, and it took another six months to get this going. So, he called me up the next day and he said, Bobby, I think we were too hasty.
He said look, I understand why you don’t want to keep doing what you’re doing, but we need to open up AMC Kazakhstan—can you go down and do that for me? So, I said all right. Because I had the time to do it as I was preparing the other. And that was another great adventure because I went down and somehow got in touch with the son-in-law of President Nazarbayev, who was a—
Daniel Satinsky: Not somehow. That’s how business probably transpired.
Robert Courtney: Right.
Daniel Satinsky: And so you were in Almaty or…?
Robert Courtney: That’s right.
Daniel Satinsky: Yeah, okay.
Robert Courtney: So, we put together a JV that would be taking over a wing of a hospital that he was given as a gift by his father-in-law, as these things go, and it was going be the American Kazakhstan Medical Center. And so we did the deal. And I said Dennis, okay, I’ve done it, here it is, and I’m going to go do something else. I can’t really tell you about what that is yet. And I left completely and started U.S. Dental Care.
Daniel Satinsky: And you didn’t think about leaving Russia at that time. You were still committed to Russia or whatever, the opportunity that you saw there.
Robert Courtney: Truth be told, it was that plus I had a very serious girlfriend, an American woman at that time, and I had already, I’d built a bit of a life around her and us and the community, and all that taken together, I’m sticking around for a while.
Daniel Satinsky: And so did you…you wanted to do the same model. You had to go to the same people, the same multinationals, or probably the same human resource people in those multinationals. I assume it took a big investment of equipment to get this going. Did you self-finance, did you have investors, or how did you do it?
Robert Courtney: It was both. I financed the majority and brought in a small handful of investors for the minority, and we got it done. It took about seven, eight months to open.
Daniel Satinsky: And you opened one location to begin with?
Robert Courtney: We opened Moscow and we opened a second Moscow. And this story crashes into the 1998 default.
Daniel Satinsky: Okay. How?
Robert Courtney: Well, we were on the verge of a significant scaling. So, we’d proved the model twice. In fact, we’d also opened one in Baku, Azerbaijan. And we had already broken through that barrier to the Russian community that had the means to pay. By this time we’re late 1995. And so we are… Sorry, that’s when we started. So, we’re now summer of ’98, and it was August of ’98 when the crash happened. But we had put together a plan to duplicate the Russian side of the business. So, we had set up a dual system. We created a residency program for Russian dentists to be trained by our foreign dentists and offered Russians a choice of seeing the American side dentist at one price or the Russian side dentist at a lower price.
And we had decided to spin off this Russian based model, which we called World Class, into four or five, starting in Moscow, clinics. Then ’98 came and a lot of things for a lot of people in businesses went on ice. And we never picked it back up after the recovery.
Daniel Satinsky: Meaning you stayed where you were with the hybrid Russian-American dentistry and how many centers did you have at that point?
Robert Courtney: We just moved one more time into a bigger facility that had room to grow, and that’s where it was when I ultimately sold the business.
Daniel Satinsky: I see. When did you sell it?
Robert Courtney: Late…approaching 2010. I don’t remember the exact year.
Daniel Satinsky: Oh, okay, so quite a big longer you operated that business, right?
Robert Courtney: Yes. Quite a bit longer I owned it. I had transitioned others into running it. So, I set up yet another company that was called Newbridge Group, whose business model was to facilitate the market entry growth and financing directly or through partners of interested Western companies. So, this was when sort of the second round of interest from the West was coming into the country.
Daniel Satinsky: When did you set that up?
Robert Courtney: This would have been…we would have started that in ’07, ’08.
Daniel Satinsky: So, full recovery from 1998 and—
Robert Courtney: Yes.
Daniel Satinsky: And so a lot of people left in 1998, and the expat community shrunk considerably. How did that impact you? And were you at that point considering packing up and leaving or not?
Robert Courtney: In ’98, no, because I really…we really didn’t have a choice. We had to save the business. And as you know, from either living through it or reading it, it bounced back remarkably quickly. Six to nine months later we were kind of back in business.
The ruble had weakened overnight, and people were going to the casinos with their worthless rubles, or buying anything they could buy from the grocery store with their rubles as quick as they could spend it, or using it to start fires in their fireplace in some cases. But anyway, I went off somewhere from your question. What was it?
Daniel Satinsky: Yeah, so you didn’t consider leaving. And did it change your clientele, who were your customers, did that change because of the ’98 collapse? I mean, in other words I’m asking you did you have more Russian customers instead of it being expats?
Robert Courtney: I don’t remember the percentages, but we already had a meaningful percentage of Russian clientele, a meaningful minority. And yes, expat companies and expats left, but it wasn’t that big of a drop in our patient flow. So, we were mostly hurt by the devaluation of the dollar—I mean, of the ruble.
Daniel Satinsky: And so what was your relationship—back to my question previously about the regulators—what was your relationship to the regulators with your dental practice?
Robert Courtney: Well, this gets into the era of the nasty relations businesses had with the tax inspectorate and the tax police.
We were operating in a world where, try as we might, we couldn’t do everything we needed to do and 100% be compliant with all the rules. I’ll give you one good example. We had a dental laboratory, and in order to make crowns you needed to make them with ceramic on top of gold. To have gold you needed to have a special license, a special secure way of storing it, and it was impossible for a business like ours to get that kind of license, but we did it anyway.
Daniel Satinsky: Mm-hmm.
Robert Courtney: Somebody found out about it and finked on us to somebody else, and we got word that we were going to get raided. And because—there was actually also another issue with our license that we’d been trying to remedy in order to be in full compliance, but we had a window of vulnerability, and we were about to get raided. So, by this time I was savvy enough to understand what the game was, and what I did was find a competing group who was sort of a bigger dog than the group that was…the group’s dog that was about to raid us, and they staged a raid an hour before the smaller dog people came. So, when the smaller dog guys turned up, the big dog says this is ours, we’re not going to share it.
Daniel Satinsky: A form of krysha ((The roof, Criminal protection) for you.
Robert Courtney: It was a—well, no, it wasn’t a krysha. We had a krysha before ’98 when you actually had to have physical security, but we had a krysha. In addition to that we had a krysha. But we actually had a militia guy sitting in our lobby with a machine gun in the dental clinic.
Daniel Satinsky: You go off to see the dentist, and I’ve got to have security.
Robert Courtney: Right. That was, you know.
Daniel Satinsky: Yeah, it was the times.
Robert Courtney: It was the time, yeah. So, anyway, we prevailed in that.
Daniel Satinsky: So, this other agency obviously had some interest in helping you, and they fended off the less important agency, is that fair?
Robert Courtney: Right. And there was a transaction fee.
Daniel Satinsky: And how long did this period last where you had to have a militia man with an automatic weapon in your lobby? When did that stop?
Robert Courtney: We had to end our contract with them because of the post ’98 economic situation. Just very nervously went to them and said we’re in trouble, we simply can’t afford you. That went to a couple stages where we reduced the fee a couple of times and finally we just said goodbye, in what we hoped was friendly terms, and it turned out to be so.
Daniel Satinsky: Okay. Because around…shortly after that, at the period where Putin is just becoming, you know, head of the state, it seems like a lot of that krysha activity was federalized, if you will, and those private groups kind of went away. Is that a fair statement or did you—
Robert Courtney: It did happen. I don’t remember the exact period. I think it was a bit after the ’98 crash, and was not really related to our situation. But I forget for a moment when Putin first came in as president.
Daniel Satinsky: I think it was—and again, I should know this cold—but I believe it was ’99. And then he was appointed, I believe, by Yeltsin in ’99 and then was elected around 2000.
Robert Courtney: Okay, that makes sense, yeah.
Daniel Satinsky: So, were you impacted by the politics of the time? In other words, you have the 1996 election, huge, you know, competition and controversy over whether Yeltsin was going to be reelected or not, and then you have the whole period after that, and kind of his decline. Did any of these big events impact you in your business or in your thoughts about the country or any of that?
Robert Courtney: No. We seemed to be in a sector that was somewhat—not immune from, that’s not really the right word—but separated from all of that. You know, I was amongst those that thought Putin’s arrival was a welcome change from the mess that Yeltsin had turned into. I know I’m not alone. [Laughs.]
Daniel Satinsky: Yeah, you’re not. Other people I’ve interviewed have said the same. And particularly you’re talking about what you thought at that time.
Robert Courtney: Exactly. That’s right.
Daniel Satinsky: You know, you knew what you saw, so… So, you know, back to some of this, the impact of your dentistry on the broader dentistry industry in Russia. Because this could be an example. I interviewed someone who…I mean, Russians always went to the movies, but I interviewed someone who changed the way they went to the movies by changing the movie theater and the experience of the movie theater, so even though it was as if it was a new industry.
And a lot of the changes in the post-Soviet period were new sectors. I mean, clearly real estate and finance didn’t exist under Soviet times, had to be created. And other sectors like restaurants were completely different and were changed. And you think that—and again, changed under the influence of foreigners and Westerners, Americans in particular. Do you see any of that same process in either in terms of the medical sector and/or the dental sector in terms of your bigger impact just by being who you were?
Robert Courtney: We’re speaking about Paul Heth’s cinema company, right?
Daniel Satinsky: That’s right.
Robert Courtney: Yeah. I know Paul well, and did back then.
Daniel Satinsky: I have an interview upcoming with him. To be honest with you, I interviewed him and I lost the interview, so I need to redo it, so that’s why I know what he did, but I didn’t know whether to use his name. But yeah, that’s Paul. That’s who I was speaking of, yeah.
Robert Courtney: Right. No, the Kodak Cinema in Pushkin Square and then later the multiplexes—well, it was—
Daniel Satinsky: The multiplex changed the experience of daily life and entertainment, right?
Robert Courtney: Yeah. To be sure, and Paul can tell you the figures, Russians, Soviets were very avid moviegoers, and there’s a whole network of theaters. And going to see a film in one of those old theaters, it’s kind of a cool experience. And many of them have since been upgraded substantially.
But Paul’s model took it from Kodak and Pushkin to the first very large cinema at the very first mega mall in Khimki. But since then he’s mushroomed into the multiplexes that we’ve gotten so used to, or back then got used to. And that was yet another generation of change for the Russian moviegoer. But to apply that back to us, I would say not on the scale that a movie theater would have changed the culture of going to the movies, because we’re also talking about the content, so it was international content where before it was just Soviet content. But the theater itself was different, the food offering was different, the whole experience was better sound, better lighting, better atmosphere, cleaner, comfortable, all that sort of stuff, so hats off to Paul.
So, the—I think I can mix these together by talking about both medicine and dentistry, because it was the same idea. It was injecting and introducing into the community something that was operating at this level while the rest of the system was operating at this level. So, on a smaller-scale level I think we made significant changes in people’s health, their lives.
In dentistry I would say—and it’s sort of a small example—but Americans are used to getting their teeth cleaned and having a checkup every six months. Russians are used to going to the dentist if something hurts. So, introducing preventive medicine, preventive dental care, was something, in our world, revolutionary. It was a fight to get somebody to schedule, to forward schedule themselves for six months or even 12 months. Well, I’ll call you if I need you. No, you need to get a cleaning because of what the doctor told you in the exam room back there, etc.
And then in addition to that you had—we inherited—and this was great for the business—we inherited decades of bad care that needed to be repaired. And more than once some dad or husband would say—and I had these conversations myself sometimes, and mostly it was with the doctors—so I’ve got a choice, I can buy a new Mercedes or I can fix my wife’s teeth. Well, sir, it’s up to you. They would always choose the teeth.
And there would be guys who would come to me and say I’ve been dating this girl, and I want to bring her in and get her teeth checked. And I said just be aware that that may be a $10,000 decision. And it always was.So, how serious are you with this girl?
Daniel Satinsky: Yeah. So, what kind of damage were you taking care of at that level? I mean, these are missing teeth, these are loose teeth, these are highly decayed teeth, right, yeah?
Robert Courtney: Very bad periodontal disease. And we’re talking about extractions, root canals, implants, dentures, bridges, crowns.
Daniel Satinsky: Yeah? And why was Soviet dentistry so bad? Do you know? Do you have a theory of that, like why? I mean, I’m just curious whether…is there any theory about that.
Robert Courtney: Well, lumping it together with medicine, there was limited budget for equipment, limited opportunities for exchange of best practices on an international level, it was a closed off system. Doctors, dentists were ill paid. They were just paid at the upper scale of a good laborer, that sort of thing. The government was very chintzy on the budget funds it gave to polyclinics and hospitals. Repairs, something would break, and wouldn’t repair it. And it just got stuck in the ‘40s, and it never really was prioritized as something to catch up with the world, and the world passed it by.
Daniel Satinsky: So, your example must have created some ripple effect of demand for better quality care, or did it? Do you know?
Robert Courtney: It absolutely did. And in…since…we’re in dentistry now, so I’ll stick to that moving forward. But we’re now in the period where Russians are sprinting to catch up across the board. And dental clinics were springing up, very nicely equipped. They were still well behind in the capabilities. But our company alone, we spawned dozens of well-trained people who went on to work elsewhere or do their own thing, you know, that sort of thing.
We had a lot of exchanges within some version of a dental association in Moscow. And it did have a ripple effect, and that sort of conjoined with the race to catch up. It took longer for the education and the competence to catch up, but it eventually almost did. And during the later years of our clinic I would have even expats say oh, we’ve got a really good Russian dentist we trust, and it’s a lot cheaper than your place. And I said I think that’s absolutely fine, but if you get into something that’s a more serious procedure like an implant that could have not life threatening, but consequences to your whole jaw, get a second opinion from our folks before you make the decision.
Daniel Satinsky: And so, I mean, you trained many, many people who went off and saw your model and thought I can do this in my hometown of Vologda or Samara or someplace, right?
Robert Courtney: Some of them did go back to those towns, but most of it stayed in Moscow.
Daniel Satinsky: Most of it stayed in Moscow, okay.
Robert Courtney: It absolutely was. We were sort of greeted and welcomed as sort of kings and princes and all that sort of stuff. And a lot of us, not just Americans, we had…we looked quite down at Russia, Russians, and the systems that we were exposed to. We thought ours were the best, and we said we’re going to turn you into sort of our image.
Daniel Satinsky: Yeah,. You probably felt that way when you got there, right, when you looked around you. Did you visit Russian medical facilities and—
Robert Courtney: Oh, yeah. I have never been sort of a snob, but it was not unobjective to see these facilities and understand that there’s a long way to go here, and we can be part of the modernization process. And within the medical communities we were really, really warmly welcomed.
Daniel Satinsky: Warmly welcomed in the sense of I would love to know what you know, and I’d like the opportunity to advanced professionally, right?
Robert Courtney: Correct.
Daniel Satinsky: So, you…did you start studying Russian, and did you in any way…?
Robert Courtney: I dove into Russian very eagerly. I’ve always had the view, then and since, that you should do everything you can to try to embrace the language of your host country. I did it when I lived in Taiwan with Chinese, did business in Mainland China in Chinese. In Spanish. It was also pre-Russia. I was doing a lot of business in Mexico. So, yeah, I studied the Russian Cyrillic alphabet on the flight over. And I always encouraged people to do that because you’re driving into the city from the airport, and—you’re a Russian speaker, right? There’s so many words that, if you know how to read the letters, they sound like our words.
Daniel Satinsky: Right, right.
Robert Courtney: “Pectopah”
Daniel Satinsky: The “pectopah” was the famous one, when Americans looked at restaurant and said pectopah, so that one I remember very strongly.
Robert Courtney: But I dove head first into very intensive lessons.
Daniel Satinsky: Yeah. Well, so you were not a typical American in the sense that you had a lot of international experience, so you had past opportunities of interacting with other cultures and sort of what it took to interact with another culture, right? I think that’s a fair statement.
Robert Courtney: That’s a fair statement, yeah.
Daniel Satinsky: And so did you…who did you interact with socially as you developed there? I mean, I know there were groups of Americans who played basketball together at the embassy, and there were particular expat restaurants and clubs, and it would be easy to just live within the expat community. And I know many people did. What was your experience? Were you mostly within that community, or did you get outside of it? What was that like?
Robert Courtney: I was part of that in the early days. And it started to evolve as my Russian grew more toward fluency. I referred to this before. As I started having dates with Russian women, as I started to become friendly with my neighbors, and started being included or including Russians in things simply like drinking vodka or going to a cafe for a tea or a coffee or that sort of thing.
But you’re absolutely right when you said sort of atypical, but I thought you were going to say something else, which was that the classic expat arriving to work for a multinational company had a car, and a driver, and a family, and lived outside, and had help in the house.
Daniel Satinsky: Right.
Robert Courtney: And didn’t necessarily need to learn to speak Russian, and in many cases never did. And you know the ability to speak the language is a window onto the culture and the relationship, and it’s the open window onto the hearts of Russians, which is the key.
Daniel Satinsky: Yeah. And you were able to make that transition. Other people never did, so they saw the country in a different way than you saw it.
Robert Courtney: Right. And you know because you’re a speaker, if you’re in a conversation or a negotiation and you can understand what’s being said in Russian, you understand that the way the translation comes back to you has some nuances, or even some mistakes, because you don’t know enough about your translator’s language to know how well he or she understands.
Daniel Satinsky: Right. I’ve learned that translators almost never translate, they paraphrase, and that there’s a lot lost in that.
Robert Courtney: Yeah.
Daniel Satinsky: And so as you began to learn the language, did it change your perception of the systems around you or your initial perception of the country? Did it change that for you?
Robert Courtney: It did. I’m going to repeat the sort of window analogy. Maybe the curtains through which you look through the window, they block you from looking through the window, you know, slowly get more and more open. And what started out as a people, a culture, a language that was rather opaque started to become more and more transparent. And of course there are all these little mini learning experiences along the way that are building blocks to a better understanding of what’s inside a Russian person’s mind and heart and that sort of thing. Like everybody says, you start out not understanding why Russians don’t smile until you figure out that if somebody smiles you’re on the road to his or her heart and a relationship.
And, you know, and to—sorry, we’re not supposed to go present tense—but as I started to visit home and people would say, hi, how are you, or hi. Hi. How are you? Somebody you don’t know who is on the street. And I learned as one of my early lessons in Russia that you really only ask how are you if you really care about the answer.
Daniel Satinsky: Mm-hmm.
Robert Courtney: So, I remember in the early days at the medical center we’d all come in from a weekend Monday morning and I’d say hey, how are you, how was your weekend? And I’ll sort of mash together the answers. You know, they’d look at me seriously and say well, my grandmother had to go to the hospital, and my dog died, and my cat got run over by the car. And I learned not to ask that question in that context, right?
Daniel Satinsky: Right, because you actually got a real answer. It was a real question. It wasn’t a form of greeting.
So, you were at the American Medical Center for how long, three years?
Robert Courtney: No, just over two.
Daniel Satinsky: Over two. And were you beginning to get the language by the time you left there?
Robert Courtney: Most definitely, yeah.
Daniel Satinsky: So, if you don’t mind, why did you leave? And you started this other business or managed the other business, so tell me about that transition.
Robert Courtney: My relationship with the guy who hired me started to sour, and in parallel with that I had…in parallel with my coming to understand that this was not going to be a long-term relationship, my entrepreneurial instincts started to twitch. Mind you, I’d never done anything entrepreneurial before. Adventuresome, to be sure, but there’s a whole basket of risk that comes with doing something on your own.
So, one of the benefits of American Medical Center was I could see that there was a demand for dentistry that we were not filling, so I came up with an idea that was rather obvious, but harder to execute than to imagine, which was to do the same business model, but for dentistry. So, things reached a point with Dennis where we just agreed that this wasn’t going to be…this wasn’t going to work, so I called him up and I said I’m out. We had a big blowup and I said all right, I’m done. And then I had started to prepare, and it took another six months to get this going. So, he called me up the next day and he said, Bobby, I think we were too hasty.
He said look, I understand why you don’t want to keep doing what you’re doing, but we need to open up AMC Kazakhstan—can you go down and do that for me? So, I said all right. Because I had the time to do it as I was preparing the other. And that was another great adventure because I went down and somehow got in touch with the son-in-law of President Nazarbayev, who was a—
Daniel Satinsky: Not somehow. That’s how business probably transpired.
Robert Courtney: Right.
Daniel Satinsky: And so you were in Almaty or…?
Robert Courtney: That’s right.
Daniel Satinsky: Yeah, okay.
Robert Courtney: So, we put together a JV that would be taking over a wing of a hospital that he was given as a gift by his father-in-law, as these things go, and it was going be the American Kazakhstan Medical Center. And so we did the deal. And I said Dennis, okay, I’ve done it, here it is, and I’m going to go do something else. I can’t really tell you about what that is yet. And I left completely and started U.S. Dental Care.
Daniel Satinsky: And you didn’t think about leaving Russia at that time. You were still committed to Russia or whatever, the opportunity that you saw there.
Robert Courtney: Truth be told, it was that plus I had a very serious girlfriend, an American woman at that time, and I had already, I’d built a bit of a life around her and us and the community, and all that taken together, I’m sticking around for a while.
Daniel Satinsky: And so did you…you wanted to do the same model. You had to go to the same people, the same multinationals, or probably the same human resource people in those multinationals. I assume it took a big investment of equipment to get this going. Did you self-finance, did you have investors, or how did you do it?
Robert Courtney: It was both. I financed the majority and brought in a small handful of investors for the minority, and we got it done. It took about seven, eight months to open.
Daniel Satinsky: And you opened one location to begin with?
Robert Courtney: We opened Moscow and we opened a second Moscow. And this story crashes into the 1998 default.
Daniel Satinsky: Okay. How?
Robert Courtney: Well, we were on the verge of a significant scaling. So, we’d proved the model twice. In fact, we’d also opened one in Baku, Azerbaijan. And we had already broken through that barrier to the Russian community that had the means to pay. By this time we’re late 1995. And so we are… Sorry, that’s when we started. So, we’re now summer of ’98, and it was August of ’98 when the crash happened. But we had put together a plan to duplicate the Russian side of the business. So, we had set up a dual system. We created a residency program for Russian dentists to be trained by our foreign dentists and offered Russians a choice of seeing the American side dentist at one price or the Russian side dentist at a lower price.
And we had decided to spin off this Russian based model, which we called World Class, into four or five, starting in Moscow, clinics. Then ’98 came and a lot of things for a lot of people in businesses went on ice. And we never picked it back up after the recovery.
Daniel Satinsky: Meaning you stayed where you were with the hybrid Russian-American dentistry and how many centers did you have at that point?
Robert Courtney: We just moved one more time into a bigger facility that had room to grow, and that’s where it was when I ultimately sold the business.
Daniel Satinsky: I see. When did you sell it?
Robert Courtney: Late…approaching 2010. I don’t remember the exact year.
Daniel Satinsky: Oh, okay, so quite a big longer you operated that business, right?
Robert Courtney: Yes. Quite a bit longer I owned it. I had transitioned others into running it. So, I set up yet another company that was called Newbridge Group, whose business model was to facilitate the market entry growth and financing directly or through partners of interested Western companies. So, this was when sort of the second round of interest from the West was coming into the country.
Daniel Satinsky: When did you set that up?
Robert Courtney: This would have been…we would have started that in ’07, ’08.
Daniel Satinsky: So, full recovery from 1998 and—
Robert Courtney: Yes.
Daniel Satinsky: And so a lot of people left in 1998, and the expat community shrunk considerably. How did that impact you? And were you at that point considering packing up and leaving or not?
Robert Courtney: In ’98, no, because I really…we really didn’t have a choice. We had to save the business. And as you know, from either living through it or reading it, it bounced back remarkably quickly. Six to nine months later we were kind of back in business.
The ruble had weakened overnight, and people were going to the casinos with their worthless rubles, or buying anything they could buy from the grocery store with their rubles as quick as they could spend it, or using it to start fires in their fireplace in some cases. But anyway, I went off somewhere from your question. What was it?
Daniel Satinsky: Yeah, so you didn’t consider leaving. And did it change your clientele, who were your customers, did that change because of the ’98 collapse? I mean, in other words I’m asking you did you have more Russian customers instead of it being expats?
Robert Courtney: I don’t remember the percentages, but we already had a meaningful percentage of Russian clientele, a meaningful minority. And yes, expat companies and expats left, but it wasn’t that big of a drop in our patient flow. So, we were mostly hurt by the devaluation of the dollar—I mean, of the ruble.
Daniel Satinsky: And so what was your relationship—back to my question previously about the regulators—what was your relationship to the regulators with your dental practice?
Robert Courtney: Well, this gets into the era of the nasty relations businesses had with the tax inspectorate and the tax police.
We were operating in a world where, try as we might, we couldn’t do everything we needed to do and 100% be compliant with all the rules. I’ll give you one good example. We had a dental laboratory, and in order to make crowns you needed to make them with ceramic on top of gold. To have gold you needed to have a special license, a special secure way of storing it, and it was impossible for a business like ours to get that kind of license, but we did it anyway.
Daniel Satinsky: Mm-hmm.
Robert Courtney: Somebody found out about it and finked on us to somebody else, and we got word that we were going to get raided. And because—there was actually also another issue with our license that we’d been trying to remedy in order to be in full compliance, but we had a window of vulnerability, and we were about to get raided. So, by this time I was savvy enough to understand what the game was, and what I did was find a competing group who was sort of a bigger dog than the group that was…the group’s dog that was about to raid us, and they staged a raid an hour before the smaller dog people came. So, when the smaller dog guys turned up, the big dog says this is ours, we’re not going to share it.
Daniel Satinsky: A form of krysha ((The roof, Criminal protection) for you.
Robert Courtney: It was a—well, no, it wasn’t a krysha. We had a krysha before ’98 when you actually had to have physical security, but we had a krysha. In addition to that we had a krysha. But we actually had a militia guy sitting in our lobby with a machine gun in the dental clinic.
Daniel Satinsky: You go off to see the dentist, and I’ve got to have security.
Robert Courtney: Right. That was, you know.
Daniel Satinsky: Yeah, it was the times.
Robert Courtney: It was the time, yeah. So, anyway, we prevailed in that.
Daniel Satinsky: So, this other agency obviously had some interest in helping you, and they fended off the less important agency, is that fair?
Robert Courtney: Right. And there was a transaction fee.
Daniel Satinsky: And how long did this period last where you had to have a militia man with an automatic weapon in your lobby? When did that stop?
Robert Courtney: We had to end our contract with them because of the post ’98 economic situation. Just very nervously went to them and said we’re in trouble, we simply can’t afford you. That went to a couple stages where we reduced the fee a couple of times and finally we just said goodbye, in what we hoped was friendly terms, and it turned out to be so.
Daniel Satinsky: Okay. Because around…shortly after that, at the period where Putin is just becoming, you know, head of the state, it seems like a lot of that krysha activity was federalized, if you will, and those private groups kind of went away. Is that a fair statement or did you—
Robert Courtney: It did happen. I don’t remember the exact period. I think it was a bit after the ’98 crash, and was not really related to our situation. But I forget for a moment when Putin first came in as president.
Daniel Satinsky: I think it was—and again, I should know this cold—but I believe it was ’99. And then he was appointed, I believe, by Yeltsin in ’99 and then was elected around 2000.
Robert Courtney: Okay, that makes sense, yeah.
Daniel Satinsky: So, were you impacted by the politics of the time? In other words, you have the 1996 election, huge, you know, competition and controversy over whether Yeltsin was going to be reelected or not, and then you have the whole period after that, and kind of his decline. Did any of these big events impact you in your business or in your thoughts about the country or any of that?
Robert Courtney: No. We seemed to be in a sector that was somewhat—not immune from, that’s not really the right word—but separated from all of that. You know, I was amongst those that thought Putin’s arrival was a welcome change from the mess that Yeltsin had turned into. I know I’m not alone. [Laughs.]
Daniel Satinsky: Yeah, you’re not. Other people I’ve interviewed have said the same. And particularly you’re talking about what you thought at that time.
Robert Courtney: Exactly. That’s right.
Daniel Satinsky: You know, you knew what you saw, so… So, you know, back to some of this, the impact of your dentistry on the broader dentistry industry in Russia. Because this could be an example. I interviewed someone who…I mean, Russians always went to the movies, but I interviewed someone who changed the way they went to the movies by changing the movie theater and the experience of the movie theater, so even though it was as if it was a new industry.
And a lot of the changes in the post-Soviet period were new sectors. I mean, clearly real estate and finance didn’t exist under Soviet times, had to be created. And other sectors like restaurants were completely different and were changed. And you think that—and again, changed under the influence of foreigners and Westerners, Americans in particular. Do you see any of that same process in either in terms of the medical sector and/or the dental sector in terms of your bigger impact just by being who you were?
Robert Courtney: We’re speaking about Paul Heth’s cinema company, right?
Daniel Satinsky: That’s right.
Robert Courtney: Yeah. I know Paul well, and did back then.
Daniel Satinsky: I have an interview upcoming with him. To be honest with you, I interviewed him and I lost the interview, so I need to redo it, so that’s why I know what he did, but I didn’t know whether to use his name. But yeah, that’s Paul. That’s who I was speaking of, yeah.
Robert Courtney: Right. No, the Kodak Cinema in Pushkin Square and then later the multiplexes—well, it was—
Daniel Satinsky: The multiplex changed the experience of daily life and entertainment, right?
Robert Courtney: Yeah. To be sure, and Paul can tell you the figures, Russians, Soviets were very avid moviegoers, and there’s a whole network of theaters. And going to see a film in one of those old theaters, it’s kind of a cool experience. And many of them have since been upgraded substantially.
But Paul’s model took it from Kodak and Pushkin to the first very large cinema at the very first mega mall in Khimki. But since then he’s mushroomed into the multiplexes that we’ve gotten so used to, or back then got used to. And that was yet another generation of change for the Russian moviegoer. But to apply that back to us, I would say not on the scale that a movie theater would have changed the culture of going to the movies, because we’re also talking about the content, so it was international content where before it was just Soviet content. But the theater itself was different, the food offering was different, the whole experience was better sound, better lighting, better atmosphere, cleaner, comfortable, all that sort of stuff, so hats off to Paul.
So, the—I think I can mix these together by talking about both medicine and dentistry, because it was the same idea. It was injecting and introducing into the community something that was operating at this level while the rest of the system was operating at this level. So, on a smaller-scale level I think we made significant changes in people’s health, their lives.
In dentistry I would say—and it’s sort of a small example—but Americans are used to getting their teeth cleaned and having a checkup every six months. Russians are used to going to the dentist if something hurts. So, introducing preventive medicine, preventive dental care, was something, in our world, revolutionary. It was a fight to get somebody to schedule, to forward schedule themselves for six months or even 12 months. Well, I’ll call you if I need you. No, you need to get a cleaning because of what the doctor told you in the exam room back there, etc.
And then in addition to that you had—we inherited—and this was great for the business—we inherited decades of bad care that needed to be repaired. And more than once some dad or husband would say—and I had these conversations myself sometimes, and mostly it was with the doctors—so I’ve got a choice, I can buy a new Mercedes or I can fix my wife’s teeth. Well, sir, it’s up to you. They would always choose the teeth.
And there would be guys who would come to me and say I’ve been dating this girl, and I want to bring her in and get her teeth checked. And I said just be aware that that may be a $10,000 decision. And it always was.So, how serious are you with this girl?
Daniel Satinsky: Yeah. So, what kind of damage were you taking care of at that level? I mean, these are missing teeth, these are loose teeth, these are highly decayed teeth, right, yeah?
Robert Courtney: Very bad periodontal disease. And we’re talking about extractions, root canals, implants, dentures, bridges, crowns.
Daniel Satinsky: Yeah? And why was Soviet dentistry so bad? Do you know? Do you have a theory of that, like why? I mean, I’m just curious whether…is there any theory about that.
Robert Courtney: Well, lumping it together with medicine, there was limited budget for equipment, limited opportunities for exchange of best practices on an international level, it was a closed off system. Doctors, dentists were ill paid. They were just paid at the upper scale of a good laborer, that sort of thing. The government was very chintzy on the budget funds it gave to polyclinics and hospitals. Repairs, something would break, and wouldn’t repair it. And it just got stuck in the ‘40s, and it never really was prioritized as something to catch up with the world, and the world passed it by.
Daniel Satinsky: So, your example must have created some ripple effect of demand for better quality care, or did it? Do you know?
Robert Courtney: It absolutely did. And in…since…we’re in dentistry now, so I’ll stick to that moving forward. But we’re now in the period where Russians are sprinting to catch up across the board. And dental clinics were springing up, very nicely equipped. They were still well behind in the capabilities. But our company alone, we spawned dozens of well-trained people who went on to work elsewhere or do their own thing, you know, that sort of thing.
We had a lot of exchanges within some version of a dental association in Moscow. And it did have a ripple effect, and that sort of conjoined with the race to catch up. It took longer for the education and the competence to catch up, but it eventually almost did. And during the later years of our clinic I would have even expats say oh, we’ve got a really good Russian dentist we trust, and it’s a lot cheaper than your place. And I said I think that’s absolutely fine, but if you get into something that’s a more serious procedure like an implant that could have not life threatening, but consequences to your whole jaw, get a second opinion from our folks before you make the decision.
Daniel Satinsky: And so, I mean, you trained many, many people who went off and saw your model and thought I can do this in my hometown of Vologda or Samara or someplace, right?
Robert Courtney: Some of them did go back to those towns, but most of it stayed in Moscow.
Daniel Satinsky: Most of it stayed in Moscow, okay.
Robert Courtney: Like with so many things, Moscow grew up first and others followed.
Daniel Satinsky: Right. And so did you ever think of going into dental education as a business?
Robert Courtney: Not as a business. There wasn’t much money in education. But we invested a ton of money into what I called a mini residency program, which we first did at the American Medical Center and then we did at U.S. Dental Care.
Daniel Satinsky: So, going back to my question about social life, by this time were you more, or were you still pretty much wrapped up in the expat community, or had your social connections diversified by this time into more…into Russians and Russian social life?
Robert Courtney: Definitely had diversified. I don’t think it was ever a majority Russian. I think it was always majority expat. But by this time everything was intermingled. I’ll just give an example. You’ve probably been to the Moscow Country Club golf club.
Daniel Satinsky: I actually was never there, but I know what it is, yeah.
Robert Courtney: Okay. So, I had never been a golfer, even though I’d lived in Florida, Arizona, California, and played wedding golf a few times, but because everybody was playing golf, and because it was a social outlet as well, I joined. And that was a really interesting multicultural group of expats from all over, Western expats, Koreans, some Japanese, and a quickly-growing cohort of Russians.
And a golf club is a very social place to be. Playing golf is a very social thing. You’re together for three and a half, four hours on the course, you come back to the clubhouse, you have a meal, and you have drinks, there are occasional parties also. Now, this was a monied class on the Russian side who were members there, but it was very much integrated, and very enjoyable because of that. Which doesn’t mean… So, this is interesting. There was a point at which—remember we talked about the arriving foreigners being kings and princes and all that sort of stuff.
But by this time Russians had, a lot of Russians had a lot of money. It was unbelievable money, as you can remember, and even below that oligarch tier there were plenty of minigarchs, and there was a lot of money out at the Moscow Country Club. Well, the tables were kind of turned. We were kind of…everybody liked to socialize together, but there was a social pecking order within that crowd.
And it got driven home one time. We had two tournaments every year. One tournament was the rest of the world against Russia. And this particular year it was the Russians’ job to organize the t-shirts for both teams and get them printed and that sort of stuff, so they pulled one over on us. We all get our t-shirts, we put them on, but before we put them on we turned them over and it says gastarbeiter. And that’s the old German prisoner of war workers.
Daniel Satinsky: Ooh. Oh, okay. [Laughs.]
Robert Courtney: That was World War II.
Daniel Satinsky: And how did you all react to that one?
Robert Courtney: Well, we laughed in the right way, but we wanted to flip a little middle finger toward them in the other. But…and that went right along with, you know, I remember a couple times a guy or two would say we’re not really happy that you’re stealing our women.
Daniel Satinsky: Uh-huh. [Laughs.] Yeah. Did you ever start encountering people who said…who were pushing back on America as the model for Russia by that time? Was that ever consciously expressed to you? Or that foreigners were arrogant?
Robert Courtney: For sure at a point there was this almost complete rejection of the idea that the American way was somehow better. Business, economics, ethics, golf. [Laughs.]
Daniel Satinsky: [Laughs.]
Robert Courtney: And I don’t…I can’t really put a finger on it right now of when that switch happened. Certainly the shock therapy stage had long passed, and that whole period had rejected what was trying to be forced upon them. I’m still waiting for Jeffrey Sachs to apologize for thinking that what worked in Poland would work in a country that had no history, pre-Soviet, of a democratic market system. If you hear about it, let me know.
Daniel Satinsky: Okay, will do. So, did…so your later business was in facilitating market entry and partnership development, this consulting business. And I’m assuming listening to you that your capabilities or your attitudes or whatever in that were shaped, on the one hand, by a much greater and deeper familiarity with Russia, its markets, having contacts through things like this golf club that allowed you to do that kind of business, along with facing maybe some beginning pushback from Russians. So, was that dynamic played out in your consulting business in terms of the receptivity to foreign partners or how you had to now structure foreign partnerships because the terms were changed, or the frames of reference were changed? I hope you know what I’m asking you.
Robert Courtney: I think so. There was a window, which we were in at this point, where Russians were extremely eager to partner with incoming foreign companies that represented something new for the market. And that could be hey, we want to be a franchisee—regional, national, multinational—we want to be a distributor. So, there was a keenness to be matched with these companies that they didn’t have the means to do on their own, and there was a new flood of interest on the Western side to come in, so we were absolutely in the right period to be the middle person for that.
And it wasn’t any sort of brokerage. It was a significant, more sophisticated marrying of compatibilities that also included investment, and also included legal structuring in a very careful way, and negotiations. Just as an example of this, you had KFC that wanted to come into Russia. And you may remember there was a chicken brand called Rostic’s.
Daniel Satinsky: Yes. I interviewed Henrik Winther, who was one of the founders of that, or implementers of it, so yeah.
Robert Courtney: Well, let me tell you a story that includes Henrik.
Daniel Satinsky: Oh, good.
Robert Courtney: All right. So, KFC had come to us, and they were our client, and their business plan was to take over the market, because they were KFC, and they still had this chest beating idea. And they wanted help with everything involved in market entry. And we said it’s a dumb idea because Rostik controls the market, you should buy Rostik. No, no, we’re KFC, we don’t need—we can do this ourselves, we’ll take over the market. Finally they said okay, we’ll talk to them if they’ll talk to us. So, I got in touch with Rostislav and with Henrik, was very good friends with him and them, and their reaction was why the hell do we need KFC? So, along comes the annual—Rosinter. That was the name of the company.
Daniel Satinsky: The parent company, correct, right.
Robert Courtney: They used to do a very extravagant international trip for a large group of people, like 80. And this year the trip was to Malaysia and then over to Malaysian Borneo. And they invited me to go along. There were maybe six guests. And Henrik and I had been friendly and friends—and developed into friends for long years. So, he and I decided to play golf, and we’re talking about this deal, and he’s saying, you know, we don’t need these guys, we control the market, and da-da-da-da-da. And I said but what about the recipes? The recipes are famous for—they’re really going to… He said we don’t need their recipes.
Long story short, we talked him and Rostislav into doing not a full acquisition, but a majority acquisition, in which they would set up a co-owned company that would be dual branded for a period of years, three or five, I don’t remember which, and that Henrik would run that company, and he became the president of Rostiks-KFC, and KFC would fund the expansion of X number of restaurants, and that at a point they had a buy option, which they exercised. And about two years into the process I was talking to Henrik one day. I said whatever happened with the KFC recipes? Did you incorporate those? And he said yeah. And I said any effect on sales? He said yeah. How much? They went up 20%.
Daniel Satinsky: Wow.
Robert Courtney: Do I have to say I told you so, Henrik?
Daniel Satinsky: [Laughs.] That’s pretty significant. Yeah. And what is the state of that relationship now? What happened? How did that work out? KFC and Rostic’s.
Robert Courtney: Oh, they exploded, both before and after they exercised the option, and then they solo branded it KFC and expanded all over the place.
Daniel Satinsky: So, the “they” is KFC took the option, took over Rostik, and then has expanded all over.
Robert Courtney: Right.
Daniel Satinsky: And is it still there, do you know?
Robert Courtney: Yes, it is. I can’t remember what they’re calling it now. But they didn’t…they paused for a while, but they didn’t stop. I don’t know what they’re doing about the recipe ingredients.
Daniel Satinsky: Uh-huh, okay.
Robert Courtney: But you know, Hen—I don’t know when you interviewed Henrik, but he’s no longer—
Daniel Satinsky: It was in 2021, I think.
Robert Courtney: Ah.
Daniel Satinsky: Most of my interviews were done before the Russian invasion of Ukraine, and so this was, you know, 20—it was during COVID, so…most of them, so I don’t know what’s happened since then.
So, look, I mean, the idiot question, and one that’s just to give you free rein, if you will, is what is a very significant period of time you spent there, what’s the impact on you personally and professionally? I mean, how do you think Russia changed you, and along with you changing Russia?
Robert Courtney: Well, I ultimately got married to my Russian girlfriend. And my first marriage. I started late. So, personally it’s been the most significant change in my lifetime.
I suppose you can say that was the culmination of a lot of other personal changes that have changed me as a person from the guy I was that went over in 1992 to Russia. But any of us, I can’t imagine anybody you’ve interviewed doesn’t say that they’ve been changed. The question is—
Daniel Satinsky: Oh, absolutely. Also.
Robert Courtney: —to put your finger on exactly what that means. You said professionally as well. So, professionally I’m a different type of business person than I was when I went over there. If somebody said so what’s one example of something, I said well, I see around corners in ways I couldn’t see before I went to Russia.
Daniel Satinsky: Explain that a little more.
Robert Courtney: There’s always something around the corner in Russia that is unexpected. I remember back when—things would be going great at the American Medical Center, and there would be no crises that had happened that week, or for two weeks, and the staff would start getting nervous. And I said everything’s going great, what do you worry about? Something’s about to happen, something’s about to happen, something always happens. Not even just in August, but something’s going to happen. [Laughs.]
And so many things did happen in simple, but even in very exaggerated ways, that almost nothing surprises me now. And very little happens that I haven’t laid out as on the list of possibilities or probabilities. So, I guess you could call that, in fancy terms, superior risk analysis, and suspicion, and prevention. And I think another—to veer into the personal—and this comes into greater focus every time I’m together with a group like… Like you weren’t at Mike Calvey’s book reading, were you?
Daniel Satinsky: No, I was not, no.
Robert Courtney: So, I mentioned this get-together that we all have every December, and there are smaller versions of that where everybody’s sort of talking nostalgically, etc., but almost to a person they’re not as fully fulfilled by what they’re doing outside of Russia than when they were doing it in Russia because the experience of life and business just challenges you multidimensionally. And it’s simpler outside of Russia than it was there. It’s not quite checkers and chess because it’s not that dramatically different. But for people like me that lived in that environment for so long, it’s less interesting to do business here than it was there. Now, I don’t know if I’ve told you I still have a business in Russia.
Daniel Satinsky: You mentioned it, and I didn’t know whether to ask you about that or not.
Robert Courtney: No, it…this will be published long after whatever anybody might want to say badly about somebody who hasn’t self-sanctioned. But I spend the first several hours of each morning in management meetings with my team in Moscow, so I’m not completely divorced from Russia, and I’m not completely divorced from the challenges of daily business.
Daniel Satinsky: Right, right. And so it was difficult to move away from that environment then.
Robert Courtney: I don’t think difficult is the right word because we made the decision to do that for two reasons. This was…so in 2014, after Crimea and the sanctions onslaught and all that, the business environment changed greatly. The attitude toward American or European business deteriorated significantly. And even though I’ve been a board member of the American Chamber Of Commerce to this day, I felt it keenly through the beginning of the departure. Of course that accelerated dramatically after February, 2022.
But we had no plans to leave Russia. In fact we had a plan—we had a house in France to straddle Europe and Moscow for the foreseeable future. But then our youngest daughter was born, and all of a sudden we just had this idea that we would rather bring her up in the American education system than there, and how do we do it if we lived in both Russia and France and it became complicated. And then on the business side we had gotten the business to the point where my Swedish partner and I both thought that we could live in our respective countries, share the management of the business. We had a really outstanding team, and still do, with almost no risk of them stealing out from under us.
Daniel Satinsky: Okay, good, yeah.
Robert Courtney: That’s happened far too many times, and you probably have heard about it. So, we just made the decision to move the family to the States, and that was in the middle of 2019. The planning for that started in probably mid 2016.
Daniel Satinsky: Okay. Do you care to say what your business is, your current business, or is that something that’s not—
Robert Courtney: Oh, no, it’s not a secret. Completely different sector. It’s the first non-healthcare thing I did in Russia. It is a…it’s in the retail real estate sphere. It’s called Retail Profile. And we rent from large shopping centers their entire common areas on a master lease basis, sublease places to kiosks and promotional stands, and manage that program in about 13 cities in Russia and several in Sweden.
Daniel Satinsky: Huh. That’s interesting. I never thought of that as a separate sort of business, actually. I mean, you know—
Daniel Satinsky: It’s not a model that exists here because 90% of the Class A shopping centers are owned by about five companies, huge companies. There’s no reason for them to outsource this business. The market’s much more fragmented in Russia. There are about 600 or so shopping malls of reasonable size, and at any given time we’ll have this model going in about 30 of them.
Daniel Satinsky: That’s interesting. So, you know, shopping malls is another one of those areas in which the Russian life was transformed in the experience of shopping in ways that, despite sanctions and everything else, still remain. I mean, there’s so much, it seems to me, from that period that’s structural and institutional that remains. It’s not very well acknowledged or recognized, I think. I don’t know if you agree, but—
Robert Courtney: Oh, I’ve seen it happen daily since February of 2022. And bear in mind that this, until autumn of 2023 I was traveling back there every quarter for two weeks. So, I watched this. I watched this exodus happen and watched, once again I watched the Russians pivot to fill the gaps that foreigners had left.
Daniel Satinsky: Yeah.
Robert Courtney: And maybe surprisingly to many—I don’t know about you—but the consumer spending power has been remarkably stable, so the shopping center business and ours as well, which depends on the traffic in the shopping centers, is just fine.
Daniel Satinsky: Interesting. Interesting. Yeah, and I’m not sure whether we should…how much of this particular discussion to include in the archive. But I think the growth of the shopping centers is so significant in how people live, and the change in the retail sector is so dramatic from when I first started going there, and when you first started there that it’s astounding. Anyway.
Robert Courtney: Well, remember, the first truly modern shopping center was the Mega Mall in Khimki. That was the Ikea shopping center division.
Daniel Satinsky: Right. So, was that—that was before the remodeling of Manezh and that underground shopping center right outside Red Square?
Robert Courtney: I don’t remember. Henrik would know because they put a Planet Sushi there. I don’t remember… But this, I mean, if you’ve not been in—it’s just a classic suburban shopping mall format. It was different from the Manezh.
Daniel Satinsky: Okay, the Manezh was meant to be a high end retail, or close to it, I think.
Robert Courtney: And, you know, Mega Mall was set up as a family place. There’s an Ikea, there’s a playground, there’s a movie theater, Paul’s theater. And there was an Auchan hyper market.
Daniel Satinsky: Yeah, I remember that.
Robert Courtney: And there was a big parking lot, so everybody came in their cars. They set up buses to run from the Metro. They did all kinds of innovative things. And that was one of our first clients. We used to run all the Mega Mall’s ancillary retail is what we call it.
Daniel Satinsky: When did that relationship start with Khimki?
Robert Courtney: 2008.
Daniel Satinsky: 2008, yeah.
Robert Courtney: And that ran for five years. And then it just restarted last week.
Daniel Satinsky: [Laughs.]
Robert Courtney: In the last month we just signed a new agreement with them. Different ownership.
Daniel Satinsky: Okay, interesting. Interesting. And it’s still a modern, contemporary kind of mall, and upscale, or what is it, family oriented?
Robert Courtney: Mega Malls kind of stood still for a while, rested on their laurels, where other, more modern, bigger, more expensive malls got built. A prime example would be AviaPark. It’s near where the Aerostar Hotel is. Remember the Aerostar Hotel?
Daniel Satinsky: Yeah.
Robert Courtney: It’s the biggest mall in Europe. It’s huge. That’s one of our centers as well. Four floors, sprawling, just a huge, hyper markets, hyper sports, hyper size DIY, movie theaters, all four of kid stuff. Unbelievably big food court, ice skating rink.
Daniel Satinsky: Is a lot of the...is the merchandise in these malls now more sourced from Chinese, Turkish sources, or Russian brands that have replaced European and American brands?
Robert Courtney: More the second than the Chinese. There’s definitely some Chinese. Chinese brands aren’t really a great fit if we’re talking about fashion. Some Turkish brands. But there’s been a lot of rebranded. Like all the Inditex, for example, has simply rebranded. Hasn’t done so well compared to Russian competitors which swooped in. And then there’s a lot of, on the non-clothing, if you’re talking about cosmetics and perfumes and things like that, and some of the fashion fashion clothing, it’s all still there, it just has to come in through a gray import scheme.
Daniel Satinsky: Okay, right. Right. Your old friend the Kazakhs and others, yeah. So, listen, are there things that you wanted to talk about—because I’ve sort of veered off into the present here without kind of wrapping up the ‘90s, early 2000s—are there things that you wanted to talk about or say that I didn’t ask you about or that you think are important that you would like included in this?
Robert Courtney: You know, we could probably talk for another couple of hours. I think we’ve done a decent job of covering the main points. You’ve mentioned a couple of topic areas that I made some notes on. I’m just having a quick look here.
Daniel Satinsky: Sure.
Robert Courtney: Oh, here’s one. You asked about failures.
The one I regret the most is, if we go back to the U.S. Dental Care in 1998, we had this plan to scale up what we called our World Class division, and it went on the shelf for six months, and we never pulled it off. We did not anticipate two things: one, how quickly Russia would pull out of this slump, but two, how nimble were Russian entrepreneurial dentists. And they so quickly filled this space that we were about to enter it made us late to the party, and that’s the real reason it had to stay on the shelf.
Daniel Satinsky: Interesting, yeah.
Robert Courtney: And that almost same story repeated itself in 2022. So, all these big Western retailers left. There was a ton of vacant space. We conceived the idea of creating what we called a small department store for fashion retail. Russian designers would have about 30 corners in a large space, Russian designers, and we would own and manage and lease these little corners. The same model we had in the common areas with these kiosks, but it would be corners in one big department store area.
And we were very careful because everybody was in uncharted territory—how much is this going to kill consumer spending, how popular are the Russian fashion brands going to be. And we spent an awful lot of time studying it. Well, by the time we were ready to press go, other Russian brands had swooped in and taken over all these empty big boxes, and there wasn’t any place left for us to put our concept in the shopping malls that we would be successful in.
And it was the exact same process, this Western caution, and this lack of an instinct about how the Russians would move more quickly and smartly in filling a certain niche. That’s what I would put in the failure category.
Daniel Satinsky: Right. Very interesting. Anything else that pops to mind?
Robert Courtney: I’m sure five or ten will come to mind after we’ve hung up.
Daniel Satinsky: Right. And so did you ever think of going into dental education as a business?
Robert Courtney: Not as a business. There wasn’t much money in education. But we invested a ton of money into what I called a mini residency program, which we first did at the American Medical Center and then we did at U.S. Dental Care.
Daniel Satinsky: So, going back to my question about social life, by this time were you more, or were you still pretty much wrapped up in the expat community, or had your social connections diversified by this time into more…into Russians and Russian social life?
Robert Courtney: Definitely had diversified. I don’t think it was ever a majority Russian. I think it was always majority expat. But by this time everything was intermingled. I’ll just give an example. You’ve probably been to the Moscow Country Club golf club.
Daniel Satinsky: I actually was never there, but I know what it is, yeah.
Robert Courtney: Okay. So, I had never been a golfer, even though I’d lived in Florida, Arizona, California, and played wedding golf a few times, but because everybody was playing golf, and because it was a social outlet as well, I joined. And that was a really interesting multicultural group of expats from all over, Western expats, Koreans, some Japanese, and a quickly-growing cohort of Russians.
And a golf club is a very social place to be. Playing golf is a very social thing. You’re together for three and a half, four hours on the course, you come back to the clubhouse, you have a meal, and you have drinks, there are occasional parties also. Now, this was a monied class on the Russian side who were members there, but it was very much integrated, and very enjoyable because of that. Which doesn’t mean… So, this is interesting. There was a point at which—remember we talked about the arriving foreigners being kings and princes and all that sort of stuff.
But by this time Russians had, a lot of Russians had a lot of money. It was unbelievable money, as you can remember, and even below that oligarch tier there were plenty of minigarchs, and there was a lot of money out at the Moscow Country Club. Well, the tables were kind of turned. We were kind of…everybody liked to socialize together, but there was a social pecking order within that crowd.
And it got driven home one time. We had two tournaments every year. One tournament was the rest of the world against Russia. And this particular year it was the Russians’ job to organize the t-shirts for both teams and get them printed and that sort of stuff, so they pulled one over on us. We all get our t-shirts, we put them on, but before we put them on we turned them over and it says gastarbeiter. And that’s the old German prisoner of war workers.
Daniel Satinsky: Ooh. Oh, okay. [Laughs.]
Robert Courtney: That was World War II.
Daniel Satinsky: And how did you all react to that one?
Robert Courtney: Well, we laughed in the right way, but we wanted to flip a little middle finger toward them in the other. But…and that went right along with, you know, I remember a couple times a guy or two would say we’re not really happy that you’re stealing our women.
Daniel Satinsky: Uh-huh. [Laughs.] Yeah. Did you ever start encountering people who said…who were pushing back on America as the model for Russia by that time? Was that ever consciously expressed to you? Or that foreigners were arrogant?
Robert Courtney: For sure at a point there was this almost complete rejection of the idea that the American way was somehow better. Business, economics, ethics, golf. [Laughs.]
Daniel Satinsky: [Laughs.]
Robert Courtney: And I don’t…I can’t really put a finger on it right now of when that switch happened. Certainly the shock therapy stage had long passed, and that whole period had rejected what was trying to be forced upon them. I’m still waiting for Jeffrey Sachs to apologize for thinking that what worked in Poland would work in a country that had no history, pre-Soviet, of a democratic market system. If you hear about it, let me know.
Daniel Satinsky: Okay, will do. So, did…so your later business was in facilitating market entry and partnership development, this consulting business. And I’m assuming listening to you that your capabilities or your attitudes or whatever in that were shaped, on the one hand, by a much greater and deeper familiarity with Russia, its markets, having contacts through things like this golf club that allowed you to do that kind of business, along with facing maybe some beginning pushback from Russians. So, was that dynamic played out in your consulting business in terms of the receptivity to foreign partners or how you had to now structure foreign partnerships because the terms were changed, or the frames of reference were changed? I hope you know what I’m asking you.
Robert Courtney: I think so. There was a window, which we were in at this point, where Russians were extremely eager to partner with incoming foreign companies that represented something new for the market. And that could be hey, we want to be a franchisee—regional, national, multinational—we want to be a distributor. So, there was a keenness to be matched with these companies that they didn’t have the means to do on their own, and there was a new flood of interest on the Western side to come in, so we were absolutely in the right period to be the middle person for that.
And it wasn’t any sort of brokerage. It was a significant, more sophisticated marrying of compatibilities that also included investment, and also included legal structuring in a very careful way, and negotiations. Just as an example of this, you had KFC that wanted to come into Russia. And you may remember there was a chicken brand called Rostic’s.
Daniel Satinsky: Yes. I interviewed Henrik Winther, who was one of the founders of that, or implementers of it, so yeah.
Robert Courtney: Well, let me tell you a story that includes Henrik.
Daniel Satinsky: Oh, good.
Robert Courtney: All right. So, KFC had come to us, and they were our client, and their business plan was to take over the market, because they were KFC, and they still had this chest beating idea. And they wanted help with everything involved in market entry. And we said it’s a dumb idea because Rostik controls the market, you should buy Rostik. No, no, we’re KFC, we don’t need—we can do this ourselves, we’ll take over the market. Finally they said okay, we’ll talk to them if they’ll talk to us. So, I got in touch with Rostislav and with Henrik, was very good friends with him and them, and their reaction was why the hell do we need KFC? So, along comes the annual—Rosinter. That was the name of the company.
Daniel Satinsky: The parent company, correct, right.
Robert Courtney: They used to do a very extravagant international trip for a large group of people, like 80. And this year the trip was to Malaysia and then over to Malaysian Borneo. And they invited me to go along. There were maybe six guests. And Henrik and I had been friendly and friends—and developed into friends for long years. So, he and I decided to play golf, and we’re talking about this deal, and he’s saying, you know, we don’t need these guys, we control the market, and da-da-da-da-da. And I said but what about the recipes? The recipes are famous for—they’re really going to… He said we don’t need their recipes.
Long story short, we talked him and Rostislav into doing not a full acquisition, but a majority acquisition, in which they would set up a co-owned company that would be dual branded for a period of years, three or five, I don’t remember which, and that Henrik would run that company, and he became the president of Rostiks-KFC, and KFC would fund the expansion of X number of restaurants, and that at a point they had a buy option, which they exercised. And about two years into the process I was talking to Henrik one day. I said whatever happened with the KFC recipes? Did you incorporate those? And he said yeah. And I said any effect on sales? He said yeah. How much? They went up 20%.
Daniel Satinsky: Wow.
Robert Courtney: Do I have to say I told you so, Henrik?
Daniel Satinsky: [Laughs.] That’s pretty significant. Yeah. And what is the state of that relationship now? What happened? How did that work out? KFC and Rostic’s.
Robert Courtney: Oh, they exploded, both before and after they exercised the option, and then they solo branded it KFC and expanded all over the place.
Daniel Satinsky: So, the “they” is KFC took the option, took over Rostik, and then has expanded all over.
Robert Courtney: Right.
Daniel Satinsky: And is it still there, do you know?
Robert Courtney: Yes, it is. I can’t remember what they’re calling it now. But they didn’t…they paused for a while, but they didn’t stop. I don’t know what they’re doing about the recipe ingredients.
Daniel Satinsky: Uh-huh, okay.
Robert Courtney: But you know, Hen—I don’t know when you interviewed Henrik, but he’s no longer—
Daniel Satinsky: It was in 2021, I think.
Robert Courtney: Ah.
Daniel Satinsky: Most of my interviews were done before the Russian invasion of Ukraine, and so this was, you know, 20—it was during COVID, so…most of them, so I don’t know what’s happened since then.
So, look, I mean, the idiot question, and one that’s just to give you free rein, if you will, is what is a very significant period of time you spent there, what’s the impact on you personally and professionally? I mean, how do you think Russia changed you, and along with you changing Russia?
Robert Courtney: Well, I ultimately got married to my Russian girlfriend. And my first marriage. I started late. So, personally it’s been the most significant change in my lifetime.
I suppose you can say that was the culmination of a lot of other personal changes that have changed me as a person from the guy I was that went over in 1992 to Russia. But any of us, I can’t imagine anybody you’ve interviewed doesn’t say that they’ve been changed. The question is—
Daniel Satinsky: Oh, absolutely. Also.
Robert Courtney: —to put your finger on exactly what that means. You said professionally as well. So, professionally I’m a different type of business person than I was when I went over there. If somebody said so what’s one example of something, I said well, I see around corners in ways I couldn’t see before I went to Russia.
Daniel Satinsky: Explain that a little more.
Robert Courtney: There’s always something around the corner in Russia that is unexpected. I remember back when—things would be going great at the American Medical Center, and there would be no crises that had happened that week, or for two weeks, and the staff would start getting nervous. And I said everything’s going great, what do you worry about? Something’s about to happen, something’s about to happen, something always happens. Not even just in August, but something’s going to happen. [Laughs.]
And so many things did happen in simple, but even in very exaggerated ways, that almost nothing surprises me now. And very little happens that I haven’t laid out as on the list of possibilities or probabilities. So, I guess you could call that, in fancy terms, superior risk analysis, and suspicion, and prevention. And I think another—to veer into the personal—and this comes into greater focus every time I’m together with a group like… Like you weren’t at Mike Calvey’s book reading, were you?
Daniel Satinsky: No, I was not, no.
Robert Courtney: So, I mentioned this get-together that we all have every December, and there are smaller versions of that where everybody’s sort of talking nostalgically, etc., but almost to a person they’re not as fully fulfilled by what they’re doing outside of Russia than when they were doing it in Russia because the experience of life and business just challenges you multidimensionally. And it’s simpler outside of Russia than it was there. It’s not quite checkers and chess because it’s not that dramatically different. But for people like me that lived in that environment for so long, it’s less interesting to do business here than it was there. Now, I don’t know if I’ve told you I still have a business in Russia.
Daniel Satinsky: You mentioned it, and I didn’t know whether to ask you about that or not.
Robert Courtney: No, it…this will be published long after whatever anybody might want to say badly about somebody who hasn’t self-sanctioned. But I spend the first several hours of each morning in management meetings with my team in Moscow, so I’m not completely divorced from Russia, and I’m not completely divorced from the challenges of daily business.
Daniel Satinsky: Right, right. And so it was difficult to move away from that environment then.
Robert Courtney: I don’t think difficult is the right word because we made the decision to do that for two reasons. This was…so in 2014, after Crimea and the sanctions onslaught and all that, the business environment changed greatly. The attitude toward American or European business deteriorated significantly. And even though I’ve been a board member of the American Chamber Of Commerce to this day, I felt it keenly through the beginning of the departure. Of course that accelerated dramatically after February, 2022.
But we had no plans to leave Russia. In fact we had a plan—we had a house in France to straddle Europe and Moscow for the foreseeable future. But then our youngest daughter was born, and all of a sudden we just had this idea that we would rather bring her up in the American education system than there, and how do we do it if we lived in both Russia and France and it became complicated. And then on the business side we had gotten the business to the point where my Swedish partner and I both thought that we could live in our respective countries, share the management of the business. We had a really outstanding team, and still do, with almost no risk of them stealing out from under us.
Daniel Satinsky: Okay, good, yeah.
Robert Courtney: That’s happened far too many times, and you probably have heard about it. So, we just made the decision to move the family to the States, and that was in the middle of 2019. The planning for that started in probably mid 2016.
Daniel Satinsky: Okay. Do you care to say what your business is, your current business, or is that something that’s not—
Robert Courtney: Oh, no, it’s not a secret. Completely different sector. It’s the first non-healthcare thing I did in Russia. It is a…it’s in the retail real estate sphere. It’s called Retail Profile. And we rent from large shopping centers their entire common areas on a master lease basis, sublease places to kiosks and promotional stands, and manage that program in about 13 cities in Russia and several in Sweden.
Daniel Satinsky: Huh. That’s interesting. I never thought of that as a separate sort of business, actually. I mean, you know—
Daniel Satinsky: It’s not a model that exists here because 90% of the Class A shopping centers are owned by about five companies, huge companies. There’s no reason for them to outsource this business. The market’s much more fragmented in Russia. There are about 600 or so shopping malls of reasonable size, and at any given time we’ll have this model going in about 30 of them.
Daniel Satinsky: That’s interesting. So, you know, shopping malls is another one of those areas in which the Russian life was transformed in the experience of shopping in ways that, despite sanctions and everything else, still remain. I mean, there’s so much, it seems to me, from that period that’s structural and institutional that remains. It’s not very well acknowledged or recognized, I think. I don’t know if you agree, but—
Robert Courtney: Oh, I’ve seen it happen daily since February of 2022. And bear in mind that this, until autumn of 2023 I was traveling back there every quarter for two weeks. So, I watched this. I watched this exodus happen and watched, once again I watched the Russians pivot to fill the gaps that foreigners had left.
Daniel Satinsky: Yeah.
Robert Courtney: And maybe surprisingly to many—I don’t know about you—but the consumer spending power has been remarkably stable, so the shopping center business and ours as well, which depends on the traffic in the shopping centers, is just fine.
Daniel Satinsky: Interesting. Interesting. Yeah, and I’m not sure whether we should…how much of this particular discussion to include in the archive. But I think the growth of the shopping centers is so significant in how people live, and the change in the retail sector is so dramatic from when I first started going there, and when you first started there that it’s astounding. Anyway.
Robert Courtney: Well, remember, the first truly modern shopping center was the Mega Mall in Khimki. That was the Ikea shopping center division.
Daniel Satinsky: Right. So, was that—that was before the remodeling of Manezh and that underground shopping center right outside Red Square?
Robert Courtney: I don’t remember. Henrik would know because they put a Planet Sushi there. I don’t remember… But this, I mean, if you’ve not been in—it’s just a classic suburban shopping mall format. It was different from the Manezh.
Daniel Satinsky: Okay, the Manezh was meant to be a high end retail, or close to it, I think.
Robert Courtney: And, you know, Mega Mall was set up as a family place. There’s an Ikea, there’s a playground, there’s a movie theater, Paul’s theater. And there was an Auchan hyper market.
Daniel Satinsky: Yeah, I remember that.
Robert Courtney: And there was a big parking lot, so everybody came in their cars. They set up buses to run from the Metro. They did all kinds of innovative things. And that was one of our first clients. We used to run all the Mega Mall’s ancillary retail is what we call it.
Daniel Satinsky: When did that relationship start with Khimki?
Robert Courtney: 2008.
Daniel Satinsky: 2008, yeah.
Robert Courtney: And that ran for five years. And then it just restarted last week.
Daniel Satinsky: [Laughs.]
Robert Courtney: In the last month we just signed a new agreement with them. Different ownership.
Daniel Satinsky: Okay, interesting. Interesting. And it’s still a modern, contemporary kind of mall, and upscale, or what is it, family oriented?
Robert Courtney: Mega Malls kind of stood still for a while, rested on their laurels, where other, more modern, bigger, more expensive malls got built. A prime example would be AviaPark. It’s near where the Aerostar Hotel is. Remember the Aerostar Hotel?
Daniel Satinsky: Yeah.
Robert Courtney: It’s the biggest mall in Europe. It’s huge. That’s one of our centers as well. Four floors, sprawling, just a huge, hyper markets, hyper sports, hyper size DIY, movie theaters, all four of kid stuff. Unbelievably big food court, ice skating rink.
Daniel Satinsky: Is a lot of the...is the merchandise in these malls now more sourced from Chinese, Turkish sources, or Russian brands that have replaced European and American brands?
Robert Courtney: More the second than the Chinese. There’s definitely some Chinese. Chinese brands aren’t really a great fit if we’re talking about fashion. Some Turkish brands. But there’s been a lot of rebranded. Like all the Inditex, for example, has simply rebranded. Hasn’t done so well compared to Russian competitors which swooped in. And then there’s a lot of, on the non-clothing, if you’re talking about cosmetics and perfumes and things like that, and some of the fashion fashion clothing, it’s all still there, it just has to come in through a gray import scheme.
Daniel Satinsky: Okay, right. Right. Your old friend the Kazakhs and others, yeah. So, listen, are there things that you wanted to talk about—because I’ve sort of veered off into the present here without kind of wrapping up the ‘90s, early 2000s—are there things that you wanted to talk about or say that I didn’t ask you about or that you think are important that you would like included in this?
Robert Courtney: You know, we could probably talk for another couple of hours. I think we’ve done a decent job of covering the main points. You’ve mentioned a couple of topic areas that I made some notes on. I’m just having a quick look here.
Daniel Satinsky: Sure.
Robert Courtney: Oh, here’s one. You asked about failures.
The one I regret the most is, if we go back to the U.S. Dental Care in 1998, we had this plan to scale up what we called our World Class division, and it went on the shelf for six months, and we never pulled it off. We did not anticipate two things: one, how quickly Russia would pull out of this slump, but two, how nimble were Russian entrepreneurial dentists. And they so quickly filled this space that we were about to enter it made us late to the party, and that’s the real reason it had to stay on the shelf.
Daniel Satinsky: Interesting, yeah.
Robert Courtney: And that almost same story repeated itself in 2022. So, all these big Western retailers left. There was a ton of vacant space. We conceived the idea of creating what we called a small department store for fashion retail. Russian designers would have about 30 corners in a large space, Russian designers, and we would own and manage and lease these little corners. The same model we had in the common areas with these kiosks, but it would be corners in one big department store area.
And we were very careful because everybody was in uncharted territory—how much is this going to kill consumer spending, how popular are the Russian fashion brands going to be. And we spent an awful lot of time studying it. Well, by the time we were ready to press go, other Russian brands had swooped in and taken over all these empty big boxes, and there wasn’t any place left for us to put our concept in the shopping malls that we would be successful in.
And it was the exact same process, this Western caution, and this lack of an instinct about how the Russians would move more quickly and smartly in filling a certain niche. That’s what I would put in the failure category.
Daniel Satinsky: Right. Very interesting. Anything else that pops to mind?
Robert Courtney: I’m sure five or ten will come to mind after we’ve hung up.
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