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.