Oleg Tumanov transformed an industry for a whole nation. He’s raised millions of dollars and hired hundreds of people in the process.
During our interview on the DealMakers podcast, Tumanov shared his insights from building a business from scratch to over $100M a year in revenues. He talked about the many challenges, which also led to breakthroughs, why you should keep pushing through, the one thing that is more important than strategy for a company, his approach to hiring, and what you didn’t know about the world of on-demand video.
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Creativity & Entrepreneurship
Oleg Tumanov was born in Moscow, Russia. It was before the Soviet Union changed and travel wasn’t a thing.
Oleg clearly has many talents, and one of those which Steve Jobs pointed to as being a talent of some of the best engineers. That is music.
Both of Oleg’s parents were musicians. They taught him to play the piano. He still composes today, and recently released a new project.
He also authored the book Choose Yourself: How to Free your Personality and Create your World. It’s available on Amazon.
These are all creative traits, and creativity is key for surviving in entrepreneurship. As he puts it, in order to keep up in our rapidly changing world, you have to be able to reinvent yourself at least every month, if not from one day to the next. To stay ahead, he says he takes time out to brainstorm and think about what the company can create next.
Oleg says his father advised him to not pursue music as a professional career. So, with good grades, he went to college at the prestigious Moscow Finance Institute.
This began a period in which he was blessed with many great roles. Though he now sees those as a distraction and drag that prevented him from pursuing entrepreneurship earlier. He was temporarily lost in building other people’s dreams and the ego of titles, and paychecks, instead of being true to himself.
Going into a banking career he had the chance to live in Geneva and New York, and hold one of the highest-ranking positions at a big Russian bank.
Going Solo & The Pirate Approach To Startup Businesses
Tumanov ended up as a chief executive officer with Access Industries. Access Industries is a global conglomerate with investments in telecom, real estate, and venture capital. They also own more than 86% of Warner Music Group.
Oleg suggested Warner create a company to distribute digital music in Russia. They agreed on the condition he brought in another major player. That ended up being Sony. Unfortunately, as soon as they started it was clear that Sony Music and Warner weren’t going to be able to get along. They couldn’t agree on pricing and distribution.
So, with a partner, Oleg decided to buy the company out and run it. In 2010 they pivoted to online TV. Today, Ivi is the top online video company in Russia.
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When they launched there was no legal company in this sector. Much like Airbnb and Uber they had to start out as a pirate video streaming service. One that would deliver better quality and better customer experiences directly to consumers.
They began as an ad-supported business model. They quickly found out that Big Hollywood Studios absolutely would not provide them content unless the end customer paid, regardless of the amount of money Ivi offered them.
Tiger Global provided them with a big funding round contingent on them getting the content. At the beginning, no one was willing to pay per view. It looked like the business would die. Then the smart TV came along. That changed the dynamics, and now around 80% of their revenues are from customer payments, no ads.
As of 2020, Ivi had raised at least $200M in funding. Yet, there were other challenges. Just back in 2017, the Russian government drafted a law to prevent the foreign investment of more than 20% in any Russian companies.
Storytelling is everything which is something that Oleg was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Since most funding sources in Russia were only focused on the short term, instead of being able to wait and lose money for seven or ten years like US-based VCs, that would have crushed the company and market from a whole different angle.
Oleg made a dash for it and met with lots of government officials to demonstrate the terrible impact this ruling would have. He pulled it off.
In spite of all of their success and traction, he says that every round of fundraising was challenging. Every time he got down to preparing himself to downsize and try to survive on his own money. Yet, he believed there was so much more growth available.
Today, Ivi has annual revenues of around $135M. They’ve been growing close to 60% every year. They have 50M unique visitors every month, and 3.2M paying customers.
“Culture Eats Strategy For Breakfast” – Peter Drucker
Oleg Tumanov is a big believer in this quote by Peter Drucker in the Harvard Business Review.
Ivi has already recruited 670 employees and is hiring even more. He has learned that culture and personality and personal traits are more important than the resume or degrees.
When he interviews someone he says he is looking at:
- Leadership skills
- Big picture thinking
- Systematic approaches
He also looks at what they’ve been able to achieve within the conditions of their environment.
Listen in to the full podcast episode to find out more, including:
- Oleg’s top advice for aspiring entrepreneurs
- How creativity and arts fuel innovation
- What he would tell his younger self early in his career
- How to get in touch with us