The Relentless Marketer: Turnaround in Moscow

FORTUNE SMALL BUSINESS, August 2000

By Bill Robinson

It was the height of the political and economic crisis in Moscow, back in August 1998. With the ruble collapsing and the government unstable, Andrei Maximov, founder of Maximov Publications , had a tough decision to make.

Maximov Publications had made its name publishing the equivalent of the Michelin Guide for political and governmental contacts in Russia. Since Maximov had founded the company in 1994, it had become an essential reference book for any businessperson seeking to get something done in Russia. Even Mikhail Gorbachev had called it "an indispensable companion."

But because of all of the changes in the government that year, Maximov's major product was becoming almost impossible to produce. The information in the guide -- names, titles, telephone numbers, faxes, and e-mail addresses -- had become so transient and intangible that nobody, not even Maximov, could keep track of it. With three prime ministers taking office in 1998 and economic crisis erupting that summer, Maximov's Companion to Who Governs the Russian Federation became stale overnight, and the prospect for updating it was bleak. Although Maximov had generated some sales producing spin-offs to his main guide -- like Maximov's Companion to Who Governs Moscow and Maximov's Companion to Who Governs St. Petersburg -- even those were extremely difficult to update.

Which brings us to Maximov's dilemma. He knew that his brand would have been permanently tarnished if the information he'd published were anything other than completely accurate. Although he could try to stay with his business model, it would have been extremely difficult. The alternatives were changing to a completely different one, or creating a hybrid of both. "I was in real trouble and the business wasn't making any money," he recalls.

Not sure how he would brook the crisis, Maximov called together his staff. "We haven't produced any books, there is no money," he told them. "You can stay and work at one quarter salary, with no vacation or holiday pay -- or you are welcome to leave." Not a single member of his loyal crew walked out, to his surprise and relief.

After discussing his predicament with the group, he decided to continue to publish his main guide -- doing whatever it took to maintain his meticulous standards -- but to shore up the business by publishing new guides to other industries. So Maximov's Companion to Telecommunication in Russia, Maximov's Companion to Television and Radio in Russia, and Maximov's "Companion to Transport and Logistics in Russia were all born, saving the company and securing its future.

Since then, Maximov has attracted new talent to the company -- and has even managed to return to paying staffers at their former rate. Although the Russian economy is far from stable, the company's sales increased by 60 percent between 1998 and 1999. "I expect a 100 percent increase in 2000 revenues," Maximov says.

Despite his success in turning his publishing house around, Maximov isn't willing to leave his company's fate to the Russian economy. He's already working on his next venture: selling books through his company's Website, in association with Amazon.com . "We are aggressively distributing a Russian Internet portal for the distribution of key and timely information on the Russian economic policy and market," he says. Spoken like a true relentless marketer.