GLOBAL BREAKTHROUGH: interview with Sergey Samokhvalov — one of the founders of SHERP (Part II)
«A car for survival in the apocalypse», «The best all-terrain vehicle in the world» — this is what the foreign press writes about SHERP. 134 million. One hundred. Thirty. Four. Million. This is how many people around the world have watched the video of the automobile blogger Supercar Blondie since July 2020, demonstrating the capabilities of the SHERP all-terrain vehicle, which is manufactured in Kyiv.
At that, the company does not pay for advertising in principle, preferring to focus on the product. It was a real explosion. For SHERP that was already the second one in a row. Prior to that, the vehicle appeared in a publication on the Top Gear website in 2016, as well as in other international media outlets
Sergey Samokhvalov is a pioneer of new markets on the world map and the main integrator within the company. A mechanical engineer by education, he believes that one of the most valuable assets of a firm is trust-based relations between partners and alignment at the value level. «We are out of the way with those whom we are out of the way with», — this is what Sergey succinctly says about the life philosophy of partners.
BUSINESS IS A CREATIVE PROCESS
We did not buy a ready-made business, but created ours from scratch. It is a creative process: from the idea of a product to opening a niche on a global scale and entering international markets. There is a difference between a business that you create yourself and a franchise where you get ready-made processes and KPIs for employees. There is less creativity in franchising. Our business is made up of a billion small tasks. And each of them is creativity.
BUSINESS AND SCIENCE: ENGINEERING STAFF
I am a mechanical engineer by profession. Nowadays, natural talent, persistence, and Google will make anyone a true engineer. Technology has escaped into space, and there is no teaching in the current education system. So we are losing the most talented, dynamic, and nice people.
On the other hand, there are all primary sources on the Internet. Western suppliers of technology, equipment, and materials regularly publish high-quality texts on their latest developments, including in Russian, because it is an international language spoken by 300 million people.
When access to scientific sites in Russian is blocked, an imbalance arises that changes the vector of development. Because of this, progress slows down, and the country loses its competitiveness.
We had an attempt to cooperate with the departments of Ukrainian universities: we tried to order the practical development of the units that were of interest to us. The idea was to make a commercial project with an educational institution, as it happens in civilized countries.
I’ve been to universities in the West. An elderly professor in France, England, or the USA is on fire, despite his age, and life is in full swing around him, and students eat out of his hands. In our case, it didn’t work. As they say, «there is no life» in many of our universities.
We still want to believe that there are good engineering staff and skills in Ukraine, and our basic engineering education is at its best. But this is not the case. A huge gap has appeared over the last 30 years, because the money was earned not there, but in the government, in law enforcement agencies, and so on. And the academic staff is more lively there; there are people from active and effective structures, and their graduates succeed. There are power, money, and motivation there.
Those who stayed to teach at a conditional road institute are people with low motivation who agreed to get two hundred dollars a month over thirty years. They are forced to live with this money and support their family. All the more active ones have already left.
The government did not support them with either decent salaries or grants, so the desire to live normally pushed them out of the education system or the country. Education is always an investment: either from the state or from large businesses. There is no other way.
MY STANDING POINT IS A RELIABLE PARTNER
I grew up in the North and it shaped my character. There are certain immutable things for me. A partner is someone you can rely on in any critical situation. In an environment of high uncertainty, when business is storming, your partner is the main standing point. I am sure that Vlad (editor’s note: Vlad Shkolnik) would have answered the same way. We have been friends for twelve years, eight of which have gone in a joint business. I am very lucky to have such a partner and at the same time a teacher.
The distribution of roles within the company was determined by history, taking into account the strengths of each of us. We develop the strategy together. Vlad is also involved in R&D, strategic technology procurement, and production supervision.
He combines many qualities: he is a generator of ideas, energetic and intellectually inquisitive, and is always in search. And he also believes everyone, but will definitely double-check everything. I am the one responsible for opening new markets, negotiations at various levels, sales, and personnel.
To cope successfully with this, you need to have three characteristics: the first is to be brave — that is, to override any authority and not to be afraid of talking to someone regardless of his or her status; the second is to be an integrator; and the third is to be honest with others and yourself. I think I have these qualities.
NEW MARKETS: INVESTMENT AND RISKS
The mentality of customers in various markets is very different. And, accordingly, making forecasts is not easy. In the post-Soviet space, clients make decisions faster. When they are on fire, they pay immediately. And in the United States, even the fastest deal is a month and a half. In Latin America, it is generally unpredictable. In a word, «manyana».
Today SHERPs are scattered all over the world; they can often be found in difficult locations, and everywhere we provide service and create regional stocks of spare parts. Despite the fact that SHERP is easy to maintain, when we sell ATVs to conventional Namibia, the first thing we do is train local specialists.
We have a program for service engineers — at our plant and through distance learning. Yes, this is an investment, but we did it. I am sure that SHERP’s service is the best in the world in its segment.
I do not know of a single competitor that would enter the global market. When they think of it — it’s yes, but when they decide to go ahead with it — it’s no. Those who take the risk will have to make an incredible number of mistakes, for which they will inevitably have to pay, as we did in our time.
We got a strong distributor in the United States, and I have positive expectations. This contract became possible because we already had a successful history: over three years of active work, we managed to develop a dealer network in this country. Otherwise, we would be, in principle, not interesting to anyone: the reputation is gained over the years. The USA and Canada, but especially the USA, are a very conservative market: «John wants to buy from John».
We have an expensive product. They do not believe your words that «SHERP is very cool, and we will provide the service». By virtue of innate politeness, they smile sweetly at you, but they do not buy. Once we started out, being guided by inner feelings, and created a product «for own cheek», but later we reoriented ourselves and are constantly developing.
On the one hand, our competitors create inconveniences by copying us, but on the other hand, they help, as they expand the niche in which we sell, and also motivate. When they breathe down your neck, it truly invigorates.
PRODUCTION: AN EBRD PROGRAM
We have grown ourselves from a garage to a production facility. EBRD consultants helped us to fine-tune some of the manufacturing processes. On their advice, we have implemented the link management. The standards helped us a lot, although this is not a panacea either.
The main thing is that we looked at quality differently and completely changed our understanding of the Control Department. In our «Soviet» thinking, we have a binary system: to accept a product or not to accept it. However, the modern approach is to track the entire process until the source of the problem is found.
We have not yet achieved success with SHERP. We have a company and a global product that has received recognition — that is, undoubtedly, we have soothed our vanity. But the financial result is also important. All the time I feel that ambition and desire to develop exceed our capabilities. I always want something more. I am a maximalist and optimist — and I have not lost these qualities yet.
CORPORATE CULTURE: ENTREPRENEURSHIP
We do not deal with corporate culture, and we do not have HR. But there are values that are congenial to the founders, and company leaders share them. From the very beginning, we strived to create an environment in which free people will have the opportunity to create.
Our brightest dream is that every worker at the bottom of the process chain is an entrepreneur, interested in making an element with high quality and on time, and then selling it to us. This is how we see the ideal organization of the company.
But this does not work: at the level of production managers, people have a greater or lesser degree of entrepreneurial thinking, but people underneath, unfortunately, work «according to the schedule». In fact, our corporate culture is a symbiosis of jazz and the army. But we continue to work on it.
There are three basic things:
- We keep promises to our partners.
- We pay the bills.
- We do not tolerate any humiliating attitude towards working personnel.
Any employee has the right to contact the founders, and no manager is interested in the workers complaining over their heads. When someone violates one of the rules, we break up immediately, because it is important for us to be honest with ourselves and others.
«We are out of the way with those whom we are out of the way with», — this is what we say at the company. This phrase is about us. Right on the mark.
«Winnie the Pooh».
«Where Piglet and I are going is a big, big secret! And we will not tell about it, oh no, and no…» (laughs). This cartoon can be quoted endlessly.
Interviewed by Zhanna Kryuchkova