Boris Yeltsin – 1931-2007

boris_yeltsin_1993.jpgThanks to Scott for allowing me to “guest blog”.

I’d like to note and comment on the passing of Boris Nikolayevich Yeltsin, the first President of the Russian Federation, and a key architect in the destruction of Communism and the ending of the Cold War.

Mr. Yeltsin was as responsible or more than Mikhail Gorbachev for the dismantling of the Soviet Union. In 1991, it was Yeltsin who, as the President of the Russian Soviet Federated Socialist Republic, gathered the leadership of the Ukrainian S.S.R. and the Byelorussian S.S.R. and formally dissolved the Soviet Union from within. Gorbachev only resigned about three weeks later when he no longer had a country to preside over.

Why is this relevant to an entrepreneurship blog? On a personal note, the social and political change that Yeltsin initiated enabled me to get my start in entrepreneurship, providing technical assistance and capital to entrepreneurs in Russia, Belarus, Ukraine and Kazakhstan. Those are memories I will carry forever. If I happen to know anything about entrepreneurship, if I got any inspiration, it was my spending 6 years in that region, trying to help rebuild the economy one business at a time. Any advice I provide to help a client or just an entrepreneur in need today stems from my experiences there.

If you think it’s hard to raise seed capital in Atlanta, try it in Minsk.

On a broader note, the social change that Boris Yeltsin ushered in has enabled the following:

500 million people in Central Europe, Eastern Europe and Central Asia can now start and own their own businesses. Entrepreneurship was a crime only 20 years ago under anti-“speculation” laws. The entire economy was run centrally. (Imagine the production of your favorite consumer product being managed by an unfirable government functionary).

Millions of people from the region have emmigrated to the Western countries and Israel where they have established businesses of their own – often in fields completely unrelated to their original fields of expertise. Plug: If you’re interested in Russian food, I love the New Odessa on Clairmont Road.

Russia, Ukraine and Belarus are all prime technology outsourcing destinations, providing some of the best programming and scientific talent on the planet.

Local and foreign-backed venture firms continue to expand operations in the region.

Russia is actually an attractive tourist destination.

Even the Russian “oligarchs” are entrepreneurs. They played by rules that were different from ours and even their fellow countrymen, but they invested capital and acquired assets (often at great physical risk) and have demonstrated the powerful potential of the Russian economy (much of it lost to diffusion by the chaotic environment.)

Finally, the end of the Cold War that Yeltsin enabled by first destroying the Soviet Union and then embracing friendly relations with the West, enabled us to move money away from defense spending and into the private sector. That extra cash was a big factor in enabling the dot-com revolution (and bubble, but Boris Yeltsin didn’t tell us to invest billions in vaporware companies using eyeballs as a valuation metric).

Boris Yeltsin was a very flawed leader in many ways. The movement to democracy and rule of law in Russia is a work that has been suspended, partially because he didn’t fully understand the very institutions he was championing. The corruption Yeltsin vowed to defeat was simply shifted from Communist bureaucrats to other Communist bureaucrats. His economic policies were much less ineffective than they might have been because he didn’t stick with any one policy long enough. He drank too much and didn’t eat enough cabbage and cucumbers.

But he stood on a tank and waved a flag that he could have been shot for waving in August of 1991. He helped make the world a much safer place, and Russia is now better off economically for the reforms he launched, and the impact of those reforms are felt here in ways subtle and obvious. And they fundamentally changed my life and made me a better person, entrepreneur, and friend.

Spasibo Boris Nikolaevich i vsevo nailuchsevo.

— mike


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