A Little Story About Failure (Part 1)
My first lesson in what not to do in business came from my uncle... (*Disclaimer: These Views Are My Own and Do Not Represent Any Organization I Am Affiliated With*)
Throughout college I was involved with a plethora of entrepreneurial/tech-focused organizations, either through internships (iAngels, Anthemis Group) or extra-curriculars (TAMID Group). Having graduated NYU back in 2018 and spending only a year at Credit Suisse in equity research, I now find myself back in the tech/venture capital ecosystem, wondering what drew me to this scene in the first place. The answer, I found, had a lot to do with correcting my family’s - and more specifically, my uncle’s - business and investment mistakes.
I spoke about my uncle in the context of failure in a medium post previously, but I figured I would elaborate on his story a bit more. The story I’m about to tell you may seem a bit unbelievable, but it’s all true (though some details might have been lost, miscommunicated, or embellished). It’s a tale I find terribly funny in retrospect, but was incredibly disturbing at the time.
The Early Days of Uncle Sasha
My uncle Sasha was born in Lviv, Ukraine in the 1940’s, the golden age of the Soviet Union - when wars were won and dictators reigned.
Growing up, my uncle was the neighborhood bully; not only would he fight on a whim, he would threaten anyone who dared mess with my father. In addition to his aggression, he also had a penchant for mischief and shady activity - skipping school, smoking cigarettes, and drinking were all important pastimes. Forced to go to engineering school by my grandfather, he believed working for a paycheck was for suckers and wanted to be a businessman, because the only millionaires in the Soviet Union were businessmen. However, the Soviet Union’s economic system didn’t allow for law-abiding millionaires; if you wanted to make real money you’d have to sell on the black market. Sasha dabbled here and there as a side hustle from his engineering job, though never broke through as a major salesman, which is lucky because the primary destination for those who broke through was Soviet prison.
*Soviet black market*
Coming to America
Fast forward to 1977, my uncle packed his things and brought his wife and kid to the United States. The Soviet Union didn’t want subversive men like him around, especially not Jews (given the raging anti-semitism in the Soviet bloc). Many Russian-speaking Jews came to the US during this time and started businesses (travel agencies, supermarkets, and many years later, phone stores).
*Netcost Market, Brighton Beach, Brooklyn, NY*
My uncle initially worked as an engineer in a nuclear facility, though always continued dreaming of big money. However, when the Chernobyl accident forced many nuclear plants across the globe to shutter under social pressure, my uncle finally had the opportunity to throw caution to the wind and do what he always wanted to do - start a business.
Forays into Emerging Markets
His M.O. was finding untapped opportunities in emerging markets. One such opportunity was working with an Israeli company to build oil refineries in Nigeria. Nigeria was still young in its development but ripe with opportunity (for cash grabs, and unfortunately, exploitation as well). Before he could really establish the business, however, his Israel-based partner passed away from a heart attack and the deal fell through.
His next business venture involved a gig as General Manager of a hotel in Bahrain, one of the only nations in the middle east at the time where alcohol and gambling were allowed. The crown jewel of my uncle’s hotel were the belly dancers; wealthy business travelers would come and gift flowers to the dancers every night. My uncle would collect the flowers and sell them at the market the next day, giving each dancer a cut of the revenue. He always had a backwards door to cash. Unfortunately, that backwards door hit him on the way in during his next trip. One fateful day his business partners showed up with their “associates” (i.e. friends with guns), and made him an offer he couldn’t refuse. They paid him $30k to leave the company and keep his life. At least he didn’t come home totally empty handed - he brought me back a camel plushie.
*Bahrain Camel plush, sitting in my parent house in NJ*
Troubles Back Home
His constant travel strained his marriage, in addition to his wife pressuring him to return to the safety of IT and engineering. As a result, they began divorce proceedings, and my uncle became more emboldened to make back the money he had lost on legal fees. One of his business partners from a previous venture had owed him some cash; in lieu of payment, he offered him shares and a management position at his alternative energy company, Altek *(I know, I’ve also never heard of someone acquiring a company this way…huge red flag)*. Altek’s proprietary technology was a fuel cell that ran off of aluminum and was developed by a Russian scientist based in Canada - this was the cash cow my uncle had been waiting for. His job now was to commercialize the product and raise funds for the business, a job he felt totally equipped to handle.
However, besides moving to the US, Altek would become the biggest turning point for my uncle’s life, and not for the better.
I’ve glossed over so many details in this post for brevity’s sake. Read part II here.
*Uncle Sasha today*