Try to find the best balance between analytics and using your own intuition when you make key business decisions.
Alexander Udodov has achieved great commercial success as a developer with luxury shopping galleries in Moscow and malls throughout Russia. Udodov’s Aforra Group provides a full range of architectural services for both residential and public buildings as well as for building managers and superintendents. In 2016, he initiated the construction of a modern balneological center at the Solnechny resort in Krasnodar Krai. Udodov is the main shareholder of VG Cargo, a large logistics corporation based in Germany.
Since 2017, Udodov has been working on Mushroom Rainbow, a large mushroom cultivation plant in Kursk Oblast. In mid-May 2018, the company launched its second phase, which brought its production capacity to 8000 tons of portobello mushrooms per year and made Mushroom Rainbow the largest complex of its kind in Russia. The company plans to increase production to 17,000 tons per year, which will make Mushroom Rainbow the country’s leader in the production of fresh portobellos, with a forecasted Russian market share of 20%.
Udodov lives in Moscow.
Where did the idea for Mushroom Rainbow come from?
I have always been interested in development. In 2014, after the real estate market sank and the payback period for projects significantly increased, it became clear that investments had to be diversified. The government’s policy on food import substitution indicated where to look. In 2015, I met my future partner in the mushroom business. He is someone who knew the market well, had a well-developed business plan, and most importantly, had a team of specialists experienced in implementing mushroom-cultivation projects.
What does your typical day look like and how do you make it productive?
I manage a lot of business processes on a daily basis—planning, negotiations, working meetings—in general, anything I need to do to be successful in business. Business requires one’s full commitment and serious mental and physical strength. I am interested in architecture, painting, and high-quality literature, which develop mental productivity. I work out by playing sports and I am on an amateur hockey team.
How do you bring ideas to life?
In my experience, the successful implementation of a business idea is based on “three pillars:” a thoroughly calculated algorithm for implementing an idea, sufficient funding, and a professional team. It is also very important to be persuasive because if I can’t communicate with other people, I won’t be able to implement the idea.
What’s one trend that excites you?
I am interested in the rapid growth of Russian portobello-mushroom production. In 2013, the Russian market volume of fresh portobello mushrooms was about 70,000 tons/year, 11% (8,000 tons) of which was from domestic production and 89% (62,000 tons) of which was from imports. In 2016, the market capacity in Russia decreased to 44,000 tons/year due to restrictive measures introduced by the state, of which 30% (14,500 tons) was domestic and 70% (29,500 tons) was from imports. In 2017, the Russian market for these mushrooms increased for the first time since 2013, amounting to 46,200 tons, with domestic production at 52% (24,000 tons) and imports at 48% (22,200 tons).
Given the current state of the market and the growth of Russian production as well as the increasing state support for the mushroom industry, we will be able to rely exclusively on domestic portobello mushroom production within the next few years. Prices will drop significantly and the industry will even be ready to export products.
What is one habit of yours that makes you more productive as an entrepreneur?
What advice would you give your younger self?
Have a more critical view of people.
Tell us something that’s true that almost nobody agrees with you on.
I believe that Russian hockey players are now the best in the NHL. Many of my friends are rooting for Russians playing in the NHL, but hardly anyone agrees that they are the main stars of the show.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Try to find the best balance between analytics and using your own intuition when you make key business decisions. Numbers and trends cannot guarantee 100% success in a project; analysts get it wrong. There is a sort of compass inside every successful businessman that tells them which path to take. It is what we call intuition, acumen, or instinct.
What is one strategy that has helped you grow your business?
You always have to get ahead of the market. You have to focus on the most advanced technologies. To make a project successful, don’t be afraid to invest. Future profits are worth financial sacrifices; the project should be ambitious from the get-go. If you feel you do not have enough money to make everything ideal, either try to attract additional investments or abandon the project altogether. When my partner and I planned to launch Mushroom Rainbow, we realized that our own funds would be enough for a fairly modest start, but we abandoned this option in favor of external financing. In the end, we spent a lot of effort, but we attracted investments that far exceeded our own budget. As a result, Mushroom Rainbow became the leading producer of fresh portobello mushrooms on the Russian market within a year.
What is one failure you had as an entrepreneur, and how did you overcome it?
I call them “challenges” and “opportunities” to find a way to move forward.
What is one business idea that you’re willing to give away to our readers?
The Russian market is now very favorable to produce-related projects. Imports of these and really of all types of agricultural products have significantly decreased and become more expensive. Mushroom production in particular, due to its rapid growth, requires more and more compost and demand for it on the Russian market is now rapidly growing. You will make a good profit from this niche.
What is the best $100 you recently spent? What and why?
That is about the amount I spend on our traditional Sunday dinners with the family.
What is one piece of software or a web service that helps you be productive?
I use Google Calendar most of the time. It makes planning and checking work schedules easier.
What is the one book that you recommend our community should read and why?
The latest book that has interested me is The Lean Startup by Eric Ries. It was published in Russian this year. The author examines the reasons startups fail in detail with many real-life examples and he suggests the right strategy for how to work with them.
What is your favorite quote?
“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” Lewis Carroll, Alice Through the Looking Glass
- Business requires one’s full commitment and a serious combination of mental and physical forces.
- A successful business idea is based on the “three pillars:” a detailed calculation of how to implement it, sufficient funding, and a professional team.
- Try to find the best balance between analytics and your own intuition when you make key business decisions.
- To make a project successful, don’t be afraid to spend money on it. Future profits are worth financial sacrifices, and the project should be ambitious from the get-go.
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