No Russian

Many people in Silicon Valley inquired over the years why I was not coming back to Russia often (I visited once in two decades) or why I’m not spending much time helping Russian startups. I usually answered these questions in generalities while keeping my grim thoughts and predictions to myself. The events of the past few days, unfortunately, show that the worst predictions I feared all these years did come true. The nightmare scenario is now unfolding as we speak, and Russia position in the world is now altered forever.

The mass murder of passengers & crew of Malaysia Airlines Flight 17 using Russian’s weapons and (most likely) by hands of Russian military squad exposed to the world that Russia is now complicit in committing crimes against humanity. That was quite a journey for a country that just six months ago were considered a full member of the global community, even if notoriously ornery one. How was it possible for things to collapse so far and so fast?

The Empire of Lies

To understand Russia’s lighting fast descend into the abyss one has to understand a simple truth that many (myself included) suspect all along: Russia was and is a failed state. What is seen from the outside is just a facade imitating a functional country and government. High oil prices, residual infrastructure of USSR and internal mass propaganda machine maintained the illusion for more than a decade.

Silicon Valley is far removed from that part of the world (Russia is non-entity when it comes to startups and innovation, besides being inexhaustible source of great engineers, we will come back to that), so let’s review some basic facts about Russia.

In simple terms, Russia is a mafia state. All the way from Moscow to regions and to small towns, everything is controlled by various mafia gangs. Police and judiciary are parts of most powerful gangs. They usually assist in extortion or theft of property earned by local small and medium size businessmen. Big business is subject to federal mafia clan wars.

The mafia-state formation is logical consequence of Russian economy: it is totally dominated by oil and gas revenues. Oil, gas and derivatives provide meaningful employment to about 1M people. Russian population is about 150M. How do they survive? The majority depends on various forms of government handouts.

With russian-style oil production you don’t have to think, innovate or even hire smart people. All you have to do is to cash the check. Gazprom is ranked as one of the most grossly inefficient enterprises in the world. So what happens when a small, totally incompetent minority controls country-wide oil rent while the rest of 149 million people are a burden? The answer is obvious: that 1M would create a mafia state to keep the rest of 149M in check by means of police and judiciary abuse and mass propaganda.

Russian propaganda machine is vast, it now exceeds the one of Soviet Union. Official TV propaganda lies professionally and constantly. There are no independent TV channels; everything is controlled by government stooges. The “news” teams employ special teams that do video editing and fabrications to present absolutely falsified accounts for TV transmission. Then these fabrications are broadcast to brainwash captive population.

The population at large is, statistically speaking, not very bright. Many are deranged from overuse of alcohol or drugs. A big number are simply aging elderly rooted in USSR-centric mindset who never adjusted to the modern world. Most of them do not “work” in the sense we understand full-time employment here: they occupy placeholder positions sponsored by the government. Being dependent their whole life on government help, they are psychologically unable even to think government can do something wrong.

The families, wives, children of Russian elite (think top 1% of that 1M strong oil & gas service clan) doesn’t live in the country. They actually despise Russia and it’s people. All of the live in the west, many in London: Russian’s oligarch family spending is major contributing factor to London overall economy. They have absolutely no long term interest in Russian country or population survival.

Corruption and theft are endemic. Recent Olympic games ended up most expensive in history of the planet not because they were so well built: it was because it gave an excuse to a huge number of mafia clans to steal on a gigantic scale.

Modern Russia is not a weaker version of Soviet Union “empire of evil.” This capability is, thankfully, long gone. Russia is “cargo cult” of Soviet empire. It lacks competent professionals, leaders and minimal work ethics to accomplish anything on that scale. It just have enough capacity to cover everything in a blanket of lies, and as long as it works on captive domestic population that is all that it’s leaders need to keep channeling profits from Russia to London accounts.

The best way to understand modern Russia is to imagine a steep pyramid. At the very top there is a clique of KGB-affiliated oligarchs, who manage barely-competent class of middle-managers (which can and do steal a fraction of everything they touch) which in turn sit on top of largely brainwashed and deranged mass population living on life-long government welfare.

Needless to say this is most toxic environment imaginable to incubate a startup ecosystem.

Creative Class

Despite all that titanic effort, modern technology is far more powerful than any attempts by a backward medieval government to hold it back. Internet, web and mobile formed so called “creative class” in Russia. In general, these folk are young, smart, energetic, totally in tune how to leverage modern technology to find out the truth or to achieve their goals. They were the spearhead and main organizers of December 2011 protests against Putin’s mafia state. When you see smart young Russian engineer in Silicon Valley, most likely, you are talking with a member of this creative class.

Yet, Macbook Pro Retina is a poor weapon when fighting AK-wielding government thugs. Mass propaganda and intimidation do work at mass scale. It is much easier to be dumb and “patriotic” than smart and inquisitive ( even US population had to learn that lesson the hard way after Iraq invasion ).

Creative class was a minority in modern day Russia and there is a strong emergent behaviour that draining their numbers. That is a class of people with the skills most in demand in Europe and USA. During “peaceful” decade of Putin’s rule over two million people emigrated from Russia: this is a number higher then immigration after communist revolution and civil war.

By my estimate there is probably few hundreds of thousands of people in the creative class in Russia. This vocal, yet very small group so far never succeeded at thwarting russian mafia state at anything. Then, recently everything had changed.

Ukrainian Valor

The differences between “Ukrainian” and “Russian” people are cosmetic. The distance between Kiev and Moscow is about same as Sacramento to San Diego. Even today, after all that happened, the most likely language you will hear on the streets of Kiev is Russian. So why Kremlin was so enraged about recent Ukrainian revolution? After all Ukraine has no natural gas or oil, there were no riches to divide, what was the fuss all about?

What happened is that first time in history, large group of ethnic “Russians” had overthrown a mafia clan in a popular uprising. Until then, Ukraine was a satellite state, and exactly because it had no natural oil and gas, much larger portion of the population had to develop “creative class” skills rather than going to work for oil company or police enforcement. Then suddenly this social group had enough heft and popular power to overthrow local mafia don.

You can imagine the amount of terror it produced in the gang occupying Kremlin right now. If was and still is an extensional threat to them, hence they pulled out all the stops to overthrow or destabilize a new government in Kiev, and at the same time whip out xenophobic mass-hysteria in a local population.

At this moment, Kremlin can not really stop. If Kiev government survives, it will fairly quickly unlock economic benefits of non-mafia, free economy. The large parasitic class living by bribes and extortion will be displaced: it will have the same effect as if base tax rate would suddenly drop by a double digit percentage. Next door, progressive Russians would quickly notice and spread information about growing prosperity and opportunity in a city next door. What was half million Euro-leaning progressives, would become a million, then few million: before long you can picture a Gaddafi-style demise for the Kremlin gang.

Kremlin is fighting for its own survival: supplying weapon system and military crew to a roaming criminal gangs is nothing for them in big scheme of things.

Russia’s brand is over

This situation will get worse before it gets better. Kremlin will fight to the last: we will yet see the massive flood of lies and deceit they will unleash to mitigate the anger of their recent mass murder. Very unfortunately everything they do will be branded with the words Russia or Russian. Can’t say the rest of the country is blameless: Putin got a stratospheric 71% support level after annexation of Crimea. Many in creative class would do the logical thing: give up the hopeless fight and emigrate. We are probably going to see another, super-massive wave of immigration coming from Russia in next few years.

I think we came to the end of the line with regards to Russia as a name, culture, a global brand. For the time being the country future is destroyed, police state is well-entrenched and the narrative for the brainwashed locals would be xenophobic tale of struggle with the “West”.

Personally, I’m thinking to start calling myself Euro-Slavic instead of “Russian”. It’s a flimsy defense, yet Russian brand, after already being tainted with gulag and the rest of its toxic legacy, is now synonymous with mass murder of innocent civilians. There is nothing of value left to recover.

No Russian - 2

In less than three days “No Russian” received over 100,000 views. It was translated into Russian, Ukrainian, Estonian & Romanian, covered by Bloomberg and American Conservative.

The traffic was dominated by Facebook and Twitter. Early leads from usual suspects (Hacker News, Reddit) within hours became a rounding error. Social media was sending a torrent of traffic, reaching almost 50,000 a day in total. Mainstream press, while lending a lot of credibility to the material (thank you!), was relatively small source in comparison.

С большим удовольствием, ну и грустью конечно, прочитал вашу статью на AIN и просто не могу согласиться больше – под каждым словом подпишусь.
-Roman

Thank you for your honest article and clear vision. Even in the U.S., it takes the courage to express yourself so freely about the Russian mafia regime and ruthless KGB. -Oksana

To a professional expert in social apps that sent one clear signal: it was all happening thanks to people individual effort to share. It resonated in a profound way with a lot of people. It resonated personally; it resonated emotionally. They were reposting, reposting and reposting on any social channel they could reach. That was classic, cascade-growth viral distribution.

твоя статья! хотела просто сказать, что согласна с каждым твоим словом. Спасибо!!! Я чувствую ровно то же самое!
-Anya

Max, that was a powerful blog posting you wrote about Russia. Thank you.

It touched something that people felt they just had to share, they had to restate that message, they had to do something about it. They did. They shared. The result was explosive.

- Thank you for your post “no-russian” – it made my day!
- Все так. До запятой.”

I think better approach is to stop calling Putin and his cabal Russians – Lubyankans or Soviets or something similar would fit better….

Russia

Большое спасибо вам за эту попытку объяснить происходящее в России … Я вижу, что люди на Западе совсем не понимают российской ситуации и как она сформировалась. И очень много каких-то плоских стереотипов о русских, еще времен Холодной Войны. Тут, в Европе я постоянно слышу наивные вопросы как европейцев, так и американцев вроде “если вам так не нравится ваше правительство и президент, то почему вы их не переизберете?”, они не знают как ущемляются гражданские права людей и как ведется бизнес (“ой, какие ужасы! А почему вы в суд на них не подаете?”), или они совершенно не понимают размеры экономики РФ (“Как работать негде? Как так правительство уничтожает средний и мелкий бизнес? Это же основа экономики!”) итд.
-Anna

Умно, хорошо, понятно,правдиво..

Russians “thank you” notes were a flood. A pain long held and suppressed, finally finding an outlet, finally getting a release. At last they had an answer they did not know they were looking for. That was their stake in the ground, the demarcation line they can define, a clear definition of “us” versus “them”.

Хорошая статья !

Отличная статья. Неприятная для многих правда. Слава правде, позор лжи.

The decision to separate is never easy. By human nature we prefer to collaborate, to find common things, to emphasize what unites us. Going the opposite way is hard. Going against your own national identity is very hard. You prefer not to. You wait it out and hope it just you. Yet at some point pain becomes too great. You had waited too long. A simplest trigger can set off a chain reaction.

They found that trigger. The small blue “Share” button was all it took to start the catharsis. Given number of translations to different languages, number of mainstream sites running their own coverage I think there might have been up to a MILLION people by now who had seen the story in one way or the other. The original article just put few right words on the page. It’s the Russian people who spread that message around the planet.

“Я хоть и не программист и работаю в другой отрасли, но живу в Силиконовой Долине уже больше 20 лет. … тут же приезжают толпы новых из России. Вы не представляете, сколько здесь сейчас русских. 20 лет назад и даже 10 лет назад столько не было. И всё едут и едут. И я не преувеличиваю нисколько. … Сейчас у нас тут, куда ни пойди, везде слышится русская речь. И вот эти люди – тот самый креативный класс, о котором автор написал. И все они работают на Америку. И даже многие из тех, кто ещё в России и не уехал ещё, тоже на Америку работают в амер. … Я это не из злорадства пишу, а просто констатирую факт. Если кому-то не нравится и хочется думать, что это не так, то это ваше право, конечно. Всегда приятнее выдавать желаемое за действительное, правда ?”

Ukraine

“Great article! But I must say that difference between Russians and Ukrainians is not “cosmetic”. The main difference is Ukrainian individualism vs. Russian collectivism. Therefore, Ukrainians HATE tyranny, they never accepted it, any Ukrainian state-building efforts have always been democratic. While Russians seem to adore their dictators (Putin is not the first). -Victoria”

Ukrainian side, deservedly, had a lot of critique for calling Ukrainians “ethnic Russians”. It was interpreted as usual Russian chauvinism rejecting Ukrainian identity, language and rights as a sovereign nation. Ouch.

My apologies to Ukrainians. From a historical perspective I was referring to, the article would be unchanged if I were to say “Russia is populated by ethnic Ukrainians from Kievlan-Rus“. inosmi.ru did astute and very subtle translation as “Russich”, which precisely the meaning I was trying to convey. Keep in mind, there is no English word I know for “Russich”, and if one exists, I’m sure last person around here who knew it left after he locked gates at Fort Ross after himself.

There is no doubt about modern Ukraine national identify. I’m only making the point it is fairly similar culture to Russian one, when contrasted with sharp differences with, say, Chinese, Indian or Latin-American cultures.

Schindler’s List

“И отдельное вам спасибо за последний параграф с призывом к действию. Я сейчас сама ищу работу вне России и знаю, насколько трудно быть русской сейчас. Если бы у меня были возможности, то я бы постарались вывезти из РФ как можно больше людей. Причем не только креативный класс, но и простых рабочих, мастеров, учителей, медработников и тд. Как Шиндлер из фильма “Список Шиндлера”. Я исколесила всю Россию вдоль и поперек, работала в Сибири и я очень люблю и уважаю русских людей, которые реально работают. А они работают и очень много. Не смотря и вопреки. Надеюсь, на моей новой работе у меня получится нанимать людей из России. Еще раз спасибо! -Anna”

As a person who went through the full immigration process, I know first hand how hard it is. Relocating is hard, learning new language is very hard. Working in a different culture requires a big adjustment, especially for the older people. The immigration systems and work visa programs of other countries (and especially United States) are borderline stupid, almost designed to keep best and brightest away. The sad truth is that H1B visas and asylum applications do not have the capacity to save entire creative population of the country. Its far too many people numerically.

At the same time, make no mistake: current Russian’s regime is ruthless, efficient and fully in control. It not going to change soon, especially with 81% popularity rating. It has no obvious weaknesses besides potential economic collapse from sanctions (and still would take 10 to 20 months and resulting political change that might not be for the better at all). The ruling elite is not considering Russia their homeland: it is occupied territory with captive native population to be exploited for monetary gain which is to be squirreled away overseas. If country and it’s people would be irrevocably ruined by the process so be it: the elite and their children will just permanently move their European residences.

That is the key problem that makes sanctions such a blunt and imprecise weapon: until they include all extended families of the corrupt Russian government-industrial complex officials they are toothless. If they do include them (and assets registered in the name of *all* their relatives) it will have big negative impact on EU/UK economy, and it becomes equivalent of nuclear weapon against Russian ruling class: they will have absolutely nothing to loose, the whole purpose of their life (Western wealth) would be wiped out in an instant. In general, it is not a smart move to put a nuclear-armed power in that position.

That leaves us is with a huge population of extremely talented people totally captive and unable to realize their potential under current regime. It is no accident that of 5 dominant giants of high tech – Apple, Google, Amazon, Facebook, Microsoft – one founder is Russian in and another is half-Syrian Arab. The fact that that majority of people in these cultures are suppressed is not a tragedy just for them, its tragic loss for the whole planet bereft of that amazing talent. Until recently I did not see any constructive solution to the problem.

Ukranian revolution, in my opinion, changes all that for the Russian culture (or to mark the progressive part of it: Euro-Slavic). Assuming Ukrainian people preserve their freedom and don’t fall under the rule of corrupt oligarchs again (enlightened oligarchs who would engage in nation building are quite all right) it presents a unique opportunity.

Kiev is a cosmopolitan European capital with good climate and great people. Unlike Moscow, it much less infected with toxic poison of oil and gas revenues – here you got to work to make your fortune. I observed many times that when it comes to cutting edge technologies Ukranian and Kiev teams are far ahead of Russia as whole – and Russia is a pretty big place! The reason is simple: Kiev teams already compete, learn and grown on the world level – they wouldn’t get any contracts otherwise. Russian teams always have a fallback to easy low-competency contracts driven by oil and gas: they have much less pressure to become exceptionally good. That how global technology competition works.

Russia’s 10% of best and brightest will now try to leave the country at all cost. Many of course will come our way to Silicon Valley or New York or other world capital, where they will be extremely welcome. However, they have to pay a heavy price: adoption and hard adjustment to English-language Western culture.

Free Ukraine represents a unique opportunity: a land culturally close to Russia, yet under no oppressive rule. Kiev should look at this 10% as very precious resource Putin’s Russia is squandering away like a drunken sailor. They are squandering their own country future; it would be invaluable gain for Ukraine future growth to pick up that talent. Consider special programs, similar to that of Singapore, promoting easy immigration path for STEMs for talented Russians to join or start a business in Kiev. Obviously, given current extremely emotionally charged situation between two countries that might be a hard thing to do.

I will leave you with the following thought: 20 years ago, I was making similar choice, and Silicon Valley was an obvious destination. Somebody younger, smarter and more energetic than me is making that choice right now in Moscow or another Russian city. He is miserable from the avalanche of propaganda washing over him, from the atrocities majority of his countryman seem to approve and celebrate. He wants to get out. Obviously, he can learn English and join me here in the Silicon Valley (as a matter of fact do send me your resume if this applies to you!)

Yet, for an Ukrainian, do you want for him to feel at home in Kiev instead, and build next international giant like Google or Facebook headquartered in Kiev?

What’s in the name

When writing original post I was not expecting any audience larger than few hundred Silicon Valley geeks who read my blog. Hence the grim analogy of “No Russian” would be apparent to them. For the larger audience here is what it means.

“No Russian” is a level in 2009 first-person shooter game “Call of Duty”. In this part of the story a deranged Russian psychopath, Makarov, and his terrorist group slaughter a helpless, unarmed crowd of Russians, Ukrainians and other fellow slavic travelers at Moscow airport – with the sole purpose to plant the blame on Americans for the massacre. Killing your own brothers and sisters just to make Americans look bad is a good deal for Makarov. Activision game designers were going for the shock effect with this level, yet even they thought to make the story to something borderline on “this is insane, yet very remotely possible”. So to keep it real, Makarov is just a fringe lunatic, a terrorist leader, fighting against and deceiving Russian government among other world governments. In the story arc that follows Makarov actually kidnaps Russian president and his daughter, Alena. Then he proceeds to blackmail him for nuclear launch codes while threatening to torture Alena.

Let’s compare a real world Russia in 2014 with what game designers considered unrealistic shock-jock dark fantasy just a few years ago. Russian weapons are killing Ukrainian brothers and sisters with tanks and heavy missile fire. The only threat to president daughter is a Twitter apology (?!) from Netherlands city mayor who just received (first) 40 coffins of his fellow countryman killed by Russian weapons. And nuclear launch codes are safe and sound in the hands of the maniac for the time being.

The scariest part: this is not a game.

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