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As the founder of “1C” built a business with revenue of $1 billion (part 1)

Starting a quarter century ago with the development of “electronic teletype”, the entrepreneur has created a sales network for the sale of software, which is envied by major retailers
The interior of the office of the Director of “1C” Boris nuralieva ascetic: table, standard cabinets, shelves. On the shelves are yellow boxes of his company’s computer programs. Here, in October 2008, Nuraliev and Elena Ivashentseva, senior partner of Baring Vostok Capital Partners, an investment company interested in acquiring a stake in 1C for the funds, met. Prior to this, the education Department rarely communicated with representatives of the investment community.

The lifestyle of the founder of “1C” is as modest as the decor of his office. He is rarely seen in a suit — the Creator of the company prefers a sweater to a jacket, and puts on a bright yellow t-shirt or a sweatshirt for corporate events, like other employees. Until the mid-2000s, he drove an old “Volga”. And just when it stopped to let in the Ministerial Parking lot, “1C” bought him an Audi A8. Meanwhile, we are talking about a man who heads a company with an annual revenue of several tens of billions of rubles.

The company and its founder are very secretive: “1C” exists more than 20 years, but does not disclose its financial performance and shareholders. It is only known that it is owned by about a dozen employees. According to EGRUL Elmir owns 32% of CJSC “1C”. The identity of the owner is not the only thing that fuels interest in one of the oldest IT companies. Over the past 10 years, 1C has managed to bypass the Russian market of management programs for medium and large businesses such as Oracle and Microsoft, and is second only to the German SAP. Its products are now used even by subsidiaries and representative offices of international holdings such as Komatsu, Toyota, Pernod Ricard. Why Russian “1C” buy more than foreign programs?

Fifty-fifty
The education Department likes to say that the secret is “1C” “building a business through partners.” In 1987 he became the head of the self-supporting Department of the research Institute of state statistics, before that he worked at the Institute of Economics and statistics. Soon he had to solve the “atypical problem” — to create an “electronic teletype” to connect instead of connected to a network of Electromechanical boxes personal computers. Such as, for example, only appeared in the USSR sederowsky new “Robotron СМ1910”. Nuraliyev with three companions wrote the program for a teletype. Their Department — and then the cooperative — began to trade it, to go to customers. Once, returning from the Yakut state statistics, they found the order of the Yakut state statistics service. Fly back to 55-degree cold is not wanted, and they suggested a local engineer who worked with them to do everything yourself. For half the price of the “box” with the program. It turned out that people are happy to take up such work. By the end of the year, specialists in electronic teletypes were all over the country, and sales amounted to 6,000 boxes. “For co-op it was a crazy circulation”, — recalls Nuraliev. It turned out that not they, but hundreds, and then thousands of Directors thought how to sell their product. “This network and then helped to stay ahead of seemingly no less successful colleagues,” — he says.

Then Nuraliyev applied the rule that formed the basis of his relationship with partners. He is ready to share part of the income with distributors, offering unprecedented discounts on the market. Nuraliev gives partners 50-55% of the cost of the “box” or service. Unlike Western vendors, SAP or Oracle, “1C” does not work itself with the end buyers of its programs. That’s what partners do.

Nuraliyev developed the idea of turning distributors into “partners” by starting to produce his own software products. In 1992, Boris invited his brother Sergei to help establish accounting in the company. Sergey (the chief architect of all business software of firm) wrote for himself the simple accounting program in the DOS operating system. Boris assumed that this product would find demand. “The average salary of an accountant was about $12, and no one would pay a lot of money to automate the work of a cheap employee,” Nuraliyev recalls. The program “Mini-accounting” of the company “1C” was cheap, suitable for small businesses and solved simple tasks: it was possible to keep financial records and prepare tax reports. And it only cost $30. Of these, the dealer received half. From competitors ‘ products — “Sail”, “infinitesimal”, “Infobuilder” accounting program “1C” was marked by an important detail: in its design Sergey Nuraliev embedded macro language programming, which allowed to adapt the software to the needs of companies and the needs of accountants.

The program was shown at Comtek-92. In fact, the stand “1C” was built under Lotus, but the dealers Nuraliev offered to take and “Accounting”, promising to pick up the program if it can not sell. Returned a few. In that year, the sales of “Mini-accounting” were three hundred boxes a month.

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