'Your only capital in business is your brain'

The digital age is opening up more and more opportunities for some of the most unbelievable startups imaginable – startups for which ideas and a drive to conquer new business territories take precedent. For Vitaly Aleksandrov, an HSE alumnus and the founder and head of the studio Out of Cloud, this territory was email marketing. Below, he tells Success Builder how correct distribution methods differ from spam, how to write meaningful letter, and whether a student is able to make money off of scholarships.

What is email marketing?

Email marketing is all about communicating with a business’ clients through email. The objective of email marketing is to boost sales and increase consumer loyalty. We use well-crafted emails to make people aware of sales and send out useful content, and various communication chains between us and companies and between companies and consumers allow people to learn something new about a product. They get the information they need, and as a result they buy what they are looking for. And everyone’s happy. The main thing is writing the kinds of emails people want to receive at the proper time.

The main task is differentiating between email marketing and spam. Spam is when you send emails no one was expecting. Email marketing, on the other hand, is when you send information to a group of users who have permitted you to send them emails; that is, they are generally interested in your online store or product, or they have an interest in the topic you touch upon in the email. This all leads to subscribers being transformed into buyers, and this is a lot simpler than is the case with search traffic, which typically involves heaps of unnecessary individuals.

But a mass email is usually thought of as an intrusion. How does the idea of ethics and intrusion factor into your work?

This dissonance was an issue for me – on the one hand, this is encouraging and inspirational work, but on the other it’s intrusive product advancement. First and foremost, though, we aim to educate clients and change their view of consumers. Our mission is also to make the customer aware of the fact that no one needs to be pushed; they just need to be given something. We have changed the mindset of countless clients, showing them that they can talk to people in a completely normal fashion. And this is our small contribution to the culture of communication between business and average consumers.

How do you write an email that someone will read and not put in their spam box?

The only rule that exists is to write an email ‘with soul,’ and we are guided by this rule. If you think of your clients not as suitcases full of money, but as people who need your help to solve a real problem, everything will work out. Good people look for other good people, and if you think about your clients in this context and really strive to solve their problem, then the question of writing a text becomes much simpler. We have seen this metaphysical methodology confirmed time and time again; the more deeply you understand your client and his or her desire to solve the problems of the emails’ potential receiver, the better result you’ll get. Also, you mustn’t use people. This applies to digital and long-distance communication as well.

Why didn’t you work in your field of study?

Everything started my second year at HSE when my friends started trying to start a business. At the time, I was really big into research and was awarded an Oxford scholarship on three occasions. I was the chairman of the HSE student council, wrote a lot of articles for VAK journals, and researched corruption. During that time, my livelihood came from various scholarships – thanks to different grants and scholarships at HSE, you might be able to make up to 50,000 rubles for different student activities. But after weighing the plusses and minuses, I understood that I wanted to go more into business than academia. After different government internships I realized that government work wasn’t quite my thing. The results are slow there, and it’s hard to assess how useful you actually are in a government position. A lot of officials work hard, waiting for their ‘moment of glory.’ But you don’t see any results until five or seven years later, and you have to spend that time waiting patiently, eating lunch at a cheap cafeteria and taking home only a modest salary.

How did you come to realize that a ‘cloud’ like email marketing can actually make money? When did you decide to make this the foundation of your business?

At a birthday party for a friend, I met a guy who worked at a social media-marketing (SMM) agency. We got together and started working on social networking groups. I got two clients and thought: why sell just one service when you can sell an entire package? I became interested in email marketing and looked for information on western websites. A lot of agencies in the West offer email marketing services along with SMM and contextual advertising services. At the time, no one was doing this in Russia, so I decided to be the first, and after a certain amount of time I started immersing myself in the market and going to workshops on internet marketing. I got a nice snapshot of the market. I saw a ton of SMM agencies that I had no hopes of beating, and I decided to leave SMM altogether and concentrate solely on email marketing. I was certain I didn’t have any competitors, so I was able to start out confidently.

Did you have any support or partners at that time?

A friend and I created the agency with two people and started working with freelancers. Email marketing started advancing gradually – worse than SMM, but working with email marketing was more interesting. Then I went to study in London, and when I returned I was alone in the business and wasn’t afraid of this. I continued delving into the topic, met with people who were interested in email marketing as an educational history, and began conducting webinars and telling people about email distribution as a new sales tool. And this was pretty successful since no one in Russia understood what kind of product this was or how to use it. Everyone knew the word ‘spam,’ and I had to explain to people that there’s a huge gap between ‘spam’ and proper email distribution. Over a four-year period, the agency Out of Cloud became the largest company in Russia to offer email-marketing services. We had a staff of 24, and worked with clients like Perekryostok, Sberbank, the State Services website, and more.

Are companies not in the position to write mass emails themselves?

The outsourcing market has and will always exist. There are always companies that are prepared to give someone else a portion of their work because they don’t want to develop certain competencies within the company. Or perhaps they just have so much to do or just don’t have time for the required creativity. I started selling our services to these people and companies. You can do the same thing with other services as well, not just email marketing.

Do western companies have their own email marketing divisions?

Yes, and Russian companies do too. Top online stores like LaModa and Ozon, as just two examples, couldn’t survive without this. Email marketing brings in 30%-40% of total sales, and it’s the cheapest and most success channel for online trade. Conversely, a separate division will probably not be created in the state services, but they definitely use services that people like us offer. It depends on the business.

Can you learn about professional email marketing in Moscow anywhere?

There are a few companies. One example is the online school Netology, where you can study and get a certificate in just two months. I teach email marketing there. Several other courses have arisen over the last few months, one of which is being done by my market competitors, while we’re doing another with the project Business Youth (Biznes-Molodost). Out of Cloud will also launch its own educational project soon. It’s rather unusual too – we’re going to teach through email distribution. For 3,500 rubles, students will each receive one email three times a week. There will be a total of 11 lessons in the form of texts that include examples, descriptions, and metrics. The best part of this format is that you’ll always have the lectures at hand. For anyone who didn’t quite understand something, we are going to have a separate support section with online explanations.

I’m also working on a book now. The classes offer a lot of useful material that I plan on publishing as a first textbook of sorts on email marketing in Russia. I’m hoping this happens by the end of the year.

About all of your tools – methodology, technology, etc. – did you create them yourself at Out of Cloud or did you make use western methods that have already been tried and tested?

Ideas and tools come both empirically and from what you read, but the structure of our work is largely thanks to the team that created it. You don’t have to be a great systematiser, but you do have to get excited quickly like we do. An idea pops up, we get inspired, implement it quickly, and wait for the results. We have a fantastic team that is incredible at developing and implementing ideas. We have all learned from past experiences, and we’ve attended a lot of conferences and support each other in continued learning. I am not a rational person. I oftentimes rely on my feelings, but overall I think that intuition plays a huge part in our work. Only then does being calculated matter.

Your public administration background won’t just disappear. Aside from having a diploma, how useful has your educational background been in life?

HSE gave me people – interesting, motivated, and close people. The university also helped me understand that nothing’s impossible. I have an example. As freshmen, we had a course called ‘Introduction to Specialisation’ taught by Alexey Barabashev, who was our Dean at the time. Literally after the first few lectures, he offered me a project on developing a package of legislation on continued education for civil servants. Me – a first-year with no legal background or education and who hasn’t read a single law carefully. But I accepted the challenge and spent my vacation after the first module at home reading hundreds of legal acts. I’m thankful to HSE for giving me a thirst for knowledge and for making me confident in the fact that there is always a solution. The university also taught me to write, speak publicly, make effective presentations, and think scientifically.

As someone who lectures on email marketing, what can you say about current trends in online trade? And who participates in your classes?

There’s currently a startup boom with young people trying to do something new. This is a projection of the people themselves; it’s what they really want to do. I wish people would show who they really are instead of doing whatever’s popular. And if you do what you love, then you’ll always be successful, whether this involves a business or new knowledge. Also, my students aren’t just young people. At my last lecture, a man came up to me who was around 60 and asked me to help bring an online context to his real-estate business. It turns out everything’s not so conservative in Russia after all.

Do you need some sort of capital to start a business like this?

I had startup capital of 15,000 rubles. Your only capital in business is your brain. It’s the 21st century; instead of buying factories, you need to generate ideas and make products that will stick with people. You don’t even need a building for a business like this. You can sit in your apartment, call your client, and agree to meet at his or her office. I constantly reinvested money, keeping only 10,000-15,000 rubles for myself each month and resisting the temptation to run off to some island. After a certain amount of time, I was then able to rent an office and hire staff.

How are you planning to develop Out of Cloud?

I’d like to build a comprehensive relationship with clients – push-notifications, text messages, and other communicative mechanisms aside from email distribution that let you communicate with clients directly. We are going to expand a package of services, and we’ll eventually try to work with western companies as well. We’ve started working with Johnson & Johnson, for example, and I see that our cases are going to fit very well into the global market.

Are there any companies you intentionally do not work with?

Alcohol and tobacco brands, sex shops, fur companies, and meat producers. I myself am a vegetarian and lead a healthy lifestyle, which is why I don’t support anything that goes against these beliefs. These rules don’t exist at our company, as vegetarians aren’t the only people I hire. The only thing I ask my employees to do is not smoke.

When did you start leading this kind of lifestyle?

My wonderful wife and I have been together for six year, and I’m really grateful to her for teaching me how to develop not only on the outside, but on the inside as well. She helps me grow intellectually and find the things I value in life. We tell each other everything, which makes for a happy relationship that helps me develop as a person first and foremost.

How do you spend your free time?

I’m a marathon runner, and have run three already – one in Paris, one in St. Petersburg, and one in Frankfurt. But lately my time has been spent building a house, and we’re almost finished. My parents and I built it with our own hands. My main idea is that I believe you should build the house your kids are going to live in yourself, with your own hands. This is why I spend all my free time at the land, which is my source of relaxation.

HSE graduates oftentimes hire their fellow graduates, creating a certain community of HSE alumni. What do you think about the university’s solidarity?

An HSE diploma is a sign of quality, and we are happy to hire a team of HSE alumni. We have internships as well. If a student wants to develop quickly and gain experience – and the agency has the wonderful opportunity of watching how the business of a number of outstanding companies develops – then working at Out of Cloud might teach the student something. We take on students for two-month internships, and if everything goes okay we hire them as full-time employees. And if not, then the intern leaves with a large arsenal of new skills and an understanding of the mysterious phenomenon of email marketing.