I have seen companies get a lot of funding, spend it mindlessly, quickly run out of cash and end up closing or selling the business for cheap. Even if you have a big budget, take time to identify ways to spend this money efficiently
As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Viktor Viktorov.
Viktor is the CEO and co-founder of REINNO, a commercial real estate tokenization and lending company that made news in the beginning of 2020 by completing two tokenization deals of real estate worth a total of $107.5 million. He is a serial entrepreneur who started his first business while at university. He bootstrapped a leading sporting goods e-commerce website and scaled it to seven countries and 120 employees.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Sure! I started my entrepreneurship career while still at the university. It was a small business importing fruits and vegetables. Then, I discovered e-commerce. At that point, people were not used to online shopping so everyone was skeptical about my idea to start an e-commerce website for sporting goods. However, I saw an opportunity where others saw difficulty. Fast forward a few years and my business became a market leader in three countries making 30 million in revenue. At that point I learned about blockchain and the benefits it could bring to commercial real estate. Since then I have been working on REINNO with my two co-founders. The company is constantly growing, we keep signing new deals with clients and partners alike. It’s a very exciting time for us!
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Maybe it’s not so funny but when I first started, I tried to get the best people on the team. Those that have the highest GPA, highest recognition, biggest names. Later on, I realized that it’s not all about the track record and the numbers. What is more important is someone’s passion and ethics, whether they want to work hard, think, challenge themselves and grow. Now I am more likely to offer a job to someone less experienced but highly motivated.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
One of my favorite books is The Greatest Salesman in the World by Og Mandino. It was published in 1968 but it is still relevant today. The book is really about how to be a better version of yourself, regardless of your career path. It teaches the importance of creating good habits, persistence and acting now. The story tells you to love not only love yourself and all the good things in life, but also your obstacles. I highly recommend this book.
Are you working on any exciting new projects now at REINNO? How do you think that will help people?
We surely are! My team and I are getting ready to launch an online marketplace for tokenized real estate. It will allow people to invest in fractions of income-producing American properties from the comfort of their homes without the bureaucracy and paperwork that can be traditionally associated with such transactions. It can be a great start for building your investment portfolio or a way to diversify an existing one. We will offer different types of commercial real estate — from retail and office to mobile parks and multifamily buildings. There is something for everyone’s investment strategy. We are also starting a series of webinars. One of them is targeted at real estate professionals who are interested in moving their deals online and significantly speeding up closing time. Another one is for VCs and is structured as a round table. More information is available on our website and social media.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Ever since REINNO was founded, the main purpose has been bringing liquidity to real estate investors. We have established a goal to become the first company to provide a loan backed by tokenized real estate and we are working towards it every day. We have already built a lending platform and are currently talking to liquidity providers. I believe that having a long-term vision and purpose is very important. This way your team can get creative and come up with ideas that are out of the box and still align with company goals.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
If you do not challenge yourself, you stop growing. I believe that in order to achieve success, you have to face difficulties and improve. The moment you relax and get in your comfort zone, you are setting yourself up for failure.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
Concentrate on the people for whom your product will be actually useful. You should understand your clients and their problems. If your product can address their pain points, you won’t have to beg them to set up an introductory call — they will ask to set up a call with you. When it comes to specific tools and strategies, we all know that referrals work best. Personally, I find LinkedIn extremely useful as well.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
Bootstrapping can give you a certain level of freedom but if you manage to find a VC that’s right for you, that might be even better. A VC can give you good advice and connect you with industry leaders and potential partners. Of course, VC funding can help your company grow faster and save you the trouble of being a struggling entrepreneur. However, taking it slow has its own benefits. You can polish your value proposition, re-evaluate the market and even switch your model completely before making a commitment. Both models have their pros and cons; it highly depends on your business, industry and a lot of personal factors.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
Depending on the stage your company is at, the method will be different. For example, discounted cash flow is good for young businesses and startups that are not trading on the stock market yet. It requires you to understand your projected performance and give a profit estimate. Do not try to be too optimistic. If your cash flow is going to be negative for the first two years — say so. Investors want to see a realistic outlook, not an empty promise.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
I would suggest a few things. First, do market research. If you competitors keep growing, the problem is probably in your product or marketing. If the whole market is slowing down, maybe there is an innovative product that’s taking away your customers and you have to consider a big strategic shift. Once you identify the issue, discuss potential solutions with the people you trust — your partners, people familiar with the industry, employees. Evaluate a few possible scenarios, choose a new direction and adjust accordingly.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
I have seen companies get a lot of funding, spend it mindlessly, quickly run out of cash and end up closing or selling the business for cheap. Even if you have a big budget, take time to identify ways to spend this money efficiently. If Twitter ads only bring you five leads per month, maybe you should not spend $50,000 on them.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Put your clients first and treat them as partners. Customer experience and satisfaction are extremely important in this day and age. Establish long-term relationships and loyalty.
- Keep innovating. Every day I see a new financial product, startup or technology appear on the radar. Not all of them are successful but they try to make financial services faster and cheaper. To stay competitive, you need to know what the latest improvements are and how you can apply them in your company.
- Have the right mindset. Embrace the difficulties and look for new opportunities. Do not ignore your competitors. Acknowledge what sets you apart and see what you can learn from them. Ask yourself, is there something they are doing better? Is there something you can do to improve your offering?
- Know how your business is making money. If you are not profitable, be critical about what is stopping you. If you are, identify the risks that might negatively affect your company’s financial stability. Regularly do a thorough analysis of your company’s financial performance.
- Think globally. It might be hard to offer your products all over the world. Start with acknowledging that your customers travel, shop and do business internationally. It means that sometimes they might not be able to physically come to your office to resolve their issue. Prioritize security but don’t turn a simple transaction into a huge pain.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Take care of yourself. Working with financial products can be stressful and exhausting. Make sure you put some “me time” on your schedule. Meditate, work out, spend some time with your family, take a painting class — whatever brings you joy. Make it a normal practice and not an exception.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would like to make investing available to everyone. This does not stop at creating apps and platforms that allow you to buy real estate or stocks with one dollar. I would like to get more people educated about the different options they have, the importance of saving and investing, the risks and the benefits. It’s all about the knowledge.
How can our readers follow you online?
Connect with me on LinkedIn: https://www.linkedin.com/in/viktor-viktorov-54176467/
Follow REINNO on a variety of social networks: