Building castles of popcorn.

• Author: Timakov, Victor
• Position: Magadan Trading Co.

"In order to do business in Russia, one has to live there" says Tom Barnes. He ought to know. After almost a quarter-century in the construction business in Whitehorse, Yukon Territory, Barnes opened his own business in Magadan, in Russia's Far East, more than a year ago--selling popcorn.

In February 1992, Barnes sold his construction company, chartered a Russian AN-12 cargo plane in Anchorage, and loaded his household -- his wife, four children, a huge Ford truck and 10,000 pounds of popcorn -- into the plane. They flew across the Bering Strait to Magadan, the former capital of Stalin's labor camps.

Before taking such a risky step, Barnes had been to Magadan twice with the Rotary Club. It seemed to him that getting into business in post-communist Russia wasn't the scary prospect most people in the West thought it was.

But what made a successful Canadian businessman take the plunge?

"Some sort of mystery of the soul led me to do it," Barnes says. "The other reason, of course, lies in a typical feature of the Northern character, that being a deeply-rooted longing for adventure. It is a peculiar feature of all Northerners, no matter what part of the northern world they live in."

Even as his plane landed, Barnes didn't know exactly what he would end up doing in Russia. "But I had a sort of feeling that if I were able to set up selling popcorn, then I could survive in Magadan," he says.

Barnes got his first good advice on how to do business in Russia from the pilot who flew his family from Anchorage. "Don't try to throw yourself into our business. Don't try to get any partners right away," the pilot said. "Just keep your eyes open, look around, and try first to get the feel of Russian life, and only then proceed with actual business undertakings."

Barnes spent three months looking around until he began to figure out the basic differences between the way business is usually done in North America and the way things are done in Russia.

"I think that the difference is essentially in basic business principles," Barnes said. "And now it is absolutely clear to me that one has to live in Russia to do business over here. I had to come over and settle in Russia to come to that realization."

It took Barnes a year to get his company founded on Russian grounds. He had to get through Magadan's local government bureaucracy, the Russian banking structures, and all the same sorts of difficulties Russian entrepreneurs encounter in trying to start private...