By OlOn August 10, 2015, Larry Page announced the creation of Alphabet, a company consolidating all businesses related to information technology. The Google search engine and its related services, YouTube, and Pixel phones were grouped into a separate holding, while startups that were expected to have a future impact were separated. Larry Page and Sergey Brin became, respectively, Alphabet’s CEO and President,, and focused their efforts on its development.

At the time, the multi-vector concept of business development – as in Brin and Page’s approach before the creation of Alphabet – seemed to me to be the most viable. That’s why my partner and I decided not to limit ourselves to any single direction. Moreover, all of our previous business experiences echoed one message: diversify or die.

We organised professional esports events, built IT infrastructure projects, created premium merchandise, developed software, and explored new directions. Therefore, I was somewhat surprised when I heard the news of Google’s restructuring.

Today, however, with our TECHIIA holding having reached about a dozen business directions, I often recall the Alphabet case. Restructuring, based on one’s own convictions, and not on the pressure applied by creditors, eliminates everything secondary and allows a focus on what matters most: improving business efficiency. In my opinion, it is based on two main principles.

Restructuring CEO interaction

When it comes to entrepreneurs, there are two prevalent approaches — maximum involvement and maximum delegation. Over the years, I have moved from the first to the second. Practice has shown that neither extreme allows you to build a truly large business.

For instance, I used to be deeply involved in every minor process. This offered a sense of knowledge and control, but was ultimately limiting. As a business grows, more attention must be paid to strategy, even though, at times, you want to create daily results with your own hands.

I changed my approach when the number of our businesses grew. “Okay,” my second partner and I decided, “we need to find self-sufficient, capable managers who share our values. And give them maximum control over managing the companies.”

For a while, this scheme worked excellently. Financial indicators were rising. My partner and I shifted from operational management to seeking investments and creating new businesses for the holding. CEOs were responsible for the development of individual companies.

However, our expectations turned out to be somewhat inflated. This was particularly evident during crises related to COVID-19 and Russia’s war against Ukraine. If you stop controlling processes completely, it can be harmful. Crises highlighted the complexities, and one of them was the CEO interaction system. Its core issue is different perceptions of effectiveness.

A striking example occurred with one of our companies. Right from its inception, it not only had financial plans, but also a development strategy, which involved the gradual entry into new markets. Sometimes, these points contradicted each other. On the one hand, the CEO had to meet financial targets; on the other, diversification meant additional costs that would hit the pocket in the short-term, but pay off in the long-run. And it was the second point that was dragging.

As a result of this policy, by the beginning of 2022, it turned out that 70 per cent of the company’s revenue came from the Russian market. My partner and I made a decision to exit all projects in Russia. This hit the asset’s income hard, forcing us to enter new markets rapidly and tap into the holding’s reserves.

The situation was challenging. The CEO was doing an excellent job of meeting the financial plan, and, if not for the Black Swan event, he would have continued to do so. But collectively, we missed a high-risk situation, in part because the founders had drifted too far from the business.

In short, the problem of CEO interaction can be framed with a useful parental analogy: will you educate your child yourself, or send them to school? I realised that ‘school’, alone, is not enough.

Restructuring own efficiency

If you have one business, finding people to run it is easy. The founder can remain aware of all the nuances of company development. But when you have more than a dozen businesses, it becomes impossible.

Another surprise that entrepreneurs can encounter is a shortage of qualified managers who can work autonomously. Most of the time, CEOs need to retain control, or else managers start focusing on financial models based not on results, but on the process. A highly-diversified business turns into a samurai model, where there’s no goal, only the path. A lot of effort is required in such a case, but it leads to only limited results.

On the other hand, the “let go and see” approach helps identify assets with the highest potential. For example, our esports asset has transformed into a successful WePlay Holding, a Drone-as-a-Service company Culver Aviation has emerged, as well as a business focused on innovative developments in the tech sector. All of them have the potential to be highly profitable if we, as the holding’s founders, put more effort into their development. However, this sometimes requires diving into the operational level and diverting attention from projects with less potential.

So, yes, we remain proponents of diversifying directions and markets. However, our circle of interests is now more concentrated.

In fact, Page and Brin addressed this issue through restructuring. They separated the cash cows from the subsidised companies and businesses with unpredictable prospects. Prior to the creation of Alphabet, some investors complained that backing Google was challenging, as profits from flagship projects were being used to fund unclear futuristic initiatives. But followingthe news of the restructuring, the company’s investment attractiveness improved.

This example is important to remember when emotions outweigh business logic. Giving up on burdensome assets may not be pleasant, but it is necessary. It allows us to stay in touch with the pulse of events and to be more attentive and effective. Through restructuring, we plan to highlight the essential and move forward with increased speed.