This is my first trip to Moscow, and Yuri Milner, the world’s most successful investor in social media, is taking me to his parents’ apartment, which he bills as a typical middle-class Moscow dwelling. It’s drab Soviet brick outside. The none-too-reliable-looking elevator is encircled by a crumbling staircase. But inside, the apartment is genteel and highly recognizable to me. It’s like many you would find on the Upper West Side of Manhattan, a cramped and comfortable set of rooms without a recent paint job, filled with too many tchotchkes and way too many books. Milner’s father, Boris, is an 81-year-old former professor—a specialist, during the Soviet era, in American management practices no less—who has written or edited more than 50 books and is eager to show me all of them. Do I know, surely I do, Professor So-and-So at Ohio State or Professor So-and-So at Georgia Tech? His less garrulous mother, Betti, who lays out a table of tea and copious sweets, is a physician who practiced at the Moscow Department for Disease Prevention for almost 40 years.
The message seems clear: Milner may have invested in virtually every social media powerhouse, from Facebook to Twitter to Spotify. He might be the vanguard of an entirely new financial philosophy. He might be the most controversial money guy in Silicon Valley—sought after, feared, and derided in more or less equal measure. But at heart he is just a nice Jewish boy.
To many, Milner’s success is not just too much, too fast, but also somehow unfair.
Which might help explain—and Milner very much wants to explain himself—how it is that he has gone from investing in a macaroni factory in Moscow to upending the American technology business. I believe, too, he is trying to say his success story ought to be just as appealing as any in the Valley.
It certainly hasn’t played that way in the tight-knit club of Valley venture capitalists. In fact, the more successful Milner has gotten, and the faster he has compounded his success—beginning with his night-raid investment in Facebook in 2009 and now encompassing major positions in Zynga, Groupon, Twitter, and Spotify—the more suspect and outré he has come to seem. He’s definitely not your conspicuous non-consumption Valley billionaire.
Kara Swisher, who, with Walt Mossberg, runs The Wall Street Journal’s D Conference, one of the prestige events in the technology business, told me with arch inflection how Milner—a Vladimir Putin look-alike with a dark undershirt always peeking out of his collar—had shown up at the conference with a blonde model towering over him. (Swisher was only slightly sheepish when she found out this was his wife.)
What’s more, a whisper campaign has dogged his American adventure. Indeed, among the early backers of his investment fund, Digital Sky Technologies, was Alisher Usmanov—one of the richest men in Russia, who even other Russian oligarchs find, to say the least, a little dodgy. (Usmanov’s résumé includes alleged Kremlin associations and an overturned conviction for fraud and extortion. He also has a near-$18 billion fortune in mining, steel, and telecom, as well as the obligatory ownership stake in a British football team.)
Oh, and his house—that has not helped, either. Milner, who runs his business from a no-frills office suite in Moscow, is spending more and more time in the Valley and so has bought a place in Los Altos Hills—not just the Valley’s most expensive house but, at a reported $100 million, among the most expensive in America. (Milner is embarrassed about this and seems aware that he may have misjudged how this purchase would be seen. Anyway, he has heard that there is another US property sale that will soon trump his.)
To many, Milner’s success is not just too much and too fast in a land of too much and too fast but … but … and here people start to petulantly phumpher … somehow unfair: Here’s an outsider who has handed out money at outrageously founder-friendly terms—paying huge amounts for relatively small stakes, essentially buying exclusive access to the most desirable companies on the web! It is his outsiderness that seems most irritating and even alarming. How is it that an outsider has spotted opportunities that the Valley’s best investors missed? Does Milner’s success suggest that the rest of the world is starting to horn in on what has been, to date, as American as apple pie—the Internet future and Internet riches?
That’s why I’m here—in Russia and in his parents’ apartment—to try to figure out just what his advantage is. If he is a game changer, how exactly does the game change? I’m curious, too, about what he’s after personally: He seems to want respect from the Silicon Valley folk—but why would he? Why does he care what they think? Milner’s rise as a power-brokering investor happened so fast—his fund went from zero equity to more than $12 billion in US assets in less than two years—that his story has not had time to come out.