Better Germans Than the Germans; Better Americans Than the Americans

The house my late father left us has an old Kon?ar stove. It was there when he bought the house in 2004. A similar stove rests in the kitchens of thousands of older homes in Croatia. It still works like it did when it was bought. It also looks like it did when it was bought and that’s one of the main reasons why Croatia never managed to build an international technology brand such as Robert Bosch.

Technology companies in the former Yugoslavia grew and prospered in a closed loop of mostly licensed technology, high consumer demand, low income, low consumer knowledge and marginal competition. People wanted stoves, so Kon?ar gave them stoves that worked most of the time at a price they could afford. They weren't pretty, but when you don't have a stove and you don't have a choice of products, prettiness never enters the equation. When you are hungry, as the masses were for consumer electronics, you don't insist on gourmet food, but are satisfied with potatoes.

This situation was not unique to former Yugoslavia, it was the case in most eastern bloc countries. Simply put, companies there knew how to sell potatoes but they didn't know how to sell gourmet meals, or dreams. Central and Eastern Europe (CEE) has long produced good engineers, but lacked sales and marketing skills. A Hungarian venture capital fund put it succinctly, ?We have only succeeded with Hungarian companies where the engineers were local but the sales and marketing was American.?

Two years ago we founded a robotics company in Croatia. Our target customers were companies who were global market leaders – big, successful and highly demanding. The question for all of us was - how do you do this in a country which had never figured out how to sell stoves to Matilda in Munich or a Pierre in Paris. The answer was simple, but very hard to execute. We had to be better Germans than the Germans, and better Americans than the Americans. We had to beat the best at the skills they were best in - make better machines than the Germans and sell and market them better than the Americans.

We had to overcome several obstacles. First, no company in the region had managed to significantly penetrate the developed consumer and industrial technology markets. Gorenje, with 4% of the market in Europe came the closest, but its biggest markets are still in the CEE. Second, Croatia in many western minds is still the ?Balkans?, so we have to overcome the negative stereotypes associated with buying ?Balkan technology?. Third, we don't really understand foreign markets – their wants, their fears, their needs and their passions, so we design products or interfaces which fit our needs and our logic, not those of our target buyers. Fourth, we don't understand that ?everything is the product?. We are not selling potatoes, where all that matters is that the buyer gets potatoes which aren't rotten. We are selling an end-user experience which has to wow the most demanding final buyers – in the way our machines work, in the way our communications look and feel, in the way we train their staff, in the way we solve their problems, in the way we talk and the way we act. Only this ?total package? has a chance of building a future Robert Bosch. Delivering anything less than that ensures that we are building another Kon?ar. 

Image Credit: irq506

This is a translation of an original column that was published in Croatia's largest newspaper, Ve?ernji List, on August 5, 2019. See my pearl trees for a complete gallery of my articles for Ve?ernji List and other publications, including The Wall Street Journal.