Can you grow a company from a small CEE country? What’s it like aboard the Slovak #AirForceOne?
The first ever joint Czech and Slovak event at the Forbes on Fifth celebrated the Centennial anniversary of the founding of Czechoslovakia and the next 100 years of innovation.
It welcomed the most promising companies, investors and exclusive guests from the Czech Republic, Slovakia and the USA to discuss what it takes for smaller countries like Slovakia and the Czech Republic to compete with larger and fast-growing economies and how to succeed in taking a business to the global (especially US) marketplace.
Instarea was represented by our director of international business development, Matej Misik, to share how we put big data monetization onto the world map from Slovakia. Having piloted from a business & technical perspective how a telco or bank can monetize their big data asset we have since deployed Market Locator at 7 telcos, in 4 countries on 2 continents. Our aim now is to find a strategic partner with whom we could increase our growth well beyond the 86% CAGR of the past 5 years. The attendees here presented a great inspiration how to do so. First their key thoughts and then their fascinating stories (apart from the really cool part of flying in with the Slovak President on the Slovak AirForceOne Airbus):
Benefits of growing a company from CEE
- All the company leaders I mention below, as well as the US investors, agree there is a strong talent base in CEE
- A fairly small market which allows for less costly “mistakes” and faster pivots
- On a fun side-note: even early stage scale-ups have access to the visibility and interest of the Slovak President and often a seat aboard his Presidential Airbus which in NYC was parked close the President Trumps AirForceOne 😉
- A common denominator was a lack of capital and the fact that the capital is provided at later stages than say in the US
- Without a US presence, active VCs are not able to provide their involvement due to the time difference and travel time and thus are wary to invest
- There is still an issue of “image”, being from Eastern Europe companies have to go an extra mile to prove their abilities
- The investors pointed out Slovak & Czech companies lack the role model of IPOs which would serve as a company goal
Views of young guns on the US market and the benefits of CEE
A common denominator was the quality of the talent pool in the CEE as well as a lack of capital. These visionaries agreed that companies from the CEE have to go quite a bit deeper and approach the issues they are solving with their business in a significantly more complex manner just to be able to attract financing and to be able to compete against US competitors who have the ability to burn significantly more marketing cash.
Kiwi / Oliver Dlouhy, CEO
A company that went from just a handful of employees a couple of years back to over 2000 today and was basically the first plane ticket aggregator that allowed you to combine tickets from non-partner airlines. A point that Oliver Dlouhy brought up is that CEE companies have to go an extra mile to beat their US rivals – have more complex solutions to outperform the marketing budgets of these large and well-funded rivals.
The company behind the web version of Tinder with its panic button to make it look all business at work – pretty cool, huh? When going into the US market the decision was made to focus squarely on the US market and drop any opportunities outside of the US and it seems the strategy and focus have paid out and since have returned to Europe as well. And as Instarea, they are an organically grown company. They are entirely bootstrapped with no outside investment.
Tachyum / Rado Danilak, CEO
From the engineer and visionary with over 100 patents and whom we can thank for SSD disks, this new endeavor aims to build a universal powerful and energy efficient chip. They are currently about 1,5 years from productional readiness, developing in California, with ambitions to then create a whole new development ecosystem around these chips in CEE. Read more about the fascinating story of Rado in a recent Trend article.
Slovak & Czech Companies that made it big
One of the panel discussions hosted the elite of Slovak & Czech business and was a real treat to listen to the stories of these business giants. I recommend to take some time to read a bit more into each of their stories.
LINET / Zbynek Frolik, Founder
Now, you may have not heard of LINET, but you may have laid on one (hopefully not) or seen it in The House of Cards in one of the hospital scenes. LINET, represented by Zbynek Frolik, the founder, is a major producer of hospital beds, employing about 1600 people out of among other locations, North Carolina, USA. Over the roughly 30 years they are in business they have captured about a 7% market share in this market.
ESET / Anton Zajac, Co-Founder
ESET was represented by Miroslav Trnka and Anton Zajac, two co-founders of ESET. Anton went on to explain how they established themselves in the US without the multi-million dollar marketing budgets of other players in the cyber security field, purely competing on the grounds of the superiority of their product and not being afraid to churn out comparison ads presenting how they outrun their competitors head-to-head. A truly inspiring company not just for their success, but for the way they run their business and their social responsibility.
HB Reavis / Marian Herman, Group CEO
HB Reavis, Europe’s largest office real-estate developer, currently building the EU’s tallest office building (Varso Tower in Warsaw). Martin Herman, the group CEO discussed how the stigma of Eastern Europe was evident, especially when entering the UK market. However, having proved their ground in London, that perception when going e.g. into Germany vanished. HB Reavis has recently entered the US market by acquiring a significant stake in a Cambridge Innovation Center, a US innovation cluster specialist.
Home Credit / Igor Prerovsky, CEO USA
Teaching the US market a thing or two in finance by a company from the Czech Republic sounds crazy (at least to Americans for sure). But Home Credit is doing just that by partnering with Sprint and thus expanding its footprint to the US.
Investors / VCs – how are CEE companies perceived by US investors?
And finally… what’s the take of the investors in the room? The three represented three distinct investors with different opinions on what a successful exit is (M&A vs. IPO), what types of companies they work with and what they see as the hottest area for investment in the next 10 years. It is to hope such an event portraying the potential of the CEE region will attract more attention to the region.
Shout out to Forbes and Andrej Kiska & his team
A shout out to Forbes and their Slovak + Czech offices for organizing this event. Not only does it promote CEE business in the US but serves also as a huge inspiration for companies such as Instarea on our path to grow, attract investors and open new markets. Thank you for the invitation and to the Slovak President Andrej Kiska for the ride on the Slovak AirForceOne 😉