When serious competition exists, when a match exists, when brands and companies fight to take a slice of the pie and when bonuses depend on results, then pragmatism, risk-taking (not too much) and a keen eye over the forest of data, begin to emerge and digital marketing yields real results
In the past eight years, the ICT industry has increased threefold, and this year it entered the top three “products” that contribute to reducing the foreign trade deficit. Yet we still more often here about agricultural subsidies than about incentives for the development of the ICT sector. This month we spoke about this and other issues with Ivan Rečević, a specialist in web analytics and co-owner of the consultancy agency Gaia Consulting.
Why agriculture and not ICT?
– It is far easier to sell raw materials and not bother about making the final put or even half-finished products rather than creating the final product. Minimum control, a simple process and it’s all over – as far as the state is concerned.
Although it has grown, the ICT industry currently has similar problems to agriculture with the sale of raw materials.
We have companies that create finished or complete products. Then there are so-called outsourcing companies that are branches of foreign companies or corporations and, finally freelancers. They all contribute to the growth of the ICT industry. However, much of the money is not visible to the state or to the tax authorities, due to an undefined legal framework that would allow individuals to legally receive money in a simple way. Individuals keep money in foreign banks (which is illegal), they pay some other taxes and withdraw money at ATMs and pay for goods under better conditions compared to domestic banks.
They say that a baby who does not cry does not receive food. It is the same in the ICT sector. Although due to the history of the slowness of the National Bank of Serbia, as well as the legislation that should enable the introduction of the modern movement of money, the legal framework of doing business – gathering and organising payment that the state will hear and based on which they will react, companies do not want to waste time.
It is easier to open a company abroad (U.S., Estonia, Ireland) and in that way do business easier and simpler. Transfer enough money to Serbia in order to deal with the essential expenses and keep the rest elsewhere.
In Serbia, at least in public, we rarely hear discussion of disruptive technologies, although it is today considered that less developed countries are provided with a unique opportunity to leapfrog technological gap thanks to innovative start-ups. How great are our institutional capacities to make such a leap?
– Let’s be clear – disruptive technologies are there to skip the pain of changing the hardware of a society (roads, construction, institutions) with the use of the software. It is the software that enables a simpler and streamlined process to which we are accustomed. The Tesla (car) is a fantastic hardware whose software changes overnight. Why should they have to change and make multiple versions of the car when it is necessary to make a vehicle that is technologically a few generations ahead of all and then change the software?
Our institutional potential exists, just look at the Business Registers Agency. Things can change – it’s only a matter of the willingness to change things. Offer companies and people an option that should make their lives easier and they will use it.
Considering that you provide pro bono consulting services to Serbian start-ups until they develop a product or service, can you tell us what their chances are of becoming, if not unicorns, then companies with significant valuations?
– My suggestion to every start-up: make a global product and work with foreign clients. On the other hand, there is a chance for some local company to become world-famous (we have examples – Nordeus, Mikroelectronika, Seven Bridges etc.) organically. In other words – only focused work on a product that is required by a client outside Serbia.
In order for such companies to survive scaling from 3 to 10, then to 30 or 100 people, it is essential to constantly change processes within the company and inevitably create a sector, and the workforce within that sector, development of a human resources sector that should be accompanied by both the values of the founders and the culture of the environment, by providing quality space, the logistics that it brings to that area, as well as 1,000 small details that enable employees to work qualitatively – not to mention finding quality managers who are top performers in their work.
Such examples exist, and certainly, do not emerge overnight. Creating a unicorn or a company with a product demands time and is a real marathon endeavour.
The amounts that circulate in the ICT industry are far greater than the official level, as much of the money come into the country via alternative channels that the state is not aware of
Start-ups lack perspective – what the path they walk looks like, what will be waiting for them and what they need to resolve at the beginning – so as not to fail or hit the marathon “wall” before the end of the race.
Then, when these things are faced by an initial team, they consider well whether or not they want to proceed. Maybe I have sometimes helped or hindered some teams, but it is my duty to present to them the reality of the business into which they are entering.
It has long been said that, with good training, a large number of people registered with the employment bureau could be trained to work in the IT sector. Despite that, we give subsidies to companies that make cables here for the automotive industry-low technological level. Are these promises of the “mass production” of a middle-ranking IT workforce unrealistic or do they not appeal to the education minister and the government in general?
– Good training is the key thing, which is not just a decision. Anyone can decide to make people from the bureau literate. The question is what those people will be willing to do after that training. In order to have quality programmers who can work in a development centre – we’re talking about software engineers – years are required (3+), and who are just starting to work. In order to reach a senior position (programmers – not managers), a minimum of 3-4 years is required. Such a programmer is valuable anywhere and their education is costly.
If the ministry will make people literate to use a computer, open a document, write a letter or access public information via a computer or mobile phone, then we can expect to create a workforce that is ready for call centres. I have nothing against call centres if that is the strategy.
Let it be clear to the people who are in these offices – what kind of knowledge they will get and for what kind of job. Let us be aware that this is the ultimate achievement and vision that the government has, reconcile with that and continue to develop our businesses and the people in our own way. We must be aware that we are no longer limited by what the state in which we live has to offer us.
Mass production of the programming code that has some purpose, quality, quality control and real application in the real world exists in Serbia, where more than a thousand people work. Those companies are hungry for new engineers who are not there. It is not that they do not exist, but rather that the part of the population that is interested in this kind of engineering has no place (college) where they can learn the right things.
Closing down the department for “data scientists” at the Novi Sad FTN is an example of not considering the needs of the market. Colleges fail to hold on to expert assistants for more than a year, and sometimes they spend only one semester at universities that have the basics of this type of engineering.
At the same time, this period is considered the “golden age of marketing”, relying on “big data”. To what extent is that part of the business policies of our companies?
– I know of three companies in Serbia that are doing that, either because they have internal teams of people or great agencies that can manage data in such a way.
The problem with “big data” is that someone has to have imagination, an idea, a concept for which they want to use such systems and whether there are real needs for such systems.
Mass production of the programming code that has some purpose, quality, quality control and real application in the real world exists in Serbia, where more than a thousand people work. Those companies are hungry for new engineers who are not there
I don’t think there are companies that are ready to use and trust the data, interpret the information in the right way and make business decisions based on facts.
For something like this you need to have stable sales, a realistic business model, for a company to reap substantial revenue from online sales channels, on the one side, and a person with the vision and awareness of what they want to achieve.
In our country, a lot is said about digital marketing – at least in the industry’s circles – but they still mainly resort to classic forms of advertising on TV. Is that a logical or mistaken approach in a country where marketing budgets are extremely small?
– I don’t believe in any kind of conspiracy, but I believe that human nature is such that it refuses to change. Take, for example, this picture from 2009.
Digital marketing enables access to a far larger number of channels of communication, each of which is its own story. If we include the possibility of two-way communication, where the buyer/consumer/customer can publicly express their satisfaction (which we all seek) or dissatisfaction (which clients really don’t like), a marketing director with some 10 years of service has a serious problem getting to grips with that the amount of information and the methods of communication that new channels bring.
Why would they simply not continue to work with television, radio, print and advertising outside the home (OOH)? Why wouldn’t they drive known things while they can? Human nature is difficult to change – though television is no longer what it was. So many cable channels and micro-niches of people represent the capacity to overcome that which the classic old-school marketing manager can comprehend. Hence come the digital marketing specialists who have little impact.
Although human nature changes from the moment bonuses or salaries depend on the results of this marketing. Pragmatism, risk-taking (not too much), a keen eye over the forest of data – begins to emerge. Then, when serious competition exists, when there is a game, when brands and companies fight to take a slice of the pie and when bonuses depend on results – unbelievers start to preach.
Although today everyone who has a website and a Gmail account has access to a rudimentary form of Google Analytics, we are very often insufficiently literate to understand what these figures tell us. Is that just a local problem or a global plague, and for which businesses do investment in these skills make sense?
– This is a global plague. Our companies are not alone in the problems of interpreting data. The thing is that medium-sized companies in the United States have over 300 employees and turnover some 20 million dollars. There are many such companies and those that want to advance will find an individual with vision or an agency with knowledge. For me, the problem is in the size of the market. In the second place, you have a lot of fish and a few fishermen. In such places you can more easily find a client.
You worked in a large system, Schneider Electric, and then entered into private business. What are the advantages and disadvantages of both of these solutions for someone who wants to build a career in this field?
– The corporate environment can bring new knowledge that it would be difficult to get to college. Also – corporations bring the opportunity to get a real mentor, especially if that is a foreigner who wants to transfer knowledge. There are people out there who want to be and do things in order for somebody else to tell them that they are okay.
Some seek that and probably like that. My road to private business came after two corporations (Schneider Electric and Capgemini) and I am very grateful for all the opportunities that we are opened for me during that period. I learned a lot and gave myself a lot for those same corporations. I think we’re even.
Through private business, you form a company according to the values you consider important and in a way that fits the business you are in. There is no one to sets standards for you – rather you’re there alone (or with someone) to make something from scratch.