February 2, 2021 - Croatian entrepreneurial excellence reaches all sectors of the economy. Meet Worcon, shaking things up in the machine tools industry - with a smile.
One of the most interesting and dynamic things happening in Croatia these days is the emergence of an inspiring generation of young entrepreneurial minds who are focusing on developing new tools and products for the global stage. With no time for politics, most have no memory of the Homeland War - indeed many were only born after it finished in 1995. They are firmly focused on their ideas and how to realise them in a fast-moving world of technological development, venture capitalists and AI.
As a journalist, I am coming into more regular contact with these bright minds of the future, and every meeting leaves me a little hopeful about the future, as well as uplifted, despite the gloomy times we find ourselves in. And never was that more true than meeting Worcon CEO Tin Keskic in his office in Varazdin Technology Park recently.
To be honest, I was a little apprehensive before the meeting. I may be a good writer, but how do you make Worcon's key products - a B2B marketplace and project management system for the machining industry - interesting to the average reader?
Simple, it seems. You just have to listen to Tin, whose smile and infectious laugh were constant companions throughout the meeting.
"The idea," he explained, " is just 1-5% of the game. You can have the greatest idea in the world, but if you cannot execute it, you have nothing. Let's call the idea X and the execution Y. If your idea is worth 10,000 and your execution is only 1, your business is worth 10,000. And if your idea is poor and only worth 1, but your execution is 10,000, you have the same. Now imagine you have an idea worth 10,000 multiplied by execution of 10,000. X times Y equals 100 million."
It was clear from the opening minutes of our chat that while Worcon's ideas are great, little progress would have been made without the executions - otherwise known as persistence, dedication and diligence.
Tin has worked with his hands all his life. First with his grandfather, who was a carpenter, then with his father working with steel. After studying electronics, robotics and engineering, he was thinking one day about the need for parts and where to find them. Yes, Google has the answer to many questions, but it is a hit and miss process, difficult to find the smaller and more obscure supplier. So he came up with the idea of creating a B2B platform of suppliers.
There was no money to fund the business in the early days, except for his own pay cheque from working with his parents, which he invested in paying his first employee. And he was always late with the payment. There was no budget for advertising, and so a mixture of cold calling and emails (thousands of emails) was the only way forward. He was 21 years old.
Initially, he allowed suppliers to list their services for free, but he soon learned that a free offer was regarded with suspicion, and that suppliers tended to respect sites where they had to pay. After building up a critical mass, he started to do just that, offering a very competitive listing price for suppliers, and a free listing of jobs required by buyers. Starting slowly in Croatia and the surrounding region, the number of suppliers started to grow steadily and become more global. There are now around 1,500 paying suppliers from all over the world.
The concept is simple. A buyer needs a tool or part constructed. They publish drawings, specs and deadlines on the Worcom B2B platform, and the suppliers bid for the job directly with the client (examples from current jobs above). Job quotations typically take less than 24 hours.
Business is extremely good. Two rounds of venture capital funding - an initial 50,000 euro followed by 400,000 euro - have given him the confidence to go forward with his ambitious place. A third round of funding in excess of 1 million euro is expected this year, which will help fund a rapid expansion, including sales offices in Milan and Munich and a total workforce of 20.
With all the cold calling and learning how the industry worked in his native Croatia, Tin was struck by the lack of systemisation many Croatian companies have in their business operations.
"So many companies were running their businesses in Excel, or even 'maybe Excel' (the boss would have everything in his head). One CNC shop with a turnover of 30-50 million and 70 employees is a case in point. They had no software and were doing many of the calculations in their heads. They are losing so much time and money, unable to accurately predict what is necessary to meet deadlines, or the best time of year to buy supplies - the price of steel varies a lot according to time of year, for example."
So Worcon came up with a project management system for CNC shop floors called MachineDesk, which is about to hit the market. MachineDesk helps the client every step of the way, from materials ordering and price tracking, to preparation time and hours needed. The project and deadline are entered into the system, after which calculations on how much time and materials are needed, pressure points on additional labour, automatic ordering of parts, and tracking of commodity prices. Workers will have tablets and can track the price of, for example, steel, which has widely different pricing in March and September. This is where companies are losing big money.
The software can tell the client with 99.9% accuracy how much he will need, including time calculations for things such as going to the warehouse, taking measurements etc - this time is not usually factored in. Everything is based on corrections, so if a 1,000-hour job needs 150 hours more, it will be even more precise next time.
One of the key benefits of Machine Desk is accountability, and the ability of client and supplier being able to track progress in real time. There is a lot of theft of materials in the workplace, for example, and Croatia is no different to other countries in that. The system tracks each item, and if something is reported broken, the physical presentation of the broken item will account for that.
With multi-warehouse options and full tracking, a German client using a Croatian supplier will be able to track progress of the order, including how many units were produced in a certain location on any one day. This should encourage efficiency and the meeting of deadlines, as well as giving the client a lot more security and peace of mind. An array of charts and spreadsheets are also available to show progress, useful for boardroom presentations.
And while Machine Desk is 99% the focus right now, there are already exciting plans afoot for expanding the Worcon portfolio.
"We are working with AI to read 3D models, if we succeed, we will revolutionise the industry. You will know your margins, we have AI, focused on prototypes and on companies who need something fast and now. We can sell this AI tech to bigger companies, getting smarter every day, and it will help them with their calculations."
The biggest success so far? Getting those two rounds of funding. When the first 50,000 euro came in in June 2019, there were very close to the edge, able to continue for perhaps 2-3 months more ("Imagine what it was like to suddenly then get 50,000 euro when you have been living off nothing."). He was just 24 when the second round of 400k came in last year.
And the biggest disappointments?
"Haha, after promising my parents that we had a unique concept which was going to conquer the world, I then found that there was some strong competition in the United States. That was a setback, but we overcome it. And also, perhaps, the numerous fake investors here in Croatia, promising lots and delivering nothing. Thankfully, we found two great investors, and things are now going really well."
Advice for new Croatian startups?
"Just start. And do not be afraid to ask for help. Or money. If you can't do that, you are not in the game. Remember that the idea is only 1-5%, and X times Y can equal 100 million. You have to be persistent.
"I am happy to help other startups, and I am glad that two have managed to get initial funding through my help. I also coach several startups on their pitch deck, which is a crucial aspect of fundraising."
Looking back at when you started, would you be happy to be in the position you are in now?
"Haha, I should show you the spreadsheets and revenue projections and where I thought we would be. The Porsche was parked in the drive, haha. But yes, I am very happy. We have great products, great investors and an unbelievable team. I am glad that I had to struggle to get this far, rather than being given a million by a rich father. It makes you hungrier."
"Where will I be in 5 years? Exited from Worcon is the plan, and working on some new startups. With the knowledge I have gained and the people I work with, it will be so much easier next time, and there are SO many great ideas."
And I, for one, would be VERY interested to learn more about those startups.
A fabulous Croatian startup with an even better attitude. One of the most pleasant interviews I have had in some time.
You can learn more about Worcon on the official website.
For the new MachineDesk platform, click here.
Worcon has also launched its own industry portal and printed magazine under the name Manufacturing Bay, see above.
For more stories of Croatian excellence and innovation, check out the TCN Made in Croatia section.
