Our guest today, Szymon Niemczura, is the founder and CEO of Kontakt.io, a famous beacon company which started two years ago here in Cracow, and already boasts a staff of 80 people. The rapidly growing Internet of Things is silently enhancing our world, and the amazing work of Szymon and his team is adding to this exciting next wave of innovation.
Mentions and links:
Table of contents:
- 02:45 Intro
- 05:00 From software to hardware. From CodeWise to Kontakt.io.
- 07:50 How to skip Seed funding and go straight to the A Round.
- 11:20 The competition between Estimote and Kontakt.io
- 16:10 How does a beacon work, anyway?
- 18:40 How beacons are being used on Alpacas.
- 20:00 The education system.
- 21:20 Beacons will slip silently into all our lives. ”
- 31:00 How to make your second startup the more successful one.
- 34:15 Answering the question of customer acquisition.
- 40:20 Scaling past 30 people.
- 45:25 Communication – The #1 tool of business growth.
- 48:30 Training leadership.
- 52:35 The values of Kontakt.io
- 56:00 How to juggle five offices.
- 01:01:00 Outro
Hello Project Kazimierz listener, it’s Sam Cook here and welcome to the seventh episode of season two of our podcast. Today’s guest is a very successful founder from Cracow, a former CEO of CodeWise, co-founder of this company which is now an advertising technology company. A few years ago he left CodeWise and co-founded and is now the CEO of kontakt.io. His name is Simon Niemczura and it’s very exciting to record a second episode with one of the top peaking companies in the world. As now we may say the Project Kazimierz podcast is a place to learn about beacon technology and business, just because Cracow has such an amazing position in the world of beacon technology and Internet of Things. Beside that, in this episode you’ll also learn how to make tough decisions how, the role of the CEO changes while your company grows and why leadership is a key for success and much, much more so I hope you enjoyed today’s episode.
So hello again Project Kazimierz listener, my name is Sam Cook, here with as always my co-host Richard. How you’re doing Richard?
Very well, good morning it’s 5:12 in the May 2016 in Cracow in a country called Poland if you’re listening a thousand years from now.
For historical purposes. We’re sitting here today, there’s a lot of noise around you
because we’re in a busy, let’s say hive of activity in the middle of the industrial part of Cracow. The, actually the former, industrial part of Cracow, another tech hub of the Zabłocie region and we’re in the headquarters of kontakt.io with the CEO and co-founder Szymon Niemczura and sorry for my pronunciations a little bit off on that but Szymon is the co-founder previously of CodeWise and now the co-founder and CEO of kontakt.io. Szymon welcome to the show it’s great to have you on here.
Welcome, thank you for having me and welcome in the office here.
Yeah I know, it’s great. You just given us a tour as we walked over here getting ready for the show and 80 people, I understand, are already on staff?
Are based in three offices. Where are your offices right now?
I’s actually more than there are three offices we have obviously here our HQ in Cracow, we have a second business office that is in Berlin which is mostly focusing on growth, we also have office in New York operating for America and supporting with one of ours in Mexico and then we also have a Shenzhen office in China supporting APAC region
So 5 worldwide offices, I understand, and 80 employees and growing.
The purpose of what we’d like you to get out of the episode today is to really learn the story of not just kontakt.io which is a leader in the worldwide beacon industry, fast emerging, but also talk more broadly about the beacon – Internet of Things movement – and finally, just to learn about what it’s like to be in a start-up that’s that’s grown from zero to eighty employees in the first two years of operations. You’ve got a background before this is a co-founder. So walk us through a little bit of how you got to the point where you founded kontakt.io, your background and what came before this.
Well I graduated University in 2010 and I was looking for a way to start the professional experience. I was doing business before – I was doing a lot projects where I was a one man army to deliver IT projects – this kind of stuff. But then at the university I have hooked up with two friends and we decided that we can start our own software house and we started CodeWise. First years were super difficult, we were really struggling with getting on track, with getting business but then I talked to my friend who is currently the CEO and owner of CodeWise and he had some ideas about building products around ad tech, so we started building this products and monetizing them and it worked great – we got a couple of different products there doing different things but mostly around delivering high volume campaigns over the Internet this was a moment where I decided that “ok this is not working for me” so I want to do something else and I decided to step away from that, and I was looking for a new challenge and one of my bankers said “well I have a project and could you just spend like 15 minutes on advising on it?” and I said “of course” and i have met him and he told me “you know we’re trying to solve this problem for visually impaired, because in the museums and public places there is no way for them to view the content and I want really right way for them to have that a great experience in there.” All the existing technology is terrible. You’re blind person and you’re given an interface that you cannot see, so therefore it’s super hard to use and the only thing you know by heart is your smartphone, so we decided – hey how about finding a way to give the smartphone the context so it can deliver the right content, and it can also navigate that person. This is how we created the first beacon, I immediately found that idea great and something that is not just doing business but also something that does create social impact so I decided I want to jump in I don’t care if it’s not a business idea in the first place, but I like it. It’s around 300 million people who are visually impaired globally. So we jumped on that, we created the first beacon, we created some sort of a basic technology for this and then we realized that there’s so many ways of using this technology that limiting ourselves just for this use case would be such a waste, so we decided to use the brain power of the entire world to build on top of the technology stack we provide. We started selling dev kits and shortly after the iBeacon and was released by Apple. We said okay this is a self-fulfilling prophecy so we must take it on board and we did. This way we’ve been boot-strapping the business for over a year, having already a lot of customers’ orders then we took a two billion dollar investment from Samsung that was two years ago. That way we just landed five million dollars with both Sandstone and Create Adventures from Prague.
Alright so 2 million in the first round was at the seed or angel round or…?
I would say from the perspective, that we boot-strapped the business and also with our own money we have concluded that was the seed round so we immediately started with the A round, so the current one would be a B round, but from American investor perspective that was the A round.
I just wanted to jump back a bit the CodeWise, because it is quite known in Cracow as a very successful company, won some awards and and you said it wasn’t working for you and I’m wondering was there a some connection? Did you somehow cash out? Because it was the money you had to invest in kontakt.io was your seed capital as a result of exiting CodeWise or are you still a shadow in CodeWise, because CodeWise is a success story and when people leave a company either they sell it or it’s a disaster. But CodeWise is still success story so I’m just wondering what the connection is? How the story ended? Because I think it’s like you skipped over that.
Obviously CodeWise is a success and I’m happy to be part of that, especially at the beginning where things were just built up around the culture, around the stuff how you build IT projects and how do you deliver them, but then again I was the CEO at CodeWise and then was the other partner who had all the ideas driving the new business. So we decided that a company with two leaders it’s technically a company that doesn’t have a bright future, so it’s got to change and I decided – okay there’s no point let’s cash out and…
We try to make these conversations useful for other people listening and it’s certainly good to hear that you have a situation where there are two founders involved in a company but it’s working well from a commercial point of view and decide its best for the company and best for them to part their ways it’s not necessarily a disaster and now you’re also leading a company that is making some impact, right?
Obviously you have to realize, when you have a start-up, is that you always have to plan for stuff like that. When the role is too big for you or the direction shifts and then you actually have to change things so you have to always always be ready for that. This is stuff that start-ups don’t talk about. I know that it’s nice to be pragmatic about business and positive but you also have to face the truth that there is always a capacity that we have, there’s always a path that we have that it’s not necessarily stretching or we’re not necessarily able to give it away and follow someone you know so I definitely decided that for me of course these are not easy things but for me it was better to leave. I was also not that excited by the space CodeWise seems to becoming. I was very excited by about its engineering part, which still is one of the apex of technology here in Cracow in terms of cloud computing and this kind of stuff but on the business side it was not exciting for me. Now I finally, with kontakt.io, feel that this is my business, this is where I feel it in my veins that I want to build that.
That’s great and maybe the lesson I’d like is obviously not necessarily the case here but a good question – when you’re sitting down planning your start-up is the question what happens if things go wrong? What happens if we start having different visions? A very good question is what would be fair rules for selling shares back to the company? Sure I’ll sell you my shares but there’s a habit of difference between one zloty and 10 million zloty it can be like something based on the previous year’s revenue or just something. It’s really good to have something, because you agree with the stuff then it makes everyone feel more secure. If you google kontakt.io and Cracow you discover that there are major global news organizations writing about Cracow as the center of start-ups and beacon technology as a one of the early investors in the company you may have heard of Estimote Is it just coincidence that there’s more than one well-known beacon company here in in Cracow? What’s the story there?
That’s a nice story and I’ve heard a lot of different, funny stories around this being told…
The previous interview with the man you may have heard of called Jakub Krzych, so your version of the story would be really interesting because I think you’re one of the people already know what it’s like.
It is truly a coincidence. I can even point when we actually realized that there is a competitor like Estimote, doing similar stuff to ours was when the iBeacon was released and actually both we and Estimote started selling dev kits out there and we thought – holy crap technically these guys are two blocks away. I went there, I met Jakub and then we chatted a little bit and then we decided to race a little. From what I see it from perspective it’s been the Estimote was a bigger company at that time and we had almost nothing, probably that was very motivational for me because I looked at the state of things and I decided that I have nothing to lose, I’m solving different problems the same tool. Let’s do it! I decided to go full speed ahead and it obviously paid out. For example right now kontakt.io by VA research is number one beacon company in the world, If you talk about volume. We sold half a million beacons in three years globally, so I think that this is something that, as a second comer, was started from an unknown company from Poland that didn’t do much marketing ended up beign a global leader, I believe is quite something.
One of the things you said and also Jakub told me this also is that you’re using the same technology to solve different problems. What are you guys doing differently or what problems are you solving versus what Estimote does? I know you’re using the same technology.
From our perspective we’ve been a different company since day 1..We’ve been super pragmatic about making beacons out they’re not visible, deployable, highly deployable that was our key goal but also we did a lot of custom work for our customers to just help them so they don’t have do everything on their own while Estimote was focusing mostly on building out the developer community, helping developers to understand this technology and put it inside the business in today’s world. We’re still fixing different things of the equation here and still that this becomes unchanged. We don’t meet a lot on the deals of vendors.
That’s good and I think good for Cracow that while you are in the same space, you’re not going after the same clients necessarily but there is just this great friendly rivalry in the community where it’s two different world leaders and in the space with different different pros and cons.
I think what the Apple really well understand is that the market were in absolutely humongous. It’s going to stay this way. There is space for probably 10 to 15 billion dollar companies in this space and we can be among them. There’s really no point and any fighting…
Absolutely, I mean in Germany there are journalists famous for his clusters and many countries are like in the UK where this is the Formula 1 motor racing cluster development companies in Germany Heidelberg area will be printing companies around color in the media companies and just in terms of attracting people if someone a really smart engineer is into beacons choosing which city to work in and you might come and work here and then think what if it doesn’t work out here and there’s a company down the road and maybe jointly you can get together talk to regulators, talk to the universities about programs. There are so many advantages because you talked about this huge market and I think that one of the most interesting questions about the beacon market is, and then in fact before you answer my question maybe a second question or other requests please explain to the listeners not really into beacons what exactly does this technology offer, that previously wasn’t available and in what way is it different and better them existing technologies. What do the beacons do, where are they fall and the second question what do you feel the killer apps are going to be for beacon technology? It’s a big question – different people have different ideas – is retail? Is it military? Is a commercial? That’s a number of questions bunched together but what I think we’ll start with – what the hell are beacons? What did what they do? Because a lot of listeners don’t know.
The beacons are super simple, they’re tiny radio devices that are broadcasting constantly BLE – Bluetooth Low Energy signal, so old and modern smartphones, all the modern devices that have BLE connectivity can use beacons and technically it’s a way to pinpoint yourself on the map indoors or in any other place but in a way that it can prompt an app within the iOS or Android systems. Imagine scenarios, thanks to the beacons, you can navigate inside the building without the GPS signal being available or you can have triggers that prompt you when you enter a specific zone like at the airport. The beauty about making beacons are – first that they’re just broadcasting data passively so you can choose whether you want to process it or not. They’re giving you this context of the physical world but also the other part is that they’re highly distributed at these days, because they’re on every single smartphone, on a lot IoT devices already. This gives you a great opportunity to interact with anything. That’s the beauty about beacons and then technically the use cases are endless. Every single day we have new customer with even more exotic idea how to use beacons and how to enhance either the user experience or track things or people or help people to find a crash cart in hospital faster so nobody dies. There is a lot of different ways of using this technology but this scale they’re deployed is the key.
In terms of like where kontakt.io fits in this marketplace, do you see yourself more as a hardware company that’s getting better and better at manufacturing, creating the beacons? Because some people say that in the long run European or American companies should be good at designing and manufacturing. And it should be done at the lowest cost without compromising on the quality locations and you mentioned the office in the Shenzhen which perhaps gives hint of what the answer might be but do you see yourself more as being as a manufacturing excellence company or will you be selling direct to users and having systems integration and professional services, for example if the Ministry of Agriculture wanted to locate cows all over Poland…
Actually we’re doing it now but not with cows but with alpacas.
Ok you can leave with that angle that with the alpacas. Better the animals than sweaters. Coming back to the identity of the company is it settled do you still don’t know?
Obviously we all want to stay open and develop as much as we can, we are here to answer problems that our customers have which rotate around – yes of course hardware in a way that is highly deployable, it’s secure and scalable but also on other problems like deploying those beacons physically, maintaining them, building up the logistics of of their operations. There is a lot of different things that our customers want to have done so they can keep focusing on their core business rather than building up proximity teams to fix those things for them, so they have us and at this point I think we have pretty much excelled in manufacturing. We’ve been able to produce at scale with will be high quality and here in Poland so I require something manufactured here in Poland and from our research, we don’t see huge savings if we move the production outside of Europe towards East. At this point it does not look very scalable for us. Also important for us to keep the highest possible quality here. That’s why every single beacon in kontakt.io is not just a thing, it’s an id, so every single beacon is unique, with the unique security registered in the cloud as an entity. It’s about quality, it’s about our philosophy of how we work with hardware and how we make it smart for our customers.
My background my first major business was a Systemy Kodów Kreskowych, so bar code into their systems integrator worked with scanners and the barcodes and in a way you can imagine that the phone is the identifier and the beacon is the scanner. Just conceptually like in biometrics you got the fingers firing the fingerprint scanner and scanner of magnetic cards etc., etc., and do you see the increasing discussions about beacons going mobile? For example of a beacon on a drone, or beacon in an ID card, where in a way you’ve got the scanner being mobile only and the mobile phones being more stationary and your conceptually do you see… does that work> Can you imagine a beacon in a drone flying over a stadium for example, if there was a health care emergency and you need to locate someone quickly can beacons go mobile?
Definitely that’s a second nature of beacons that was not that obvious some time ago, now it’s becoming more and more – it’s that they’re frictionless, so in order to interact with anything you don’t have to have that sort of us scanner, you don’t have to have that physical interaction, the line of sight, you don’t have to take it out from your phone and anything can happen frictionless and even userless I would say so. Technically we already see that trend happening where beaconised things and devices, and mobile devices, and people, and things and then you just used to many different things. It’s definitely already happening and what we see it that’s probably where beacons can kick in into the IoT really big. Mobile phones are always limited with app opportunities, with the app adoption and stuff like that, so when you think about beacons in the borders of IoT there are no limits, you don’t have to have the mobile app to have certain functional. This is very important for this world, this is something that Google is aiming at with the with the Eddystone format, with the physical web and think about it this way – you have China and you have we chat being dominant force in terms of mobile apps. China has really no point in building mobile apps, so what you’re going to do if you are a local restaurant out there, you don’t want to build an app – you are going to use the physical web, you’re going to use the web that is in a mobile phone that is triggered by the beacon. Lots of opportunities outside of regular set killer app thing…
If you think of the beacon as an identifier like it were an RFID tag you have been costly an issue if you think of it as a scanner, is a very local scanner and a great bunch of your biometrics is but you get the fingerprints, and the eye for free, you don’t need to spend anything. The great advantage of the humble market is income paper is very cheap and the disadvantage of RFID tags is that they always costs something so it’s hard to identify a box of matches with a RFID tag because the value of the items to located compared to the value of the identifier. Can you talk about the cost trends in beacon technology – iif you think where we are now and in five years’ time where you expect the cost of a local beacon volume, will it be under a cent or under ten cents? Because I’m sure many listeners think this is cool but you know it may be too expensive for me right now.
It depends on whether what is this scenario you’re using, for some we need to have high end hardware that has different sensors very, long battery life and so on… you will technically, physically you can’t squeeze those costs too much but I think there is a big space for very little low quality, very low price…
Exactly. You can just throw out and you don’t care about and they cost probably a dollar or two. That’s definitely something that will happen in the next five years. Generally, when you think about beacons they’re smart hardware but the thing is that this is an enabler, it’s not something that is the solution itself. It’s something that helps to deliver this physical context. Think about it this way – normally we would not, if we had another option, use some sort of magical technology nobody would like to install those things, but the thing is that you have to have them as the necessary evil to to have to get all the stuff, to get all the benefits of proximity. I would say that it’s never about the hardware, it’s about how you package the whole thing what kind of extra services, extra stuff… you can help your customers with… so hardware is just a neighbor here.
Ok, but in terms of long-term cost trends you see a dollar or two for local beacons for, I don’t know, it might be a festival or something, where people would be to basically temporarily enabled and it didn’t matter that after six months the battery was dead. So it’s not going to replace RFID tags because that’s still scan id.
I think this technologies and I’m very pragmatic so I really like that our customers are
mixing different technologies together to get the best outcome, for example if you’re doing item tracking and the logistics using RFID and beacons makes a lot of sense. Think about it like a crate of goods and you have one beacon per crate but also RFID tags per every single box that’s on the crate, so you can have a great granularity of the beacon detection so you know where your crate actually is but then if you need the actual list of items from that crate you can use to RFID tags on on each box. I think the beauty is that we can still use those technologies in a very sensible way so we get the job done instead of thinking what’s better, if it’s RFID versus beacons – they’re calling different spectrum of needs, obviously beacons can go from zero to eighty meters well but then the cost, but then that benefit of being very frictionless, so it’s about making use of the current technologies and providing input from every customer ones to fix.
Ok, we shouldn’t spend too much time on the technology because it’s really about business but if there are other insights about the technology and where it’s going to want to share you do them. Maybe talk about your longer-term goals, you mentioned that after the CodeWise you felt that this is really your home, you know you’re in the right place, so could you imagine in 5 or 10 or 15 years’ time still leading the company in it being a major global player with all… potentially could be a part of Rockwell Automation or some giant global companies like Cisco or… I’m just giving examples and also those particular targets because I think beacons to new to fit into the existing ecosystem. But do you see yourself leading this company for years and are you taking it year by year in step by step.
I definitely hope so, because I really enjoy what I’m doing, I love it and I want to keep doing it as long as I can. Definitely that’s something that is my greatest passion. I think that the key question here is what actually stands behind the development of kontakt.io and to be honest, we want to build an organization that last, an organization whether you are in it or you already you have your career elsewhere you look at it you look at it, you look back and you can say “I built this and this is my child”
and you can say to your grandchildren “hey guys this is what we developed together with this guy and we’re super proud of all of this”. I would say that this is what we’re aiming and I want this company to last. That’s how I’m building it up together with my leaders and I definitely want to change the way, I mean not change but define a way the IoT works in the future.
So really you… and I think this is a common theme I’ve seen in lot of start-up founders is the second one seems to be that the more successful one, the one where you…
of course some people hit perfectly on the first one but do you see a big difference between the way you started the second one in the first, from how you form a partnership agreements to how you funded it to how you set yourself up capitalizing on your strengths and compensating for things that you may be weaker on?
Definitely there is this experience but also this gut feeling that tells you to “this is what you want and this is what you don’t want”, because you’ve been there and you’re certain you don’t want that. What’s the key driver of this business is building this global start-up, global impact or is it just purely revenue based service approach or how do you build up your team’s, how do you treat them, what kind of values you want to pass them? This is definitely a better experience when you are doing it for it for a second or third time and you’re not doing a lot of mistakes that you did in the past so it doesn’t mean that there are none but it’s definitely much better.
More higher quality mistakes, right?
Exactly. Bigger impact.
Bigger and bigger quality problems as you go up. I think it’s greater whem yours solving bigger problems.
I’m curious in terms of your customer records, every company’s called obviously your finances, got production, manufacturing technology and it’s called sales and marketing and because of the high profile ensure the sector maybe it’s quite organic but it in terms of customer acquisition, is it more web based generating inbound leads of search engine optimization or is it old school trade fair or is it telesales… what’s your… because it’s quite tempting to think in the start-up world being open, the new ways – your LinkedIn, Facebook, Google Adwords… it’s the way and sometimes the buyers don’t completely different, the corporate purchasing doesn’t click on Google Adwords and I know many companies when’s there is some tension between what you read on TechCrunch and what actually works if you know what I mean. I’m really interested in what your thoughts are.
That’s actually a really good question. The answer is simpler than that everybody can think of and this is something that it’s not something I’ve known for ages but something that i recently found out, is that if you look at big companies – even like Google and you think about AdWords right and the sales process you would be amazed, but truly these guys have really strong sales teams and the long-term which is servicing is I would say small and medium businesses, this is all automated. And it does not require them to to put in any sales effort, but for the enterprise customers and big customers they’re doing, trust me, they have huge sales teams that are just doing this every single day – selling the value to the customer. And in every single business they tell you they’re doing differently and they’re doing just automated sales on the web is not true so the same thing goes for any business even like ours we have a strong sales team that is present in those five offices that we have across the globe that are are selling a lot and then we have those automated sales and automated regeneration channels that we have on the web. If you really want to build serious business you have to have people there, you have to have this, you cannot have this nice online business where I don’t have to talk to anybody, because it doesn’t work this way.
That leads to a very nice question about fundraising, because which is usually if you’re talking to professional investors in start-up businesses, this is question cost of customer acquisition as it can lifetime value of the client, right? And it is a challenge many start-ups are really struggling with, because we’ve only been in business for three years, how can we tell the lifetime value of the local steel mill is? We don’t know yet! It sounds terrible. How can you not know, it’ on the one hand but on the other hand is how do you if you have like the blended cost of customer acquisition, including the guy who gets on the plane and flies to Tokyo for a meeting as against a thousand dollars on AdWords, again it’s very tricky and obviously you were successful in raising money so somehow you overcame this fundamental difficulty…
This is a big challenge but then again it’s not just unified sales funnel, there are different types of customers, different types of sales. You have to have this structure that supports it so there’s a different cost of acquisition for online sales, for the dev kit versus online lead that becomes an enterprise customer. This is something you have to be on top of that data that you have, but this brings something I wanted to mention before – the key answer to the sales team and sales operations is that you’re building a relationship and with hardware business it is super difficult to answer the questions you just asked, because it’s not requiting revenue, right? It’s not a SAS business where you can technically… even if you don’t answer these questions the cruel figuers can support your hypothesis and you can do whatever you want in the long-terms forecasts. But if you’re talking about business like ours – building a relationship with customers is super important. These guys have to trust us, they have to know that we’re here for them and we’re not going to eat their lunch. That’s something we’re building up – old school way of doing business in the Internet in the global world today.
One of the things that you you’re doing here and I was impressed with is is the size of your sales team for a tech start-up. And I think one of the big mistakes a lot of tech start-ups make is this – if you build it, they will come to life philosophy and we’re just going to make this product amazing and and everyone is going to love us because we’re like Apple and I don’t think people realize how much work a company like Apple puts into its launches, its branding. Apple spends quite a lot of money setting the stage for these launches….
Every launch is one thing but the other thing is the huge enterprise sales going on. They partner up with IBM to sell solutions, right? Because they know that selling hardware is a recurring revenue because you just exchange it every two or three years but again you also have to build up software value right so that’s why Apple is big on sales, with IBM selling business solutions and probably a big chunk of their revenue comes from enterprise sales.
Microsoft was amazing at doing the same thing – landing big OIM contracts with governments and with every single corporation out there for their system and people tend to romanticize and simplify things that they see – thinking “l I just need to copy it and do that”. I love the term passive income, anyone who says that are just going to get a passive income business and just sit there live off of it it’s really fiction and it takes hard work. I’m getting sales in my sleep but I don’t sleep that much, because i’ve been studying about the systems to do that and it’s it’s great to hear that you’re really paying attention to it and I think that’s why you’ve been so successful in leading leading the world in beacon sales is you put the attention into sales. Let’s talk a little bit about the background of the founders here. I was talking about this before you and Tomasz were here right now the the two co-founders still with the business and then the original background of the people in, you have a very strong sales business development, business school background so talk about how did you pick the original founding team and why was it composed the way it was.
I think it’s about this moment when you connect with people and things click. These guys are a good party to start and from my perspective, Tomek was the the guy who was helping me in the bank and he just asked me for advice and this what we kicked-off. There is also the other Tomek who is the visually impaired person who was the motivation behind building those things and Rafał who was the technical co-founder and I was also co-founder at CodeWise so we’ve been trying to put a mix of guys who really want to do it. We didn’t thought “you gonna do this and that” we decided that this is the project, this is the problem we wanna solve let’s just divide that into a list items to deliver and let’s just do it, and this is how it kicks off in the first place. And then everything evolves, the company’s being build the structure shows up and the scale is enormous and you end up having 30 or 40 people under you, so then you have to become a manager and you have to become a leader and this is usually when this is verified whether you have the capacity to lead and are going to be in a big organization or not.
I think I met Rafał and talked to him about this. Companies fundamentally change
after you you get past twenty and thirty and forty employees. Sometimes that’s fun and exciting to people to stay with it throughout and sometimes it’s not and people want to move on. And that was Rafał’s decision right?
There was more a CodeWise thing that we had. But here at kontakt.io there was a different motivation with Rafał – private stuff happening so this was decided to be the best for the company growth. With Tomek we realized, “okay Tomek, you were the inspiration, you stil are the inspiration of this company and how we started but obviously there is only this kind of stuff you can do for us, so so he’s not in the sort of managerial position in the company but he’s still with us.
So just one more thing, I wanted to praise the local government – Urząd Miasta Kraków and Urząd Marszałkowski, they sent people to open coffee, there come various people. So they actually have learned, it’s just – I didn’t want to end on a bad note. It’s great that they show up, and I always give them a round of applause when they show up. And when the guys from the corporations come, you will get a round of applause as well.
We’re just coming into a very interesting topic about the evolution the culture. You talked earlier about what sort of company you wanted to leave and what culture you want.There’s always a tensopm with the start-up culture against processes and making sure that everyone knows what to do, when they got to have it done by and what their KPI’s are. Can you tell us about your experience from where you started to where you are now so quickly it’s a real challenge and one of your main way someone listening to you was going to get the benefit of your experience with can comment on how important to work on processes and “the machine”. There is always this fear in the listener “oh my god it’s going to be a corporation”. What are your thoughts on that?
At some point of the company when there is there is already a couple of teams and they have a sizeable number of guys in those teams the problem is to create a harmony in the way how you manage anything. It’s not like you’re building a corporation but why are you putting some thought into the way how you work, how do you make decisions, how do you put those decisions into life. I would say it’s absolutely your obligation if you are a manager or leader in a super small start-up or a bigger start-up, you have to get your craftsmanship on leadership and management and the best is just get people who have the experience, you can either hire them or get them as consultants and coaches but this is stuff that is so easy to make mistakes and management and leadership and resources for coaching and training that management and leadership are so available as super, super stupid not to use them.
That’s really interesting, I didn’t know how you’re going to finish that sentence. When you said the resources for leadership and management I thought you might say are so hard to find. And you said they’re so available, so where should people go, for example here in Cracow, if they want to find people who really know about leadership?
I was very actually lucky to find the Leaders Island. It is a project by Józef Kącki and he built a platform for start-ups to pass on his 25 years of experience in managing IT business. It’s a great experience, because he helps you to get the basics but not only for you, but for all of your leaders and then he’s also building up the ecosystem for you to get it with you. I don’t know where I would be if I haven’t met Józek just by accident.
This is leadersisland.com, right? We’ll put a link in the show notes, because this is very interesting, there are quite a lot of resources out there but it’s very hard, if someone’s to be a client to know whether it’s just a nice website or it’s real.
I graduated from a business school, so you can think what attitude I have towards stuff like this. I thought “this is this is going to be so so book driven, this is going to be something I’m not gonna use again as it was from my university” but I gave it a shot and turns out that there are systems that… well there are no bullshit systems that give you the right tools, only the minimum that makes sense. And then they help you to get better and better at what you do. Right now ninety percent of my job is to be a leader and manager and this is what I’m trying to build up within our teams, that we have to focus on how we get better with people, how we get better with passing the goals, how we get better with communications and I cannot emphasize how important this is. This is the tool that can help you build an organization that will last or if you don’t use it then you’re putting too much on the stake, where there is a lot of luck involved
And it might well be, because we’re interested in an introduction to the guy who runs this to talk to him, because I think the wake around businesses is people talk about the product, they talk about the market, but actually you know once you’ve got a bunch of people, the wages aren’t as low as they used to be here. You’ve got a significant amount of money flying out of the door every day, a lot of responsibility to your investors….
This is the more important part because what is the company? Company is a group of people, right? You have to get these people motivated, you have to give them everything they need for their work and should be ninety-nine percent of your work. This is the most important thing.
I think that’s the hardest part of a start-up founder is the transition from doing to recruiting coaching and enabling and right now I’m in the new agency that i just started six months ago and my last business which didn’t work out, if you if you’re curious why get to the episode 20 and you can listen to the whole story with Richard and I but I had gotten to the point in that last business where I was mainly working on recruiting coaching and enabling. Now I’m going back through the entire process again where I’m doing a lot of work and I remember the last process where made that
transition and I’m Thinking about it very, very carefully – about how i’m going to make that transition again, because we’re growing and thankfully the new agency is doing well but that’s a very hard transition in start-ups and you go from being the artist, the creator of the sales person, the person bringing in the business and you have to step out of those.
It’s a tipping point, if you can’t do that it’s really, really close to a disaster. There’s no other way here’s no the detour, there is no way around. You have to do or somebody else going to do it for you.
What’s the point when you went through that? How many employees were you at? What part of the business was it?
It was pretty recent. It was when I started the new fundraise, one year ago from now. This is where we realized that we are 60 people and it’s super difficult to manage anything and super difficult to keep track. It’s rough anybody who went through a start-up that is 60 and grows to a 60 in a year from 20 this a lot of experience and a lot of pain and a lot of trouble but this is where I realized that we need to get this serious, we need to get the organized in a way that we can build this. Especially difficult for a business like ours with five different offices, you can imagine, and so many different people, so many different backgrounds. This is not just an IT company, this is a company that develops software, hardware, has a sales, customer support operations and logistics assembly is super, super tricky to put this in a one machine, one engine.
I came 17 years just from leadership in the Army, so to me this is this something – well not natural leader i think it can be. But I think the point is it can be trained and if you’re listening to this and you have dreams of building a global company, know that when you get to a certain point – twenty, thirty people – you have to go through this transition to becoming a leader and if you’ve never had leadership training before shame on you, you went to business school so you at least were aware of leadership from a conceptual standpoint and you knew that you had to tackle these issues but even if you don’t have that background, say you’re an engineer – do not underestimate I this transition because…
It’s cool the problem is that you never going to give you a sort of the point of view of the guy who has the experience. It’s all the book knowledge, it’s nice but then when it comes to a daily operations, where you’re super busy building your start-up you have no time for reviewing what kind of strategy will work for you, you need someone that has five or six key answers that you need.Somebody who did it 1,000 times.
You’re saying that the business school didn’t do a great job of preparing you for the real world business and leadership?
It did a great job of preparing me with a couple of things, like for example logic, language, I would say – guts, but like any management book you can take and read it’s not going to help you a lot. It will give you some ideas and will give you some hints but it’s not like the guy who has 25 years’ experience – you’re telling him five things and he immediately gives you five ways of solving that. Instead of thinking about how do you solve these problems; you already have a solution of solving them. That’s a key difference.
You’re graduate of AGH, right?
No, I graduated WSB – Wyższa Szkoła Biznesu w Nowym Sączu. It was one of the leading business schools, private business schools in Poland some time ago. Right now it’s nearly non-existent but that’s the thing I am strong fan off and I’m supporting this idea that it doesn’t matter what kind of university graduate, what kind of stuff you do, it’s all about what you and then how you put that into motion every single day.
I wanted to come back to these ideas of leadership. If you were just going to say a few sentences – what the most important characteristics of leadership are for you? Because – leadership – everyone thinks they know what it is and then find it quite hard to define.
That’s a really good question and difficult to answer it like this but I think that the key ingredient is that you have to be yourself; you have to truly show yourself. The worst things I’ve seen were where the leader was trying to be someone else and nobody believed it. We have to show integrity as a person. This is what I believe in, this is why I’m excited about this and this is why I believe we should build that. This integrity and transparency, these are the things that mix really well and when you start showing it even in a company like this, when people already see there is some distance, companies bigger than it was before I still strive to show transparency and, I still strive to show them that we need their feedback, we need their information to flow, we need them to take ownership and take it as a sort of a token of trust. There is a couple of those things but they all have to be wrapped up around that integrity.
What would you say the values are – we’ve already said integrity and transparency – are there other values, and you’ve talked about feedback and communication, within kontakt.io. Are there other values that you think are really important in the company culture?
In kontakt.io there is a particular culture and it’s already identified and even measured, so with kontakt.io we’re evaluating things like mastery around the stuff that we do. That comes out of passion, how will get better at stuff every single day, how do we craft the things, the product that we’re doing in a way that we’re proud of it. That’s the sort of a baseline you doing here, but also how do we craft technology and not be hip about it we’re just doing this pragmatically as a business decision to help our customers. Other things are rotating around ownership – so we really strive for our people to take the ownership of the stuff they’re doing and double up on that we have a lot of examples where someone was just a marketing assistant now is a head of customer support and success. We have lots of examples across the company where people really grew from a regular job to someone who is running a sizable chunk of the organization. We also have guys who like to have fun and we’re not – the famous sentence “all work and no play makes Jack a dull boy”, so this is something that we live on a daily basis, we’re doing a lot of fun stuff, a lot of parties and that kind of things. We’re not necessarily visible in the Cracow start-up scene, because we don’t have the luxury for that, because we’re too busy. We definitely are having fun here and then doing a lot of interesting ideas.
I didn’t encourage you to engage with the seller communities like I think that obviously I think we’ve got the head of the Y Combinator coming to Cracow. in a couple of days. Estimote went thought the Y Combinator so they have the connection but we want all companies in the ecosystem. We aren’t actually competing with each other and were competing with the rest of the world or even there’s a billion-dollar accident Berlin that might be good for Cracow, because of more capital around, and that brings us to local patriotism and national mission here that is always interesting. This interplay between the Poland is traditionally a country that for many years was wiped off the map, suffered a lot from its neighbors, so quite often as a kind of act of patriotic mission to show that Polish companies can be successful which is a powerful motivator and sometimes the Cracow of water rival room here are people here want to show that Cracow is a significant player and the international companies that can be a bit weird when you and your you’re from France or Ireland or Ukraine and its Poland first. And you think “how do I fit into this?” How do you balance this? And what’s important at kontakt.io
To be I’ve never thought about it.
You’re the first person I ever asked about it.
I think that’s the thing that we were very pragmatic in what we do so we don’t care about those things, to be honest and we feel proud this is the technology that we developed here out of Cracow but we have this global connection. kontakt.io is already a mix of different countries, different people, different backgrounds, different nationalities and religions so it’s great and never think about it from that perspective , to be honest.
It’s better to be honest, that’s part of your company.
We’re working great with all these offices. Berlin feels like a Cracow, Cracow feels like Berlin. In Berlin we have a company shuttle that gets people around from this office to an R1. There was no decision-making on who is going when and where and it’s great because it keeps the culture really spinning, because you don’t detach. In Berlin office they do exactly what we’re doing here and the other way around. This is also a part of trying to keep the culture consistent.
It’s interesting because sometimes people assume there’s a national or local mission but you’re certainly master of your technology and thinking about what customers want. The word customer is very important. If you leave customer out of the equation then…
I think this is in our DNA, the first month we started selling our dev kits we already had a hundred and eighty orders from all over the planet, all over the place. Nothing specific but different places we became in that first month a global company. We realized we have to be there, we have to ship there – these are the things we have to fix because the customers aren’t there. It’s not a particular location, it’s not the US and Europe it’s everywhere and you have to be there for that.
I think it’s very important for the listeners to realize that business is about delivering benefits to people and I remember of my own business we were selling American and Japanese barcode scanners to electricity companies in Poland owned by the French important to bring down the cost of operations. I was a British guy, so like a British guy selling American Japanese technologies to a French company in Poland. Actually who cares? Its just about getting the data into computers without errrors, bringing the cost down and I think there is no business reaally isn’t national and in this culture you know your customers aren’t buying the product, because it’s Polish. They’re buying it because it works, it gives them benefits.
Well Szymon, I think just on behalf of Richard and myself the Project Kazimierz audience really just want to thank you for a very educational feedback on what it’s like to grow business very quickly from 0 to 80 in just a couple years global organization world leader in beacon technology and really some very, whoever runs the Leadership Island, is going to be very thankful for your referral because it we’ll probably end up trying to get him on the show and I think the key lesson that I get from that a lot of start-up founders in Cracow could benefit from is you seem to not be afraid to spend on consulting and training to fill your own gaps as a leader and I think a lot of people try to do everything themselves and that was a huge learning point that other people in this community can learn is to take outside help and get that help and blow through developmental learning opportunities as a leader you just can’t grow.
It’s super important. I think for this is to make sure you pass it along and make sure that you build it within your leadership team because the best, best guys can get for your business are those guys who started with you and who are they in the company. If you can double-up their careers within the company this is achievement.
And just to recap but I’m sure there are many people who listen to this podcast or services that Gary Vaynerchuk who talks about self-awareness thing. One of the key things you don’t have to be good at everything, but you do have to be aware of the way of where you have weaknesses and sometimes like in finance you have no choice, it’s not that hard. You have to learn the basics of finance right, even if you don’t like it.You can’t just say “oh I’m not going to worry about money”, not if you’re the CEO. You have to worry about how much money is in the bank. On the other hand you know just recognize you’re not going to be good at everything so your hire people, you develop yourself and weaknesses as well as your strength and I agree certainly will follow up with an introduction to your training organization and equally if listeners think “you know that’s unfair what about this for some organization tell us about that one” we’re not in the business of picking winners here.
Take as many chances as you can in terms of learning how to manage these people that’s that’s the key takeaway I believe.
I don’t think you can ever invest too much in your own education, because at the end of the day if the start-up doesn’t work you still have everything that you learned in it. Thank you again Szymon joining us. Congratulations and best wishes to you and kontakt.io going forward, continue this global success I know that you say your focus so much on a global organization but I think you’re definitely making the Cracow community proud and definitely our listener base is going to really enjoy this story.