There aren’t that many people that remember what spark ignited the Internet, but one thing is for sure, when Yahoo put those banners, and that changed someone’s business, the rest was history. E-commerce disrupted so many industries, and is continuing to do so like nothing else. You could say that people expected so much out if it, so early, that it may have caused the .com bust all together! Where ecommerce is going, and how it felt starting a company that pushed ecommerce, we asked a serial entrepreneur, and the founder of Inchoo.net, Tomislav Bilic. They are specialized in building web shops using Magento, the most flexible enterprise-class ecommerce platform to power your business. Magento was bought by Ebay in 2011 for $180 million, and Inchoo grew in 5 years to over 40 employees, and they are hiring as you read this.
Why are we writing this? Well it doesn’t make sense owning a website if it goes offline, it Alexa decreases, someone else owns your domain, or your email gets blacklisted. So we notify you when that happens with our website monitoring tool.
Goran: Can you tell me a little bit about yourself before May 2008 when you started Inchoo? What was the force that pushed you towards entrepreneurship? Or perhaps, was there a force that was pushing you away from something else?
Tomislav Bilic: During my faculty days I was building some internal projects like web based games. Back then I also started a couple of website development projects with two of my friends., Zorin Radovancevic and Damir Podhorski. After we developed a few websites for post graduate studies, local companies started contacting us to do some work for them as well.
That eventually grew from student contracts, to building a company called Escape in 2003. Which is now one of the leading digital agencies in Croatia, so you can say that company is also quite successful. After some time, my personal expertise and interest were focused on ecommerce development.
E-commerce was something that was most fulfilling to me. That’s because only in ecommerce on the web you can see results immediately. When we built online stores, the actual results could be seen almost in real-time. So when the client increases it’s sales online with the website you built the communication, trust and co-operation skyrockets.
Because of this I wanted to be in a company that was focused in ecommerce because it is quite complex, and it had to be core business in order for the company to grow. Therefor I left Escape and founded Inchoo in 2008.
Goran: So it was your quality that attracted the clients to contact you to build their websites?
Tomislav Bilic: Yeah exactly. The first customers we got exclusively through word of mouth. The very first client recognized us as students who knew how to build great website, and our professors vouched for that because we build a few websites for them as well.
Goran: What was the most difficult period for Inchoo, and what is different today from then?
Tomislav Bilic: In 2008 when Inchoo was founded it was a company with 1 guy (me, self-employed). After that the company grew very quickly. In the end of 1st year there were 5 employees, 2nd there were 11, 3rd year there were 20, and now there are 35 employees.
This growth is quite challenging, since it brings a lot of fresh problems to the table every day. People have trouble to accommodate to the environment. For example, a junior developer works on a very serious project just after 2 months. After 6 months he is a project manager, and after a year he is a team leader, leading a team of 3-4 people.
During last 5 years, the company changed a lot. The most challenging time for the company, to be honest, is right now! The company is transforming from a small company to a medium one. When the company was smaller, there was no need for strictly defined processes, and there was no need for overhead. Everybody knew his job.
Now when the company is larger you have a lot of investments in defining the processes, but also people need to understand the mission and the vision of Inchoo. All this is even more challenging because we are living in a smaller city, Osijek, so you don’t have a large pool of qualified people. You need to invest a lot in internal education and finding the balance between fast growth and setting up a healthy working environment, is a hard path.
After Croatia entered the EU we had another challenge because many of the employees were swarmed with offers from abroad. Although our employees have great compensation for Osijek standards, we can’t financially compete with cities like London or Frankfurt.
Goran: How do you attract talent, and how do you keep the troops at home?
Tomislav Bilic: Most of the people we hired are from Osijek, where we also train them. We had previous experience with people moving from a bigger cities like Zagreb, would move back after a couple of years. So, we concluded there has to be some love story involved. Some of the best people we hired were from Osijek and we also invest a lot in our education and training.
That’s one of the strengths of Inchoo, that we are very efficient in training of developers. This is something that we can count on a long run.
Goran: So to sum it up. The bigger the company, the more money, the more problems you have right?
Tomislav Bilic: Exactly! When the company is young , everybody works mostly on enthusiasm and emotion. So you have a friendly, small, cozy environment. When the company grows, it gets harder to keep the family atmosphere. Later, when the number of teams increased, family spirit was moved to a team as a unit.
Most of the challenges are organisational ones, caused by the growth of the company.
Goran: How has the ecommerce landscape changed in the last 6 years? How did that impact Inchoo and your way of thinking? Do you think there will be a similar shift in the next 6 years?
Tomislav Bilic: E-commerce changed a lot in the last six years. On technology perspective we had a huge change with evolution of many platforms (Magento was one of them) and in impact of social media towards ecommerce. Also there was a huge challenge with the rise of mobile, so the actual devices where people are buying from also changed. People are buying from their desktop computers, their laptops, tablets, mobile phones, TV’s. We even had internal jokes that people are buying from the fridge because Samsung had announced that one of their new refrigerators will have an Android with a display in front.
Al these elements made this ecosystem very dynamic. So when you look at the numbers, although the growth of new users of the Internet is decreasing, the ecommerce growth is actually increasing faster.
6 years ago you didn’t have many stores who were strictly online. This changed because now you have a large number of businesses that are strictly online! For example there were a lot of daily deal websites. Although they have their own up’s and down’s they had a huge role in popularization of ecommerce, especially in Croatia. Few years ago people were only talking about buying stuff online, but after Kolektiva this changed and ecommerce started to grow.
In the next 6 year we wont just have ecommerce on the web, but in many other places. To be honest, I don’t really know what will happen! This ecosystem is changing so rapidly. We might have holograms where we could try the jacket on before we buy it. Who knows?! Whatever does happen, Inchoo will be there.
Goran: What would you say which companies are at the forefront of the ecommerce innovation? You mentioned Samsung at one point, that proves ecommerce is going to go in many directions. The offline world will continue to go online, and now online world will start to go offline. Already you can pay with your mobile in brick and mortar stores. What are the 3 companies that are moving the ecommerce forward.
Tomislav Bilic: First I would have to mention Magento because Magento created the order in the ecommerce platforms out there. Before Magento there were a lot of low-quality platforms and Magento placed standards making it scalable, robust and ready for enterprise level.
As for the other two, that would be the leading merchants Amazon and Ebay. They have a lot of innovations on their websites. Having business this large makes it possible to invest in research and user experience and old types of research how the customers behave. They built a lot of innovations in the shopping system. The way search is done, related items, experience, and a lot of merchants are copying them. So I would name Magento, Amazon and Ebay.
Goran: Could you share with us 3 top advices you usually give to your clients, and explain how are they making money from the opportunities Internet presents?
Tomislav Bilic: Don’t copy your competitors. This goes especially for Croatian merchants. Create your own story, get to know your clients well. We see that a lot in our clients. When they are building a shop, they want to copy a little bit of everyone. They are not really creating a story that is making sense for them. In the end, the customers don’t respond well to this.
Trust your solution provider. So when merchants are hiring an ecommerce provider, they shouldn’t just hire a company. They should hire a partner. They should have in mind that before this specific job, solution provider built dozens if not hundreds of online stores, and they know best practices.
Solution provider also knows the technology side, and what particular set of technologies is good for the client. Usually when the client doesn’t listen to the solution provider, the results aren’t the best. If the client doesn’t trust the solution provider, he should find a new one because there is no success in this story. So there should be a huge synergy between the client and the solution provider. The client knows his clients better than the solution provider, and he should focus on that area.
Change your perspective. This is mostly related to the companies who already have an offline business and they want to go online. In this type of scenarios we see that they often observe the customers the same way they do offline. However online customers do not behave the same way offline do. This is the reason why so many merchants need to change their perspective. The content and the message have to be changed and delivered differently.
There are just different ways the client browses and purchases online. The advantage here is you are not limited to your local environment, and clients can purchase your goods from literally around the world. Therefore, you need to have a prepared strategy.
Goran: If clients are more and more going to be “from far and far away”, would you say that todays shipping companies such as UPS, Overseas and DHL are prepared for the task that is going to happen in the next 6 years in the ecommerce business?
Tomislav Bilic: I think they are. I don’t think it’s a problem of shipping; it’s more of a problem for merchants to organize themselves to be able to accommodate the needs. Lets say you want to ship to Japan, and you have a product that will be popular there. Maybe you don’t need to ship there every single order? Maybe you can find a drop shipper there who can have some sort of stock there, and then ship from the drop ship company. There are a lot of possibilities. You just need to be open to this type of possibilities.
The problem with the local merchants is that they think small. Don’t build your strategy like you will have only one order from Russia. Think like you are going to have thousand orders from Russia or Japan. Then you will not have to ship each order separately, and a drop shipper can take care of that. What you really need to focus on is your story, because not every product will work for everything and everywhere. Maybe your product is only local, so you just need a good local strategy.
Goran: Do you know any funny or educational stories from past client experiences?
Tomislav Bilic: There are many, and after speaking with a colleague we tried outlining some of them.
One of the most interesting for us is with a client keepshooting.com. We built an online store for a legal weapon dealer. You can basically go to a store and purchase guns, grenades, shotguns, and it’s totally legal in US. Since US has 50 states, and all of them have internal laws that are related to the weapon industry there was a lot work involved in customizing the store which products can be shipped to specific state. So for example, you can’t ship a slingshot to Maryland, but you can purchase a bazooka. Which was quite funny when we were developing it.
We haven’t really talked about this before, but I’d like to mention it. One of the Inchoo’s strengths is our marketing strategy. We can thank our growth of our marketing strategy of sharing knowledge. Right now our blog is the number one unofficial Magento website in the world. That’s because we have a lot of quality content and a couple hundred articles regarding various Magento topics.
So for example when we worked with one Magento client from Germany, we worked on-site with them for a couple of weeks in Berlin. We went there, and had to meet their development team. One of their developers even had something he called the Inchoo Bible. So we asked him what he meant by that. He actually printed out all our articles which was thick as a book. He waived at us and said that this is the Inchoo Bible, and that he learned most of the Magento from it.
This sort of education based marketing gave a lot of visibility to the individual qualities of our team. So for example there was this one time when I was talking with a client, and he mentioned some of our developers by name. He read everything we published and he distinguished one person from the other, and learned their writing styles. It was a great feeling, because I was talking with him for the first time, and already he knew everybody. Not only that but he was able to guess people’s personalities by their writing styles.
Goran: How did you get the name Inchoo?
Tomislav Bilic: I wanted the name to be short, memorable and to sound good. I also didn’t want any loan translations. I also wanted to stay away from generic “web something”, “IT something” names.
I also had to keep in mind the Croatian law so it had to be a Croatian, Latin or Ancient Greek word. I found the word Inchoo in the Latin dictionary and I liked it and it also had a cool meaning. Inchoo means “to begin”, “to commence”, “to be able”.
The only problem was that just few days after I selected the name, .com domain was registered so we registered inchoo.net. Today I think it’s obvious that didn’t stop us from succeeding.