Innovation was established 7 months ago and from an initial 2 employees, it grew into 5 employees and is and currently hiring 3 new IT engineers. Innovation is a training center for Microsoft and Cisco, exclusively for young people, and they work on tailor-made software development.
YES Incubator is the first ICT Incubator aimed at supporting youth in the Former Yugoslav Republic of Macedonia by stimulating the entrepreneurial spirit and boosting the self-employment among young people. The Incubator offers technical assistance and financial support in the form of grant funds and credit lines for the purpose of teaching the youth in business and soft skills, and supporting them financially to survive the critical development phase of their businesses.
Within seven months of its launch, YES Incubator has managed to house 9 businesses with more than 20 employees in the ICT and ICT related sectors such as Marketing and Graphical and architectural design. One of the most important services that YES offers to companies is matchmaking and networking. As a result of this, YES started a successful cooperation with the Agency for foreign direct investment in FYR Macedonia. As a result of that, foreign ICT companies that are interested in ICT investments in the country visit YES and explore the business opportunities.
This interview was conducted with Goce Armenski, one of the company owners.
Is this the first company that you have started, and what drove you towards it?
Our company was started by three IT Engineers, myself included, that work at the Institute of Informatics in Skopje. We have all gained experience in the private sector before we joined the Institute of Informatics and we have also worked on various projects as ICT consultants in Skopje. I am a teaching assistant and my two colleagues are professors. We decided to start a company because we saw the opportunity in the market.
Innovation is the first company that we started, and works as a CISCO and Microsoft training and examination center for youth. We also work in the areas of general ICT consultancy and software development. What drove us towards this is the need in the Macedonian market but also our exising contacts network that needs software applications, and for whom we have developed software as freelancers before. We have been ICT consultants on many e-Gov projects in Macedonia, and we participated in many TEMPUS projects and we are constantly analyzing the Macedonian IT market and we saw that there is a possibility to succeed in it.
"The biggest problem we are facing is the process of finding the right workforce... an important benefit from the YES Business Incubator is being able to educate our employees in business and soft skills with the entrepreneurial trainings organized at YES."
Mr. Goce Armenski, Owner, Innovation
Being closely related to the commercial ICT market we have identified several areas which lack in the country. Also, in working with young people we were aware of the fact that this area of Europe has big innovative potential. That leads us to the name of the company – Innovation. What we want to do is to design and develop innovative solutions which will help companies improve their working procedures and make them more effective and competitive. By identifying the lack of well trained ICT people in the country we have oriented part of the company resources toward education, giving CISCO and Microsoft certificates.
How did you finance your start-up operations and how long did it take for the company to become self-sustainable?
We started the company with our own resources and after few months of operations we achieved break-even. We achieved this as a result of the great interest of the youth for professional ICT trainings and as a result of our ICT consultancy work in the area of e-Gov in Macedonia and in Albania.
After 6 months of operations we are a self-sustainable business with 5 employees and we are hiring more developers for different software solutions. Even before starting the company, we had developed several software applications for E-testing, E-voting, CRM, DMS and many more. Now with our staff we are improving the versions we have and planning to sell them in other countries. We already have some partners from several EU companies which are interested to become our exclusive distributors for their market.
What are your major products and services and how are they unique? What is your competition?
Our major products are software applications for E-testing and E-survey software, Workflow and document management system, E-voting, DMS, CRM, Student SMS Center, Web pages development, as well as ICT consultancy services and training center for Microsoft and CISCO for students.
Our main competitors in the software area are the big software development companies in Macedonia. However, our competitive advantage is the innovation itself. What we develop are new innovative solutions which do not exist in the market. And we utilize new technologies to create ubiquity products both for the web and mobile market. In the education area, the main advantage are the prices we offer to our students, and also the experience our trainers have in the education area. All of them are experienced lecturers that have been teaching at the University for many years.
How did you first launch the product?
Most of the products we have developed by now have started with research in the specific field. Having the opportunity to travel very often, we get new ideas by talking to other people from other research institutes, which are most often connected with some big companies. After the research, we examine the possible market and then we go to the phase of design and development. However, we also have custom made solutions for some of our partners in the country. Depending on their requests we are always ready to modify our applications in order to fit their specific purpose.
We launch our products according to the requests of the customers i.e. we developed the application by request of the international organizations in Macedonia, such as USAID. Then some of the applications we developed as a result of open tenders in many institutions in Macedonia such as Komercijalna banka, State Election organization, Municipalities, and so forth.
How do you measure the success of the company?
Profits achieved are only one way of measuring the success. The number of employees and the number of increased projects outside boundaries of Macedonia are another important factor which we take into consideration when we evaluate our success.
At the moment, thanks to the YES Incubator, we have applied for a joint project in the Dutch embassy along with the Dutch company Satellite Services as part of the PSOM program (Program for Cooperation with Emerging Markets). Getting the project means that half of the investment needed for it will be financed from the Dutch government. It will require software development from our side and marketing and sales from the Satellite Services side. This will lead to new opportunities for Innovation in Holland as well as expanding the business by employing new people in the company. The reference we will have from the Dutch government with this project will be very important for us as well.
Who are your clients and how many do you have? How are you focusing on expanding your user community?
For the consultancy part of the business, our main clients are the biggest Macedonian companies as well as international organizations in neighboring countries. For the training center, our clients are young people in Macedonia (mostly students) and all those interested in expanding their ICT knowledge. And for the software applications, our clients are all organizations and companies in and outside Macedonia that need these applications no matter their size or their business.
Are you planning to patent your product and do you see any obstacles in doing so?
Patenting our knowledge and solutions is an idea that we have had for a long time. Still from what we have experienced until now, our legal system treats software as literature, and it is very hard to patent part of it, since most of the procedures in the law for intellectual property rights are not very clear. We are nonetheless in constant contact with the national organizations for industrial rights, and hope that in the future as part of the EU accession, we will have improved laws and better conditions in the market regarding software patenting.
What was the biggest challenge in starting an innovative business in your country and how did you overcome that?
It may sound very strange since we live in a country with a very high unemployment rate, but the biggest problem we are facing is the process of finding the right workforce i.e. IT engineers. In market analyses it is widely acknowledged that the market lacks ICT engineers. We try to overcome this problem by investing in our employees in terms of providing them possibilities to upgrade their knowledge in or outside Macedonia, working on challenging projects, having a good compensation policy as well as flexible working conditions.
Who are the shareholders in your company?
The company is formed by three ICT engineers which have equal part in the business.
How have you benefited from business incubation?
The main benefits that we get from the business incubator and that have helped us in business development is the matchmaking and networking opportunities that have enabled cooperation with foreign companies. The project with the Dutch Embassy was a result of the help from the Business Incubator. Also, there is a new project that we are currently negotiating, which is for software development in one neighboring country, also as a result of being in the YES Incubator’s network. Another important benefit is being able to educate our employees in business and soft skills with the entrepreneurial trainings that we receive from the Incubator. All of this improves Innovation’s performance and profits.
How do you plan to internationalize your product and if so, how?
At the moment we are already working on the international market and we are planning to expand our presence there. Our strategy is based on cooperation with local companies in different countries where we will identify possible markets for our products. Since we are only starting out in this area, we are sure that we will have much to learn from experience from our partners.
With hindsight, are there any particular lessons or messages that you wish you would have known when you started up your company?
Usually all ICT engineers in the country lack business skills. That was our biggest problem in the beginning. The current studies at the Universities teach students very basic business classes, sometimes even none at all. The situation is improving by modernization of the curricula, but still it is not on the necessary level for being competitive in foreign markets. All IT people must know business, otherwise their excellent ideas will not get them profit. That is why business Incubators are ideal place for them, since they will help them to learn business and how to run their businesses and make profit out of them.
Do you feel that you had the necessary advisory and support network when you started your company?
We had excellent support in terms of technical and consultancy support from the Incubator’s side. I think it is extremely important for start-up companies to be able to use business incubation services, because this helps them overcome the most critical phase of their development and teaches them how to avoid the most common mistakes when starting a business. The Incubator for sure increases the chance for success.
What is your message to funders/supporters and what is your message to the users of your product?
Innovation creates knowledge, and knowledge has value. We must all invest in knowledge since the ability to innovate and create knowledge is a main tool for creating economic growth and social development.
For more information about the YES Incubator, please visit their profile in the Global Network Directory.