Is this the first company that you have started, and what drove you towards it?

42 Gradusi is the first company my two business partners and I have started. Our previous work experience with various companies in the web development and IT sector in Georgia gave us the knowledge and feeling about deficiencies of existing companies, what was missing on the market and what we could do to achieve a competitive advantage.

How did you finance your start-up operations and how long did it take for the company to reach breakeven?

We have started 42 Gradusi with one old laptop and a room in my house. We have managed to start with virtually zero investment and were financially self-sustainable from the very beginning. Our advantage was technical knowledge, information about the market and an extensive network of contacts to both potential customers and partners, that we could also use for outsourcing of some functions we were not able to deliver at the beginning.

What are your major products and services and how are they unique? What is your competition?

While we had been focused on web design in the beginning, 42 Gradusi's services currently cover whole a wide range of digital marketing services: online marketing strategy development, web development, e-mail marketing, search engine optimization, pay-per-click advertising, social media campaigns, etc. Our company is the only one at the current stage on Georgian market that offers integrated digital marketing services based on carefully developed strategies. We also developed a high quality management structure of our company along with superior services, providing our customers with creative solutions that follow a strict time frame and have almost zero response delay with client concerns.

42 Gradusi also developed its own Content Management System for web sites and a fully manageable, interactive mapping solution for Georgia, based on GIS and Flash technologies.

Though Georgian market in the web development sphere seems overcrowded from the first sight, there are not many companies offering a wide range of both quality products and quality services with flexible packaging. These factors make us distinctive. We rigorously try to build our brand's uniqueness further on that.

How did you first launch the service?

We had known almost everything about what and how our competitors were offering to their clients. So, we developed better offers and since all of us had good contacts and reputation already as professionals in our field, we managed to convince our first major client that we could offer a better product and service. We had been able to keep the promise and build upon that consequently.

How do you measure the success of the company?

At 42 Gradusi, we have three major indicators for measuring success: 1. Growth rate in sales, 2. 42 Gradusi's advancement in industry indicators benchmark scale (developed by us, as there is no research or statistics available), 3. Satisfaction of our customers, measured at feedback interviews.

According to the mentioned indicators, we achieved 200% growth rate during the 1.5 years. We went very far if you keep the starting point of an old laptop and on room at my house in mind, but in real terms we just got out from the status of a micro business and plan to reach medium business status (by Georgian standards) in another 1.5 years.

In terms of visibility on the market, we really achieved a lot, as 42 Gradusi is routinely considered among the best 5 companies in the field in Georgia.

Who are your clients and how many do you have? How are you focusing on expanding your customer community?

42 Gradusi works in the B2B sector and our clients are mostly major Georgian and international companies working in Georgia. We have just finished the development of a website for local services of American Express. Among our customers are German dvv International, Auto Bild, Bank of Georgia and about 15-20 local large Georgian companies.

We are expanding in both directions - offering new products and services to our existing customers and connecting with new clients. As our market is not a consumer market, we prefer carefully planned and targeted marketing campaigns to attract new customers. In parallel, we work permanently to offer new or improved service to our existing customers, trying to be one step ahead of our competitors.

One of the biggest obstacles to our growth is the small size of Georgian market. The only strategy towards expansion is widening the product and service range and finding new markets, which we plan to do in the upcoming year.

What was the biggest challenge in starting an innovative business in your country and how did you overcome that?

Georgia has a very small and underdeveloped market for technological and IT products and services. If a company aims towards growth, it cannot stay focused on the domestic market only. And here arises the biggest challenge: in the general environment of low competence and capacity both in business and technology spheres, it is extremely difficult to compete on international markets. In this segment of industry a low price means a lot, but quality is a decisive factor.

We see a lack of information and a low competitiveness on international level among Georgian enterprises. Building up international business contacts is the most important challenge for them. Georgian companies lack reliable information about how the international markets function in different fields, what are criteria for quality, what are trends in their corresponding industries, what is the demand, etc. There are very few places they can go in Georgia to get this kind of information or consulting.

Before coming to BII Incubator, we had no clear vision on how to expand towards new markets, what is happening in Europe or US in digital marketing field, and how to get there. However, with the help of BII Incubator of Civil Society Support Centre (CSSC), we addressed most of the challenges and currently work on a strategy of internationalization. The key factors we build upon in the first development phase are contacts in Germany provided by the incubator.

Who are the shareholders in your company?

My other three friends and I maintain equal and complete ownership of 42 Gradusi at this stage.

How have you benefited from business incubation?

As I already mentioned, we did not have much knowledge in business, our advantage was local contacts and reputation. With the help of BII Incubator of Civil Society Support Centre (CSSC), we completely overhauled organization structure, management, developed business and marketing strategy and conducted the financial analysis. We have learned a lot and now have a much clearer vision on where we are, where we want to go and how to get there. Though infrastructure is important, the 'soft' services provided by the incubator - coaching, consulting and contacts - had the biggest impact on 42 Gradusi development. With the help of BII incubator we obtained contacts in Germany and now we are developing a strategy to enter first there and then on other markets too.

Do you have some specific lessons that you know now and wish you would have known when you started your business, and which you would like to share with fellow entrepreneurs?

We have learned (sometimes in a hard way) three key lessons during 42 Gradusi creation and development - the most important factors for success are a clear vision, persistence, and the permanent drive to learn more than what you know today.

How did you internationalize your product, and how to you plan to internationalize it even more in the future?

All our products and services are intended for international market from the beginning; it just happened that we have mostly local customers so far. In the new 2010, we plan to open a branch in Cologne, Germany, and hope to attract our first customers outside Georgia. Our plan is based on the advantage of superior quality combined with relatively low price, and of course also on our partners in Germany (both Georgians and Germans).

Do you feel that you had the necessary advisory and support network when you started your company?

Definitely not. Before moving to CSSC's BII Incubator we did not receive any kind of advisory on how to do the business. So we spent some considerable amount of time reinventing the bicycle. From the point of view of a startup company, our conditions are very difficult; it is really hard to find support of any kind in Georgia as there is an apparent lack of entrepreneurship support institutions or tools here.

What is your message to founders/supporters and what is your message to the users of your product?

We want to say big Thank you to all the people and companies that supported us. We want to assure our clients that we will stay committed to the same values of quality and that we will stay as proactive in order to address their demand as we have been so far.

For more information about the company, please visit http://www.42gradusi.com/