One of the best entrepreneurial real-life stories in Croatia.
Ivan Mrvoš started his business career a few years ago when he founded a company as a 19-year-old, changing three business models in a short period of time. Among other things, he tried to sell not very functional illuminated chairs to all the cafes in Split. However, without such failures he would not start producing smart benches that are currently spreading through Europe. His startup Include is a serious company that is now receiving serious investments, reports Telegram on March 24, 2017.
In the late spring of 2014, Ivan graduated from a vocational high school in Split. He says he was a little nerdy and had excellent grades. He won second place at the national mechatronics competition, winning 99 of 100 possible points. Most of his friends from the school wanted to study at the Faculty of Electrical Engineering, Mechanical Engineering and Naval Architecture in Split, and Ivan did the same.
Toward the end of high school he founded the Include company. He was good at software development and saw that a lot of companies from Split and the surrounding area did not have a website. He thought he might earn some money. “I am not from a rich family, so my goal was to literally earn money for brunch.” That spring, while others were preparing for their final exams, Ivan was developing a business strategy for his new company.
The strategy consisted of printing out a list of all companies in Split and its surroundings, and googling which of those companies already had a website. “Then I took a phone and called all the companies that did not have a website. But no one wanted me to develop a website for them. I got a call from a restaurant and a small company. I have even sent them some drawings, but nothing ever came out of it”, says Ivan.
The Mall of Split shopping centre was being constructed at the time. Ivan saw that they were offering a space for rent. It was obvious that developing websites will not bring any money, so he decided to open a shop for repairing computers at the mall. He contacted the owners and arranged a meeting with the mall’s lawyers. They showed him three possible locations which would be ideal. The only problem was that the monthly rental price was 15,000 kuna, with additional 60,000 kuna to be paid in advance. Ivan had no money, so nothing came out of it.
“One evening, I was sitting in a cafe in Split where I saw a flower pot which lighted up. I thought that was a very cool idea. If only these were chairs or tables instead of a flower pot.” He went home, draw plans and played with the idea. It was rather easy to turn it into a reality. His house was full of materials and various equipment. He only had to invest some money in electronics, metal and plastic, and he could make LED chairs that would glow like the flowering pot. “But, the problem was that my chairs needed to be recharged. This meant that every few days a waiter would have to come with 60 chargers and plug them all in. It was a disaster. My initial idea was to make 100 such chairs, sell them, earn 60,000 kuna and then start the computer repair business.”
Material needed for four chairs and a table cost about 5,000 kuna. Ivan asked his grandmother to help and got 4,000 kuna. “By the end of August, I produced four chairs and a table. They had a switch and were able to change colours. All together they had 16 colour combinations. They had a battery and could work for four to five days, and then needed to be recharged.” He photographed his set of chairs and tables and produced a brochure in Word. “I printed it out and started visiting literally all the bars in Split”. Everybody thought that the chairs looked great, but the problem was the price. Ivan was selling chairs for 1,000 kuna and tables for 2,400 kuna. Another reason for rejection was the fact that they had to be recharged. Nobody bought any chairs. Ivan did not know what to do with them. He made a wooden platform in front of his house, covered it with a dark cloth and put the chairs there. He wrote “www.include.hr” under them. “I was monitoring the traffic on the website. There were visitors all the time.”
In September, he started college. An entrepreneurial event took place at the time in Solin where various entrepreneurs presented their ideas. Registration cost 1,000 kuna, which Ivan did not have. Nevertheless, he asked organizers whether he could take part. They liked him and agreed to allow him to come without paying, and they even invited him to speak at the official opening of the event. There were hundreds of people in the audience. He spoke as a young entrepreneur about his LED chairs project. People in the audience applauded. They were thrilled. They saw a 19-year-old man who wanted to do something. All the journalists who were there wanted to talk to him. “I ended up on evening news, in Večernji List, on Index.hr. I figured the chairs would sell immediately.” In the end, no one bought a single chair. The table is still in his office. On one chair he keeps his clothes, while a printer is on another chair. He has no idea what happened with the remaining two chairs.
He gave up on his LED chairs idea and devoted himself to college. “I still owed money to grandma. So I thought about these chairs. What if I put solar panels on them? They could be charged, but they would have to be outside. They may still be costly, but they would produce energy. This means you would be able to charge mobile phones.” In November 2014, he drew plans for the first smart bench. While working on a budget, he realized that there were no companies in Croatia that could sell him solar panels which he needed. He had to adapt the design to what he could buy. He had some of the material left from chairs, but he still needed a few thousand kunas. He found them by selling his guitar and amplifier. He says it was one of the worst days of his life.
In April 2015, exactly one year after he founded the company, Ivan made the first smart bench. It had four USB ports through which it is possible to charge mobile phones, a small sensor that measured air temperature, and an application which you could use to find out the temperature. It could be lighted up, but only in one colour. Ivan took the bench to a student entrepreneurial competition in Zagreb. They finished second. “Reactions were excellent. People were sitting and charging their mobile phones. Perhaps this makes sense”, he thought.
Smart benches are products which are sold to local government. No one will buy a smart bench for their garden. His customers are towns and municipalities. So, Ivan called the mayor of Solin and made an appointment. When he showed up, he had to wait for an hour and a half. He presented his bench to the mayor, saying that it was the first smart bench in Europe, and asked if he could put it somewhere in the town. The mayor was afraid that someone could break it, but said he would think about it. He ultimately allowed him to install the bench in front of the town administration building, because that was one of few places in Solin which was covered by security cameras.
Ivan came the next day and installed his bench. It was dark, and the bench was glowing. Of all the journalists who interviewed him at that camp, Ivan had a phone number of just one of them. “I called her and told her that the first smart bench in Europe had been installed in Solin. She came the next day with a photographer. They took pictures of me on the bench. I ended up on all the TV stations and internet portals. Newspapers were full of me and benches. I could not believe it.”
His company began to receive first official inquiries. People were asking about prices and maintenance issues. Ivan had no idea what the price should be. One day he received a mail from someone who identified himself as the organizer of the Sarajevo Film Festival. They were interested in buying six benches. “I thought someone was making fun of me. Still, I wrote them that I will send them an offer.” Production of a single bench cost him 5,000 kuna. He decided to charge 11,000 kuna for a bench. So, six benches for 66,000 kuna. They agreed. After several days, the first half of the money came. There were just for days until the scheduled delivery. Ivan worked for four days and four nights. During the day he worked in his yard, and overnight he worked in the living room, from which he threw out all the furniture. When the benches were ready, Ivan and his father put the benches in a rented van. Export papers were filled by a father of a friend who worked for the customs. They brought the benches in Sarajevo where organizers of the festival had a major press conference. Ivan kept his hands in his pockets all the time during the event because he forgot his belt in the hotel so he was worried his pants might fall down. He returned from Sarajevo with the other half of the money.
And the real business had been launched. He sold a couple of benches in Split and Istria. By the end of the year, he sold about 25 benches. That year, Include earned a total of 350,000 kuna. The profit was 70,000 kuna, which he used to buy a new bed and spend the New Year’s holidays in London.
In December 2015, he made new designs. He added wireless charging for cell phones, connection to the internet, improved design and app. The new bench could recognize when it was raining to turn itself off, it monitored energy production and consumption. He decided to launch a new investment round. His colleagues started calling potential investors and they even managed to arrange a couple of meetings. “I was completely crazy. I asked for one million euros for 25 percent of the company that had sold 25 benches. People could not believe what I was telling them. These were the people who run McDonald franchises, who had companies in Qatar with 200, 300 employees.”
There were no investors. Still, Ivan decided to form a team of six or seven engineers. He published a job announcement, and 150 people answered. “I meet with two people with PhDs. I could not believe they wanted to work for me.” Finally, he hired seven people, but he was afraid. Some of the engineers left jobs with excellent salaries and he had enough money for just a few months of business expenses. Everything else were just plans. “My whole idea was only to sell as many benches as possible so that I can pay people.” He took a loan of 30,000 euros. He spent part of it on equipment, and part of payroll. By the end of June, he sold about 30 benches, and it seemed that everything will be fine.
But then everything stopped. They did not sell anything from late July to mid-August. People working for local authorities were at their summer holidays. In July, the company had zero kuna on its bank account. “I gathered all the employees and told them there is no money. If they do not receive salaries by the 31st, they are free to leave and I will go bankrupt.”
On 31 July, a payment arrived for some benches that they sold a long time ago, but which had not yet been paid. Ivan does not even know who paid the money. They all left for summer holidays, and when they returned, everything started moving again. Zagreb wanted ten benches. Orders started coming from all over the world. He says they are now a real business. His assessment is that Include is today worth around four million euros. Through Funderbeam, they have collected more than 420,000 euros worth of investments.
“We will invest the money in development and marketing. I want to have a real marketing team.” Ivan says they will continue to produce city street equipment, because the idea of smart cities is very popular internationally. In the future, they will maybe work on smart bus stations or garbage cans that will report when they are full. Ivan says that he would focus on Include for another four to five years, and then he would like to found another company. Maybe for something that he will be able to sell to individual customers, and not to local authorities.