Are Spin-offs the Way to Go?
Eight outsourcing companies in Bosnia and Herzegovina started their spin-offs where they have developed their own products. Is this the answer to unresolved issues in the country's ecopnomic development? It might be,
In Bosnia and Herzegovina, in 2021, several companies, established as outsourcing businesses developing software solutions, created spin-offs and started working on their own products. Is this just a trend or a permanent shift in the local economy?
One of the trademarks of tech companies from Bosnia and Herzegovina is that they are excellent in providing quality software-based solutions for their clients worldwide. Outsourcing, as a business model, proved to be working quite well for local companies. It enabled many businesses to build an impeccable reputation, stay on top of demanding technological developments, accumulate capital, gain business experience, and acquire knowledge on specificities from the startup world.
A mixture of tech talent, capital, and basic business know-how encouraged founders in Bosnia and Herzegovina to experiment and try building and launching their own products for the global market. Instead of making software products for others, why not do it for themselves? Saša Blagojević, Product Owner at Codaxy, explains:
As an IT company, we have worked for clients for more than 12 years. I have to say that the job is excellent and very rewarding as you help customers increase productivity, improve employee and client satisfaction, or find other ways to improve their work. However, during the pandemic, we had some problems that we wanted to solve internally. This opportunity, combined with our long-lived wish to create a product of our own, led to the idea of a spin-off startup. As for why we still pursue it: because it allows us to gather great people, be creative, and learn new things.
Codaxy was not the only company to think that starting a spin-off startup was a good idea. In 2021, eight different spin-offs were launched by larger and more successful companies in Bosnia and Herzegovina:
- NSoft started the Rolla app
- Misija.Web started BeeBee
- WaySeven started Opti.Space, which in early 2022 pivoted into Culturate
- Codaxy started Lorino
- JSGuru founded Peak Culture
- Digiqal started YuMeets
- ZenDev started Robinize
- Cox4 started xTend Solutions
Some of the spin-offs we mentioned have already secured investments (Rolla), gained popularity (Peak Culture), and gotten traction (Culturate). According to Srdjan Sukara from JSGuru, it was thanks to their previous engagement and work, that the process of launching a product and beginning the startup journey was accelerated:
The most valuable lesson from our previous entrepreneurial experience that we are applying now is the readiness to adapt to different situations and user feedback. We don't take anything for granted. Things can, and will, change. So it's essential to listen and to act quickly.
Even if they have a lot of accumulated knowledge, outsourcing companies' teams know that developing a product requires different skills. Competencies such as product development, product marketing, sales, or pitching, are now in demand, attracting people with new skills to the startup space, so it’s useful to get support. This is where Swiss EP comes in.
The Swiss EP helped us tremendously. We were introduced to many specialists through Vladimir Ćorda [Swiss EP Ecosystem Facilitator in Bosnia and Herzegovina] and later mentored by them in various things, such as how to prepare a pitch, create a marketing strategy, develop a business model, or test hypotheses.” Sasa explains. “We were all relatively unfamiliar with those, and thanks to the Swiss EP experts and mentorships, we mastered them faster. Vladimir was also always available to answer any questions and provide guidance, which was essential in our early days as startup founders. Without him, everything would have progressed much more slowly.
For Srdjan, besides assisting in developing specific skills, Swiss EP experts also served as motivators:
What we would note the most is the energy that Swiss EP experts bring and transfer to us. Whenever we have the chance to work and talk together, we see a different mindset and willpower to execute things. We need to see and feel that kind of energy and sense of community, so we have an example of what we need to build.
Are spin-offs the answer to some unresolved questions in the economic development of Bosnia and Herzegovina? They might be. Dynamic and thriving companies demand young and active individuals, ready to learn. They compete globally, and bring "startup glamor" to local communities in Sarajevo, Mostar, or Banja Luka. Most importantly, they drive the development of the entire entrepreneurial ecosystem.
Hopefully, the wave we're seeing now with these eight, extraordinary spin-offs is something that’is here to stay and will continue to motivate other outsourcing companies to take the plunge.