Gauss is an outstanding example of how, with knowledge and determination, one can create the fastest-growing tech company from the ground up in less than five years. We asked Ivan Lozančić, the director of Gauss, what the secret of their success is.
Deloitte recently published a list of the 50 fastest-growing tech companies in Central Europe, and six Croatian companies made it to the list – Gauss, Rimac Automobili, Axilis, Telum, Hangar 18, and Serengeti. Like in previous years, most of the Croatian companies on the list are involved in software development, one in clean technology (Rimac Automobili), and one in digital marketing (Telum).
Gauss is the first Croatian company on that list, ranking 19th. It is a young company based in Osijek that focuses on software development for clients and also offers IT education and develops its own commercial solutions. Ivan Lozančić, the director of Gauss, has consolidated his previous experiences in software development through this venture. Gauss was founded in 2012 and now has over 70 employees, providing job opportunities in Slavonia, a region in Croatia with a high demand for jobs. Read on for an interview with Ivan Lozančić, where you can learn more about Gauss, its activities, and their plans for the future.
Today, Gauss is a respected company not only in Croatia but also in European contexts. How did you dare to venture into entrepreneurship, especially in an environment that is not ideal for private businesses?
For years, I worked as a freelancer in web development, and at that time, I was doing well, so I didn't think much about becoming an entrepreneur. I left a well-paid job and, without high expectations, together with my partner Dragan Ibriks Golub, started building the company. The experience we gained from all our previous jobs helped us avoid certain beginner mistakes, but we still learn every day because running an 80-person company in such a dynamic sector is something you can't learn fully. Most of the people who joined the company from the beginning did so by leaving secure jobs. We had the desire for change, a different working environment, and the ambition to build something big. We never wrote it down on paper; everything we planned, we executed without a strictly defined plan. In that process, many good things happened, along with some mistakes. I am satisfied with what we have achieved, but we have great ambitions for the future. The business environment we operate in is not ideal, with numerous obstacles and challenging circumstances for growing companies, but I believe things are getting better. Optimism and self-belief are something people around us often lack, but they can be enough motivation for positive changes.
What does Gauss Development offer to the market, and why would someone choose your services over others?
What sets us apart from the majority of software development companies is the wide range of services we offer and the flexibility we maintain according to our clients' needs, which we have successfully upheld since our beginnings. Although we started with web development, we quickly realized that we must not miss the potential in mobile solutions and custom business solutions. When you work for larger clients, all these areas become interconnected, and you can compete better if you can effectively cover all of them. We managed to build expert teams in these areas, and now the biggest challenge is to ensure enough work for everyone at all times and internal organization within all departments. Clients choose us because we always strive to simplify the process, shifting the focus from technology and development processes to solving problems.
Most of your revenue comes from exports, i.e., selling services to foreign clients. How did you get your first international clients, and how did you gain their trust?
In the beginning, we reached foreign clients solely through recommendations, but now the majority comes through the web. Trust is always the key to gaining new projects, especially when you start as a small company from Croatia. We had various experiences and situations where clients were skeptical because we were young or because we operated from Croatia, and so on. The quality of our work always removes any doubts, but it's not always easy to reach the realization and start of work.
Currently, about 70% of our business goes to foreign markets, and the rest stays in Croatia. We mostly cooperate with clients from Central Europe, companies from Switzerland, Germany, and the United Kingdom.
Does that mean that you are less interested in the domestic market?
The domestic market kick-started us, and it still represents a part of our business; that may never change. Our domestic clients come from various industries with whom we have quality relationships and efficient cooperation. Even in the domestic market, there is still a lot of untapped potential, but we are getting closer to changing that in our favor.
What incentives and assistance do you receive from the government? Do local authorities help you, and to what extent?
Although there is a lot of talk about it, we don't have a healthy entrepreneurial climate here, and progress toward it is almost negligible. Every entrepreneur wants normal conditions for their business, but unfortunately, we are far from that. The system is oppressive and difficult to follow, but as an eternal optimist, I hope that we will see concrete measures that provide more support to growing companies. In five years of business, we haven't received any incentives that would give us the necessary boost; we are left to work and not expect anything that we don't realize ourselves. It doesn't help that we educate our workforce because the educational system doesn't provide enough.
It is known that Slavonia is in dire need of job opportunities. Do you experience a rush of interest from job seekers, and how do you attract skilled professionals?
We receive many job applications, and the greatest satisfaction is seeing an increasing number of high-quality applications that stand out from the crowd. It can be a bit disappointing when you see that some individuals don't make an effort in their job applications while there are so many unemployed people. The interest has noticeably increased after Gauss made it to Deloitte's list of the fastest-growing tech companies in Central Europe. Slavonia lacks job opportunities and professionals with specific skills.
Gauss is one of the pioneers of the "Osijek as an IT zone" idea, and other startups follow this concept. Are educational institutions, which should produce more specialists for this sector, also supporting this idea?
An IT zone in Osijek, with the necessary infrastructure and proper incentives for companies, would undoubtedly contribute to creating a new, positive atmosphere among young people. We have always gathered young people around us, educating and mentoring them in developing ideas, which we plan to formalize as an accelerator in the near future. The synergy between the educational and real sectors is the only way to bring concrete knowledge closer to young people, as the skills required for our sector cannot be found in textbooks. What is applicable today may become outdated tomorrow. The dynamics of the IT industry are like that, and we all got used to it, functioning only under such conditions. I want motivated young people who won't leave Osijek, but at the same time, I want everyone to rationally assess their positions and not create an illusion about the state of the industry. We are still far from achieving real results; there is much work ahead to truly establish Osijek as an IT zone and be able to confidently handle large numbers in all aspects.
What are your plans for the future? Do you plan to continue growing and expanding, or will you proceed more cautiously?
Lately, I have often said that now I have a plan to make a plan. We do have a plan, always have, but it was never written down on paper. My partner and I want to realize some of our ideas, which we believe have great profit potential, as well as ideas from our employees. Our goal, apart from delivering excellent development solutions to clients, is to build our own products that the company can sell. We are getting closer to realizing these plans, but there is still much work to be done. Expansion has always happened organically for us, depending on the influx of new projects and the establishment of new business models that we will have. Gaining a larger share of the foreign market is always an absolute priority, but not the only one.
What message would you like to convey to young people who are knowledgeable and motivated but currently unemployed?
Work, and work hard. Knowledge has never been as accessible as it is now; you just need to choose your desired direction and educate yourself. It has been shown that Gauss's best employees are those who have had various student jobs - telecommunications, seasonal work, work on farms... Every experience is valuable; you can learn something important from any job. Loyalty, work ethic, responsibility, diligence, and persistence are qualities that I highly value. Often, when I recognized these qualities in individuals, I offered them a job without specific knowledge, and I haven't been wrong. They appreciated the opportunity, worked diligently, and progressed quickly. Only people who genuinely want to work in this sector can survive because then nothing is difficult or impossible to learn.