Entrepreneurship Case Study. OROCON.
Last week right after the Entrepreneurial case task was distributed, I had texted my good old acquaintance who is now running the startup named OROCON to ask him several questions about it.
OROCON — the Latvian based SAAS startup, which helps construction companies to manage their resources and organize workflow. OROCON was started by a team of 4 Latvian guys in Riga during the acceleration program named Startup Wise Guys Riga. Andrey told that although the official story begins indeed after the acceleration program in StartupWiseGuys, it is not a complete story. From the reflections of the founder Andrey, a story of OROCON had started long before the acceleration program, when a bunch of friends decided to build a solution to the problem. The problem has already existed before — an absence of proper organization and management in construction projects. Based on data research, finishing a construction project typically takes up to 20% longer and is overpaid by 80%. One of the biggest reasons for project under performance is poor contractor performance. Only 23% of megaprojects around the globe finish their projects on time, and the rest are behind schedule for 40% or even more. After correctly identifying the problems that they were going to solve, they started to build a solution.
Once upon a time, four founders with different areas of expertise decided to form a team to build a solution for the problem that was identified by one of the founders. They founded a company, attracted some initial investment from Angel investors, and started to code right away from the start. In the retrospective, Andrey acknowledged that it was one of the biggest mistakes made during an early-stage phase. Building without gathering feedback from customers resulted in the product, which was too complicated and wasn’t a product-market fit. Although, the startup had already some paying customers, they could not scale this product, and finally fallen into a problematic phase, which probably all startups fallen once . They had burned all cash, investors’ money, founders` initial savings, and end up with the product, which wasn’t what they had expected when they had started. During those difficult times, some founders left the company, developers got tired, and the hope and motivation remained only for a few founders.
Persevering, the remaining team has applied to the accelerator program for SaaS startups organized by Startup Wise Guys. They were accepted and started to work from scratch on the solution, but at this time, their goal was to find a product-market fit. A product Market Fit is one of the buzzwords in a startup world, yet it is crucial. If they say the product has a market fit, then it means that the product solves the problem, which exists, and customers are ready to buy the solution. Working with the Startup Wise Guys, the OROCON team had learned a lot, and one of the takeaways that Andrey mentioned was the right development team structure and development process. When OROCON were starting a development the second time, they decided not just to hire developers into a flat structure, but to hire a product owner, product manager, architect, and then only developers. This approach was advantageous as the architecture was already sound and prepared, and it was easier to integrate new developers into the process.
Nowadays, OROCON is a good growth company, which offers, for now, two products: 1) time management software for construction companies; 2) inventory management software for companies. According to the founder, the company is moving in the right direction and is growing. Besides Latvia, OROCON is already working in Poland and the Czech Republic. The founder had articulated the clear vision for the company and, as he admits, it was necessary, as there were times when it was not clear what it the next goal and the purpose of the goal. The company OROCON has a bigger vision than speeding up the construction time. The company is going to use the digitalization in the construction field fully. One of the future milestones is to develop an open marketplace for contractors and companies who are willing to sell their services on the particular construction stage.
My four key takeaways from OROCON startup case study:
1. When building a solution, getting out of the building is more important than having a sense of vision and high motivation to be “next Facebook.”
2. Clear vision and mission are crucial, not for investors and anyone else but you. There will be hard times when even founders and initiators question the existence of a startup.
3. The development process should be taken seriously right from the start, putting emphasis not on the app, but the architecture first.
4. After identifying the existing problem, try to talk to your potential users to get insights for the right solution. Reaching the product-market Fit ASAP is an essential milestone for the early-start-up goal.
