A co-founder of the Croatian Business Angels Network (CRANE) and founder of HGspot, the largest electronics retailer in Croatia. He invests in some very interesting projects that change the course of Internet and mobile usage in Europe and worldwide. For Babel Guide he talks about them, as well as about the future of the online world in Europe.
Hrvoje Prpić
How did an entrepreneur become an investor?
In 1997, I founded HGspot, the largest electronics retailer in Croatia, similar to Best Buy, with annual revenues of about $120 M. The company grew for 100% each year. HGspot went public on the Croatian Stock Exchange in 2007. At that moment there were 50 stores in 3 countries.
Then I went to live in Australia for a year and when I came back I co-founded the Croatian Business Angles Network and I have invested in many different projects since then.
What kind of projects do you usually invest in?
At the beginning, they say the company is being financed by a triple F. Friends, family and fools. 
As the company grows, Business Angels come in. We invest in start-ups. Those are really risky investments. Usually, out of 10 investments, 7 fail, 2 hardly accomplish anything and only 1 actually makes the investment double, triple or even centuple. Business Angels invest up to 200 000 euros. Then Venture Capital (VC) funds took over the business. VC is known for investing into FB and Google. They were both start-ups and they had Business Angels’ investments at the beginning. So the road to success goes from us, the Business Angels, over VC to IPO. We invest in scalable projects that can be easily copied and exported.
We’ve recently invested in 10 to 15 projects. ONCE is the newest one, other projects include Ototrak, Salespod and WhoApi, which has been chosen as the best project by “The Geeks on the plane”.
ONCE seems like quite a kick among other iPad/iPhone football applications! How would you describe its top features?
Apart from one of the most creative designs ever, it’s an application for football coaches, scouts and professional players. It analyzes football matches and it helps coaches and players prepare for their rivals in upcoming matches. They also use ONCE to review their last game and to understand the mistakes they made. For example, the forwards can use this application to check a complete version of the opposite team’s defenders or a goalkeeper can receive a full overview of the penalty shoot-out players. With ONCE, we’ve analyzed Cristiano Ronaldo and realized that 85% of his kicks go to the lower, left corner. So, this application improves football teams’ game up to 10/15% (of course, if the match is between the equal teams). Currently, we have 14 clubs using ONCE, that’s great!
Which teams are using ONCE at the moment?
Croatian national football team, Lokomotiv Moscow, Dinamo Zagreb, Al-Wahda UAE, Central Coast Mariners Australia, Adelaide United, FC Maribor Slovenia. The application is also currently being tested by an English national football team, Bayern Munich, FC Stuttgart, Udinese, Anderlecht, 2 Japanese teams, a Malaysian team as well as other ten minor European teams.
Are you planning to upgrade this application for Android, too?
My plan is to include B2C market into this application. I’d like to make an archive of all football games played in the past. This would be interesting for consumers to view all the previous matches, goals, kicks, penalties, dribbling etc. It will also enable consumers to compare current players with the previous ones. For example, it would be interesting to compare Pele with Messi or Maradona with Ronaldo, don’t you think? Combining the complete archive with game analyzing and making it reachable for everybody will be included into Android. Currently, Ivan Ilecic, the official analyzer of the Croatian team and me are running negotiations with very interesting companies in order to provide fans with these interesting possibilities. At the moment, we have approximately 20 000 fans. I aim to increase this number to 10 000 000 fans. If you consider the fact that the Champion League finals are being watched by the incredible 2 billion fans, than I’m sure that within 5 years from the first contract, ONCE will have 4 million fans.
Did you combine ONCE with social media?
At the moment, we tweet about football results all the time. We’re planning additional features which would enable the fans to invite their friends before each game, to predict the results, to like or vote, but also to chat live during each game, to make comments and share them on their profiles. The new interaction is planned to cover social media, especially Facebook. That will definitely excite our fans and we expect to have a lot of positive feedback.
Speaking of social utility, there’s an interesting project you’ve been involved into lately. Tell us about your 3D shopping world.
Trillenium is the 2nd generation of the e-shops. Over the past 20 years, people have been using e-shops which are more or less just copies of printed catalogues. But I thought it makes no sense using old technology for such a new, unique media as the Internet. So the idea was to take advantage of all the potential the Internet is offering and make a 3D e-shop. When we started, we soon realized this kind of shop is not meant for everybody. It is necessary to choose the target group, the companies with enough products to offer in order to cover the expenses of such a specific e-shop and its system. So, we narrowed our choice to big department stores in London and New York. However, during the negotiation stage, we came across Asos.com. This online fashion store is planning to have £1 billion turnover this year! And we have Asos interested in implementation. That is a significant step we’ve made with Trillenium. So, stay tuned for the upcoming news!
Why have you been developing it for such a long time? (We hear all the time that you should lean startup, so four years seems like ages). The hype around Second Life, for example, just passed and nobody really cares about it now.
I was surprised by Trillenium’s complexity to tell you the truth. When we first started, it seemed as though it would take us less than a year, but the depth of such project made us realize that this kind of market lacks some of the necessary features, so we had to start from scratch. Only 20% of the full project makes the front end. The majority of Trillenium is in the background where it was necessary to simplify the maintenance of such a complex store. It took money and time to do that part right.
How will the shopping experience be different in Trillenium?
The thing is that e-shops are all about price war. Each e-shop fights to reach more consumers, and the only weapon they have is the most acceptable price they can offer. For example, you have consumers searching for a product on an e-shop and they divide the products according to a price they are willing to pay. But the real world shopping is about emotions, not prices. In real life, it is possible to separate expensive products from the cheaper ones and provide consumers with information about what makes these products special. So, it’s not only the price that differentiates them, there are other reasons, too. Trillenium is an exact copy of a department store. We don’t create new retail tools, we use the existing ones which were developed in last 50 years. Such tools are not used anymore because their form is not suitable for online stores today. So, while on a usual e-shop consumers will see only the price, in Trillenium they will see the actual product. Also, avatars will have friends. You know how people enjoy shopping with friends? Well, they can all interact with each other, have a coffee, take a walk and go shopping together in 3D world. That’s how the shopping experience will be different.
There are a lot of brands and shops that don’t give a damn about price – the luxury goods has the biggest margin, so isn’t it better to focus on that rather than the price only?
Exactly! Trillenium aims at this kind of buyers. Our target groups are companies who sell extremely expensive goods, like Selfridges and Harrods, for example.
How do companies react to your suggestion of them becoming 3D? Because, apart from movies, 3D world has not been completely discovered yet, am I right?
Yes, that’s right! 3D is not so advanced yet. We’ve been working on Trillenium for the last 4 years, and we still don’t have a competitor. Which is great for us! But it’s actually a disappointing fact concerning how advanced the technologies and Internet possibilities are. But the most common concern companies have is if the 3D style is technically possible. Luckily, we have developed steps from the data entry, all the way to the shop appearance. This includes a lot of administrative tools which makes 70 – 80% of Trillenium today. Once we present all the steps from the beginning to the final stage, we’ll have positive feedback and companies interested in joining Trillenium. They are all delighted by the idea of customers choosing their avatars and they absolutely love the idea of being differentiated from common e- shops.
You’ve launched a new application for jet-ski and you claim to have the ambition of holding a monopoly over the world’s jet-ski renting, really?
Yes, that’s correct! The OTO TRAK application will be embedded into every jet-ski in order to monitor activity, position and speed of jet-ski drivers and to report it to a server which will returns certain commands. This iPad application will work according to standard regulations. One of the regulations increases speed and provides drivers with full speed when they are 300 m away from the coast. This is important for the swimmers’ security during the summer season. Also, if the jet-ski drivers exit the allowed area, the application will lower the speed in order to remind them to come back. After 15 minutes, the application will send signals to the drivers that their time is over. OTO TRAK improves security, payment methods and control from anywhere in the world, so there will be no need for the jet-ski owner to be around.
What’s the next move with the OTO TRAK application?
Well, the idea is to have the jet-ski producers embed the hardware as additional equipment while we provide them with the technology and leave all the profit to them. In the meantime, the jet-ski concession owners will hire our software service during the season. That is how I want to hold a monopoly over the jet-ski renting in the world.
What project would you like to invest in?
I’m in only for interesting projects that will enable me introduce new products on the market and make me happy, not only rich.
Hrvoje Prpić
Are there opportunities in Croatia (or CEE) you would like to invest in?
Of course. All projects I’ve invested in so far are Croatian. The Croatian market is slow when it comes to bringing out new and interesting projects, but the competition of investors is smaller. I’d say there are 1 or 2 interesting projects every year. Investors from Western European countries and USA can also expect such tempo due to a big competition of investors.
Are there start-up incubators in Croatia and if not, should there be some?
Yes, there’s a start-up incubator and it was founded over less than a year ago by the members of Crane. After a few years of experience, we decided that for some projects it is better to keep them in incubators before investing in them. That helps us check the entrepreneurs’ persistence and diligence before we make the investment.
What do you think is the most perspective social media nowadays and can you share your ideas about the future Internet with us?
The number one is definitely Facebook! But I see LinkedIn as the media that will start earning more money soon. All the business possibilities that it’s offering… It’s amazing! I tell students not to write CVs anymore, but to create a very impressive LinkedIn profile and make it public in order to be available for employers.
If you’ve noticed, regular jobs are dying. Now there are other, different jobs appearing online. And not only that: the number of people offering the most wanted jobs is increasing every day. Today’s jobs are about social media management, copywriting, blogging, storytelling, online marketing, etc. Everything you can do online. Europe still has a lot to learn from the USA and Israel when it comes to the Internet. We’re still far behind. Maybe England and Scandinavian countries are in a better situation, but in order to keep up with the USA and Israel, we need bigger countries, like Germany or France, to invest in the online world and people.
Martina Vuksan
This post was written by Martina Vuksan: follow her on Twitter, connect on LinkedIn or Facebook.
