How We Started A F$40K/Month Full-Service Digital Agency In Croatia

$40K
revenue/mo
2
Founders
9
Employees
product
Kontra agency
from Zagreb, Croatia
started November 2011
$40,000
revenue/mo
2
Founders
9
Employees
208K
alexa rank
2.32K
followers
3.23K
followers
73
subs
market size
$49.4B
avg revenue (monthly)
$197K
starting costs
$27.5K
gross margin
20%
time to build
10 months
average product price
$7250
growth channels
Word of mouth
business model
Consulting
best tools
Instagram, Twitter, SemRush
time investment
Full time
pros & cons
40 Pros & Cons
tips
11 Tips
Discover what tools Ilija reccommends to grow your business!
platform
social media
productivity
Discover what books Ilija reccommends to grow your business!
Start A Digital Agency

Hello! Who are you and what business did you start?

Hello! Our names are Ilija and Petar, and we're two friends from Split, a sunny city in Croatia. We've recently entered the tenth year of running, which is now a full-service digital agency. But it was far from that in the very beginning. Some more about that soon.

We started as a small social media agency, having two clients each. All we had was two laptops and some money, which Ilija's family left to him, which was just enough to open a company here in Croatia legally. Ten years later, we're offering all kinds of different services, primarily shared across two main divisions of Kontra – digital marketing and web design/development. Today, we're most famous for our focus on driving results.

In a time where we measure success with likes, pretty photos, or social media followers, we're the agency that will get you into that double-your-profits-in-a-year category. Everything else is just a means of success. Just because everything does something one way doesn't mean it's the best way.

how-we-started-a-f-40k-month-full-service-digital-agency-in-croatia
We have nice photos as well, but they don’t define us

What's your backstory and how did you come up with the idea?

The year was 2011th, Apple had just released their first iPad, and Ke$ha's single, Tik Tok was all over the charts (Ke$ha did you know something before everyone else?). I (Ilija) was nearly over with my internship at Microsoft. Petar was the president of a student organization. Earning money and showing his entrepreneurial spirit by selling books on the side. Being a creative geek (which I still am), I spent a lot of my free time on Twitter, where I met Petar. It wasn't too long before we met in person since we both lived in Split.

Soon after, we were sitting by the sea, in our favorite bar, drinking some beer. It was how we made the majority of our big life decisions back then. Since we were interested in social media and had two clients each, Petar suggested starting a social media agency together. And that's how it began.

As we already mentioned, Ilija had some family money that was just enough to get us started, and I pinched-in with what I had, and off we went. Many agencies began sprouting in those early years, but a lot of them selected a short-sighted, quick-money approach. We wanted something different from the very start.

To do so, we used to work six-days-a-week, from 08:00 a.m. until 10 p.m. and then again on Sunday mornings. We would take Sunday afternoon and evenings off and start all over again on Monday. It was a challenging period. As our business started to develop and our clients started to emerge, we noticed we're missing a lot by having an agency in Split. It wasn't long after that we decided we should move to Zagreb.

Take us through the process of designing, prototyping, and manufacturing your first product.

Well, in the beginning, there wasn't much designing and prototyping. We would mostly be based on copying what other, successful people from the world did, and we took our time studying—a lot. We invested most of our joint profits in business development, and our private profits in buying books, courses, etc.

how-we-started-a-f-40k-month-full-service-digital-agency-in-croatia
We were younger once

When we started, our business was working through two companies. Akcija – A social media agency, and FenixApps - a Startup dedicated to manufacturing mobile apps and games. One of our first big clients was Walt Disney, which I remember telling Ilija: "Hey, I just got an email from Walt f---ing Disney, and they want us to make a Facebook game app for them. We couldn't believe our eyes. Once we did that, we started receiving inquiries about other Facebook game apps, which went great, and the results were terrific.

Since we spent a lot of our time studying, we selected inbound marketing as our market approach. Which we still use today, with over 200 blog posts, eight ebooks, and several other pieces of content filled with first-hand knowledge and experience.

After reaching a notable success with those, Facebook decided to shut down the type of apps FenixApps was making. It was at that moment that we realized. We must be much more agile, adapt, and develop our business much faster if we want to succeed in the world of digital.

Describe the process of launching the business.

As we already mentioned, we had just two clients each initially, and amid all the working, setting things up, and learning, the main goal was to make outreach, advertise and get as many clients as possible. In the beginning, the wages we could afford for ourselves were smaller than what a part-time intern makes today at Kontra. It was a challenging time. We're not going to lie.

We like to recall one of the funnier things today when we went to a big retail chain meeting here in Croatia. Since our agency was called "Akcija," which is the same word (but different meaning) in Croatian as "sale," a potential client contacted us for a meeting, and we rushed there because clients that big rarely call you up like that. When we got there, the misunderstanding soon became evident. They thought we offer a platform where a store can publish their weekly catalog, discounts, sales, and offers. We immediately stood up and went away. Like that alone wasn't a waste of time enough, I had left my laptop on the roof of our car and drove us back home. That's the story of how I lost $2,000 in one day.

Amid the rest things we were working so hard on, there was also our website. After all, what is a digital agency without a website?

As you can see, we hadn't done great. Although, the old website you can still see here, looks much better today than it did back then, at the beginning.

It was at that time when we coined one of our credos - "done is better than perfect." The idea is, essentially, to start and worry about being perfect later. That is usually a problem when someone wants to create something like a business. People tend to postpone it because not everything is perfect from the start. Guess what? It never is.

Since launch, what has worked to attract and retain customers?

The idea at the start was simple – get as many clients as possible and make our business viable long-term. We explored different options and ways to grow our business. Since we spent a lot of our time studying and wanted to be patient, we selected inbound marketing as our approach to the market. There was (and still is) a huge need to educate the market.

For those who don't know, inbound marketing is essentially a type of marketing that uses content (blogs, ebooks, webinars, infographics, etc.) to create interest and to pull customers. Basically, instead of trying to persuade everyone how you're excellent, outstanding, and unique, the idea is to explain, in concrete examples, how can your product or service help your target audience.

As aforementioned, this is an approach we still use today, and we can brag with over 200 blog posts, eight ebooks, and several other pieces of content filled with first-hand knowledge and experience. And when it comes to promoting that content, there isn't a channel, platform, or type of digital ad we haven't tried. But the main conclusion which we came to, over the years, is also the best advice we would like to share: Don't try to be too smart, different or creative. These days' attention span is low, and you have a few seconds to say what you want to say. Do it as simple and as straightforward as possible. Leave the curiosities for those who want to know more.

One of our more straightforward techniques of reaching new customers is offering our ebook for download, completely free of charge. In return, we ask only for the contact information of a person who downloaded it. For instance, if a brand manager of a jeans brand downloads an ebook on Google advertising, our sales department will get in touch and check if they require professional help with Google ads. 1% of yeses is more than enough here. Over the years, as we started achieving excellent results for our clients and created good brand awareness, inquiries began to arrive by themselves as well.

embed:instagram

In the last few years, we started aiming at the foreign market, mainly with our design and development services such as website building and creation. Since we're fully a digital agency, we hadn't been a big name among the Croatian agencies regarding local awards. Still, we received numerous acknowledgments from the platforms such as Clutch.co and DesignRush. Here you can see most of the info about that.

How are you doing today and what does the future look like?

Last year was challenging. Several clients worried about their business liquidity and had paused our activities. To make things worse, we had just lost our biggest client due to its internal organizational change. The group that owns the brand in question decided that one agency should manage all countries' digital marketing activities. And since the first lockdown in Croatia had finished, we started our bounce-back process. We can say we're still feeling the consequences of the pandemic, especially since it's still not over yet, but things are getting better each month.

how-we-started-a-f-40k-month-full-service-digital-agency-in-croatia
We love beer and we love to have Varionica craft brewery as one of our clients

Profitability-wise, until 2020, we recorded at least 50% growth for four consecutive years. It is incredible how much the CRM we picked did for us. It's called Productive, and a Croatian company, Infinum, developed it. What is so great about it is that we can track the time spent on each task, and since we know the price of an hour for every service, we can easily calculate the profitability of each project. It doesn't do wonders for profitability alone, but productivity and work-life balance as well.

Our employees aren't staying after hours, which is often the case with advertising agencies in Croatia, if not worldwide. If there's too much work, we know that we should employ more people, and since we know which service is overloaded, we always know who we should hire.

The goal, for now, is to continue growing steadily. If everything goes according to our (realistic) plans, we should be back on track by the end of the year. If that happens, we should be growing by 50% annually once again. Our final goal in terms of development would be to grow up to 30 people employed. We believe that anything over that creates an entirely different atmosphere and that you're not an agency anymore, but rather a corporation. An agency can undoubtedly work properly like that, but the internal relations inside are entirely different. Here at Kontra, all of us are of a similar age. The most significant difference from youngest to the oldest employee is less than ten years, which is, we believe, crucial for the atmosphere to be just right.

Through starting the business, have you learned anything particularly helpful or advantageous?

We had our share of mistakes and poor decisions over the years, but the thing that saved us is that we always stood by our mistakes, opinions, and principles. As time passes, we're getting a better insight into how important it is to have well-developed processes. Developing them is a long and exhausting feat, but we must do it. The importance of processes comes up the most when developing complex, custom websites for large companies. It's a thing we're still working on and always will. Things in the digital are changing so fast that it's simply irresponsible to leave something to chance.

One of our best decisions is, as we already said, to track time spent on projects and tasks. The other is most certainly broadening our services. Since we started a social media agency and did only that, we would miss the opportunity to work with many clients and partners who decided to manage their social media but still need other digital services. So, a great decision was to hire specialists, and generally enable our employees to develop in their desired directions. Another great thing we decided to do was to be generous. What we mean by that is we decided to introduce consulting & education service among others. Over the years, we were all over Croatia and the region, giving lectures and participating in conferences and seminars.

Although financially not as profitable as other things, educating enables us an additional platform where we cannot only educate our audience on what we do but also introduce our agency. It is not uncommon for us to sometimes receive a phone call or an e-mail from someone entirely unknown. Little did we know, those are the same people who listened to Ilija at his lecture a couple of years ago. People tend to remember these things, you know. An ad can only get you so far, but when people hear a lecture and connect it to a face, they recall that much longer.

What platform/tools do you use for your business?

We already mentioned Productive, but of course, there are lots of other apps, tools, and platforms we use for our business. Google Analytics, Ads, Facebook Business, and Ads manager are some of the more obvious ones. Besides those, we're using tools such as Trello, Bitbucket, git, Microsoft Teams, etc.

When it comes to email, we're sending a newsletter each week (They're great, you should subscribe to them), and we're doing so through Active Campaign. Not that other emailing tools are not great. We just opted for this one because we liked the tracking possibilities. As true digitals, we love tracking everything.

What have been the most influential books, podcasts, or other resources?

We both listen to a Croatian podcast Surove strasti, but also some podcasts and lectures from Gary Vaynerchuk, Tony Robbins.

Advice for other entrepreneurs who want to get started or are just starting?

Just do it, don’t overthink.

Are you looking to hire for certain positions right now?

We're always looking for talent, but at the moment, we already have some people we want to hire in mind. If that doesn't go according to plan, we will certainly set up a public job advert on our social media and other channels, so be sure to follow us.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!

-  
Ilija Brajkovic,   Founder of Kontra agency
Pat Walls,  Founder of Starter Story

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