You founded win.rar GmbH as a student. Who or what encouraged your entrepreneurial spirit?
We started win.rar together with my cousin Öncül Kaya during a time both of us were in the first semesters of our studies. For me it was a logical continuation of my career which had began as a coach and manager at a small basketball club in Germany. I had been actively promoting our club and already at the age of 17 I was actively doing all classical work in marketing and PR. After finishing school which is 13 years in Germany plus an extra year in USA and the mandatory military or civil service I did a two year training to become a banker. That makes a total education of 17 years. Following banking I worked part-time in a company that was consulting banks on IT projects and then I moved into a company that was a local internet service provider (ISP) and Software Development company. As Marketing Assistant and later Marketing Manager, one of my tasks there was to create business around WinRAR which the company was distributing in Germany and USA.
After leaving the company I was approached by Ron Dwight the publisher of WinRAR and asked if we would like to sell WinRAR in Germany.
I thought that it would be wrong to engage in a business which would be in direct competition to my former employer and so we tried to build an international business around WinRAR aimed at consulting Ron Dwight on how to improve WinRAR, the distribution network and the brand of the product.
It was intended to generate us a little side income until the end of university.
We basically had two underlying ideas for starting our own company rather than just acting as employees or contractors:
A) We wanted to have an official business structure with a GmbH which is German for limited liability company. However the GmbH back then required a minimum capital of 25’000 Euros, so it enjoyed the respect of people since not every entrepreneur is able to put that kind of money into a bank account and is willing to risk it.
We were able to convince my father to loan the money and agreed internally not to touch the money except for paying the expenses related to registering a company.
That way we were planning to be able to act as respected entrepreneurs without risking not being able to pay back what we owed my father.
B) We wanted to prepare a future brand-transfer by putting a well recognized name on our business that everybody would know and which would give us credibility in the future in case we would move away from WinRAR.
So I asked Ron Dwight if he would allow us to call the company win.rar GmbH. He agreed with a sentence I never forgot:
“Of course you can use the brand for your company. It will make sure you commit yourself 100% to WinRAR because you would not be able to conduct any other business under that company name.”
It was a price we are very willing to pay. We did not have much to lose and we had a feeling that if we did our job well for a couple of years (until we are done with our studies and could commit full-time), we could convince Ron to retire and have us continue the business for him.
So to sum it up, we were young and went for an opportunity that we believed was going to fund our expenses while going to school and we felt we had an opportunity to create our own work-place when done. The costs and risks seemed very low compared to the outlook it gave us.
Was anyone mentoring you at the very beginning of your career?
It depends on when you define the beginning of my career. Prior to starting with win.rar I did a two year training program with the Deutsche Bank, where all we did was being monitored and coached. It was an incredible schooling or mentoring experience in all areas of business. Before I was very lucky to have very good teachers when going to school. Especially in Mathematics I was always challenged by a long line of great teachers. The same is true for my language teachers. It was only much later that I realized how valuable the lessons were that I was taught in school. After the training and before starting with WinRAR I was lucky to have Andreas Messer teach me the tricks of the trade in the consulting business. Then during the founding period I was lucky to consider Ron Dwight as a mentor. He was always happy to answer any questions I had. However after he passed away I did not have additional help except from our peers.
What was the initial idea of win.rar GmbH? Was it difficult for it to make a success?
In addition to the above, the basic instrument to build was a multi-lingual website. Since at that time I more or less spoke five languages, we built a simple site in English, German, Turkish, French and Spanish. I had managed to buy www.win-rar.com for approximately 500 Euros from a domain-grabber and with the contract that allowed us to sell WinRAR we had put together five puzzle pieces:
- Distribution rights to a Product
- A website containing the product name
- A company name containing the product name
- A website with an international appearance around the product
- The necessary infrastructure (registered company and bank account) to be able to conduct business
I would love to say that it was very difficult, but we were surprised by how easy it was. A couple of days after we had put the website online, we already received a fax with the first order. The next day the second fax came in. It felt like we had struck a mine on the first try, but what followed was more than anything we had imagined.
What was going on with your job after Ron Dwight passed away?
Things happened extremely fast around Easter in 2002. This is just weeks after starting the company on 20.02.2002. Ron passed away hours after explaining to me how we need to operate his platform in order to create license keys for the first two orders we had received. So basically we had only successfully created a single user license and one multi-user license when our entire business structure faced potentially becoming obsolete.
We had no idea who would follow Ron. We had no idea if that person or organisation would respect the agreements we had made with Ron, some of which had been verbal. We had no idea how we would be able to provide the product to our customers if his platform should stop working. So basically I was not only very sad about having lost a respected business partner and mentor but I was also afraid that everything we had built could become obsolete.
So we made a decision to deviate from our plan to not touch any of the money and instead use whatever we need to fly to the funeral, talk to the family and find out if there is any opportunity to continue our business. We had a head-start over anybody else including the developers around WinRAR because -as I only found out later- I was the person most involved with Ron. In order to set up everything I had pretty much been calling him on a weekly basis for months and when he passed away, his girlfriend did not know who else to call but me, so it was up to me to inform Ron’s business partners about his death.
So after booking the flight I asked some former colleagues for an emergency meeting and we mapped out a concept based on the limited knowledge we had. We agreed that they would try to develop a system to handle orders while I talk to the family and we would offer them to continue the business.
However the family was not interested in getting involved. We were able to make a deal with the creditors, with the distributors and developers and Ron’s family which made everybody happy but meant a load of work for us since it meant us being the future exclusive publisher of WinRAR taking over a business which we had only very limited knowledge of.
I quickly realized that I could not go on with school, but the healthy business we had been able to quickly create from almost nothing in just a few weeks allowed us to pay back my father and was so much more interesting than school that it was fun to spend around 100 hours per week on building win.rar to what it is now.
Does WinRAR make life easier?
I absolutely believe so. It was one of the reasons we got involved with it. We feel that it is a useful tool for people who either have limited bandwidth or limited storage. While today such restrictions are no longer the main reason for use of WinRAR, we still offer the most convenient way of sharing files and folders and enhance that service with safe encryption, repair functions and other features that allow ease of use when it comes to archiving your data.
Surely there are thousands of ways today to handle data, but if you are concerned about privacy and reliability, we feel confident to say that there is still no better way than using WinRAR to maintain your own data on your own system.
There are a lot of jokes online about the WinRAR never ending trial period. What is your favorite joke about WinRAR? Do you have your own?
Actually there are so many, it is hard to only chose one. Here is a selection:
Our own jokes do not come close to these I think. But we would like to ask the community of crackers:
“Why do you bother creating a cracked version of WinRAR? The trial period never ends…thank you very much for the free marketing you gave us. We will be forever grateful!”
There are only five people in your company. How did that make life different for you? Would you ever scale up?
That is a tough one to answer. It will surely depend on the project. Having only few people around you has a lot of advantages. The biggest maybe is having to constantly prioritize and focus on the immediate needs. It keeps the management and the company very centered. Any new project may require more man-power and there is no reason to not scale up when the business/project appears to be very profitable. But we believe that just employing people for the sake of growing is not the way. We like to see it the other way. Do things manually first but then immediately decide if it is possible to cut repetitions and program to make things easier. If it makes money and there is a good chance it will make more money, when more people are involved then go for it. But if it already makes money, it is also easy to find partners that can come into a win-win situation. We chose to allow partners to come in and have a piece of the pie if it allows us to earn just a little more while having minimum effort. During the few semesters I studied, I was able to understand the holy grail of business: “How can you make as much profit with as little work as possible?” We are trying to live an enhanced version of it: “How can you make money without any work?”. It is a very hard task, but we are coming close.
What is the current situation with your company?
Within the 15 years of business we have managed to navigate through some heavy weather. We started in the time after the burst of the dot com bubble and a world of turmoil post 9/11. Then 2008 we had to cope with the global financial crisis which heavily hurt our business. Some of our markets and business partners have until today not recovered from it. Now we are facing a global change towards cloud computing, Software as a Service (SaaS), mobile computing and a wide-spread expectancy that everything on the Internet should be free. We have always remained a lean and small company in order to be able to quickly adapt to such circumstances and to not have to worry about overhead costs in case we can’t. So we are doing what we have always been doing: offer a reliable product, support users and partners well and be thankful for any revenue we can generate.
Which were your best moves during your business journey?
I am sure you will be able to identify them easily when carefully reading this interview.
Which have been your biggest professional mistakes and what have you learned from them?
Well, I must say that the way we started business was not allowing to make mistakes. Everything went extremely fast and for some reason we managed to make pretty much everything right. The mistakes only began when we had the luxury to think about what to do aside from WinRAR. So I would say that the biggest mistake was having rushed into investments into start-ups because we felt we are missing out on future opportunities instead of building more products ourselves or instead of taking due time and research on the businesses we got invested in.
So I can say that we have learned to be much more patient and much more careful when it comes to investing into ideas and businesses.
Before moving to Split, you lived in Shanghai for some time. Tell us a bit about the experience of living in China.
I think my answer to that question can fill entire books. Let me try to apply the question to business culture: The China market is probably the most capitalistic market on earth. It is following a very fundamental and pure philosophy where the strong beat the weak. The fast occupy new markets and try to fully exploit them before others can. It is therefore a highly competitive market. People like to think the USA is the place to find the purest form of capitalism, but I think China is much closer to that. Just imagine everyone living in Croatia coming to Riva at the same time. Not just to visit, but to live there forever. It will give you a feeling of the immense density of people, culture and business mixed with everyone’s struggle to survive. In such a situation there is not much space left for caring about others. However at the same time in China there is huge respect for brands. So I was able to enjoy the benefits of everyone knowing WinRAR and was able to base business talks on their respect our success. That was an extremely nice experience which I did not see in that extent anywhere else.
Why have you decided to move to Split? What are the advantages and disadvantages of our town?
After four years in Shanghai we decided that the next place we want to move to should be a place we can imagine to live at for a very long time. So we put together some criteria: we need to find a “Switzerland by the Sea with Basketball”. There were only few places on earth that came close and we decided to take our chances with Split since we already had some very close friends here, a house in Marusici and an established basketball project in Podstrana.
The advantages of the city are apart from the nice people, its climate, its beaches, its hub to the islands and its airport and its culture: its very long history in basketball.
The disadvantages are only few and surely no different to disadvantages you will find anywhere. If you are looking for the problems, you will not see the solutions.
Have you met the local IT and startup scene and what are your thoughts on it? Is it promising? Would you like to be engaged in it?
I have been extremely busy trying to make up for the many months spent to relocate, so I have not had the time to look into the startup and IT scene yet. However, I am already looking forward to that and thanks to Toni Trivković and startup.hr a few first talks have happened very recently. I am sure it will be as promising as the people want to make it for themselves. I don’t see why people should be less successful here than they could be elsewhere. If they can let go of the thought that the grass my be greener on the other side of the fence then Split can be the place of choice for anyone in the industry. Great life and work balance can be established here. Right now many succesfull managers around the world have some doomsday scenario in mind in which they try to find a place that allows self-sufficient life, has great weather and a beautiful scenery. Sounds familiar? Yes, Split and Dalmatia is just that place.
Do you have any advice for young people from Split who have a business idea, but don’t know how to make the first step?
That one is quite simple and philosophic: start with one foot and then use the other. You will keep better control and balance if you take small steps. Just keep going and don’t give up. If you fall, get back up and continue. If you fail in something, start over and try it again in a different way.
What are your current and upcoming projects?
- Redesigning WinRAR graphics
- Restructuring the WinRAR advertisement structure
- Creating an Online File Exchange Protocol for Online Storage Providers
- Establishing UTILILAB NitroBROWSER
- Establishing UTILILAB SearchGUARDIAN
- Relaunching an automated app-creation platform
- Expanding the K.K. Mislav Podstrana Basketball project
- White-labelling an online game portal
- Setting up an online Tai Chi class
- Creating and licensing a start-up framework
- Training an artificial intelligence software (AI) to know how to automatically turn an idea into a business if it is profitable
What is your biggest passion nowadays? Do you have a life motto?
My passion is Basketball and Business Philosophy. I love to think about business models and new ideas and I just love the game of basketball . Or as a friend used to say while I was actively running a professional team in Germany: “We live the game!”.
I follow a basic principle in life, where what you might call Karma has an important place. I try to be nice and helpful to everyone and hope that life is in return nice to me and the people close to me. Also I am trying to do things that create positive feelings and trying to stay away from business or places that create negative feelings. Some may consider that naive or weak, but it is something I learned from my father and it is working quite well so far.
As to a motto for entrepreneurs and people who are at the beginning of something, I came up with the following sentence to sum up the secret of being successful:
“The difference between the master and the apprentice is merely the sum of tiny things.”
I hope some of these things you read will help you making good choices and less mistakes.