Eight People In A Garage, And The Deal We Were Right To Refuse
The co founder of Rimac on capital, failure, and why the region nobody funds is the one worth funding.
I studied journalism. I was going to educate people and reveal the truth, and instead I found that the work available to someone starting out with no connections was the kind of journalism I did not want to do. So I looked for something else. That is the entire qualification I brought to the automotive industry.
In 2010 a mutual friend introduced me to Mate Rimac, who told me he intended to build the world's fastest electric car. This was 2010. Tesla was barely beginning. Fisker was barely beginning. There were eight of us, we were working in a garage in Croatia, and not one of us had an automotive background.
I have thought about that a great deal since, and I have stopped seeing it as a handicap. We were not in anyone's box. Nobody among us knew how a car was supposed to be developed, which meant nobody could tell us that what we were attempting was done differently elsewhere. We explored. We failed a great deal. We tried again until we found the things that worked.
When we went to the Croatian university, to the automotive department itself, and asked the professors to help us develop the car, they told us we were crazy, that we would ruin ourselves and everyone we employed, and that a car could not be built from Croatia.
In 2011 we took the Concept One to the Frankfurt Motor Show and became the surprise of the show. More than a thousand horsepower, four motors, one controlling each wheel independently with torque vectoring. Audi engineers came to our stand and stood at our display of motors and batteries doing the arithmetic, trying to work out whether what we were claiming was physically possible. When people asked how many of us there were, we said twenty. We thought twenty sounded credible and eight did not. Knowing what I now know about how many people it takes to make a car, twenty is also nothing.
The deal we walked away from
Our first investor was supposed to be a royal family from Abu Dhabi. We negotiated for months. We flew there repeatedly. Everything was agreed and we arrived at signature, and at signature they added one condition. We were to move the company to Abu Dhabi.
We refused. We had no Plan B. We had no other investor, no runway and no idea how we were going to survive the following year.
From 2010 to 2014 we took no outside investment at all. What saved us was that we were developing our own technology, so we began selling it. A battery for a car enthusiast converting his own vehicle. A small project for another company in the industry. Then a full car for the Japanese driver Nobuhiro Tajima, who took it to Pikes Peak and finished second in a machine designed and built in Croatia. Those projects paid for the next ones.
I now believe that walking away from that money was the best thing that ever happened to the company. If we had been funded early we would have done what funded companies do. We would have bought the components that existed on the market, assembled a car and called it a product. Because we had nothing, we had to build the technology ourselves, and we had to take every euro and try to make it do the work of a hundred. That technology is the reason Rimac Group exists today with roughly two thousand people across it. Bugatti Rimac. Rimac Technology, whose batteries and powertrains sit inside cars from BMW and Porsche. Rimac Energy, because it turned out that what we learned about batteries matters enormously to a grid that artificial intelligence is about to make very hungry. And Verne, which is something the whole of Europe should be proud of, the first commercially available autonomous taxi fleet on this continent, in Zagreb, because Zagreb was the first city willing to do the regulatory work. Kia is an investor. So is Uber, and you can now book a Verne from inside the Uber app.
At the time it felt like a catastrophe. Everything that felt like a catastrophe, I can now see, ten years later, as the thing that made the next part possible.
Four hundred people, and a conversation I did not want to have
Between 2014 and 2018 we went from around twenty people to four hundred. I was Chief Operating Officer in title and in practice I did whatever was required for the company to survive. In the early days I filmed our videos and wrote the scripts for them. I wrote the press releases. I ran the finances internally. Investor relations were mine.
Then suddenly the team was large, and none of that was my job any more. My job was to delegate and to manage, and I was not automatically good at it. The arithmetic was simple and unpleasant. If I did not grow at the speed of the company, either the company would outgrow me or I would have to change, significantly, and work on myself to keep up.
There was a woman in our HR department who had decided she wanted me gone, and was working on it. A friend of mine, a psychologist and a well known HR professional in Croatia, told me not to confront her about what she was doing. He told me to invite her for a conversation and ask her what people in the company actually thought of me.
She told me. Some of it was hard to hear. She said people found me unapproachable and severe, and that they did not like it when I walked through the company without greeting them. My first reaction was defensive and, I thought, reasonable. I was walking clients through the building several times a day. There were four hundred people. How exactly was I supposed to greet all of them.
And then I thought, perhaps she is right.
Filtering what was true out of a conversation conducted by someone who was trying to remove me, and then changing my own behaviour because of it, is the thing in my professional life I am proudest of. Changing yourself is the hardest work available to anyone, and it is the only work that reliably moves you forward.
A dear friend of mine, the late Formula One driver Adrian Campos, once told me that he started producing his best results the moment he understood that the biggest enemy on the racetrack was himself. I have never found an exception to that.
What Barcelona taught me
After Rimac I intended to rest. Instead I met the team at QEV Technologies in Barcelona and could not stay away from what they were doing.
The Philippines runs on jeepneys. Three hundred thousand of them, heavily polluting, mostly owned by tiny operators or by a single person running a single route. The government wanted them replaced, which is easy to say and almost impossible to do, because you cannot ask a man who owns one bus to buy a new one. So we built an electric conversion kit cheap enough for that market. They shipped us a vehicle, we converted it in sixty days and sent it back, and the ministers drove it and it went out on CNN. QEV also built and ran championship winning electric racing teams, including the car that won the first Formula E season.
The lesson I took from Barcelona was not technical. They took an hour for lunch. A full hour. My instinct was that twenty minutes was sufficient and that we should get back to work, and I remember catching myself and asking whether I seriously intended to change a hundred Spanish people, or whether I could simply sit in the sun and drink something. Everything still got finished, on time, to standard, with the hour included. I have pushed the tempo my whole life. Barcelona taught me that slowing down does not cost you the result.
Why I crossed to the other side of the table
I moved into investing partly for family reasons, because Barcelona and a young daughter do not combine well, and partly because I wanted to learn a new thing. I became CEO of NAD Capital, a family investment office in electric mobility, joined the board of Turbo Energy, which is listed on Nasdaq, and took the venture capital executive programme at Berkeley, because there is no stage of life at which you get to stop learning.
There is also no substitute for doing it. I made angel investments and I made mistakes in them, and the mistakes taught me the thing I now look for first. A company at an early stage needs technical strength and commercial strength, and it very rarely gets both from one person. Mate was one of the rare ones who had both, and even then we spent time polishing the presentation half of it. When I look at a team now I am not looking at whether the founder is a woman or a man. I am looking at whether the ingredients are all on the table.
The other thing I learned as an operator is what financial investors usually bring, which is money. Strategic investors open doors to customers and suppliers. Financial investors, with honourable exceptions, arrive with capital and a board seat. I wanted to build something that brings more than capital, because I have sat on the receiving end of the alternative.
The market nobody is pricing correctly
So we built N-Vision Ventures, with the European Investment Fund as our anchor, a Croatian pension fund and insurance companies alongside them.
The case is not complicated. In developed European markets, in Spain, in France, in Germany, average enterprise value growth runs at around seven times. In Southeastern Europe it runs at around twenty three and a half. More than three times the growth, in a region that receives a fraction of the capital. There is deep technical talent here and the talent leaves, because there is no money for it to stay for. Companies that do grow hit a ceiling and go and do a joint venture somewhere else.
In 2010 Croatia had no venture capital funds at all. Today it has some, and almost all of them sit at the earliest stage. Above a one million euro ticket there is very little, here or anywhere in the region, which means a company that succeeds at the first stage has nowhere domestic to go for the second.
Our answer is deliberately unfashionable. A fund of our size would normally make thirty or forty investments and accept that most will fail and one will pay for the rest. We intend to make thirteen to fifteen, at pre seed and Series A, in artificial intelligence, digital solutions, personalised health and mobility, and to be genuinely useful to each of them. My partners are Dejan Ljustina, who brought SoftBank into Rimac and previously ran PwC for the region, and Drazen Orescanin, who built BIRD Incubator with his own money as a contribution to the community, five years ago, focused on artificial intelligence, which at the time was early.
If you want that region to change, you do not start with a fund. You start with communities, and with more companies being built locally, and the ecosystem follows. And you tell the founders here the thing they most need to hear, which is that they have to be international from the first day, because the local market is too small to build anything on.
The room is still full of men
I did not choose venture capital as a statement. I noticed only afterwards that I had walked into another industry where most of the people I meet are men, in a market where only around fifteen percent of general partners in Europe are women. That is a small number. Automotive was the same, and hiring did not fix it, because when ten men and one woman apply for an engineering role and you choose the best candidate on merit, the arithmetic decides for you long before you do.
So I have stopped expecting the top of the funnel to fix itself, and I work on the other end of it. I take my daughter to the cars and the events and the things I do, not to make her an engineer, but so that the door is visibly open and she can decide for herself.
I will say one more thing about this, because I have watched it for fifteen years. If I had ten men working for me, eight would come and ask for a raise. Of ten women, perhaps two would, and those two were invariably the strongest performers in the group. Women in business often behave as caregivers. I did. I treated the company as something I was responsible for rather than something I was extracting from, and it genuinely never occurred to me to put myself first in that way.
I am not going to pretend that costs nothing. It cost me. But the answer is not to ask women to become men about it. A company needs both energies, and what has to change is the assumption that only one of them is how a serious person behaves.
Failure is a credential
There is one cultural habit in our region that I would change before any other. Here, when you fail, you have failed, and people do not entirely recover from it. In the United States, failure is celebrated. You tried, it did not work, and the only question anyone asks is what you are doing next.
Every failure I have had turned out to be a learning curve I could not have bought. And when I look at what actually separates the people who make it from the people who do not, the answer is not talent. Tim Grover, who trained Michael Jordan and Kobe Bryant and then spent years with executives and entrepreneurs, describes it as circles: talent is the biggest one, then knowledge, then intelligence, then competitiveness. The smallest circle, and the decisive one, is resilience. How much you can absorb, and still get up, and go again.
Above my desk there are two words written on the wall. Breath. Slow down.
If you are in a difficult moment, take a few minutes and do only that. A surprising number of other views open up once you stop running.
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About the Author
Monika Mikac
Author, "Eight People In A Garage, And The Deal We Were Right To Refuse"
Co founder and former Chief Operating Officer of Rimac Automobili, which she joined in a garage in 2010 and helped build into one of Europe's foremost electric vehicle technology companies. Former Chief Business Officer and board member at QEV Technologies in Barcelona, and former Chief Executive Officer of NAD Capital. Board member of Turbo Energy, listed on Nasdaq. Angel investor, and a graduate of the venture capital executive programme at Berkeley.
Founder and Managing Partner, N-Vision Ventures
Member, Global Council on Health and Longevity, Salvator Mundi Global
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