Back to the past: The first five years of Skladon – from idea to Mosnov

What led us to the idea of building a company focused on fulfillment? What were our entrepreneurial beginnings like when introducing an unknown service in the Czech Republic? Or what obstacles did we face in the beginning?

We have answered these and similar questions countless times. That is why we decided to summarize them in one publication on the occasion of our 10th anniversary… a publication that maps our first five years and shows how turbulent, but ultimately successful, this period has been.

In this article, we use specific examples to reveal the challenges we faced, the pitfalls we overcame along the way, and the lessons we ultimately learned. We believe that the following lines can be an inspiration for other entrepreneurs, not only in our sector.

The birth of the fulfillment idea [4/2015]

The idea to build a fulfillment company was born in the mind of our co-founder Patrik Babinec, who at the time was working at BeWooden, a company focused on the production and sale of fashion accessories.

“Our team wanted to focus primarily on quality and expanding our product portfolio. We saw logistics as an integral part of our business, but it was slowing down our growth. It occurred to me that there was no service on the market that would completely solve our logistics needs and at the same time free us up to focus on what was really important to us. And that’s how it all started,” Patrik comments on the origin of the idea.

Patrik then thought about who to approach with his idea and decided on his friend and former soccer teammate Konstantin Margaretis.

“I remember when Patrick and I met in a café and he presented his idea to me. I was immediately drawn to the concept – the usefulness of the service for the ever-growing e-commerce market, the low competition at the time, and the logistics industry, which will always be here. After returning home, I sketched out our business plan on a single sheet of A4 paper, and everything fell into place. Patrik and I decided to bring this idea to life and began working on the first necessary steps. By the way, I still have the paper with the original diagram, and I’m surprised at how accurately we managed to capture the structure of our service right from the start,” Konstantin describes the very beginnings.

Winning a student competition [6/2015]

The initial idea now had a more concrete foundation, but launching the business required a larger amount of money. At that time, Patrik and Konstantin heard about the Brilliant Young Entrepreneurs (BYE) competition, which was organized under the patronage of Junior Achievement Czech Republic. The competition was open only to university students (Patrik studied law at Charles University in Prague and Konstantin studied economics at the Technical University of Ostrava, editor’s note), and the main prize was €15,000 to start their own project.

Patrik recalls the experience as follows: “One of the conditions for applying was to record a video presenting the project. During filming, we struggled with the sound, so we finally decided to record the audio part under a blanket. We submitted our application at 11:59 p.m. and waited for the finalists to be announced.”

Out of a total of 32 applicants, five projects with the greatest potential were nominated for the finals. “The final included a presentation of our service, which we pitched to the expert jury – and in the end, we won the entire competition. To this day, I suspect that we won thanks to my last name, because one of the judges was named Margareta Krizova,” recalls Konstantin Margaretis with a smile.

He continues: “The initial joy was quickly replaced by sobering up with the realization that this was it – we had the commitment and the initial capital to launch our dream. If not now, then when? At the same time, we already knew how important technology and IT would be in our business,” Konstantin continues.

Patrik then traveled to the US within the Work & Travel program, and on his way back, he approached his friend Milos Halecky with an offer to collaborate. “In addition to his IT skills, Milos also happened to have a part-time job at DHL, which gave him the most extensive logistics experience of the three of us. Milos and I agreed on the structure of the IT department and the share in the company. Milos agreed, and that closed the chapter of our company’s co-founders… co-founders who decided to start a logistics company without almost any logistics experience,” recalls Patrik.

Starting a business and our first client [7/2015]

After winning the competition, we had to set up a company and fulfill other administrative requirements that were necessary for officially launching the business. Thanks to Patrik’s contacts, it didn’t take long to find our first client.

“Right at the beginning, we managed to acquire our first client, which was on a similar corporate trajectory and on which we were able to validate our service on a larger scale. It was a Brno-based client, Skinners, which reached over 9,000 customers from more than 90 countries around the world with its sock shoes on the Kickstarter crowdfunding portal, making it the world’s most successful fashion project in the footwear section… It was a real logistical challenge for us right from the start,” says Patrik Babinec, who was also a sales representative at the time, describing the first collaboration with a smile.

That’s why our young entrepreneurs immediately set out to find their first warehouse from which they would be able to handle these shipments. They found their first place of refuge in a business garage in nearby Ostrava-Privoz. “To be honest, it wasn’t exactly a representative space. In winter, we worked in the cold, marked the metal shelves with colored paper on which we wrote the sizes of the sock shoes with a marker, and there were no facilities for basic needs… So it was clear to us that if we were serious about our business, we had to find a more ‘lucrative’ address,” recalls Konstantin.

He continues: “This first shipping also brings to my mind a funny story. Our unknown company, which had decided to ship goods halfway around the world to a relatively unknown company called Skinners, was visited by customs officials. At that time, my friends, part-time workers, and I were packing products into white non-transparent bags, which we were preparing for shipment on a mud floor. When people saw this, they naturally wanted to know what was inside the bags, and we had to explain that they did not contain any addictive substances.”

„All the commotion surrounding the first shipment culminated when the carrier’s first invoice for delivery arrived. On a daily basis, I was dealing with purchases of basic equipment worth a few euros, when suddenly I received an invoice for shipping costs amounting to 75 thousands euros in my inbox. My chin dropped at that moment, but after our client paid the costs, everything was resolved,” Konstantin concludes his experience with the first shipment.

The birth of the Skladon brand [10/2015]

In the meantime, we were also thinking about the brand name. The reason was that the name Central Warehouse Solution s.r.o., which we still use today, was not only extremely awkward for business and marketing activities, but we also wanted a more striking and memorable name. Konstantin recalls this stage as follows: “Given the nature of our business, I had had the phrase ‘sklad online’ in my head for quite some time (‘sklad’ means ‘warehouse’ in Czech, editor’s note), which led me to the word Skladon. I remember presenting it to the management at the time, and the name caught on so much that, in addition to a mutual agreement, our current logo was created on the spot.”

Vendula Margaretis Rechova, a member of the board at the time, adds: “In addition to the logo itself, we also discussed a comprehensive approach to the new brand. I still remember our decision about the colors. I perceived Skladon as a company with innovative and unusual logistics services, so we wanted to use something unexpected. We chose pink – a completely unique color in the logistics world. It was so disruptive and distinctive… in short, easy to remember. Today, I can say that it was a risk, but ultimately a successful one. And I am very happy that we have followed up on this in the future with a number of activities, such as purchasing our pink shelves.”

Cooperation with MSIC [7/2018]

After the space in Privoz, the next steps led to a warehouse in Ostrava-Vitkovice, which was still not optimal, but nevertheless suitable for current needs. The company began to grow successfully, launched cooperation with new clients, invested in higher-quality equipment, began hiring its first employees, and increasingly focused on developing the MySkladon application, which offers its clients an overview of their own logistics.

“We had a validated product, a vision to build a major fulfillment player with a network of distribution centers across Europe, enthusiasm, and ambition. However, we lacked deeper logistics know-how. That is why we decided to turn to the Moravian-Silesian Innovation Center (MSIC), which supports local businesses and at that time offered young companies the opportunity to use the Expand program – searching for, recommending, and co-financing industry experts. This gave us contact with external consultant Rudolf Maly, ALog., a logistics auditor and a man with experience from companies such as Kofola and PST-CLC,” says Konstantin, naming another milestone.

Rudolf immediately contacted Konstantin and came to our warehouse: “My first visit to Skladon consisted of an introductory meeting in the conference room, where Konstantin and Patrik presented their project to me, along with their vision of what they want to achieve, followed by a practical demonstration of the warehouse. I must admit that after this visit, I didn’t know how to approach the project. I sat in my car for at least an hour afterwards, wondering if it was actually feasible. On the one hand, there was an old warehouse that was unsuitable for scaling, without the co-founders’ logistical know-how. On the other hand, there were open-minded, tough, and very ambitious entrepreneurs who were willing to sacrifice almost anything for the success of their business. In the end, I said to myself, “Why not?” I still consider this one of my big professional decisions, which ultimately brought me far more than I could have ever imagined,” Rudolf Maly describes his experience from the early days.

After the initial meetings, the company smoothly transitioned to more qualified management. For example, the first more sophisticated financial and personnel planning, the transfer of logistics experience, the establishment of our company in the logistics field among suppliers and business partners, and, last but not least, the search for new warehouse space that would meet the requirements of the near future were addressed.

Thanks to market analysis and Rudolf’s contacts, the selection was narrowed down to three suitable locations in Ostrava – Kuncicky, Hrabova, and Mosnov. The final choice fell on the newly developed multimodal logistics complex in Mosnov, which convinced the company’s management to relocate due to its location, equipment, and logistics capabilities. After DHL, we are now the second tenant in the complex, which is also used by other major international companies.

Move to the distribution center in Mosnov [4/2019]

The move to Mosnov was marked by the opening of the largest fulfillment center for e-shops in Moravia, where we began operations on an area of 2,600 sq.m. The then deputy governor was also present at the grand opening, describing us as an ambitious start-up with a clear vision and global goals, and wishing us many years of success and persistence in achieving our goals. It was much needed.

Immediately afterwards, Skladon faced the most difficult test in its history. The modern and financially costly space took its own toll. All those involved, who are still active employees of the company today, agree that it was the most physically and mentally challenging period. First and foremost, it was necessary to fill the shelf positions, most of which were empty, so that they would be financially profitable. Coincidentally, during the first months in Mosnov, we managed to sign another important client – Kilpi. Former employees of this company, who were familiar with the original internal processes, were also available to us for the initial stocking and launch of the cooperation. We supplemented these employees with our own staff from all departments. All our efforts were thus focused on overcoming the enormous challenge brought about by the move to significantly larger and more professional premises. We worked literally day and night, repeatedly seeking solutions to seemingly unsolvable obstacles and pitfalls, significantly increasing the employee base, addressing existential issues, and, after a short period of operation, expanding the storage area to 5,000 sq.m.

When things got really bad, our CEO Konstantin decided to sell his apartment in nearby Brusperk and use the money for the company’s needs during the transition period. “I simply felt it was necessary. There was no need to think twice. The company needed it, I believed in our project absolutely, and this was an opportunity that could save us for a while,” Konstantin comments on his decision.

At that time, we had also been aware for some time that without deeper logistics expertise, the current situation was unsustainable. Here again, we owe a debt of gratitude to Rudolf, who recommended that we offer the free position of logistics director to Max Kovar, who was currently terminating his employment at nearby Tatra company. Everything fell into place, and the logistics division – the centerpiece of our business – gained order, which, with a little distance, had a positive impact on our operations. Within a few months, we had largely stabilized our operations, which was one of the cornerstones for the future direction of our company.

A new phase for Skladon [3/2020]

Almost six long years ago, we moved into the next phase of the company’s development. These stages gradually brought further growth in our client and employee base, expansion of our warehouse space to its current 16,000 sq.m., significant investments in warehouse equipment and IT, optimization of warehouse processes, gradual expansion of top management with senior managers, the entry of strategic investors, repeated victories in international competitions, improvements in the company’s financial management, and much more. This was all the more intense with the onset of COVID-19, which initially brought a wind of change to our industry, but subsequently caused a post-COVID cooling of the e-commerce market, to which it was necessary to respond with further strategic steps.

In conclusion…

Our beginnings, which we have recorded here, have brought us a wealth of experience that we can draw on not only in our professional lives – many of them also have personal significance. We are convinced that without persistence, perseverance, and the search for ways to overcome obstacles, we would never have reached the position we are in today – a leading provider of fulfillment services in the Czech Republic.

We have long been certain that we laid the stable cornerstones of our success back then – a common goal. A goal that we will strive to achieve in the new decade.

Keep your fingers crossed for us.