„Define who is and who is not the ideal partner. Work actively with your partner and build personal trust. And don't be afraid to check in and give feedback. Even from their customers. “
Milan Šimek is the founder of Sewio Networks, an indoor localization services company. Simply put, they deliver location technologies called RTLS, real-time location system. These tell you exactly where the goods are in the warehouse, where the forklift is currently going, how many pallets are in the shipping zone or what the busiest routes are in the warehouse.
These technologies show in real time where people are and what is happening. They give us visibility, reduce unnecessary searching and manual work, and increase efficiency. Daily routines are reduced. Milan believes that in a few years these technologies will be as common as Wi-Fi.
In addition to Milan's core business, we discussed the importance of building partner networks in Zážeh. Sewio has partner networks all over the world. It's like in life, you have to hook a partner, nurture them and then control them. Listen to Milan's answer...
🔸 What is RTLS technology and why should I want it
🔸 How to use RTLS technology in a small and medium-sized business
🔸 Why Sewio is building a partner network and how
🔸 What contributes to a partner's quick success
🔸 Why is it a mistake to think that the partner will build the market on its own?
BONUS
Jak si vybrat parťáka do podnikání (Kód bonusu: SPRAVNYPARTAK)
TRANSCRIPT OF THE INTERVIEW
Martin Hurych
Hello. I'm Martin Hurych and this is Zažeh. Today's Ignition is with Milan Simek from Sewio Networks. The company that Milan founded and is currently running is an indoor location services company for industry and warehousing. Hey, Milan.
Milan Šimek
Hi, Martin.
What does Sewio Networks do?
Martin Hurych
So come and tell us what you do in Sevio and how you came to Sevio.
Milan Šimek
I would try to take it from the customer's point of view. What kind of data and what do we bring to the customer specifically. Those customers are really mostly manufacturing companies and warehouses. What we bring to the customer is
answers to questions such as where the forklift is, how many pallets are in the shipping zone, why the order has not yet arrived for shipping, etc. We can also improve safety in the workplace by knowing where the person and forklift are and reacting to that situation. We know what the busiest routes are in the warehouse so that we can optimize logistics flows and increase efficiency. We do all this with the help of our location technology, which is referred to as RTLS, real-time location system. You can think of it as an indoor GPS. We manufacture it here in Brno and we're proud of that. It works based on active tags that our customers install on pallets, forklifts, tools and material that goes through production. We install receivers in the warehouse, call them anchors, then install our location engine. With this technology, we are able to locate material movement with very high accuracy and reliability for these industrial customers.
What is RTLS technology and why should I want it?
Martin Hurych
Let's break it down a little bit. Why would I want to bring this technology into my own manufacturing plant, even though I feel like I have everything in order and know everything about everything? Because the first impression I get from the way you described it might be that you're solving chaos and you're going to find something that I've lost. What do I take away from this technology even when I feel like I have a very well-run manufacturing plant already?
Milan Šimek
You may have this information, but you may have it late. You know that your production is working, and you know that, for example, some goods have not arrived for dispatch. But you find out about it after a delay, and only then do you go to find out at which station the delay occurred. What we bring is full real-time visibility of the entire material flow, the entire work in progress. Imagine that all pallets flowing through production are tagged with our tags, and we can inform you in real time whether a given order has arrived in a specific zone at a specific time. If a given order has arrived at a station with any delays, we immediately inform the manager. The decision tag, which receives the information, says that the given order is currently running late and there is a probability that it will arrive at the dispatch with an hour delay. The manager can go immediately to the shop floor and address the problem. The second thing that happens very often, and it's really one of the most common problems that we see with manufacturing customers, is the so-called mushrooming. It doesn't seem like it, but these people really spend part of their day shift looking for specific pieces of material to bring to their production site to work on. It's a very common problem. Indeed, it happens that 20% of the daily shift of the people who are responsible for working on a given product is spent searching in a 5000 m2 hall. Huge losses can be incurred in this way. The machine stands still because the person who is supposed to be working on it is looking for the workpiece. These are things that we are able to solve very efficiently with location technology.
How did Milan get to RTLS?
Martin Hurych
Before we go any further, tell us how you personally got into these technologies. What attracted you to them and what was your journey to Sevio?
Milan Šimek
The path led through the university, through doctoral studies at the Brno University of Technology. There I met today's co-founder and technical director of Sewia Lubomir Mraz, with where we did our PhD, where we got in touch with many radio and localization technologies. We came into contact with this special technology called ultra-wideband. It's a new technology that's been on the market since sometime in 2014. We realized at that time that we had something in our hands that we believe will one day be the standard for localization in industrial halls and facilities. Thus, in 2014 we decided to start our own startup, recruit people and embark on our own development in the field of localization technologies.
We think location-based technologies will be as common as Wi-Fi in the coming years. Our knowledge of the market leads us to this. We see what's happening in the market. Ultra-wideband technology is not yet that well known. The first commercial chips came to market in 2014. It was a huge boom, and it was only one manufacturer. The huge boom in location technology, specifically utra-wideband, was in 2019. Apple, as the first phone manufacturer, announced the integration of this chip into its devices to improve the accuracy of location services. Since then, the market has started to change very dramatically. In 2014 there was one UWB chip manufacturer, from 2020 we will find another 5 or 6 manufacturers such as NXP, ST or Qorvo. You find these chips today in Tesla, in Volkswagen, in Jaguar, specifically for secure unlocking, for example. The market is moving very fast and the number of these manufacturers is increasing. There is an increasing demand for more accurate and robust location technologies for manufacturing companies and warehouses to ensure smooth operation of logistics flows. By believing that within two or three years, these UWB tags will be in almost every manufacturing plant and warehouse, we are preparing for huge demands from customers. For this reason too, we are building our partner network. Also, 10, 15 years ago, nobody imagined that Wi-Fi would be commonplace. All barcode scanners, all printers, all forklifts, all robots are now connected to Wi-Fi and it's standard. We argue and believe that any form of location-based services will become the exact same standard for all manufacturing companies and warehouses. Finding, navigating, routing, in short, everything that moves will have a little chip on it through which all managers will see what's happening to them on the plant floor. This will increase efficiency, reduce tracking, and reduce manual work because people will stop manually scanning. Today, the most common way to identify where a given item is located is by having a person take what is called a handheld reader and scan a barcode on a pole somewhere. This can be repeated up to 2,000 times a day. Our challenge is to reduce these daily routine operations.
What is the situation abroad? What to prepare for?
Martin Hurych
You're straddling Europe and the United States. Come tell us what is happening at the moment in the markets that are on the road to your ideal state. Where are they in the States, where are they maybe in Germany, in England, and what is the state of play in the Czech Republic and Slovakia?
Milan Šimek
The condition is incomparable. I'm not saying dimensionally, but we can see that the wave of digitisation, automation and robotization is pushing in from the West very quickly. Warehouses, warehouses, fulfillment centers are changing a lot nowadays, we all see it today. You have pickers in the warehouses, they have headsets and they are guided by voice where to go to pick up a given package to bring it to the production line. A lot of the trends have been, for example, gloves that you wear that help you to squeeze quickly so you don't have to have a reader in your hand. That was trendy about 3, 4 years ago. Then everything went to the cloud. I've just come from America where we were at MODEX in Georgia and we saw the market moving very quickly. In terms of warehousing, we are seeing a huge amount of robotization, automation and digitalization. It's not people walking around, it's robots that are able to take goods off the shelves. It's robots that are now able to drive around the shelves on the shop floor, pull a box out of the rack and bring it to the picker at that location to save that person time. The picker then eventually picks just the item from the order and the robot takes it back. This huge degree of robotization, digitalization is something that is very much in line with our intention to equip warehouses, manufacturing plants with our location technology. Nowadays they are pushing for same day delivery. In America, they're trying to get your order delivered within two hours. All of this puts enormous pressure on suppliers and especially on logistics services. We want to help them with that so that we can increase security and increase efficiency through localisation.
How to use RTLS technology in a small and medium-sized enterprise?
Martin Hurych
At Zážeh, we mainly help smaller and medium-sized companies to accelerate their business. You mentioned the big names. I can imagine a robotic warehouse in a large manufacturing company like Amazon, in the Czech Republic for example Mall, Rohlik, Zásilkovna and other companies that service the B2C segment. What can I take from the technology if I have a smaller or medium-sized business or manufacturing company in the Czech Republic and Slovakia? Where to possibly start if you have motivated me, and how not to overdo it at the beginning?
Milan Šimek
We go through these processes every day. We have here in the Czech Republic, in Europe, medium-sized companies, 500 employees who work two shifts. Those companies are integrating WMS systems, warehouse management systems, to increase the visibility of material flow. They can be single piece orders within the warehouse or orders within production, if we are talking about manufacturing companies. If the customer does not have a warehouse management system in place, there is no point in talking about other technologies. The data from other IoT and high-tech technologies will be meaningless because there will be no system to manage and use the data efficiently. Whatever form of warehouse management system, MES system, ERP system, this is the first foundation that a company needs to get clear on. You need to set up the entire process and only then go ahead with further innovations and implementations of these high-tech technologies. It's not just about the platform, it's all about the people. It's about the fact that if the management of the company is not ready for change and doesn't want to work with data, you can buy the best, most expensive management system, but it will never work for you. You really need to have a management team that wants to implement that change, wants to deal with new changes, innovations, and definitely start from there.
Why is Sewio building a partner network? And how?
Martin Hurych
We also often talk about business in the Zagazh. Now we've discussed the innovation part. Let's get into your business. I imagine that by selling innovative solutions, you have to do a lot of explaining, a lot of consulting. So I would guess that your sales cycle would be about a year from the first customer contact.
Milan Šimek
Martin, you're guessing plus or minus correctly. What I would clarify is that we at Sevio have been building partner sales since the beginning. We operate in the B2B segment. We supply to manufacturing companies, warehouses, but only through partners. This is one of our successful ways through which Sewio is experiencing success in markets like Europe, America. By building a large range of partners in these regions, we are able to reach customers faster. After all, we are a small company in the Czech Republic, but by building partner networks and trust, our partners then have their own channels and the customers to whom they supply our technology. Our business approach is mainly to build a scalable partner network.
Martin Hurych
This is an area I would like to stop and explore for a while. We've had a few episodes of the affiliate sales podcast here and they've always been a great success. What region or country are you going to and you're not there yet? Let's do a little bit of a mental exercise.
Milan Šimek
There is no country where we are not already there and we would like to be there. Rather, there are regions like Germany, like America, where we want to strengthen our brand, our position very dramatically. Mostly today we talk about finding Sewio partners in about 40, 45 countries, but there are really priority regions where we want to strengthen our brand and our market presence dramatically.
Martin Hurych
Let's look at Germany as a European industrial power. Let's say we're looking for a partner in Germany. How will you start this process and what stages will you go through? What does a partner have to meet to become your partner?
Milan Šimek
The first step is how to approach such a partner in the first place. That's something we've been going through for quite a while in Sevio. We have defined the ideal profile of our partner, it's usually a company of around 100 people with a turnover of around 10,000,000 Euros. It's a company that supplies WMS systems, barcode scanners, barcode printers. Their customers are mostly manufacturing customers and customers who have warehouses. We focus on these partners. We have built quite efficient marketing processes for this, where we are able to automatically find these partners in the region and reach out to them. We reach out to them using automated personalization of our communications. We do this through email and LinkedIn, where we really reach out to the partner and offer them to try our technology and services, mostly consulting and support, for 2 months. We also show them what references we have. We are able to reach, for example, 100 partners in a region in a few days. Of course there is a conversion rate. Partners who are interested go on an initial intro call with us, where we introduce them to how the company works, how the technology works and offer them a free 2-month loan of our starter kit to try out. We give them advice and support on that. During the two months we try to motivate them very actively to partner with our company. That's the first 2 months. When this new partner, we call it a bronze partner, becomes a partner, it is very important not to lose traction afterwards. In the next six months, this partner must experience success. That's why it's essential to really commit to it.
Why doesn't Sewio give his partner exclusivity?
Martin Hurych
I'm gonna go back a little further. You said you were reaching out en masse. A lot of people, in order to get that partner that first deal relatively quickly, they give the first partner in that region or in that country exclusivity. I take it that's not your way?
Milan Šimek
This is not our way. We are fully open and transparent. We tell all partners to look at our website where they can see how many partners we already have in the region. We have open price list for all partners, there are recommended prices, but we do not give exclusivity to anyone. It works quite well in terms of the competitiveness and predation of these companies, but on the other hand, we have to protect them in some way. We have a locking system. We have built a partner portal for our partners, where all partners around the world register their customers, their orders and we lock them in. All a partner has to do is come to us, say that they have a customer in a certain region that they have already qualified for the first time, and the system itself will evaluate whether that order has not been registered yet. We lock it in, which means that we fully support the partner in that contract and can possibly go with them for some initial consultation if needed. We try to make partners fully independent, but that doesn't mean we can block other partners. So we don't prohibit another partner from going into the contract. However, we will tell him that we are already supporting another partner in this contract who was there before so that he knows about it. Of course, we are not allowed to reveal names, but we say that we have been working on this contract for some time.
What contributes to a partner's quick success?
Martin Hurych
Next, I was intrigued by something that I think contributes a lot to success within six months. You're taking on partners who already have the potential customers you need. You're taking someone into the party who's already in the market, knows the market very well, and you're giving them something in their catalog that's very likely not competitive with what they're selling, but you're increasing their chance of increasing the size of the deal. Am I getting this right?
Milan Šimek
Exactly, our product adds value to his services. For example, partners who offer, deliver warehouse management systems, warehouse management software. Because this partner starts working with us and can deliver our location data in addition to the WMS system, it increases the added value of their own services and products. That's why they're doing it with us. Of course, the customers themselves approach their suppliers and the suppliers approach us. If a customer approaches us themselves and says they are considering implementing location services, we ask what partner supplies their IT systems. Because there is already a link between the customer and the partner, we then find it much quicker and easier to go to that partner.
What does onboarding a partner look like?
Martin Hurych
I got an email from you, I liked you, I liked you, I'm becoming a bronze partner. Now we're going through those six months where we're not supposed to lose traction. What happens in those six months?
Milan Šimek
It's actively supporting that partner. Firstly, our channel manager, who is dedicated to that region, to that partner, trains that partner in terms of market knowledge references. They select the top 5 customers from their CRM that our channel manager can go with the partner, that they can introduce the collaboration and the technology to. In addition, joint webinars are organized during the six months, where we help the partner to introduce the fact that the partner has entered the localization services market. Thirdly, we place business development managers in the regions, whose task is not to find new partners, but to find new end customers. Not for us, but for partners. Its
The challenge is that if a new partner is found, he should help that partner win the first at least medium-sized contract within six months. He has to get 5 new customers in the region that we want to pass on to this partner and help deliver at least one customer within six months. Mostly up to the size of at least some first concept, so that the partner can be at the customer's site, try working with us, try out the technology. So that they can see that the technology brings insight to the customer, can make some margin on it and want to continue to work with us. That six months is really crucial. It's something that we want to work on long term to shorten that cycle and it wasn't 6 months, it was 4 months, it was 3 months. So that within 3 months of having our first partner, the partner has had success with us and we've moved on. That's what we're working on.
Why is it a mistake to think that the partner will build the market on its own?
Martin Hurych
What do you say to people who believe that if you sign a contract with a potential partner in France, in Portugal, in Italy, that you are done and that the partner will crush the market on its own?
Milan Šimek
That it's a big mistake. We are in a community of companies that run affiliate programs. There you can see that you have to be committed to the partner. It's about building a relationship, it's about building trust so that the partner has confidence in you, that we're really on the same page, that we're not just distributors. It's also about keeping an eye on your partner. When I hand over a customer that our business development manager has developed, I keep an eye on that partner to see if they are responding to the customer's emails. I also ask the customer how satisfied he is with our partner. This feedback is very important. Not to leave the partner alone in this, because very often partners lose focus, forget and then we lose orders because there was not active cooperation and sufficient communication. It's terribly important to realize that you can't do it just by scaling people in the firm, i.e. more partners, more people. You have to think very far ahead and say how can I scale this. Covid has helped us a lot in this. We were still training partners here in Brno 2, 3 years ago. They came here and we trained them for 3 days. But suddenly they weren't allowed to fly and we wondered how we could continue. So we completely switched to online platforms and started digital e-learning training, which works very well. Our channel manager brings in the first partner and they have to go through some levels of training. We did tests, videos and tutorials to shorten the cycle. All the content is on our website. It's a way to scale the quantity and performance of partners so that we don't have to scale the number of people in the company. If we have 200 partners, 200 partners can't have 200 channel managers. That couldn't work.
How to address partners?
Martin Hurych
I'm going to ask you now to pull back the curtain a little bit on the success of LinkedIn outreach in a few minutes. I sometimes hear that LinkedIn doesn't work, that it only works for IT people. Come tell us what outreach typically looks like for you. How does it happen that when I'm a potential partner of yours, I just open your message, which I get hundreds of a week on LinkedIn? How can you engage me?
Milan Šimek
I would recommend that listeners check out the webinars and podcasts from our head of marketing, Peter Passinger, who spoke about this very nicely at a meetup in Prague. He discussed it beautifully there.
What definitely works is the personalization. For example, we create individual web presentations for the partners we want to reach, showing them why they should work with Sewie. What benefits they will get from working with us and using our technology. We send a quick message on LinkedIn that we've reached out to them via email and we'd like to show them the added value. We then see the traction and action of that partner on that page. We really need to personalize and not fit into that gray. And again, we need to figure out how to automate this personalization, how to create this individual content so that we don't have to do it completely manually. Like I said, this is a specialty of our marketing team that we continue to strengthen because we know that the success of the business depends a lot on marketing. Today we are a company of 30 people, we have about 5 people in marketing and we plan to recruit another 5 people in the next 2 years. Because we believe that marketing is the driving force behind the business.
Martin Hurych
We will definitely track down the link to the webinars and put it under the video. If you were to put in a percentage, how much of the page is about them and how much is about how you guys are the best, how much would that be?
Milan Šimek
It has to be about them. It has to be about knowing what they do, knowing what they do, knowing what our customers are like and therefore adding value to them so they can increase their traction and they can get more customers. I don't know if I'm going to be able to put it in numbers exactly, but we try to make the site breathe about them, about the partner. That we know about them, we've studied them, we think we've added a lot of value for them and we'd like to offer them, for example, a free test drive for 2 months to try it out.
Martin Hurych
I've never gotten a page like this from you, which is a little disappointing, but I imagine the reason I'm getting back to you is because it's going to make me sit my ass down. Because I very likely have never received such an email or LinkedIn message in my life. So I haven't gotten any personal website from anyone. Do you have it untracked that the surprise is the reason they're coming after you?
Milan Šimek
It's really a combination of different processes and different activities. We have gone through quite a long process of how to streamline this whole process of acquiring new partners. The email campaign and the creation of these individual websites started to work very well for us. We reach out via email, send an individual website with a presentation for the parta and confirm on LinkedIn to the same person that we would like to connect with them. Using LinkedIn has started to lift our conversion rates of positive responses. People like it and want to call us afterwards. Because it takes a few seconds to read a message on LinkedIn and a few seconds to respond. You have a lot of emails in your queue, and it takes a while to get to a particular one, but LinkedIn flashes and you see the message immediately. The combination of these different tactics and potentially tracking whether the person opened the page and what they did on that page is the key to our success. It's something our marketing is working on and we're trying to push that further to be able to acquire more partners.
Summary for those building affiliate sales
Martin Hurych
If you lend it to us, I'm sure your marketing director is invited, because we're all interested in this. If you had to summarize the affiliate sales in three, five sentences, recommendations for those who want to go your way, what would you tell them?
Milan Šimek
I will definitely pass on the reference, I think he will be very happy. He's very outgoing, and as I said, he's been to a few meetups, he's done webinars on this. We try to share a lot, so if we can, we're certainly very happy to share what we can. I'll try to make 3 recommendations. The first thing is terribly important, really define your ideal partner. Who is the ideal partner and who really isn't and don't go to them. The second thing is to work very actively with the partner and build trust and a personal relationship so that the partner sees you not only as a supplier but as a business partner who will not let them down. That works very well for us. For example, every year we also do what we call Sewio Summits, where we invite all the partners from all over the world to present key studies to each other. Even though they are competitors, they come to us, they want to present, they want to show off. We invite customers there as well, but it's about building a kind of community that trusts each other, sharing experiences with each other because they know they can help each other. And thirdly, which is definitely very important, you need to work with your partner not only actively, but also to check, to know that he is really doing his job correctly and to give him feedback. This is something that we definitely want to work on further. What you don't like about working with us, we'll tell you what we would like to see improved about working with you. At the same time, we also ask for customer feedback because it's crucial for us how satisfied the customer is with the partner. So definitely the ideal partner, trust and then of course some management and control of that partner channel is very important.
Martin Hurych
I just want to say amen. Milan, thank you. If anyone wants to know more about your location technologies for industry and warehouse management, or if anyone wants to talk to you about partner sales, where can we find you?
Milan Šimek
Definitely LinkedIn. If someone writes to me on LinkedIn, I'll definitely reply, I'm active there, I have a phone number, I think I have an email. If someone looks at my LinkedIn profile, I can be reached there. I think that's the quickest way.
Martin Hurych
Thank you very much and good luck in your next expansion.
Milan Šimek
Yeah. Martin, thank you very much.
Martin Hurych
That was Milan Simek. If you are interested in localization technologies, don't hesitate to call Milan or watch some of his freely available webinars and popularization videos. If you've been wanting to discuss foreign expansion or even partner sales within the Czech Republic and Slovakia, you can definitely reach out to both of us. If you enjoyed the episode, please share, recommend to friends, acquaintances, other entrepreneurs. You yourself, keep liking, keep subscribing, because otherwise the internet world won't know about us, or at least much slower. You can definitely look for more acceleration information on my website, www.martinhurych.com, where there will be a bonus in the Ignition section that I will pull from Milan later. This is the umpteenth episode where I've forgotten about it as part of a riveting discussion. I have no choice but to keep my fingers crossed and wish you success, thanks.