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From producing blinds to owning factories equipped with modern technology - what follows the 23-year history of DIO’s business in Georgia
Author: Elene Kvanchilashvili
Company: DIO
Type: Family
Founders: Irma Daushvili, Tamaz Daushvili
Experience: 23 years
Employs: 200 people
Produces: up to 70 products
Owns: ISO 9001: 2008; ISO 9001: 2015 certificates
Slogan: Always choose "Dio!"
Respondent: Tamaz Daushvili, managing partner
http://forbes.ge/news/7468/2019-wlis-dekembris-nomeri
In 1996, 23 years ago, you’ve started a business with zero capital. This was the period when many businesses started, but little if any maintained their profile, growth and expansion. DIO is one of the positive exceptions in this regard, so Forbes Georgia was interested in you and this business.
By that time the Soviet Union had already collapsed and the country was facing an economic collapse. People in Georgia fought for self-preservation. We, like many other families at the time, thought about how we could save ourselves.
We started the business with zero capital. It started out as a family business. We had an idea to bring a curtain-blinds to the country and introduce this new product to the customers.
We started door-to-door in 1996. We had no money to invest in the business. We would go to people and explain what our product is, and then we would show them photos of blinds. Once a person completely understands and they would give us money in advance to order. That’s how we bought materials.
I was a student then. I remember once installing blinds in a nightclub and downstairs my peers were hanging out. However I did not mind was not let down by the fact. I knew it was my way and I had to do it to the end. I still think so today: you have to believe in the idea and use all the available resources. When you have high motivation, it is already 50% of success.
It was a period of great hardship in Georgia back then, I remember, if some businessmen would earn a little money, they would immediately buy the best car. We did not do this: we returned every penny we received from the business back to the business. We did not think that buying a good car or anything else was an end in itself. Our goal was to develop the business.
Turns out, you created a market for a product that consumers didn’t even know about. As a rule, the opposite happens sometimes. What was that challenge like and who were your first customers?
We put a lot of effort into introducing our products to our costumers. We had few buyers at the time because the population was virtually in poverty. Our first clients were legal entities, mainly foreign organizations: embassies, representations of international organizations. They were familiar with this product, so it was easier to communicate with them. This has already led to the interest of individuals and customer trust. This trust was very important to us because we did not have our own capital for this business and we had to convince our customers that this was not a waste of money and get a quality product.
How did this trust turn out to be enough to overcome the very big problems or challenges that followed at that time?
We really faced a lot of challenges. Customs, tax and other state structures did not work properly, the crime rate was very high, corruption was everywhere - as a result, business was under great pressure.
However, this period also had a positive side - a very high motivation to create something and achieve success. Each white (coin) we produced was again used to develop the company.
A lot of businesses didn’t survive, and when I think about why they couldn’t survive, the answer is simple- They did not spend the benefits they got in their time didn’t go back into their business. We refused all personal comforts and all whites (coins) were reinvested in the business - with this approach we also justified the trust that the customer had in us during those difficult times.
The fact is, only one person couldn’t do all this. You needed a team too. Where did you find the professionals?
It is a paradox, but from this point of view, finding qualified staff is more difficult today than it was then.
Why?
Many professionals remained unemployed after the collapse of the Soviet Union. Consequently, they also had great motivation. The situation was such that professionals with higher education were willing to do any technical work themselves. Such a qualified staff has largely contributed to the success of our company.
We were the company that introduced several products to Georgian customers for the first time - curtain-blinds, outdoor protective blinds, automatic garage management, shade awnings. Also, we were the first to introduce pergolas (very durable rolling roofs) in the local market; For the first time we imported and now here, we produce blinds inserted in the glass on the spot. This is a product that neither ages nor gets dusty. There is a long list of products that we introduced to Georgian consumers for the first time.
Our goal then was as follows: If we noticed that an imported new product was easily catching up in the market, we would start producing it locally. We have been producers for exactly one year since the first import - in 1995-96. Starting local production was not easy, but we knew it was a much needed job.
We still don’t buy or sell products: we try to master the technology and create more value on the ground - to employ more people, to leave more money in Georgia. This is what our country needs today.
In addition, we have developed a whole feedback system that provides information about what the user thinks of us - both electronically and directly, through face-to-face meetings. We always remember that the salary is paid by our customers.
A very large portion of your company website is devoted to standards, quality, etc. - How ready are consumers today to buy this quality?
This is a challenge. I always prefer to call the problem a challenge, otherwise if we approach it differently, it will turn out that my whole life is about solving problems. I do not even want my activities to have a negative impact. On the contrary, we evolve and meet challenges.
We have an ISO certificate issued by a German agency since 2005 and which is updated annually after the relevant inspection of the company. DIO has always been associated with high quality and a not so low price.
Over time we were able to start producing an economical product line. This means that we offer customers a more affordable price, but not at the expense of quality. Meanwhile, quality is more appreciated in Georgia as well. Now many consumers already know that for example, buying a cheap window means you will have to pay twice.
Do you think that today - in the world of digital, high competition and new technologies, if you start a business, you will be able to start it again with zero capital?
I believe that even today it is possible to find a business idea that can be turned into a successful business with zero capital. Today there is much higher competition in Georgia, but we also have easy access to new information or technologies.
When we started the business, then there was no internet, no mobile, no landline phone was working properly. When we started the business, the first remote means of communication was pager. It was with the pager that we informed the staff of the assignments.
Consequently, many things can be thought of in this world of technology, but it is necessary for a person to constantly work on himself: I sincerely believe that if each of us wants to get an education, improve skills, Georgia will be able to repeat what the Baltic states did after the collapse of the Soviet Union.
Do you see yourself as a big business?
Turning into a big business is not our end goal. We want to develop not fast but stable. In case of such development, we will better maintain the quality of our products and services. As soon as the country's economic growth allows us to grow our ambitions, so be it.
How direct is the connection between the country's economy and the development of your company?
Business development keeps pace with the development of the country. If the economy is growing fast, then the motivation for business in this country to see its future will increase even more. If there is no vision of economic development, even if the growth rate is slow - intellectual and other resources will flow out of the country.
Where is Georgia on this continuum today?
Georgia still has a chance to take its special place in the world economic competition. However, this chance can not last long, so it should be used today. Anyone can become a businessman and the state should encourage many people to get involved in business, i.e. economic activities.
Who or what should develop the economy?
First of all, we need a good business environment and as much foreign investment as possible. We must remember that we are in a lot of competition in terms of attracting foreign investment - especially with Eastern European and Asian countries. These countries are looking for investors who bring new technologies and knowledge to the country.
We understand from all international financial or rating organizations that Georgia needs to carry out structural reforms to increase the attractiveness of the business environment. If you were to set these priorities, what would you prefer?
The main thing is to invest in the next generation is education. If we look at the skills of our young people - the skills of reading, mathematical thinking - we will see that we are far behind the developing countries, there is no talk of developed countries either. Without educated people, business cannot thrive. Business needs professionalism. Vocational education is also very important. There is a great shortage of professionally educated people in Georgia today.
A very good example of the success of vocational education is Germany and other northern European countries. Our company is happy to train factory staff, but there is no proper system in the country to connect such interested young people with us through vocational schools. A very good example of the success of vocational education is Germany and other Northern European countries. Our company is happy to train factory staff, but there is no proper system in the country to connect such interested young people with us through vocational schools. A very good example of the success of vocational education is Germany and other Northern European countries. Our company is happy to train factory staff, but there is no proper system in the country to connect such interested young people with us through vocational schools.
How easy is it to join your team as a new member?
When we hire a new employee, we introduce them to DIO’s corporate culture. This culture includes customer care, honesty, and helping each other within the company. These are the core values we agree upon in the company.
If we do not have common attitudes and visions in this direction, then we can not work together. We never cheat customers because we never cheat on each other inside the company. Our approach is: "Where you work, you have to spend to the end", because quality is achieved in detail.
We do not want a person to work only work for a salary. We strive to enable employees to develop their own knowledge and skills. We want to know who out of 200 employees has what aspirations, where he sees himself, what job he is interested in doing. Intrinsic motivation is paramount. When a person does what he cares about, he creates a much better product than a person who works just to get paid.
All Dio employees are committed to eradicating the myth "They do not know service in Georgia" forever. We know the price of each client and we also know that our mission is to create comfort in their families or offices.
All this time you hear and hear a very specific, consistent vision of how a country, economy, business, skilled workforce can develop. Do you see the same from the state?
The goal should be to simplify the business environment as much as possible.
So I ask you: the state taxes one-handedly distributed profits and thus takes a step towards tax liberalization; On the other hand - it directly transmits many EU regulations without prior impact assessment and thus restricts the free market - are these different views?
Regulations regarding life protection and health are very good to be introduced. But there are various regulations that create useless bureaucracy. For example, when a business plans to build a new factory, It has relations with various state regulatory agencies and these agencies do not work in coordination with each other. I think this problem will be solved by the idea of "Business House", which was voiced before, but then was not implemented.
These are state-of-the-art public services for business. There were no regulations at all before. It is very important to start introducing regulations that apply to human life. It is necessary to think more about labor safety in Georgia, so that construction will never cost human lives. Everything is possible by developing and adhering to the relevant standards. Of course, the new conditions of labor safety require much more labor and expense from the business, but it is a much-needed labor and a necessary expense. If developed countries have achieved this, why can’t we?
What do you think about corporate social responsibility - it is in vogue today - what does CSR mean to you?
Consumers often think that a business is doing nothing without direct benefit - especially a business that does not bring it any profit. For me it is not so.
We do not want to be a rich business in a poor country. Every person employed in DIO is a citizen of Georgia and the pain of the country is also their pain. So we try to turn our help where it is most needed: we have been helping the Children's Hospice since its inception, this facility serves children with chronic and incurable diseases and their families for free. It was opened a few years ago at the initiative of the Open Society Georgia Foundation; We assisted the local population in restoring and opening libraries in different regions of Georgia; We strive to encourage teachers and promote the development of education; We promote the establishment of a healthy lifestyle among young people.
The business routine is quite heavy, so we also enjoy when we can temporarily interrupt it and redistribute the resources we get from this business so that we know for sure - we are doing a good job. This further increases our motivation to return more actively to our daily business routine.
Not all aspects of doing business in international rankings are what you as a practitioner focus on. However, we agree that starting a business in Georgia is easy. Then my question is: is it easy to keep a business here? Is it easy to increase it?
This is a very interesting question, because one is to start, the second is to maintain, and the third is to grow the business. We started in the 90s. There were some benefits even then: the business was exempt from, say, the same tax audit for a certain period of time from the start; He started paying profit tax two years later - these were really tangible benefits and then everyone benefited. However, it was very difficult to maintain business then - because of the criminal situation and corruption in the country.
So these benefits, in total, lost their value. In our conditions today, business development can be hindered by low economic growth, devalued national currency, unfair competition in the market. I strongly believe that no one advocates business in Georgia today. There may be some inconveniences, but these are unit cases. Today business is freer than non-free. Consequently, we have the following data: It is crucial to build a business environment that will allow investors to develop more.
I call the recession of the lari an indirect tax - a tax that each of us pays as a result of a poorly produced economic policy. Do you agree?
Yes. We are taxed because of wrong policies. All this affects the business mood. Businesses look at the GEL exchange rate, while consumers look at the refrigerator. If no one sees a positive change, then the numbers written on the sheet mean nothing.
One of the reasons for the increase in inflation today is the devalued national currency ...
Moreover, inflation measures the increase in prices only for primary consumption products. We alone should not measure how much people can buy products necessary for physical survival. This is wrong.
Or are you saying that inflation is even higher?
Of course. A person’s aspiration to earn more and accumulate more wealth is normal. He must not only take care of himself, but also raise his standard of living, and he must be allowed to do so. In Georgia, people often do not even receive the necessary income.
What do you think about banking regulations in this context?
I agree that giving so many loans by hand was not right. Regulations and regulation in this area are important so as not to tempt people. But where does this temptation come from? Are these regulations fighting the cause or the outcome?
Now as a result – I agree with that part. The reason is that there is a tendency for investment and economic growth to slow down. The bank has become the only investor in this country and it is not just the bank’s fault at all.
How does DIO view its future?
We will grow. Now we are building a new enterprise where new machines will be placed, New employees will be employed and the production process will be even more technologically advanced. And most importantly - of which I am especially proud - we will move some of the production to Kutaisi. It is very important that everything is not concentrated in the capital. I am glad that we will be able to employ the local population in Kutaisi.
