Darius Žakaitis, CEO of Tech Zity – on Lithuania’s growing startup ecosystem: we deserve to get more from our jobs than just a table and chair
The sewing factory Lelija – one of the first Soviet-era light industry plants in Vilnius – is set to be resurrected as Europe’s largest technology and creative industry towns. Here it is in figures: €100 million, 55,000 m2, and 5,000 people. The man behind the project – Darius Žakaitis – says that, in the face of changing global trends, Lithuania might get its chance to pull ahead of the competition.
Darius Žakaitis, CEO of Tech Zity
“If anyone had asked me 2 years ago what startups were into, I would’ve immediately rattled off a list: exercise, sustainability, and equity investment. But now, it seems, they all had enough of that. Even I used to take part in triathlons, making it half-way through Iron Man – and what’s the result? Nothing’s changed. Why run 50 km, if you can regularly do 5 km, along with 10 pull-ups and 10 squats, performed with perfect form. It’s quite sufficient. What’s even more important than physical activity is staying in shape long-term – it takes 10 years for the benefits to really become apparent. And this principle holds for everything, universally,” Darius explained.
He and his team are also working on other fascinating projects – from Tech Park in Sapiegų Park to Tech SPA in Druskininkai, as well as prospective new work spaces by the sea for talents generating high added value. Coming to the startup sector from traditional business, D. Žakaitis has been actively investing in new startups himself.
“I’m still very happy with my decision to turn over a new leaf. Upon quitting traditional business, I went to work for a large corporation, helped out a contemporary art centre, and looked for something interesting and challenging. I read books, went to exhibitions, talked to architects and other smart people. I also became an amateur architect, renovating first my place in the countryside, and then my house – you wouldn’t believe the same person designed both structures. It’s really experience and communication that educate us,” Darius shared his ideas on what could help Lithuania become a pole of attraction for startups.
How and why did you come with Tech Zity? How did it all start?
Once we started designing premises for startups with my team, we soon realised that like-minded people who both work and spend time together, often come up with new ideas – which is how businesses and highly effective partnerships are built. The success of Tech Park – a building complex for tech companies on L. Sapiegos street in Vilnius – inspired us to keep going. This time, our priority was having a large space for events, co-living, exercise, and health care services. This gave us the idea to build something bigger and more comprehensive.
Negotiations with Genutė (CEO of the garment manufacturer Lelija – Ed.) took a very long time, with common values being the key factor leading to the eventual agreement. We’ll do everything in our power to preserve those unique buildings – part of our architectural heritage – like the H-shaped industrial structure from the 1940s, built from unique materials, using unique equipment, etc. Preparations took quite a while, but construction has now commenced.
What are your key objectives for 2024?
We’d like to “clear house” and begin structural works. We’re currently renovating old buildings to make sure they meet the latest safety, comfort, and efficiency standards pertaining to infrastructure, roofing, humidity and ventilation systems, and acoustics. We plan to finish the first stage next spring, including the finalisation of the key multifunctional premises, such as co-working, event, dining, and education areas.
Instead of engaging in long and boring critiques of what’s missing or how the things present on the spot fail to meet certain needs, we just said, “It would be way more productive to simply make everything ourselves”. People of our generation, and especially creative talents at startups, aren’t interested in mono-functional buildings. We deserve to get something more than a table and chair at work – from good food to an inspiring community.
Tech Zity will change the face of Naujamiestis – and Vilnius must prepare for it. What would help to realise that change? What’s missing?
I’d love for the building complex to be as free of cars as possible. Last April, I set myself the goal of surviving in the city without a personal vehicle. Now I see and feel the city differently. We’re looking for a ride-sharing solution, and seeking the city’s support for connecting Tech Zity to the bicycle path network. The location is excellent: the Old Town, New Town, downtown, and the Naujininkai block are all within hand’s reach. My dream is to link up all the startup hubs – Tech Zity Vilnius, Vinted, Cyber City, and Tech Loft – via bicycle paths, which would only take a few hundred metres of extra cycling surface. If we want to make a change, this community is the perfect place to begin.
Setting technical solutions aside for a moment, let’s take a brief look at the places attractive to tech talents in this part of New Town: 1986 Gallery, Kablys, Loftas, Bored Panda, and the Auto Museum. If we were to integrate these names into a close-knit, cooperative network, our community and foreign talents would be able to see how compact Vilnius is: work, creative industries, music, recreation – all right around the corner. This way, New Town could become a real magnet both to further developing our community and attracting the best talents from abroad.
Lithuania is short on talents able to generate high added value, forcing startups to look abroad – do you have any further advice on how to attract them?
I’ve had multiple conversations with businesses that moved their operations here. I remember one particular case – a company was choosing between Bucharest, Belgrade, Warsaw, Prague, Vilnius, and Riga. A key aspect in securing victory for Vilnius was face-to-face communication. We met several times, I recommended people who could lead operations in Lithuania, we went to dinners – it was straightforward human interaction that tipped the scales. If you’re inviting someone, you must be agreeable, unassuming, and supportive – this helps people feel understood, welcome. Knowing someone in the country you’re travelling to makes it look very different – that’s how we should think about talents, making them feel like they have a friend.
Tech Zity Vilnius
What’s in store for the Lithuanian startup ecosystem in the next 5 years?
We and members of Unicorns Lithuania have set ourselves the goal of expanding the ecosystem to at least 2,000 startups and 30,000 talents. For a new startup to be born, however, a founder is required. Those are magical people willing to go out of their comfort zones and say no to a fixed income – just to generate more value. They believe in their ideas and manage to convince others to invest into, work on, and implement them. If we want to add a further 1,000 startups to the 900 we already have, we need at least 2,500 of such brave people, because startups usually have no less than 2 co-founders, which is ambitious.
How do we achieve this ambitious goal of doubling our startup ecosystem?
When researching other thriving startup ecosystems, we found the meet-up format to be the most helpful, whereby 10-20 ambitious people come together and engage in discussion. Startups are born in conversation. Hackathons are great, too. If you have an idea or you’re a leader or specialist, you can join them and find yourself a team. The next step would be accelerators, funds, and incubators. For them to generate value, however, an idea and a team must already be in place, even if still at a very early stage.
What would you tell startups that are only starting out, facing challenges, and looking for investors? How do you see the sector in 2024?
Following business cycles is for cycle chasers, otherwise, you just go and do it. Sure, there are harders and easier times, but you can’t just sit and wait for winds of change. For instance, 2023 wasn’t the easiest year, yet it was also the year when, for the first time, we saw as many as 2 startups raising $100M in funds. A good team, a good idea, and figures showing that you’re generating value to users are always great to have. Today, you must be profitable, and prove that you’re able to continue growing – that’s how good teams operate.
I know that you personally had an opportunity to invest in two early-stage startups that ended up becoming unicorns – Printful and Bolt. What was the reason behind your eventual decision not to work with them?
These stories are, indeed, true, yet I can’t flog myself for that decision too much. When I started investing in startups, I wanted to back exceptional ideas that could change the world. As time has shown, however, those ideas aren’t always successful, because the key variable is actually the people.
Speaking of Bolt, when a 24 year old lad sends you a bunch of somewhat messy slides, aiming to prove that he could outcompete Uber, you’d have to be extremely insightful and driven to believe in him. It seemed like a utopia to me. And that’s how many people see Tech Zity Vilnius – building the largest tech park in Europe sounds like a utopian idea. As for Printful – printing on t-shirts, etc. – I just didn’t get the concept. I also didn’t pay much attention to it – didn’t do much research or speak to the founder. I just didn’t believe that it was unicorn material. They earned their success with a lot of hard work.
Since you’re in regular contact with different startups, investors, and top talent – have you noticed anything that makes the Lithuanian startup ecosystem unique?
An acquaintance of mine from abroad has noticed that Lithuanians have the unique ability to do more with less. A small country with a small market forces you to go global immediately. We also have plenty of resources, so you just squeeze out as much from them as you can. That’s our uniqueness.
The entrepreneurial spirit – nature of nurture? What did your journey into business look like?
I’ve felt the need for freedom early on, so it’s probably something internal. Growing up in Antakalnis, Vilnius, I played a lot of basketball, which taught me discipline, effort – and even perseverance in the face of discomfort. Practice, school, friends – I didn’t think much of the future. After graduation, I considered studying literature or finance. I loved to read, but my mom, who worked with books, talked me out of it. I ended up studying finance and economics at Vilnius University.
After my freshman year, I took an opportunity to work in the U.S. where my uncle lived. I was allowed to leave because of Perestroika. Although I spent an entire summer there, I mainly worked with a rake and shovel, realising it wasn’t the future I wanted. Coming back to Lithuania and seeing lots of opportunities here, I started my own company at the age of 19, in my sophomore year. It wasn’t a large business, I just sold whatever I could to make some money. This soon led me to realise what money really meant to me – freedom, learning, travel. Along with arguably the first Lithuanian group, I took a charter flight to Singapore and Malaysia in 1991 or so. I liked it, and wanted more.
What are the main principles guiding you in your professional, as well as personal life? What helps you to sustain your drive – and to infect your team with it?
I’m motivated by the goal and my team. If we succeed in building spaces where startups feel good – we’ll feel the same way. This, in turn, generates energy that brings change. You just can’t work in Tech Zity’s team if you don’t believe in it – there are companies that pay more, offer better “workations”, and have tastier pastries in their offices. For a startup, our team is very small – although it has nearly doubled over the past several years. This means that each and every person working here is a leader – there’s no hierarchy, no layers or levels, just an atmosphere of openness.
My work is simultaneously my leisure. I also love art, travel, and daily exercise. Healthy body, healthy soul, healthy mind – that’s what guides me, I seek balance. I can also see that others, too, are increasingly tending in this direction – functional medicine is gaining in popularity, especially in the U.S. I also like reading. The last book I loved was Architecture of Power, showing how architecture shapes the identities of statesmen and gratifies their egos – a good example of what not to do. My other recommendation, a work of fiction this time, would be The Fountainhead.
What would be your advice to Lithuania? What’s needed to increase the number of startups and unicorns here? To make Lithuania the best country for unicorns in the world.
I’d like to see more startup founders, more tech companies, and more happy, successful people working in them. Them eventually becoming uni-corns, bi-corns, or half-corns shouldn’t be a goal in itself. I’d really love to see a large community of people doing things and pushing the entire country forward on a tech platform. Quality comes out of quantity, so I’d first try to attract more talent. People are attracted by people – and smart people attract other smart people.
This interview was prepared by Vilnius TechFusion partner Unicorns.lt. Find the full story in Lithuanian here: „Tech Zity“ vadovas Darius Žakaitis – apie augančią startuolių ekosistemą Lietuvoje: darbe mes jau nusipelnėme gauti daugiau nei stalą ir kėdę | Unicorns Lithuania
