In Belgrade, Yes Belgrade, an Unlikely Path to a Tech Hit

Branko Milutinovic left war-ravaged Serbia, only to return and create a soccer game that's been downloaded more than 170 million times.

An employee works on computer games design at the Nordeus Holding Ltd.

Photographer: Oliver Bunic/Bloomberg

When Branko Milutinovic was growing up in Belgrade, air-raid sirens routinely cut short pickup soccer games with friends. "If you heard a siren you had about five to 10 minutes to get to a shelter," says Milutinovic, now 34. "You’re watching from the window and seeing rockets coming up and coming down, then things explode. It was like in the movies."

The bombings ended in 1999, leading to the eventual downfall of former Serbian president and accused war criminal Slobodan Milosevic, but the prolonged conflict left the country’s economy in tatters. Milutinovic, who enjoyed tinkering with computers, did well in school and received a masters degree in computer science. Then, like many ambitious young Serbs, he left the first chance he got.

Milutinovic decamped to Copenhagen for a low-level job with Microsoft Corp. The work was fine, but he didn't love it. He was anxious to return to Belgrade to be with his ailing father.

Branko Milutinovic
Photographer: Oliver Bunic/Bloomberg

In 2009, along with two college friends, Ivan Stojisavljevic and Milan Jovovic, who also joined Microsoft from Serbia, Milutinovic decided to move back. After toying with different ideas, the three pooled their savings and started a video-game company, using an algorithm to come up with the name Nordeus. They figured the money would last them a year or so in the relatively inexpensive city and that they could always find another coding job if the money ran out. "We weren't doing this to get rich," says Milutinovic, who has blonde hair, a tall muscular build and boxer's nose. "We wanted to live off making games."

They achieved that and then some. The trio created "Top Eleven," a soccer game that's been downloaded more than 170 million times and built a cult following among enthusiasts around the world. Players build teams by drafting and trading players—much like a big-league general manager. A year after its debut, "Top Eleven” was the top game on Facebook, beating out companies such as Electronic Arts and Zynga.

Unlike many app companies that hit it big before disappearing, "Top Eleven" continues to grow. While not well known in the U.S. and other less soccer-crazed precincts, “Top Eleven” has been one of the top-10 grossing game apps in seven countries, with a particularly strong audience in Europe, Southeast Asia and Latin America. Last year, Nordeus generated more than $75 million in revenue.

"He's an amazing success from somewhere you wouldn't expect," says Christian Hernandez, a former Google and Facebook executive who’s now a partner at the London venture firm White Star. "I use him all the time as one of my favorite case studies."

Compared with the likes of Uber, Nordeus is tiny. Milutinovic prefers it that way. Unlike many startups, Nordeus has been consistently profitable, starting three weeks after "Top Eleven’s" debut. As a result, Milutinovic never took money from investors. The lack of financial entanglements means the founders do whatever they want—whether it’s an all-hands vacation to a Greek island, building an ambitious years-in-the-making fantasy game due this year, or becoming one of Serbia's largest philanthropists. "Venture capitalists give you a lot of money and less freedom," Milutinovic says. "We didn't care much about the first one and we still don't; freedom is the most precious thing."

War Reminders

At a time when Silicon Valley is as well known for loutish behavior as innovation, aspiring entrepreneurs could do worse than look to Milutinovic for inspiration. He was named after his grandfather, a wrestling champion and resistance leader in Nazi-occupied Belgrade, who wound up in a Gestapo jail. "He bought me my first computer," Milutinovic says. "My earliest memories are around building stuff, playing games and computers."

Milutinovic's father was a lawyer, but for political reasons wasn't allowed to practice. His father and grandfather's experiences under authoritarian regimes affected Milutinovic—he uses the word "freedom" no less than 15 times during two meetings. But with much of the fighting during the Balkan war taking place away from Belgrade, his childhood wasn't overly disrupted, with days filled playing sports or video games. Milutinovic coded his first program at age 10, a trivia-quiz game, and won medals in math and physics competitions. "I'm a geek, essentially," he says.

Still, there were regular reminders of the war. In the hospital for appendix surgery at age 11, Milutinovic saw children with missing limbs and orphans whose parents were killed in the bloody conflict, which lasted through much of the 1990s and ended only after the intervention of NATO forces and the breakup of Yugoslavia. Milutinovic’s middle school took in a steady stream of refugee children from Croatia and other neighboring areas affected by the fighting. "These kids were so shaken they wouldn't speak to anybody," he says. "I felt for them, everybody did."

Nordeus now uses some of its profits to build 11 pediatric units at hospitals around the country—an effort that has made the company one of Serbia's largest benefactors. The hospitals handle about 21,000 births a year, or about a third of the 65,000 babies born in Serbia. A Nordeus-funded hospital in Belgrade that was once used as a prison now delivers about 30 babies a day. Dr. Biljana Pejovic shows off a new wing used to treat premature infants, including a few whose parents are Nordeus employees. "We didn't have this equipment before, it was improvisation," Pejovic says. "It's all contributed to saving lives."

Milutinovic has become a role model for young Serbs who corner him about their interest in joining the technology industry. This year he partnered with friends at Microsoft and the genome-mapping company Seven Bridges Geonomics on an initiative called Digital Serbia to boost the country's tech sector. He's eager for Serbia to be seen outside its its war-torn history, but knows it will take time. One of the biggest challenges is persuading the best students to stay in the country.

The day after one recent graduate accepted a job with Nordeus, he returned crying to say he couldn't take the position because his father wanted him to accept a job outside Serbia. Milutinovic called the father, who didn't believe a digital company in Belgrade would last, and asked him to come to the office. "I wasn't going to let this go," he says. Milutinovic spent three hours with the father and hired the son.

With youth unemployment in Serbia hovering around 30 percent, Milutinovic's determination is having an effect, says Vukasin Stojkov, who runs a co-working space popular with aspiring coders. "There are a lot of people who perhaps want to explain to themselves why they haven’t yet succeeded and they buy into the mantra that it’s because of the place where they come from," he says. "Nordeus has been an amazing argument against that."

Valley Trappings

People smoke everywhere in Belgrade, including hospitals. With brutalist architecture and rundown infrastructure, parts of the city feel years behind modern cities. Some buildings are still cratered from bombings nearly two decades ago. But it's a city in transition, located at the beautiful intersection of the Danube and Sava rivers. There are trendy areas, young and vibrant, with people sitting outside restaurants and bars. The Nikola Tesla Museum, dedicated to the renowned Serbian-American inventor who inspired the name for Elon Musk’s Tesla Motors Co., is favorite a tourist stop. Packed nightclubs send music thumping across the river late into the night.

Nordeus has taken over several floors of a modern downtown office building, where locals work alongside more than 30 employees from outside Serbia, including the U.S., U.K., France and Germany. The office has the usual trappings of a Silicon Valley startup. Breakfast and lunch are catered, and gourmet ice cream and microbrews are stocked in self-serve coolers. A local restaurant makes the red pepper-based Serbian condiment called ajvar for Nordeus to feed a 40-jar-per-month habit. A lifesize zombie is stationed next to a conference room, and car simulators and virtual reality headsets can be enjoyed in a nearby gaming room. Milutinovic is coy about how much money Nordeus is making, but it's clearly not insignificant.

Married with two children, Milutinovic lives in an apartment above his mother in downtown Belgrade. He says the technology industry is too obsessed with wealth, and vows not to sell Nordeus or take outside investment. He plans to cap hiring at about 250 people—Nordeus currently employs about 170—because otherwise it "will be less fun to come to work every day." Still, he allows that it was enjoyable to be wined and dined by investors who wanted to back Nordeus. "We learned all about great wines and food and truffles, what great sushi is," he says.

Whether Nordeus can remain independent will depend on future success. While “Top Eleven” remains hugely popular with players willing to spend lots of money on various features that let them advance more quickly, gamers are notoriously fickle. Right now, Nordeus’s biggest hit is also its biggest business. "The question is how to do you go from one hit, to two hits, to multiple hits,” says Don Mattrick, who as chief executive officer of Zynga explored buying Nordeus and is now a mentor to Milutinovic. “That's the learning curve they are going through right now."

Driving home from dinner, Milutinovic seems to relish the added pressure of running Serbia's most promising business. He knows success can be fleeting, but says early tests make him confident the company's next release, a fantasy-battle game called "Spellsouls," will succeed. If not, he says the company has saved enough money to endure a few flops. "We take pride in that we came from Belgrade, Serbia, from nothing," he says. And then there's that word again. "We wanted freedom."

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