Don't be afraid to innovate and go for it. Look for space and don't be afraid to show people what you have. Often, we're afraid that if we tell someone an idea, an idea, so someone will steal it. But the important thing is the execution. And implementation is difficult nowadays. So, I would talk about it with the environment, not be afraid, go ahead and look for ways. If it's something that's going to fulfil me, there's nothing to stop it.
Jan Koprajda is the founder and director of the software company Whys. The company is engaged in the development of specialized robotic B2B e-commerce solutions, integration of ERP systems and custom development.
How hard is it for a small company to compete on price? What are the benefits of narrow specialization? How does it view the productization of services? How does it feel about innovation? And what opportunities does it see for the Czech Republic in innovation?
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INTERVIEW TRANSCRIPTION
Martin Hurych
Hello.
I'm Martin Hurych and this... This is Ignition.
Ignition is the beginning of acceleration. Acceleration is something you need to get moving from a place. By finding this podcast, which I thank you for, you've taken the most important step for your own acceleration, which is the first step. In Ignition, we share our experiences in B2B business. From business, from innovation, from working with people and more.
Today we're accelerating with Jan Koprajda. Hi, Honza.
Jan Koprajda
Hi Martin. Thank you for having me.
Martin Hurych
Honza is the founder and CEO of the technology company Whys.
Honza, what does a technology company mean to you? And just so I don't get confused, give us a little background on your company, Whys. What do you do, how do you do it, why do you do it?
Jan Koprajda
Technology company is a pretty general term. There can be several types of these companies. We are in the software development business. We develop customized software. Very often we try to improve processes in the company for our clients by building online information systems. At the same time, we create a product portfolio according to common requirements that are repeated by customers. We also try to help companies a little bit with the business when they need software that saves time, increases sales or automates sales and so on. So what does Whys do? Right now Whys is currently helping companies use software to increase profits, to enter a new market business-wise, or we automate their processes so that they can save money on, say, people, or reduce the error rate that the human factor has.
Martin Hurych
I find it very interesting to see how your generation has overwhelmingly entered a completely different business than mine. We are still more, in your words, hardware people, you are very much software people.
Do I understand correctly that Whys is not just a software vendor, but a business partner to its clients?
Jan Koprajda
To a certain extent, that's right. We try to create solutions for our customers, it doesn't make sense otherwise, that bring them some benefit. If we just produce software and don't think about it in context, the customer can't be satisfied with the delivered solution. I take it automatically.
Martin Hurych
I found on the web that you do Full Cycle Software Development. What do I mean by that?
Jan Koprajda
Software development is quite a demanding process and often requires certain stages to be successful. Full Cycle Software Development says, "Hey, we'll help you. You have an idea and we want to help you implement that idea. That's why we need to find out more information about your idea." We'll throw our ideas and thoughts into it. We force the customer to think more about it, to do research with potential users. And so on. We just take the client through the stages one at a time. It's not just about development, about programming. It's about design as well. And then it's about service. Full Cycle Software Development means going from the very first ideas and prototype to implementation and service. Everything is tailor-made for the client.
Martin Hurych
Are you primarily involved in customized software?
Jan Koprajda
We started that way. I wouldn't say we are primarily involved in that today. But it's still like a serious part of the work that we're doing at the moment.
Martin Hurych
There are a lot of software companies, small companies and big mastodons, and they all say that they write custom software. How does one compete with that kind of competition? How is customized software sold?
Jan Koprajda
It's a pretty tough market. Uniqueness is hard to find and hard to grasp. I think it's also quite incomprehensible to customers. Even if I tell them that we do something better, or that we have some more appropriate technology, they don't get it. They're dealing with their business and utility. The most they know is that software development is quite expensive. Of course, if they can save any amount of money, that's interesting to them. That's why they often compete on price. Or the business is downright based on contacts and on trust. I also deliver bespoke software to customers who trust us from the start for some reason. They may not even know us, but by having recommendations from other companies they trust, they go to us and say, "We want it from you."
That's the way we like it. As Whys, we don't tender. Unless we're talking about bespoke software. We haven't done that before, so we don't have experience with that. I think it's a hell of a lot of work, which is why we don't go into it.
Martin Hurych
If you don't go for it ... You said you started out like this. Now you're not going for it. What are you getting into then?
Jan Koprajda
We're not rushing into the tenders. If somebody wants custom software development, and if it's an interesting project, then we're in it. But we're more looking for a product portfolio that we can build.
Martin Hurych
That's exactly my point. The question was actually, how do we get out of the rat race of competing on price? If I understand you correctly, it's a difficult situation in this market, there's a lot of you, there's a lot of price...
Jan Koprajda
I'm still wondering ... When a company has a big and established brand, when it's a company that has maybe higher tens if not hundreds of developers, then of course it's easier. There is a general awareness of the brand, the company, there is a general trust. The company can of course afford to have much higher prices, but it already shows some guarantees with its former projects. Being a small company, it is difficult for us in this area.
Martin Hurych
You're from Brno. Brno is the Czech Silicon Valley. How do you fight against having to participate in the rat race? And where are you moving to? You said, "Yes, we grew up on custom development." But you haven't told us where you're going now?
How to find your own specialisation
Jan Koprajda
We are now testing and looking for possible products. That's what I think every IT company that deals with custom development does. Everybody wants out of it, or at least most of them.
We might just be a little bit lucky. We've found products and activities that we've optimized with our current clients, and we can scale them up to be a product. And I'm very cautious, I don't like to take risks. That's why I do it so ... We're constantly developing something, and once I figure out, hey, this could be scaled, done in general, we're looking for solutions to program that service so that we can then recycle it for others as customers. That's the approach that we're building our product portfolio on now, which we're gradually expanding.
Martin Hurych
What is it that you have in your portfolio?
Jan Koprajda
We currently have a B2B e-commerce platform. We wrote the basics about 2.5 years ago. It's very young, in very young technologies, so it's also very interesting technologically. At the same time, we can integrate it effectively into ERP systems, which is the main reason why clients come to us.
And then we have created an integration platform that is a demonstration of how we productize. When the first enquiries came in, I thought from the beginning that I would separate these 2 things, make them more versatile and get clients that way. The second product is an ERP aggregator. A platform that will allow to efficiently connect other web applications with ERP systems so that it is not too expensive for those customers to implement.
Martin Hurych
How big is the market for ERP system integrations?
Jan Koprajda
I don't have it fully mapped. I think it's quite big. There are more and more companies using ERP systems. It's more a question of which ERP systems to focus on. We have chosen ERP systems that are very specific. Not that many companies use them. We work mostly with the Karat ERP system, there are, let's say, higher hundreds of clients, which is not very many. If we talk about systems like Pohoda, small accounting systems, we don't see a chance. It's like e-shops today. So, we're more focused on a narrow portfolio of systems. We're looking at Helios, we have a customer on K2. We're looking for those systems where the problems are obvious, and the integrations are challenging. We are looking for a way to automate not only the customer, their processes, but to automate the work of interfacing with larger and more complicated ERP systems.
Martin Hurych
So, if I understand correctly, you've gone through an evolution from a large market where there's a lot of competition to a very narrow specialization and a small market?
Jan Koprajda
Yeah, that's right.
Martin Hurych
What are the advantages of breaking out of the rat race? And at the same time, what are the potential risks for you?
Jan Koprajda
One of the big advantages that I see is that I'm better able to tell the client what we're doing. I can focus it more on a certain whole group. I know where to find it as well.
With the generic solution if we say we're doing custom development ... As you mentioned, there are hundreds of these agencies just in Brno, in Silicon Valley. It's not easy to do it there. All the agencies are very contact-driven. Which is great. I also have an extensive network of contacts around me because I've been in the market for a long time (I've been programming since I was 14), which has always helped. My business here is just inertia.
But now that I want to sell and handle the business proactively, it's just easier to specify the offer for specific purposes. Plus, we get some specialization, some skill that not everybody has. So, it's also, I would say, quicker to recommend, and has been recommended for years. And companies, when one gets well defined, for example in marketing, in webinars, or webinars, they find that they are solving this problem and they didn't even know that there was a solution. Suddenly it gives him a more concrete outline that there is a solution or an activity that will make something better.
Custom development is such an elusive ... The customer knows that someone will develop a specific solution for them because everything can be developed these days. But if you don't have a specific idea? Often customers want to see the product, they want to see how to click in the interface, they want a solution at an affordable price, and so on. Custom development goes against that. So I see that as a benefit as well.
I see as a risk that it might not work, we make the wrong brand, or the market dies out, or we find out that maybe it's not big enough to be worthwhile. Then it's bad. Or a partnership. For example, we have a partnership within an ERP system. Those are also sensitive. I'm a little naive, I always see everything as positive and that it's going to work out. But I don't think there's that much risk.
Martin Hurych
If I go back a little bit and if I recap what you said and sum it up in the sentence "The clearer and more specialized a company is, the easier its business is" would I be too wrong?
Jan Koprajda
No, that's probably about right.
How to work with a B2B partner
Martin Hurych
You mentioned that you depend on partners. What does that mean for your own company's long-term development? I assume you didn't build your company for partners, but for yourself and the people you have in your company. In a previous podcast, we talked about how to build a partner network. You're on the other side of the barricade now, so I was wondering what it's like to be a partner with someone who's delivering your solution somewhere. And what are the potential risks of that for you? And of course, what are the benefits?
Jan Koprajda
So the advantage is that I don't have to deal with the business, that's like a very big advantage. Those partners usually already have some network of contacts or they can get to contacts more easily that we can't get to. By the fact that they already have the trust, then it's easier for us to get in. If a partner says, "hey, here's a Whys who can do this, he did this with us, we were happy, the customers were happy too", then they don't de facto have much reason, especially with specific ERP systems, to say no. Those companies are capable, they're not poor, they have no reason to put out a tender because it would be more time and money consuming for them.
And the pitfalls? Often what happens is that the partner is not completely transparent, they don't communicate things to us in a completely timely manner, so we might find out some things late. Or we find out that maybe the assignment is supposed to be a little bit different, etc. It's more work on the process and development side. But I always tell myself that it outweighs the business. Just by not spending as much time on the business, I have more problems with the development. Which of course we're trying to address. We're looking at how to set up relationships with partners, both business and process, so that it works well for both sides. Of course, it doesn't always work out. It may well be that we may get into a bigger crossfire with a partner and that may be the basis for the partnership to end. There's a risk that if the partnership ends, it will cut us off from some clients. They can be quite substantial clients.
Martin Hurych
How do you set up those relationships right?
Jan Koprajda
Clarify the expectations of both parties, tell each other and find some common ground. If the partnership is going to crash my business, for example, and I see that it's an intractable situation, I would rather think about termination. That's how the partner can have it too. So I understand that sometimes it happens that the firms don't get along. So they go, "OK, it didn't work out, so we're just going to go our separate ways."
We're working on some sort of communication optimization right now. It's about how to perform together in front of potential clients and customers.
Martin Hurych
The solution is logically a question for both sides. What are you going to bring to the table? What is your proposal? How to prevent potential misunderstandings, miscommunication, clarification or lack of clarification of expectations?
Jan Koprajda
My biggest problem is that I'm not a paper person who likes everything to be written down, when there are contracts and so on. Mostly all the relationships that we have, and partnerships, and clients, with complete exceptions, we have it so that everything is just a verbal guy agreement, a guy handshake.
We're at the stage now where we know that's not enough. So we're looking for ways to communicate that with the partner, to write it down, to make the rules stricter on both sides. What's going to happen when this and that happens. Some way to back it up. The main thing is to listen to each other. But even so, sometimes those needs can be so different that it's just better to go apart than to just do it together, that's just the way it is.
What is and what is not innovation
Martin Hurych
You said right at the beginning that you are a technology company. To me, a technology company equals innovation. And I like innovation. I know you like to play, you like to explore, you like to look ahead. What is innovation to you?
Jan Koprajda
I feel that the word is heavily misused now. That everybody here is innovating. I think we don't innovate much.
Innovation for me is bitcoin, for example. Innovation for me is something that completely changes something important in a particular market. Something significant, some very big step, or maybe more like a big set of steps that are real and change something. Like Apple when they came out with the iPhone, that's innovation to me.
Then there's the other kind, the weaker kind, which comes up much more often. Improving on things that are already done, which is the thing that I think we're dealing with. I'm not exactly a visionary, I'm afraid of the risk of innovation. Innovation usually requires a lot more risk taking and preparing for the fact that maybe it will be completely stupid. I think that innovation is often created more with a passion, where the person doing the innovation often doesn't even think about the fact that it's going to spread massively. He's just doing it because it's just his purpose in life at that moment. Most companies that operate commercially, at least in my opinion, are looking for those commercial innovations so that they can simply sell it, sell it quickly. It's more about improving the process, the process, the marketing. It's usually more like small steps that maybe just increase profits or reduce costs or somehow change something like ... I don't know ... like, I don't put gasoline in my car, but the car is de facto the same, it just runs on electricity.
Martin Hurych
It's funny you should say that. My social bubble often says, "There's no innovation for us because we're not Apple. We're not Elon Musk. We don't have a chance to invent the next bitcoin." I think that's an unnecessary exaggeration and misuse of the word innovation, because then we often give up. Innovation is often more about a permanent appetite to improve yourself in small steps rather than inventing a big thing, because even the big things have been created over time and by small fuck-up improvements.
Jan Koprajda
That's the other view. I understand it. Maybe it's because I have my boundaries set completely differently as to what is innovative.
On the other hand, I take it that even with these small steps that take a long time, maybe 10 years, suddenly something completely new is created, which maybe has been on the market for a while, but it was hidden. Then it gets out there and suddenly people are talking about it, it's great. I still accept that this is not exactly that kind of INNOVATION. The visionary one. But more like a process innovation, a gradual improvement of what already exists, just somehow smoothing it out to a final form where it can't even be improved any further. Then it just requires INNOVATION, the product has to change completely, one product disappears, a new one is created.
Martin Hurych
Do you, as Whys, or do we, as the Czech Republic, have a chance to really be innovative like that?
Jan Koprajda
If I talk about the technology segment, I think we are doing quite well. I would say we are innovating. For example, we are doing a lot of work on Artificial Intelligence. Or virtual reality. Those are innovations from my point of view. So, yeah, we're not exactly big players, more like we have a few tweakers here, but we have quite a few. And we have companies that can do something very innovative. For the size of the country we are, we are pretty good, for example, if I compare it to the US, where there are 35 times more people.
Martin Hurych
What do we do to encourage in ourselves that we have the chance and that we are good? How do we nurture in ourselves that we have a chance to be innovative, that we have a chance to break into the world league? How do we fight against what I often hear ... A small company from Brno, from Prague, from Liberec, it doesn't matter, it doesn't have a chance to innovate because we don't have the resources, we don't have the information, we're not Elon Musk, we're not going to invent another Google... How can we fight this when we know that there are a lot of smart minds in Silicon Valley in Brno who objectively have the chance?
Jan Koprajda
The question is who wants to innovate. What you said ... Innovation, for you, is also some incremental improvements. I don't think we have any big problems with that, on the contrary we are looking for ways. Czechs are very crafty, we tend to tinker with everything and therefore automatically make it better. We're really good at that. We are kind of Ford. We have a good breeding ground for innovation. I would say support. There are various centres in Brno that help companies. In addition, because we are such a small country, we are sometimes forced to think about how to make it worthwhile to develop a product. We are looking for ways to get out. At least to Europe.
It's very much about ambition. If someone doesn't want to innovate or doesn't have it in them naturally, it's hard to convince them. But we Czechs are entrepreneurs, I guess. The proof of that is how many e-shops I have created here, or how many discount sites there have been. Wow, that was terrible.
Martin Hurych
So let's close on an optimistic note. Let's say something motivating for people who want to innovate...
Jan Koprajda
To not be afraid and to go for it. It's stupid for me to say "Go for it", because I don't go for it myself. Rather, they were looking for space and they weren't afraid to show people what they had. To share it. To communicate it to others. A lot of times we're afraid that if we tell somebody an idea, an idea, so somebody's going to steal it. But the important thing is the implementation. And implementation is very difficult nowadays. So I would talk about it with the environment, not be afraid, go ahead and look for ways. If it's something that's going to fulfill me, there's nothing to stop it.
Martin Hurych
That was Jan Koprajda from Whys.
If this episode has sparked you in any way, I'd love it if you subscribe to more, either on YouTube or your favorite podcast app. Be sure to check out my website as well - www.martinhurych.com, where you'll also find a transcript of this episode.
Fingers crossed and best wishes for success.
(edited and condensed)
Automaticaly translated by DeepL