In February this year, Spyrosoft made its debut on the NewConnect market, which is a big step for a relatively young company. How – in such a short time – did you get listed on the stock exchange and why did you decide to take this step?
The debut on NewConnect stock exchange was not caused by our desire to enter the stock market. We were also not seeking potential capital injections, as our capital is quite big, and in these “covid” times we are protecting it effectively by preparing in advance for all types of – yet unknown – risks. The reason behind it was completely different – we wanted to reward our employees for their trust and all their effort they put in creating Spyrosoft. We agreed that the best way is to give them a part of the company in the form of shares. It was decided that around 1% of the entire share capital will be distributed among our employees. And since we already said A and gave the shares to the employees, we also had to say B and give them a place to trade them. That is how we came up with the idea of joining the NewConnect stock exchange, where Spyrosoft’s shares enjoyed a large interest and a high valuation from the beginning.
It must have impacted the company’s credibility on the market?
Yes. That was, after all, our second goal. We wanted to verify that the company is perceived positively in the market and to increase our credibility. This, of course, has helped us a lot, especially when it comes to acquiring new clients.
What is your business model, what sectors do you operate in and what services do you offer?
We implement Artificial Intelligence & Machine Learning tools, as well as cloud-based solutions, Enterprise software and embedded systems. We also offer technology consultancy services. The company operates in many fields, such as: automotive, HR, financial, geospatial, medical or Industry 4.0. We focus on distributed management whenever it is possible. We want all our development centers — from Białystok, through Wrocław and Kraków, to Zagreb — to live their own lives and consist of up to several hundred people. On the one hand, such a number of employees guarantees efficient implementation of projects, and on the other, it allows you to avoid transforming into a corporation. We also want to avoid centralization, which in our opinion is no longer a necessity. From the very beginning, we wanted to create a medium-sized company that creates each workplace from an engineer to an engineer.
With what kind of clients do you operate?
Our target clients are companies from the SME sector, employing from 50 to 1000 people. Nevertheless, we also have very large corporate clients in our portfolio, e.g. a company which is one of the largest producers of car components, employs 160 thousand people and has a turnover of EUR 25 billion a year.
What exactly is it that you do for your German automotive client?
We are engaged in a research and development program consisting in creating a level four autonomous driving system. After being integrated into any car, it will allow autonomous driving without the driver.
How advanced is this project?
Such prototype test cars are already in use in several cities, although – of course – they use specially designated routes. We are currently working on creating the next version of the software that complies with all the stringent standards that are used to adapt the car to emergency situations, such as events in which traffic users may be injured or even killed. Therefore, the key is to minimize the possibility of an accident. Our task is to optimize what is already functioning in the aforementioned prototypes and add some functionalities and speed up the system’s operation. In 2022, a car with our system should be available for sale at one of the manufacturers.
Last year was a very good year for Spyrosoft – you have, after all, doubled your profit. How does the demand for your services look like today, in the era of the coronavirus pandemic?
We are working on projects all the time, even for the aforementioned automotive industry, which has been impacted heavily during the pandemic. Actually, now we have even more orders than before COVID. What makes us happy is that we have also gained new clients. However, these orders are not enough to make us believe that we found a cash cow. But we have definitely not been impacted by the crisis, even though some projects have been frozen.
Can you say that the coronavirus has actually helped you a little, too?
Indeed, one could reach such conclusions, but you will not hear it from me. We still do not know what will happen next – and such uncertainty has not been a part of our lives for a long time. I would risk saying that even World War II was a more “certain” time, because it was possible to predict some things in the longer perspective. Coronavirus, on the other hand, does not provide any, even “encrypted” information. We have to rely on our luck.
Some people argue that the IT industry is actually doing quite well now, but the current crisis will hit it a bit later than it hit the rest of the economy. Do you share this view?
Definitely yes. Therefore, although we are slowly unfreezing some investment projects, we are not doing it bluntly. Maintaining a healthy cash flow is the apple of our CFO’s eye all the time. We are aware that the coronavirus crisis is not over and more waves are likely to come. However, I am not able to predict how much impact they will have – nobody is. And although, as I have already mentioned, as an organization we are prepared for a lot of turbulence – as an optimist, I hope that we will be positively surprised.
Why should this happen?
Spyrosoft carries out a lot of research and development projects, and in such uncertain times organizations should not give them up – they can give them a powerful competitive advantage in the future, when these uncertain times are finally over. If a company is thinking of being a leader in a given field, whether it likes it or not, it must focus on the development that defines the future – and look for savings in other areas. This is what our main corporate client from the automotive industry already does – although it is a blessing in disguise that they operate in Germany, where the government transferred 750 billion euros at the beginning of the pandemic to save the economy. This is an exorbitant injection of easily accessible money. I do not know if you know, but 90% of applications for funding there are considered – and paid out – without human intervention, fully automatically. In Poland we are not that mature yet. I have a great regret for this to the decision-makers who – having so many great IT companies in the country – are not able to use their potential, so all the administrative decisions have to be processed and finalized manually, by an actual person. Besides, the above-mentioned situation in Germany is not a European exception: similar systems operate in Slovakia, Estonia and the Czech Republic.
Coming back to your business, which sectors are currently the most promising?
Definitely medicine. Currently, in the time of covid, we have significantly accelerated our work on solutions from this field. We carry out, among others, a project on patient health and life monitoring systems, such as, for example, an ECG device – somewhat similar to a holter – that patients get after a heart surgery. It accumulates data and sends it to the system that automatically analyzes it. There is also a device that functions like a wristband monitoring basic vital functions and parameters. In case of any irregularities, disturbing data is sent directly to the doctor. Apart from medicine, also the field related to work virtualization and remote work, including the transfer of typical server solutions to the clouds, is certainly very promising.
You also operate on several foreign markets…
We mainly operate on foreign markets. And the most important ones are Germany, Great Britain and the United States. When it comes to possibilities of international development, we react on an ongoing basis, depending on the needs. If there are more clients, e.g. in Norway, we will probably decide to open our branch there. We have not yet decided what our next target country is. I can only reveal that we are actively thinking about Scandinavia and Switzerland. We are also considering entering the Chinese market.
Are you not afraid of this huge market and local competition?
Maybe I will surprise you, but – not really. Firstly, because there is no highly educated IT force there that would be able to implement all types of projects. Secondly, their IT specialists are sometimes more expensive than us. We can offer the same services to the client, e.g. in Shanghai, 20% cheaper than the services offered locally.
How are customers in different countries responding to the current crisis? Did their priorities in your projects change?
We carry out many projects and the reactions of different clients are very varied. Generally speaking, the projects whose added value during the crisis is not significant are being reduced or frozen. In our case, the vast majority of projects are prioritized regardless of the pandemic, and work on some has even sped up – we have increased the pace within the Business Unit of Healthcare and Life Sciences, because we have more and more inquiries in this industry. In terms of geography, the economy in Asia after the pandemic is already stable and growing, while in Europe and the Americas we are expecting the situation to stabilize in the third quarter.
How did you as Spyrosoft adjust to working after the pandemic broke out? You employ nearly 500 people – how effective were they during the enforced home office?
Like everyone else, in mid-February we were surprised by the growing possibility of a pandemic outbreak and, unsure how the situation would develop, we had to prepare for several possible scenarios – from the most optimistic, that there will be a lot more work, to the very pessimistic ones, that there will be little or no work at all. And we did it. One thing that we definitely did not have to prepare was the transition to the home office. We were ready for this a priori, because we already had a quality management system implemented, and because it is one of the risks that we must constantly take into account when creating a Business Continuity Plan. So we drew on the procedure that was prepared in advance and we implemented it efficiently. On Friday, we announced the transition to remote work, and on Monday, no one was working from the office.
What did the preparation for the possible scenarios consist of?
First of all, we started with the development of new budget plans. We limited our expenses to a minimum – for example, we eliminated costs related to training and to administrative activities. However, we have kept all our employees without lowering their wages. It was a priority, because in the case of a service company, our greatest asset is people and their knowledge. This value must be protected and appreciated. Still, when it comes to the effectiveness of employees during the home office, we did a few training courses on how to work so as not to go crazy. Remote work requires specific discipline and hygiene at work, as well as the cultivation of specific rituals. If they are retained, efficiency should not change. And so it was with us. Besides, our line managers keep in touch with employees on an ongoing basis. We also hold informal, virtual meetings over a beer to escape the monotony of the following days and weeks, at least for a moment.
What are the most important goals that business sets for IT departments today?
Continuous advancement in the fields of virtualization and work automation, as well as even more developed integration of people by means of multimedia. I think it would also be nice if we could use holograms in communication, not just video transmission, so that I would “appear” next to you, and you would “appear” next to me. However, the most important challenge facing us is to make business take not only the IT world, but also scientists or other people with a very broad understanding of the world and its problems, much more seriously.
Interview by Mikołaj Marszycki