Jan Mrázek, Adastra

We Are Like the Catholic Church, says Jan Mrázek, co-founder of Adastra

Adastra, which helps banks and others handle data the best way, is expecting big growth thanks to technological changes. It now has sales of over CZK 2.5 billion. Its founder Jan Mrázek wants to strengthen their position in the USA.

For businesses today, a frequent topic of conversation is how to obtain and use the maximum possible data about clients, whether from the Internet or from different user systems. You have dedicated yourselves to Big Data and how to use of large amounts of data for 15 years; what are your opportunities to­day?

You’re right. It’s already been going on twenty years, only the term “big data” is young. This has been a huge stroke of luck for us, since we have been at the epicentre of events from the beginning. Pavel Kysilka, head of Česká spořitelna (Czech Savings Bank), noted in his diary that the information revolution is one that changes everything. It is accurate. Banking is an example, where different start-ups approach them, which says it all. Even we are trying to ride the new wave. On the other hand, just because everyone is talking about it does not mean that it will be introduced immediately. It is a question of years, two or more. Large companies have great momentum.

So, you don’t think it will be so fast? 

The revolution that has become involved in the thinking everyone, really is. People’s ability to adapt to new technology is huge. When I was talking with the leadership of Canadian banks twenty years ago, still prior to Adastrou, and tried to impose ideas on information management they looked at me like I was crazy. What new ideas could an IT guy bring to the board of the bank? They considered IT as just something for the core functions of major systems, but did not understand its other uses. Ten years ago some had already begun to anticipate it, as it was taught in executive MBA programmes, but still kept their distance. But they all live with it now. 

“People appreciate the fact that I don’t speak like a corporate figure; I speak from experience.”

Under these influences, how has Adastra and its business changed?

When we founded Adastra in 2000, information management and data warehouses were already operational. Large companies such as IBM and Accenture did good things, system designs and ornate presentations. But someone had to do the complicated and less sexy job in the background. And that’s where we found our chance. Easily simplifiable interconnected systems receive data from one point to another with a certain purity and quality. Today it is more complicated; in terms of the big data already mentioned, all kinds of transactional data are mixed, which are collected in different systems.

Has the structure of your clients changed? Have new branches entered into this?

Rather, individual fields are expanding. One of the reasons is technological change, and then of course is the fact that our company is growing. We started with banks, insurance companies, and then came telecommunications, healthcare and production companies. Recently, one big German car manufacturer approached us wanting us to do a large data pool, a so-called pool for managing large amounts of client and other information. It’s not a new idea in principle; we did analysis for Barclays Bank 15 years ago, for example. But then we put into the pool completely different data than today, where data is collected from the outside, perhaps from social networks. You need completely new technology for this, and we know how to build this new world.

And is it just for big clients?

Previously, we were utilized mainly by large companies that were rich in terms of data. But today even significantly smaller companies have abundant data, smaller insurance companies, for example. Today we work for the five largest banks in the Czech Republic and also for insurance companies. But midsize companies also entrust us with constructing the entire system. Based on this experience we’ve gained ground against big companies, which is how the strategy of big data for the second largest Canadian bank Toronto-Dominion is not be provided by IBM, Accenture or Terrado, but by Adastra.

You say that you are flexible, but on the other hand, you have a very large global company. Technological corporations start to ossify from a certain size and smaller fish in the pond will start to get ahead. Are not you afraid of this?

We have just over 900 people, and certainly it is true that with the growth you stagnate but we still keep the company going at a healthy pace. Yesterday I was reading a notice from our HR department from Canada that perfumes are prohibited at our offices. Someone probably overreacted and made an internal regulation. This is understandably the fate of a lot of big companies. In the past, I would have dealt with this a normal chat about it, as I used to speak with everyone on the same level. But when you have a big company, it’s completely impossible. You don’t know all employees anymore; some might be offended by your common approach. However, as far as basic functions are concerned, we still try to keep a young spirit and playfulness in the company.

Where are Adastra’s largest markets?

Canada accounts for about 50 percent of the business, with the Czech Republic being the second largest market, followed by Slovakia and Germany. In terms of the Ataccama Company, which is our software division, the USA is the most developed market.

Two years ago you opened a branch in Russia. It’s probably not the easiest market now, is it?

Yes, Russia is not booming much these days. We have a few people working at our office there and we have kept some of our customers there. But we have not hit it big time as we expected yet. It is due to external factors that we can’t influence. Due to the weak rouble, costs are too high and the Russians now also favour domestic companies. But like the Catholic Church, we’ll be here for thousands of years, so we are patient and we’ll break through into Russia one day. Fortunately we’re not losing money there, and we’ll wait for the rest.

The Catholic Church you say; so you’re not planning on leaving and selling the company?

When Jan Červinka, Petr Jech and I were establishing the company, we took it for granted that in five years we’d be on the stock exchange. Perhaps we could have been there a long time ago, but luckily we have grown wiser since then.

You could have peace and quiet again and enough money for the rest of your life. It’s the classic North American model, don’t you think

We have it anyway! (Laughing) Al three of us are Czechs, although I am Canadian. We have long presented ourselves as a Canadian company because the focus of the business is there, but today we are a global company. So it doesn’t matter where. We still enjoy doing business and we don’t want to sell the company. We’ll see how it will develop in relation to our children. My son works in the company as a developer, so he’s on the right track. My daughter worked in marketing over the summer. Jan’s son is younger, but also studying IT. But we haven’t thought about whether we’ll pass the company on to them.

But there’s interest in your company from investors or large companies, isn’t there?

Yes, just recently one of the largest IT companies, I won’t mention which, that wanted to swallow us up. But there have been several such offers over the last 15 years. Bankers and investment funds have approached us offering their money. In hyperbole, I always ask them where they were when we really needed the money. No one at the beginning wanted to lend us even ten thousand dollars.

“The competition must take specialists from Western Europe; we have our own.”

How did you get to know your partners?

As employees in the Czech Republic, they established a branch of the Canadian software company Speedware in 1994. But gradually the parent company began to limp and its products ceased to be the rage on the market. It was clear that its business would go somewhere. So, we jointly purchased it from the Canadians and Adastra grew out of it, which we relocated in Canada. I had a lot of business contacts in Canada; I dare say I was one of the first there in 25 years who dealt with information management. I had a good reputation. We started sending our first employees from the Czech Republic to Canada. They then came back after two years as professionals. Consequently, we are able to compete with IBM and Accenture. While they had to bring over specialists from Western Europe, we had our own. We were cheaper and better. This was a competitive advantage from which we benefited in the beginning.

You still haven’t told me where you met. You lived in Canada and they’re in Prague.

Even when I worked for the Bank of Montreal, I wanted to start my own company. Then I travelled around the world as a speaker at various conferences all the time having the concept of establishing Adastra, at that time with a Briton and one American. But I hesitated. They had too much leverage, put their money into a project for which I did not have enough, and I was a little discouraged. Them, I ended up in Prague for a conference. That was about 1999. I did a show here, which they liked. People appreciate the fact that I don’t speak like a corporate figure; I speak from experience, not through PowerPoint presentations.

“We’re not selling. I always ask those interested in buying Adastra where they were when we really needed the money.”

And your future partners were also in the audience…

Yes, after this lecture a lot of people approached me wanting to do business with me. Among them were two young guys, much younger than me. Decency made me not refuse anyone but it did not look productive. After a few moments talking we hit it off great, we found that we share the same reasoning; they are wonderful, insanely smart people. Then Jan came to visit me in Toronto and mapped out Adastra in the kitchen. To the word. And according to that piece of paper, we’ve been going for 15 years.

Have you got new projects in the Czech Republic?

Large companies are really trying to find a new generation of ways for saving and managing data. Three major local banks have just bought this from us. In this category we are the largest in the Czech Republic. There are also new to monitoring responses to online systems. We’re trying to figure out where to improve the response to customer systems. At the same time, based on big data, we find out what customers do when they are not satisfied with the reaction. Based on this, companies know how to record dissatisfied customers. In terms of telecommunications, we’re currently testing a tool from our new company Adastra Partnering in Slovakia. In telecommunications, there is perhaps more commoditization of services than in banks. They must be differentiated. Although they were not able to define it alone, telecommunication companies were the first social network. The ability to see who is calling whom, who is located where, how and who pays. While traditional services are experiencing falling revenues and profits, they also have a vast new potential in the rich pool of data. They just don’t know what to do with it.

They are not allowed to sell it, as they have to protect customer privacy.

But there are ways to work with it. Take Paul’s coffee shop across the street – just as a random example, because I go there for the apricot pie. They open a new branch and want to let customers know. They can do it the traditional way, or do it cleverly. The operator can’t sell their data, but Paul can go to the operator and say he wants to reach out to people of a certain age, who move in certain places, buy certain things and make them an offer. The operator does it by not transmitting any data, but it is very efficiently used. But for that you need a special programme that we have developed.

Where do you want more growth? What about China and other Asian markets; are you interested in them?

We’ve been in China. We had a few people and did projects with our clients from Europe. Every year revenues grow, mostly from all of our companies. But we don’t tell you how much it should be. In terms of markets, we now very interested in the US. We already have a lot of business there, but it’s a giant market where there is still room to grow.

Where does the company have its headquarters, actually?

That’s something people often ask us. We put Toronto on the website, but in fact I would say that it is somewhere in a work e-mail that you send to each other, or somewhere in the middle of the phone line when you need to call Jan halfway across the planet.

Jan Mrázek (53)
A native of Prague, he emigrated with his family in 1988, first to Germany, then to Canada. He has a doctorate in operational research from the University of Hagen in Germany. In Canada, he worked as an expert on information management, especially for local banks. In 2000, together with the Czechs Jan Červinka and Petr Jech, they founded the technology company Adastra. He has two adult children, is a big supporter of organic farming and a healthy lifestyle. He plays tennis and likes hiking.

Photo: Dan Materna, MAFRA