We are ahead of the market and have a chance of major growth, says the founder of CodeNOW
The Czech service CodeNOW provides a cloud-native platform for large and medium-sized, which allows their developers to build and operate new applications and services in a single environment with virtually unlimited scalability. It currently employs over 60 people, but according to its founder Petr Svoboda, this is just the beginning. With an investment of dozens of millions of Czech crowns from J&T Ventures, it is now heading for the crucial American market.
Where did the idea of creating your own developer platform come from?
I worked as an architect in international companies for a long time, where I participated in large projects in banks, and I saw a lot of poor efficiency, lost potential and wasting. Developers don’t have good tools and conditions for their work, especially because they are not independent. They still have to ask someone for something and then wait. I saw hundreds of developers waiting for someone all the time and doing nothing. When I finished my career as an employee, I founded a company called Stratox Cloud Native, which won a contract for the delivery of a new system for consumer loans for a big bank. This is where we applied our vision for the first time. We demonstrated that our concept of the future product works, and this is how this all started.
Gartner expects that Value Stream Delivery Platforms, such as yours, will only become widespread in the next five years. To what extent do you need to explain your service to potential clients?
It is still a brand new idea for companies. There is a small percentage of knowledgeable companies, but nine clients out of ten need a lot of explanation. There has always been a developer platform, especially in big companies, in some form, but it is usually their own solution with a dedicated team. These types of products are currently being co-modified in the market. When we started our activities, there were five similar products in the market, but now there are nearly a hundred of them. The market is only being formed, but according to Gartner it is one of the four most important strategic trends for 2022.
What particular problems do you solve for your customers? What is most important for them in practice?
Everyone has a digital strategy, which naturally includes the application of a cloud infrastructure, but actually hardly anyone knows how to develop for cloud. The bigger the company is, the more complex the problem is exponentially, because there are suddenly hundreds of those who don’t know. Then you need something standard, something they can learn, something that will be the same for everyone. That’s exactly the task for our platform. Another essential part is developer self-service, so that developers can serve themselves during work. We can see a big reduction in tickets with our customers, because a developer doesn’t need to ask anyone to set up a database or create a server. He can do it on his own without waiting.
How does CodeNow work in terms of technology?
What principally differentiates as from other competitors is the fact that our product consists of purely open-source tools. The Unix philosophy says that one tool should only do one thing, and it should do it well. When you want a development platform, you need dozens of various tools. Our competitors developed them on their own, which means they are proprietary and not specialised in terms of their function. The customer’s ability to extend or adapt the platform is almost zero. In addition, people who need to learn how to work with such a platform want to progress professionally. Developers and team leaders find it more interesting to learn how to work with a standard set of tools that can be used anywhere and anytime in the future than with a single specific platform that they won’t come across again in their lives.
This means you choose from existing technologies and services, which you make available at one place via your platform. Is that right?
Yes, exactly. We are a member of an organisation called Cloud Native Computing Foundation. It administers the Cloud Native Computing Landscape, where only products that guarantee a certain level of quality, portability, support, etc. can get in. That’s the first gateway to choosing the best tools, but this still concerns many hundreds of products. So how will you choose 20 of them that you need for your platform? And that’s the gist of our business. We keep monitoring trends, integrating the best products in our platform and re-integrating them on a continuous basis. And our customers benefit from this and save their costs and capacity.
What made you decide to make use of venture capital?
Primarily the need to accelerate our expansion; in the beginning, we produced something that mostly we trusted, but soon we could see that dozens of other companies are following a similar path and are successful. It was clear that it wasn’t just a wild idea, but a real trend. And it’s going to be an extremely big trend in a few years. In order to progress further, we need to validate the platform and the business model especially in the American market. Although we already have customers in Germany, Poland, Romania or Bulgaria, Europe is conservative, but in the USA the culture of experimenting with external services is deeply ingrained. Now, the success depends on us acquiring a sufficient piece of the cake soon enough. For this reason, a big portion of the investment will be used for improvement of the product so that it meets American standards.
Are you planning to be in the USA physically?
Yes, it’s something that is being implemented at the moment. We are in touch with CzechInvest and CzechTrade, and the aim for the first quarter of 2022 is to build sales and customer support in the United States.
Why did you choose J&T Ventures to become your investor?
There were multiple options, but our mutual chemistry and the ability to match our joint targets were the decisive factors. At J&T Ventures they really tried to understand and help us.
And why, on the other hand, did J&T Ventures decide to invest in you, in your opinion?
We have global ambitions, a product with global potential and real results. Gartner included us in the selection of major providers alongside giants such as Microsoft or IBM. Our platform is really diametrically different from other platforms and it has potential. If we learn to sell it well and take care of our customers properly, we have potential for major growth. And our large senior team played an important part, too.
You managed to form a team of dozens of top specialists. How difficult is it to find such people in the Czech Republic?
It’s always been difficult and it is getting harder and harder, but we are successful in this for several reasons. First, we have a very informal company policy – a number of companies are considering cancelling working hours or classic offices, but we have never had anything like that. Senior developers wish to be trusted. Second, our product is technologically at the top, it’s something interesting and new. There aren’t many companies developing in the native cloud environment. But the traditional software architecture is expensive for large-volume operations in the public cloud. Bigger companies or start-ups that are going to become big tend to have the operating costs of their product in the cloud at a level of 50-60% of their total income, and that’s a huge problem. This can only be eliminated with correctly designed architecture, and we have managed to obtain this know-how. Many people want to learn this and we can teach them. And our platform makes this process even easier and faster for them.