“We’re setting up an international start-up corporation”
The energy and enthusiasm shown by Vladimír Kvaš and Jiří Svěrák during this interview in which they shared G2 server’s vision were like a wave of refreshment in a repressively hot Prague. Although they are different in terms of age, professional experience and education, they are as one in terms of company expansion and cloud services provision.
Vladimír Kvaš jointly founded the company at the age of 20 after lasting exactly one semester at university. Jiří Svěrák obtained an MBA at LIGS University and is an experienced corporate player. After a career in corporations such as Aliatel, Hewlett-Packard and DellEMC, he transferred this June to G2 in order to boost the company within Western markets.
G2 server was founded in 2004 and is today one of the largest cloud services providers. A turnover of around 400 million CZK is predicted in 2017, with employee numbers of 40.
The company has a subsidiary in the United Kingdom, and in autumn 2017 it is planning to expand into the Western Europe region. In September, Ondřej Vlach will boost the company’s position with his experience within VEEAM, and his task will be to expand the company within Poland and the Baltic region. But G2’s regional growth is far from ending there. Other key markets being looked at include Spain, Portugal and Russia of course. The new G2 team is breezing its way to meeting its vision of, “Becoming the Number One cloud services provider in Europe”, and for those who fly you might say at jet stream level.
Our interview did not focus just on expansion, but also the importance of building up a solid company culture, learning from your mistakes and debunking the myth that the perspectives and position of a corporation and a medium-sized enterprise are necessarily fundamentally different.
Jiří, you’ve come to G2 server after a successful career in a number of multinational corporations, and your job is to build up a new one. So as Director for Germany and Austria you’re launching the big expansion.
We want to be a large business provider based on strong distribution and work with our partner network. It is our partners for whom we want to help build their business, and we then aim to replicate this successful model in other countries. My role is to build up company headquarters in Germany, Austria and Switzerland. We realised during planning that the logical next step is to carry out a similar step in the Benelux countries and in Liechtenstein. And then at a stroke we’ve created the Western Europe region, common within corporations. Ondřej Vlach, who is a specialist in back up, a key field for our customers, has Poland and the Baltics under his management. 2017 really is a landmark year for G2, transforming from a company mainly operating within the Czecho-Slovak and British markets into one operating Europe-wide and present within key markets.
It is said of corporations and SMEs that they operate in very different worlds, often almost impenetrable. You two, however, have known each other for some time and you have already worked together successfully on many projects.
Jiří: We met seven years ago when I was working for HP. Vladimír was our customer. I’m glad that G2’s successful cloud history began on HP technologies.
Vladimír: I’m going back to 2004 when the company began. After its first year and the first million made, I had a great feeling. We’d become ‘millionaires’! At that time we were focused on low-volume services in the IT field. Over time, we began to focus on the enterprise segment, which also required the use of appropriate technologies and it was HP which supported us.
It sounds almost like a fairytale. Jiří Svěrák is known for his business and networking skills and human approach to business, but was the meeting between an enthusiastic young man and the corporate world really so smooth, dare I say idyllic?
Jiří: It was for me. I was trying to find new customer segments with my team, and the cloud was new, even for us in corporations. From today’s perspective, you might think this field is well-known; we even back up our telephones in the cloud, but at that time it really was a new approach and we had no prior experience. At HP, we had dealt with the problem in terms of hardware, and it seemed to us that companies involved in hosting could be suitable customers. The fact that we are sitting at the same table today shows that we weren’t wrong. I got a list of 200 companies; 190 were really small, and of the 10 potential customers G2 proved to be the most interesting.
Vladimír: I can remember that Jiří’s colleague brought our first enterprise server by taxi; he was carrying it in his arms and it was a demo. He assured the worried salesman that we really would pay for it.
Jiří: Yes; I taught all salespeople that sales mean nothing when only invoiced and you have to wait for the money in your account. Young flexible teams can be found even in large corporations.
Vladimír, when you went to HP as a customer for G2, did you notice the difference of the corporate world, or did you tell yourself that even HP began as a company in a garage?
I’ve even been personally to look at that garage. You’re right, it was a meeting with a different world. I admit that there was a period when we despised HP as a company. We had been buying cheap Chinese servers and we couldn’t understand how someone could sell the same technology for two to three times the price. A number of previous meetings where HP had tried to acquire us as a customer had broken down over the price. In the end, we came to realise that although they were a little more expensive, their quality was in a different league, and that offset the price of many Chinese servers. HP employees who came to G2 regularly heard a talk on how “that corporation doesn’t know how to make sales effectively” and is too expensive.
Younger people giving their experience to older people, or David to Goliath, is a trend of today. What did G2 realise about itself through collaborating with HP?
Vladimír: I’d describe it as literally a meeting of two worlds. After five years of doing business, I was 25 already and I thought I’d experienced it all… (laughs) I was convinced that we were brilliant. I looked at everything from the perspective of a small enterprise, which can equal the world at an enterprise level. But growth and revenues in this segment were limited; customers were unwilling to pay for the quality provided yet expected 110% guarantees. In 2010, we said that we no longer wanted to work for customers who want cheap Chinese servers. I wanted to work for customers who appreciated quality and were also willing to pay for it. In 2010, we undertook a kind of company restart and we cancelled contracts with almost half our customers. Targeting the enterprise segment brought us year-on-year growth of almost a hundred percent, a figure which had previously been ten percent. From a turnover of fifteen million CZK, we have reached an expected four hundred million in 2017.
Let’s go back to the beginnings of doing business. Vladimír, you started doing business right after secondary school at a time which wasn’t as favourable to young entrepreneurs as it is today. In 2004, corporations offered not just premium salaries, but also security, benefits, career growth…
Both my parents were entrepreneurs; they worked hard and from childhood I had had the opportunity to watch them. From secondary school, I wanted to be an entrepreneur, to found and manage a company. I endured just one semester at university. With hindsight, I have realised that this wasn’t entirely a great idea. I don’t mean you can’t do business at twenty, but a young age can put you at a disadvantage in negotiations with senior colleagues from the corporate world. At twenty, you basically look like a child. I spent a lot of time thinking about how to look older.
Jiří, were you never attracted to running your own business?
I did try it. Following a brief experience as an entrepreneur in the educational books field, I came to the opinion that my opportunity to grow and meet with large customers and do big deals was limited. I joined Aliatel, where I was responsible for large customers including the Czech National Bank. Suddenly, my partners were two generations older than me. I also began thinking about how to look older at that time. Eventually, I acquired not just business, but also management experience and I subsequently joined HP, which at that time was one of the largest corporations in the Czech Republic. To begin with, I wasn’t sure whether they would succeed and I hoped I could last there at least a year. I was responsible for small customers, so the shock from moving to a corporation wasn’t so large for me. Within the small customers segment, we managed to grow from nothing to 20 million dollars, so acquiring great renown. After eight years, I left HP, having been offered the opportunity to work as EMC Country Manager for the Czech Republic and Slovakia. Three years passed and following the merger with Dell I decided to move outside of the current corporation world and help to build up a new corporation.
Doubts in a corporation are a bit different to those in a small or medium-sized company. Vladimír; can the owner of a medium-sized company afford to have doubts?
Definitely. I can’t say everything I have done has been absolutely the right thing. I still learn from my mistakes, but after 13 years in business their percentage is smaller. You have to learn from every mistake you make, even if that does sound like a cliché. I made a lot of mistakes at the beginning in regards to recruitment or my little experience managing people. Suddenly I had to become an expert in managing people instead of an expert in IT, and I had to focus on managing them, motivating them, and also shaping the work environment so that they were satisfied and had reasons to remain in the company for the long-term.
Jiří, what made you decide in the end to move to G2?
I was enthused by the opportunity for expansion, to build something from scratch and to establish completely new relations within an international environment. I’m really looking forward to the opportunities and new encounters in Austria, Switzerland, Belgium… and I’m looking forward to building G2 into a corporation.
The word corporation, however, does not have positive connotations for many people today.
Vladimír: We want to build up a start-up corporation.
Jiří: Let’s define what that word actually means. For me personally, corporation doesn’t have a negative meaning. We’re going to build a company which will operate Europe-wide, and in future globally. If we’re going to have many times more people, then we’re also going to need certain processes to manage them. If we’re going to have tools, then these need to be described. Almost nobody in any role can avoid Excel and making tables these days. So it’s about the corporation’s company culture. And I trust that we will preserve our company culture, which is creative, enjoyable and in a certain sense homely. The environment will be more corporate in terms of the nature of communication with various nationalities, customers, employees, partners and distributors and that will require certain rules. But we do still want to build a corporation with a human face.
Let’s look specifically at people; we are always hearing in the Czech Republic about the lack of IT specialists. How can you acquire them, and how can you keep them?
Vladimír: I’d like to say that I think this frequent discourse on the labour market is not a good idea. The fact that there are no people available on the market gives the impression that there might be qualified people sitting somewhere at a job centre, waiting for the right position. And today really is not the right time for recruiting people through internet advertising as many incorrectly believe. Today it is important to focus on HR marketing and show using specific examples in practice that despite rapid growth, the company is able to maintain its start-up spirit and keep up its distinct company culture and company spirit. And rapid growth also attracts many talented people.
What makes your company spirit different?
Vladimír: Even choosing your environment is key; we don’t want to be in a greenhouse like many other companies. We have a large terrace where we hold parties. On hot summer days ice-cream is available, while during flu epidemics in winter we have tea with honey and lemon available, along with throat pastilles and cold medicines. We endeavour to ensure people are truly happy here. Every day they can enjoy pre-sliced fruit. It is our experience that if you only keep fruit stored away then it goes bad. We also offer healthy breakfasts. These might seem to be trifles; the cost of one ice-cream is negligible, but employees appreciate that the company tries more than is common in other companies where the first coffee is free of charge and any more have to be paid for.
I’m really surprised that neither of you are complaining about the young generation and their volatility or poor loyalty.
Vladimír: I think our particular company culture means we have a very low staff turnover. Our first colleague is leaving after five years, and only to grow their professional profile. It’s not just about salaries; people here don’t feel like they’re at work, but rather in a team of clever and friendly people. It all begins with recruitment, when you ensure nobody comes into your team who would spoil that culture. We recruit people on a similar wavelength with the same values. And then they are happy to remain with us and apply to us directly. We can choose.
Jiří: I think talent management is key here. And I’m really looking forward to building this agenda and developing it in different countries. And we really watch out for well poisoners. We will be very careful in our new countries to ensure the managers of each of our subsidiaries are right for the company. Recruitment under pressure won’t pay dividends. I am convinced that you can always find suitable people; we just have to reach them. And we have something to offer.
Vladimír: The fact that a strong and specific company culture can attract the right people was confirmed during our expansion to Slovakia.
G2 started with the cloud, so can you tell me what is beyond the clouds?
Jiří: The cloud is a major topic, but there are many types of cloud… You can have photographs or the basic operations of a company in the cloud; you can also develop your start-up in the cloud. At the moment, we are focusing on traditional infrastructure, but other new platforms are coming. Applications are developing quickly, and as such businesses won’t keep a single environment along with expensive experts on operation and maintenance, but will instead want to have a simple functional environment for their further business.
Vladimír: In the American market, the cloud is divided into infrastructure, platform and software. Today we are focusing on infrastructure, but there is a lot of space for growth. As yet, the markets in Eastern Europe are not ready for the next phase. The Czech Republic is ready for platforms. Customers are different too, and that’s a great challenge for us. As Jiří implied, growth is far from being just limited geographically.
Guys, here’s to your further excellent cloud navigation!
Good luck on behalf of Czech and Slovak Leaders editors from Linda Štucbartová.
Vladimir Kvaš, Chief Executive Office of G2 server has co-founded the entire company in 2004. Vladimir is responsible for company’s vision, mission and strategy leadership as well for legal offices and datacenter expansion across regions. G2 server has been already marked as fastest growing cloud provider on Czech and Slovak market. Vladimir has built up a functional executive structure of directors to enable company’s business boom in Germany, Austria, Switzerland, Belgium, Netherlands, Poland, Hungary and Baltics.
Jiri Sven Svěrák, Regional Director of G2 server for Germany, Austria, Switzerland, Belgium, Luxembourg and Lichtenstein has joined the company in June 2017. His mission is to execute the business expansion to above mentioned countries and establish functional operations and business. Jiri has more than 15 years of corporate experiences from service providers segment and IT vendors as well. Jiri joined from General Manager role form Dell EMC and he worked on several managing roles at Hewlett-Packard before.