LIST: 25 RICHEST SLOVAKS

NOVEMBER • 2017

NEXT BILLION DOLLAR IDEA THE RICHEST MAN IN , IVAN CHRENKO, INVESTED 10 MILLION INTO A DIGITAL STARTUP. NOW EXPONEA FOUNDERS JOZEF KOVAC AND PETER IRIKOVSKY ARE ON MISSION TO CREATE A WORLD-CLASS COMPANY. This text is a translation of Forbes Slovakia 11/2017 Cover Story. ROCKET BOYS

More than three years ago, two young men met for the first time. One was a technological visionary and expert in artificial intelligence, the other, a top manager who had captured the interest of the world’s venture capitalists. The result was an investment, by the first Slovak billionaire, of more than ten million, and a company aspiring to be one of the most successful worldwide software businesses was launched. One that has already stirred the interest of Silicon Valley and the funds managing Mark Zuckerberg’s money. Read the story of the self-learning analytical tool, “Exponea”, from Slovakia, and the three key men behind the scenes: Jožo Kováč (CTO), Peter Irikovský (CEO) and investor Ivan Chrenko.

LUCIA VANKOVÁ, JURAJ PORUBSKÝ FOTO: ONDŘEJ PÝCHA Peter Irikovský (right) and Jožo Kováč, the founders of Exponea. EXPONEA

magine the world’s fastest Edinburgh, Moscow, Bogotá, and Palo revenues. growing software business in Alto, and a new office in Berlin, They say it’s just like Formula 1 – you digital marketing. Valued at is scheduled to open soon. go fast, too fast for common operations – over EUR 2 billion, it has sales In each of the past two years, the but the prize is extremely attractive. You in the hundreds of millions company has more than quadrupled its have to be able to hold on to the steering of Euros, with nearly 3,000 sales. The company’s key indicator is its wheel despite the ear-piercing speed and employees on 5 continents, and ARR (Annual Recurring Revenue), i.e. outrun everybody around you, including officesI spreading from London to New revenues that recur on an annual ba- those who had a head start. York. sis. At the end of 2017, according to the According to the SaaS 1000, in Octo- If this scenario comes to reality - and company’s plan, ARR will reach $5m and ber, Exponea became the fastest grow- it is on the horizon, about 5 years down total revenues will be even higher. The ing company in Europe and the world’s the road - this extraordinarily successful company’s value is growing at a similar second fastest in B2B software solutions. business will be Exponea – an artificial pace, as can be seen in the last investment With six-month growth at 44.8 percent, intelligence based analytical startup from round, when it raised more than €40m. it has already outrun the growth rate of Slovakia. In such a future, it will become According to Irikovský, if the company the popular online newsletter sender as big a name in the global market as the were based in the U.S., with identical indi- MailChimp (13.6 percent), team commu- current prevailing platform for team com- cators, it would have reached a valuation nication platform Slack (11.9 percent) and munication, Slack (valued at $5bn), or the of $60-80m. online questionnaire generator platform streaming platform, Spotify ($9bn). Next, the plan is to reach growth at SurveyMonkey (5.9 percent). Exponea would rank among the such a level that would allow predictions It has also been driven by the fact that tiny fraction of global startups labelled of 10m in revenues in the next 12 months. it has achieved approximately two thou- as “unicorns” for their exceptionally fast sand percent growth in monthly recurring growth, high scalability, and valuation, revenue (MRR) for the last two years. Every day of every month which for a short period of time exceeds matters. In the global world the billion-dollar threshold. HOW CHRENKO’S MILLIONS ARE of SaaS, where software is “BURNED” In the Slovak market, Exponea would bought as a service and paid be the most successful company of all- As for financing, at present Exponea for on a regular basis, companies time, and would, over time, even outgrow is “burning” it at a ratio of 1:1 with reve- can explode in value reaching giants like Eset and HB Reavis. nue. While not an insignificant figure, it millions even just a few months is a common strategy for startups which, Its founders, Jožo Kováč (CTO) and after being founded. due to their fast growth, also have high Peter Irikovský (CEO), absolutely believe capital expenditures. In such cases, inves- in this ambitious plan, but are primarily tors usually do not mind losing money, if keeping their eyes focused on the day-to- If Exponea reaches this level (around the startup shows exponential growth of day operations. $833,000 per month of recurring reve- revenues and has a sound business model. nues) in the next eight months, its value The so called “Rule of 40” (the sum of WE’LL BOARD. THE ROCKET. could be 50% higher than if it reached the percentage of revenue growth and WE’LL FLY. this threshold two or three months later. FCF) is used to assess this. The average In order for the plans to become reality, That’s why every day of every month for private SaaS companies of a similar two things are needed: sufficient financ- matters. In the global world of SaaS (Soft- size is 22, and the average indicator for all es and a robust growth rate. The launch ware as a Service), where software SaaS companies for the past three years, looks more than promising. Significant is bought as a service and paid for on according to the Bessemer Cloud Index, improvement in sales, via e-shops driven a regular basis, companies can explode was 33. To put it in broader perspective, by the Exponea software, can already be in value, reaching the millions of Euros the most successful publicly traded cloud seen by businesses like clothing retailer even a few months after being founded. company Shopify has a score of 88, which Zoot, airline ticket vendor Kiwi, Trenčín’s Exponea is planning to jump from pushes its valuation to a 17.5 multiple of skyrocketing Factcool, and by retail play- a million in annual revenue to ten million its revenue. Exponea stands at more than ers worth a billion on the British Isles. in revenue in about 20 months. The 200. In two years, Exponea has expanded record holder in the world of SaaS is Despite this, an inflow of a great from 6 to 113 employees, based on four Slack, reaching this level in four and a volume of investment is essential (Note continents. Its offices, outside , half months. With an ARR of $10m, it however that if the company had not include Prague, London, Manchester, had a valuation of $3bn, i.e. 300-times its grown so extremely quickly, in December EXPONEA

2017 it would have generated its first prof- “Imagine Warren Buffet wanting Outside his work for IBM, he started de- it). For now, finances are being ensured to invest in HB Reavis – this is exactly signing an analytical tool he later named by joint venture capital fund LRJ Capital, the size of venture funds in the world 7Segments. headed by Peter Irikovský (simultaneous- of technology we are talking about,” the “My first customer was my dentist. ly the CEO of Exponea) and billionaire co-founders express the viewpoint of I ran the contact data of her two thousand Ivan Chrenko (HB Reavis), the first Slovak Chrenko, who traditionally does not talk patients through the model, and sent each dollar billionaire, as listed by Forbes mag- to the media. of them mail with an offer for their reg- azine in its prestigious rankings. ularly scheduled check-up. I don’t know Near the end of October, during Se- STORY NUMBER ONE: A VISIONARY if I have ever done anything with better ries B funding, Chrenko allocated another GOES TO SILICON VALLEY results. The campaign had a 70 percent €7.5m for the startup. This was in addition Let’s go back to the beginning. It was 2011 success rate,” he laughs today, looking to the previous €2m from Series A, which when a then 29-year old data analyst from back. he invested into the self-learning analytics IBM, Jožo Kováč, went to a technology Then bigger clients started getting of Exponea a year ago, and the €500,000 conference in Las Vegas. At that time, he on board – SPP and Exisport, whose in seed capital from 2 years ago. already had plenty of experience. He was boss Tomáš Bel had originally wanted to According to the founders, the developing predictive models for the IBM become the first investor in the startup. capital, along with revenue of a similar Watson supercomputer and connecting At that time, his company was undergo- amount, should be sufficient to continue data analytics, based on artificial intel- ing restructuring and no agreement was the flash speed growth until autumn of ligence, with risk management for large reached. next year. Then, the company will need multinational clients. Despite the inter- But then the first really big client to raise an estimated €25m, either esting work, he yearned to do something appeared – game studio Pixel Federation. through long-term financing, bank loans, else. He wanted to experience Silicon The newly established startup began fo- or other investment rounds with the par- Valley. cusing on the world of “gaming”. This was ticipation of foreign venture funds. During the conference, he rented back in 2013, when Jožo Kováč impressed Conveniently, foreign funds are a car and, on a whim, decided to “escape” Pixel CEO Šimon Šicko by having his already interested in investing in the from Las Vegas to California, which, with artificial intelligence segment 20 million Slovak startup. “On a weekly basis, we re- ideal traffic conditions, meant an eight- players in a few seconds. ceive at least two offers, in a month, some- hour drive. His destination: the headquar- The downside of the gaming world times dozens of them,” says Irikovský. ters of Google in Menlo Park. Arriving at is that it moves ahead at a lightning pace, In recent months, three of the top U.S. the colossus of more than 40 buildings and the artificial intelligence must react funds have declared informal interest. with more than 18,000 employees, Kováč to players’ requests in real time. Kováč The first, ICONIQ Capital, is an invest- was disappointed. “I thought, how could admits that he started feeling “old” in this ment fund from Silicon Valley headed one person make any difference here?”, industry. by Divesh Makan, a former banker from he reminisces. Another dark side of the gaming Goldman Sachs, which manages the Staying for a time in California, he market is its extreme concentration, with money of several influential billionaires met with Michal Šimkovič (Musho), who approximately 10 companies controlling including the founder of Facebook, Mark was then working as a freelance web 80 percent of the profit. Getting to them, Zuckerberg, and the wealthiest man in designer for Google and Microsoft. This and thus to the real money, is not at all Hong Kong, Li Ka-šing. meeting changed Kováč ‘s way of think- easy. So have Insight Venture Partners ing. founded by Jerry Murdock (who also A colleague of Musho’s, an Amer- STORY NUMBER TWO: YOUNG TOP invested in the U.S. Forbes magazine, ican who wasn’t yet even 25 years old, MANAGER Alibaba, Shopify, and Twitter) and Kleiner had worked his way up from practically Simultaneously, the story of Peter Irik- Perkins Caufield & Byers (KPCB), one nothing and was launching a startup - Cir- ovský, the current CEO of Exponea, was of the world’s strongest funds, an early cle, while working for other companies. unfolding. During his studies at Charles investor in Amazon, Google and Twitter. “You’re kiddin’ me!” was Jožo Kováč’s re- University in Prague, he joined KPMG as In August, Lucas Swisher from the action when he saw a new Porsche parked a consultant in the corporate finance area. KPCB investment team praised the com- in front of the house. “It was an interesting situation. At the pany when he said, “Exponea continues After returning home, he changed his interview, I was told that they were hiring to come up as the absolute best next gen- perspective: he no longer wanted to be more than 50 students for the Audit eration solution in the market.” one of the thousands of people in a corpo- Department, but only one for corporate ration; he wanted to lead his own project. finance,” recalls Irikovský. After this EXPONEA

STORIES OF COMPANIES announcement, all the students sitting the fact that their time is worth a lot of USING EXPONEA around me erased their first preference money.” for corporate finance and quickly decided Irikovský, who up to that point had to apply for the audit positions. lived in seven different countries, decided ZOOT “The chances were higher there. to return home. At the airport, he met the Back then, I could sense an opportunity, then fledgling entrepreneur Tomáš Čupr, The Czech e-shop, which also operates in the Slovak and Romanian markets, counts among so I switched to corporate finance and who, in the , was building the top 5 fastest-growing large tech businesses got hired.” A few years later, Peter Irik- Slevomat, a discount portal that would be in Central and Eastern Europe, according to the ovský’s story captured the interest of Ivan worth billions. Almost immediately, they Deloitte Technology Fast 500. ZOOT’s primary goals were the personalization of its website Chrenko. “To him it was proof that I was reached an agreement. As a 27-year old, content for each visitor and the automation able to make quick decisions, re-evaluate Irikovský took over as CSO and, less than of its marketing activities. my position, and use the opportunity if a year later, Čupr stepped back and put circumstances change,” he adds. Irikovský in charge of the company. That FACTCOOL Two years later, and a few weeks was in 2012, and as CEO and minority before another (his third) promotion in shareholder during this time, Irikovský FACTCOOL is the fastest growing Slovak online KPMG, he decided to move to McKinsey made Czech Slevomat the fastest growing store. Today they sell to 19 countries from Slo- vakia, count 1.5 million customers, and maintain & Company as a business consultant. company on the Czech internet (a billion more than a 300% year-on-year growth rate. Again, it was slightly a matter of coinci- CZK in sales was reached after 3 years dence when the 26-year old member of and 8 months from launch), with the high- the team got to travel to the United Arab est profitability. KIWI.COM Emirates and India, where, instead of his As with Irikovský’s previous employ- The fastest growing online seller of airline superiors, he was the one doing inter- ers, it was not quite the perfect match tickets worldwide from the the Czech views with CEOs of global companies for him. Within 3 years he left Slevomat, Republic. Exponea analyzes customer behav- ior and marks the points when the customer and making estimates on their chances after which a break-through meeting with can still be convinced to stay on the website of success. Branislav Kleskeň took place. Kleskeň is or return later. Once more, avoiding a potential a former McKinsey partner who returned managerial promotion – he moved on to to Slovakia to build LEAF, a non-profit T-MOBILE the British branch of the world’s largest organization (financed by multiple share- discount portal, Groupon, which belongs holders of HB Reavis from their private Exponea analyzes the customer segment and, on the home page, offers the customer tailored to the portfolio of German billionaires, funds.) products based on his/her previous user be- the Samwer brothers. At that time, Irikovský was introduced to the havior. In addition to the personalization itself, Groupon was preparing to go public, and non-profit world and decided to connect Exponea makes an automatic evaluation of the Irikovský was tasked with resetting the it with the world of business. He attended potential interest in products and, connects the customer to the call center. non-functioning branches in Wales and conferences in London, Israel and Los An- then opening new branches in the United geles, but the foreign entrepreneurs only Kingdom and Denmark. He also attract- gave him uncomprehending looks. “So, are SPORTEGA.DE ed the personal attention of the Samwer you a business guy or a non-profit guy?“

A sport shop, which was looking for a way brothers, founders of the biggest joint ven- Ivan Chrenko, whom he started seeing to make its web campaigns more efficient. ture investment fund for startups, Rocket at LEAF Supervisory Board meetings, was During a month-long preparation of an exten- Internet (the most successful European the one person who understood. One day, sive personalization-based e-mailing campaign, Exponea managed to reduce marketing costs VC fund based on the number of success- Chrenko asked him how he would change by 22% and simultaneously increase the total fully established companies). the environment in Slovakia from the income by 3.5 percent. Their interest in him only increased position of a businessman. when he rejected their offers to manage Based on this discussion, a new in- DUKE & DEXTER the Groupon Sales Department in the vestment fund, LRJ Capital, was founded. or manage an entire Ever since, it has invested in more than 20 British shoe brand with Exponea managed branch in New York, and decided instead companies with high potential and high to create an AB test extremely quickly, which displayed an image from Instagram of an entire to return to central Europe. “Oliver and growth, while using the majority of its outfit with the product details. This approach Mark Samwer were personally trying to revenues for non-profit purposes. increased the conversion into purchases by 34%. convince me. For a month, they called me An additional ingredient was added every day. It was crazy, as they are known thanks to a discussion with Filip Fischer, for their two-minute meetings and given co-founder of Pixel Federation, who at The DataDuck in Exponea “is a symbol of freedom, which is a major corporate value. It reminds the team members to be relaxed at work and to look at things from a more objective view.” EXPONEA

one LEAF event told Irikovský about Jožo bought by Amazon in 2012 for more than Kováč’s analytical company 7Segments. a billion dollars, and the cloud solution There no longer was anything else to wait Workday, which made its debut on the for. The time to meet had come. New York stock exchange the same year with a valuation of $3.85bn at a 19 JOINING OF TWO “AMAZING“ STORIES multiple of revenue (the current value of IVAN CHRENKO (50) The first meeting between Kováč and Workday is $22.5bn, which, due to slower

The first Slovak whose net worth exceeded a Irikovský happened in Bratislava’s Polus growth, represents “only” a 12-multiple of billion dollars, which according to the U.S. Forbes shopping centre in 2014. “I was just about revenue). magazine ranked him among the two thousand to leave Slevomat, where I was negotiat- Human-wise they were a “match,” wealthiest people in the world, at position 1795. ing the buy-out of my shares. I had a lot even though their business partners say His assets come mainly from real estate develop- ment and the giant HB Reavis, which he started on my mind. But at that meeting, I real- that, as with people whose IQs are well building in the 90’s. ized that this was the very thing I wanted above 140, it is natural that they get into to do. I told Jožo that it was a shame we each other’s hair at times. Gradually, $ hadn’t met two years earlier, because he they got to the point where the company would have saved me a year and a half at officially had “two heads”, and they had Slevomat,” Irikovský remembers. to resolve the question of who would take LRJ CAPITAL At that time, Kováč was busy, actively over the management. “At first, a startup

A venture capital fund aimed at investing in high searching for an investor. “I even went has a ‘wartime’ CEO. As in war, quick de- potential businesses and teams and using the to Neulogy Ventures, as they were giving cisions and clear instructions are a must. yields for non-profit activities. The companies out money. But they immediately started Then comes the period of a ‘peacetime’ it has invested in include the self-learning ana- lytics Exponea and the gaming studios Charged telling me what I was supposed to do CEO, who builds the team and instils its Monkey and Mingle Games. Its partners are Peter and not do. I didn’t like it,” says Kováč culture,” explains Irikovský. Irikovský, Štefan Šurina, Filip Fischer and Michal about why an agreement wasn’t reached. “However, at the beginning we were Pastier, while a part of the capital comes from the first Slovak dollar billionaire Ivan Chrenko. His original idea included a seed both wartime CEOs, and that didn’t work investment of €500,000, and he was very well. We had to agree that I would be only willing to give up a maximum of 25 the CEO and Jožo would be the non-exec- $ percent of the company. Finally, after utive founder and Head of Product (since meeting Irikovský, it was clear that these mid-October he has been in the position EXPONEA conditions were possible. “We agreed very of CTO, editorial note),” describes Irik- quickly,” they say, without any elabora- ovský. A tool for the automation of digital marketing and web content optimization. It works on tion on the specifics of the investment Initially, Irikovský had to do some machine learning and artificial intelligence. It is agreement. work he didn’t quite like. “I’m not very currently being used by more than a thousand Why did Ivan Chrenko decide to good at managing a small group of people. marketers, primarily in the field of online retail. invest money in this project? According Quite the opposite, I need to be surround- Its clients include Factcool, Kiwi.com, ZOOT, T-Mobile, BMW and others. At present, the com- to the founders, it was thanks to the ana- ed by many people who are better than pany employs 113 people and operates on four lytics, which demonstrated its potential, me. That’s about 50 people and up,” he continents. and because he considers both founders adds. At that time, Exponea only had six “amazing stories and characters”. employees. Chrenko supposedly performed He started managing the company a detailed background study of the found- in the style used by companies from the ers of the most successful companies Rocket Internet Group (the Samwer in the “Software as a Service” segment, brothers) – 2 percent of management is and concluded that a connection between strategic planning and the remaining 98 business and technology “veterans” with percent is executive tasks. There is no access to nearly unlimited know-how reason to waste time that can be dedicat- in the form of artificial intelligence and ed to growth. unlimited capital from an “enlightened” The team was growing, and so was investor are preconditions for success. the scope of business. Continuation in the As the founders add, similar condi- world of gaming started decaying with tions can be found in two U.S. success the arrival of Irikovský. “From the very stories: online store Zappos, which was beginning, I believed that the technology EXPONEA that Jožo and the team had built would reeling in more, bigger, clients,” describes both founders consider it an excellent be best applied in e-commerce and online Irikovský. decision. Since that time, their revenues retail. After the first sales meetings, it The conquering of the British market have gone up more than tenfold. became crystal clear. Kiwi, T-Mobile and was also the key to success for Ivan When evaluating Exponea, one needs Sygic confirmed my hypothesis, and the Chrenko. This is exactly where we can to realize that there is no such thing direction to head was set,” says Irikovský. see a parallel with HB Reavis, which as local software. Their competition In September 2015, Irikovský and pushed its way through to real estate is solutions provided by multinational Kováč agreed on founding a new compa- development in the centre of London with corporations such as Adobe (Adobe Mar- ny, which would be focused on e-com- projects worth several billion pounds. keting Cloud), IBM (Watson Campaign merce and online retail. “From the perspective of Europe, Automation), Salesforce (Pardot), Oracle In cooperation with Michal Pastier there is nothing bigger than London. (Eloqua), and a few “smaller” firms such from BigName, they came up with a new London is the end of the journey. From as Marketo and HubSpot. name, logo (the beautiful E is the work the beginning, we knew we had to be That is why, from the very beginning, of Rudo Letko) and overall brand style. successful here. It would be ideal if, by the Exponea has been compared to the largest Exponea was thus founded in October end of the summer, Exponea had technological firms around the world- If 2015, promptly bought all the rights to the 60 percent of its revenue from the United it wants to succeed, it must compete with software from 7Segments, and took Kingdom, while in November it would them in the global arena. A significant a substantial leap into the marketing be roughly a third,” Irikovský talks about indicator is not only growth, but also cloud market. Chrenko’s opinion. quality. Currently, Exponea is a few deals For example, the G2 Crowd portal LONDON IS THE END OF THE JOUR- away from this target. In October, fashion did an analysis of the best cloud-based NEY. IN EUROPE retail had about a 46 percent share of marketing solutions, based on 48 different The company also started attracting the revenue, with general online retail indicators. In the results, Exponea came bigger clients such as BMW, T-Mobile, representing 18 percent, 9 percent comes out with a better score than the market- fashion e-shop ZOOT, delivery service from online airline ticket sellers and other ing clouds from Adobe, IBM, Oracle, and Dámejídlo (DeliveryHero Group) and travel services, and approximately 6–7 Salesforce. the online airline ticket seller Kiwi.com. percent of revenue is made up by telecom- It also achieved similar results in the However, the greatest challenge was tack- munication operators. test of the world’s top 20 marketing au- ling the British market. Who is a typical Exponea client? Ide- tomation tools, according to the Finances Following the pattern of HB Reavis, ally it is an e-shop with current sales in Online portal, where it ended up seventh Irikovský moved to London, primarily to the hundreds of millions. However, it also (the U.S. tool bpm online marketing, add online retail clients to the company’s works with smaller e-shops, where the which ranked first, is significantly lagging portfolio, since the UK is considered the minimum is around €3-5m. In these cases, behind Exponea in terms of growth). Mecca of online retail (especially in fash- there is a high probability that over the It again outpaced Salesforce, IBM, and ion) in Europe. next three years their sales will multiply. Adobe. For growth to kick in to the extent it Exponea has several clients who count The Slovaks also ranked in the hun- should, however, the puzzle was miss- among the fastest growing companies dred most promising big data techno- ing one key person: Marwan Chanawani in Europe (Zoot, Kiwi, FactCool). logical solutions worldwide, 90 of which (CSO), who joined Exponea as sales come from the United States and only director. His experience came, among RANKING AMONG WORLD’S TOP four from Europe. other places, from Eset, for which he was PRODUCTS Exponea was simultaneously the closing new deals in Asia. Around the time of the expansion to world’s first software business to integrate “I was convinced that once I went London, Exponea received one of the first Facebook Messenger chatbots into its to London, I would somehow achieve investment offers from a foreign investor. tools the first week they were introduced the breakout point, as I still had contacts It was submitted by Irikovský’s former in April 2016. A year later, it was the first from Groupon there. But it took Marwan employers, German billionaires, the Sam- Marketing Cloud to integrate Amazon’s for us to be able to launch a large-scale wer brothers. artificial intelligence Alexa into its system. business. He pushed us to finish up all the Ultimately, they refused to sign the Despite this, Exponea’s key business basics- we made a proper website, nice “best effort” clause of the agreement is the personalization of customer com- case studies and success stories, and we saying that they would help the Slovak munication through all channels. began collecting reviews... We also started startup enter the German market. The For example, Exponea is able to send out going to expensive conferences and began deal did not go through and, looking back, more than 1,620,000 fully personalized EXPONEA

emails per hour. The Exponea A.I. takes only 2 milliseconds to prepare the best PETER IRIKOVSKÝ (33) possible content for each customer. The Born in Michalovce, he grew up in Považská key issues that Exponea is solving for its Bystrica. He studied informatics at the clients include the creation of a compre- Charles University in Prague and later hensive view of customers (single-view graduated from executive management courses from the Singularity University or of customer) and the personalization of IMD. He was hired as a business consultant customer experience through all chan- by KPMG, later transferring to McKinsey & nels (omni-channel), all in real time. Company. He entered the world of discount The greatest majority of people con- portals by working at British Groupon, the world’s biggest portal of this type. Before centrate only on product development turning 25, he had already worked his way and customer care (55%), and after this up to a managerial position, but eventually comes sales and marketing (only 16%). In decided to join Czech Slevomat with the entrepreneur Tomáš Čupr. There he acted as comparison, SaaS companies of similar CEO and shareholder until early 2014, when size have a ratio at 40% to 30% and the he left the company to take the leading SaaS giant ServiceNow even has it at 37% position in the investment fund LRJ Capital. Since September 2015, he has been simulta- to 39% in Sales & Marketing. Irikovský neously heading the startup Exponea. adds: “Recruiting for Sales & Marketing is a challenge. We are very demanding regarding the quality of people, and in Slovakia there are hardly any people JOŽO KOVÁČ (34) with relevant experience. Therefore, the majority of new hires come from After graduating in artificial intelligence abroad, mainly from the UK, Germany or from the Technical University in Košice, he was engaged as a consultant in Antik. the USA”. Even now, according to the Da- Later he became a data mining specialist tanyze server, Exponea is being used by in the software company Adastra. After 305 various corporate pages worldwide. three years, he transferred to the position of business analyst at IBM. A developer and an In order to strengthen its position, AI tech enthusiast, he had already started starting next month they are launching building his first startup, 7Segments, in new products: The first predicts ware- 2012. Later, it became the Infinárium project, house stock, considerably facilitating a predecessor of today’s marketing tool for processing large volumes of data called e-shops’ handling of their goods and Exponea. therefore contributing to an improve- ment of the margin and the overall cash flow. PEOPLE, PEOPLE, PEOPLE The second is the free version of its software that small and medium enter- The biggest challenge management prises will be able to use in full without is currently facing is recruiting new being forced to purchase any other people. Given their rapid growth, products, as is customary with freemium they need to hire new people almost versions. constantly, and must compete for tal- What is behind this step in the ent with virtually every big technolo- business model? “Absolutely nothing. We gy company in the industry, whether wanted small flower shops or your den- it be Eset, Sygic, or Pixel Federation. tist to also be able to use our tool. Once The situation in the job mar- they grow bigger, in the future, and have ket is forcing them to experiment. more data they’ll know who to turn to,” Strategies include hiring secondary Jožo Kováč answers promptly. grammar school graduates as interns where they can “shape” themselves, luring foreign Slovaks back home, or headhunting Brits and Americans directly. EXPONEA EXPONEA

PAYPAL MAFIA An example is the story of 20-year So far Exponea has been working in old Roman Kluvanec, who after two a flat hierarchy, in which the teams main- Term first used in 2007 by U.S. Fortune magazine months of internship went straight to ly manage themselves. “The other day as a label for the group of founders of the pay- ment gateway PayPal, bought by eBay in 2002 open a branch in Edinburgh. “I suggested I came to Jožo and I was telling him for USD 1.5 billion. The managers used the exit it when we were speaking and he did not about a thing that happened here and money to build further million-dollar startups believe me at first. He couldn’t stop think- I didn’t know about it,” explains Irik- with some of them going on to become billion- aires. For illustration: Peter Thiel (CEO of PayPal) ing about it, and a week later he came ovský. “I asked him – do you know about was one of the first investors in Facebook and the back to ask me if I was serious,” laughs it? He said he didn’t. And I said – isn’t co-founder of big data startup Palantir, valued Irikovský. that amazing!”, he adds smiling. today at $20 billion. Or Elon Musk, a visionary whose company, SpaceX, wants to send the Another example is their Customer The company’s boss tries to get to first people to Mars in the next few years, while Success Manager, a U.S. citizen from New know every employee by name, even also the boss of Tesla Motors, and is, according York, who will be moving to Bratislava though given the hundred plus employees to Forbes, the 21st wealthiest man in the world. with his girlfriend in November, all be- it proves somewhat difficult. “Despite Other successful spin-offs of the rich group of entrepreneurs around Thiel include, among cause of Exponea. this fact, I want to have the last interview others LinkedIn, Yammer, YouTube and Yelp. Money is not the primary motivation. with everyone and remember his/her Mainly, people are attracted by interest- story,” he adds. ing projects, an entrepreneurial environ- The building of a “love brand” is ment and top-notch colleagues. Despite working – this year, for a few vacancies this, from the start the owners reserved they had more than 1,200 preselected more than half of the company’s shares candidates, but only 6 percent of them for the employee option program (which passed the final interviews. the 34-year old “veteran” from Silicon Valley Joe Lonsdale also considered very EXPONEA MAFIA innovative). People from Exponea are a part of According to the founders, Em- a bigger plan the owners have, besides ployees are allowed to work on things building a billion-euro company. The aim ALL-TIME FASTEST GROWING outside Exponea and can focus on their is to lead the company, in the upcoming SAAS BUSINESSES* WORLDWIDE own projects (e.g. e-com companies or 3–5 years, to a strong at least partial exit, (by ARR**) dedicating themselves fully to something which will not only make dollar million- new). The first spin-off is the Academy of aires of many employees of the startup, Web Development for Women, MiniTech but at the same time enable them to 1 SLACK MBA, which was launched this month by invest their acquired capital into other former company HR manager Miroslava spin-offs. 2 TWILIO Rusnoková, with seed capital from LRJ “I want several other hundred-mil- 3 SERVICENOW Capital. lion or billion dollar companies to Another motivation for employees is originate from Exponea, and this plan can 4 INFRASTRUCTURE the relaxed atmosphere created by lots become reality,” believes Irikovský.

5 BOX of couches, colourful “toys”, PlayStations A similar way of thinking was also and large LED screens on the walls, on characteristic of a group of thirteen entre- 6 EXPONEA which they can watch movies. In practice, preneurs from Silicon Valley 15 years ago, however, people would rather sit in the who managed to sell their project, the 7 SHOPIFY meeting rooms or form working groups payment gateway PayPal to the electron- at the company premises, located in the ic marketplace eBay for $1.5bn. They *SaaS = Software as a Service co-working hot spot HubHub, in Twin invested the earned capital and know- **ARR (Annualized Run Rate) = indicator of the City. You can see that their work absorbs how into tens of other companies, and company’s future revenue growth based on the them completely. the first unicorns were born – LinkedIn, current volume of revenue in a one-year horizon We experienced the biggest interac- Palantir, SpaceX, Tesla Motors, Yahoo and tion during lunch, which was delivered YouTube. to employees from the bistro Bratiliano. The group of managers who suc- Besides getting free, tasty food, this is the cessfully sold one exceptional compa- most efficient way of catering from the ny became the “PayPal Mafia,” which point of view of minimizing time loss. has founded several giants. However, EXPONEA

nowadays the valuation of each goes far beyond one billion dollars. The owners of Exponea want to create a similar en- vironment in Slovakia and with a certain dose of exaggeration they speak of the “Exponea Mafia”.

BACK TO START (AND TO THE END) The next steps are clear: besides strengthening its position in the British market, it is mainly to penetrate the Unit- ed States market next year. But for that they will need a contri- bution from foreign venture funds. They assume they will open the first invest- ment round within two or three years. This takes into consideration the first issue of shares on the stock exchange in London or New York, as well as the entry of venture or private equity funds or big players into the field of marketing automation. In any case, it would have to be smart money that won’t tie the founders’ hands, but help them grow, say the investors. What does this mean? Into the category of “smart” investors they put the CEO of Amazon Jeff Bezos, or his nearly twenty years younger “double” Joe Lonsdale- the co-founder of the $20bn startup Palan- tir Technologies and board member of Hyperloop. But what is the biggest obstacle the investors can imagine? What could thwart the meteoric growth of Exponea? Without a second ’s hesitation, and with a hundred percent certainty in his voice Jožo Kováč replies: “Nothing. It is simply going to happen.”