Netwise with ambitious plans for 2024
In 2022, an article titled “Netwise has a recipe for growth” was published in Puls Biznesu, the main Polish business daily. Did 2023 allow for maintaining a good streak, or in the face of emerging information about a crisis in IT, was it rather a bitter pill?
Wojciech Sobczak, CEO of Netwise: This year was very successful, and not only in terms of numbers, which are, of course, important as they define the business and indicate growth and profitability. It was definitely a year of significant events that will translate into the future development of the entire company. In terms of numbers, we maintained the growth pace that we have been cyclically noting for several years now.
Continuous growth requires effort. The key to success is not only increasing market share but, above all, building a team and organization in a harmonious and thoughtful way. The sum of “small” competitive advantages in every area and “significant” advantages in terms of competencies and quality is the recipe for Netwise’s success.
Jakub Skałbania, founder and Chief Growth Officer of Netwise: It was definitely a year of intense work on two major projects. The first project was to delist Netwise from Warsaw Stock Exchange.
The second thing, which we are particularly proud of, are the companies that are part of Netwise group, which already have their own products and are ready for expansion. Netwise transformed from a single company in 2022 into a group in 2023. We have portfolio companies, such as Power PRM, with an excellent product that is already generating significant interest. We own Atteli, whose business has almost doubled since we acquired and incorporated it into the group in 2023. Therefore, it was a breakthrough year.
It is often the case that when someone in business is not succeeding or is afraid of scaling, they hide behind the ’boutique’ label. Why do you still insist on this company format when you constantly talk about growth and development?
JS: You cannot build scale just for the sake of scale. Moreover, in the Polish market, it’s not that difficult when you want to grow quickly without looking at the long term. Our core business has been and still is delivering the highest quality services in the areas of CRM, PRM, and business process automation. Of course, we could radically increase our resources in this model at any time, but it carries the risk of lowering the quality we are proud of. Scaling up from a 100-person company to a 200- or 500-person company could have the opposite effect of what we intend. Quickly hiring a large number of specialists poses challenges in terms of onboarding and teaching the standards for which we are known globally.
WS: Yes, we are ready for a big leap today when it comes to the entire Netwise group. However, we are thinking about achieving this through both acquiring competencies and acquiring entire companies and teams, rather than organic growth. Currently, we are already a medium-sized company and a recognized entity worldwide, attracting the attention of major players. But we are also interested in the market because we need to consolidate our resources.
Does it mean that Netwise will start acquiring others?
JS: Just as with scaling the team for the sake of size alone, it’s worth emphasizing that we will never build a group just for the sake of building. Our goal is not simply to buy another company and increase our revenues with its help. We aim to integrate and build a group without compromising on quality. We are not focused on quickly increasing the sum of revenues because we are committed to long-term growth. We approach strategic decisions very cautiously, and each one is carefully considered as it lays the foundations for the future. Every decision made must be a basis for growth.
In 2023, global Microsoft featured Netwise twice at their global conferences. Does this mean that Netwise becomes globally visible?
WS: In 2023, Netwise celebrated its 15th anniversary, and our dream is for it to become a globally recognized brand. The source of all our successes is our boutique service of the highest quality. The PRM product stems from our services. While implementing solutions for enterprise-class clients, we noticed that there was no product on the market that met their needs. We are currently filling this gap by delivering a proven, yet cutting-edge solution that gives our clients a competitive edge.
JS: The mother of our success is precisely the boutique model and a fanatical focus on high-quality services. By fully focusing on clients’ needs and their backgrounds, we provide them with solutions that fully meet their needs, without taking shortcuts or making compromises.
Global Microsoft appreciates our quality, innovation, and approach. We have very good relationships with product groups because they see what we do for clients with Microsoft solutions. It’s not just global Microsoft that notices and appreciates us. In 2023, for the first time in history, we were recognized in Poland as a finalist for Partner of the Year in two categories – Business Applications and Sustainability. This really pleases us because Polish Microsoft is beginning to recognize the potential of a Polish, albeit still a company. Strange, isn’t it? (laughter)
WS: Netwise, whether as a company or a group, will always be a team of outstanding specialists in their fields who can convert Microsoft solutions into business value for the client and, based on them, build new, proprietary products. Then, in building the group, we simply leverage these competencies.
And when it comes to development, on December 29th, Netwise delisted from the stock exchange, as you mentioned. Isn’t this a step back, contradicting the idea of expansion?
WS: This decision may be unclear to some because, after all, the stock exchange also has its advantages, such as transparency for clients. On the other hand, there are significant drawbacks since decision-making processes in a private company are faster when the shareholders are homogeneous and focused rather than scattered. Decision-making processes are crucial for the company’s development. Of course, we will still communicate with the market, and we still want to be transparent because we have many achievements to showcase, and we have nothing to hide.
JS: There are those who blindly and uncritically believe in the stock exchange as the best place for capital acquisition and company development. Good stock performance provides interesting strategic options for the company, but it’s important to remember that valuation is not everything. Moreover, at the time of delisting from NewConnect, Netwise had a higher valuation than many companies on the main GPW market, similar to its financial results over the past few years. Without going into details, I can say that delisting opened up the opportunity for us to choose the direction of further business development. However, the entire process was neither simple nor obvious for us. We did not want to use new issuances on the Warsaw Stock Exchange because we don’t need to be on the stock exchange to raise capital. Over the past 15 years, we have had and continue to have a positive cash flow, so staying on the stock exchange is not essential for us.
At COP28, at the invitation of Microsoft, Netwise presented its ESG solutions alongside global giants such as Accenture, Capgemini, and EY. Do you have any concerns or complexes when standing next to such huge players?
JS: We don’t have complexes because we have no reason to. The market clearly informs us that we are a leading company in our sector in terms of quality. The same applies to the innovation of our solutions. This is beyond discussion, as evidenced by the interest of global Microsoft in two projects Netwise implemented in 2023 – the world’s first Sales Copilot deployment in the financial industry for over 1000 employees and, according to the product group from France, the world’s first Power Automate deployment using language models and GPT in insurance. Both implementations took place in the USA and were carried out by teams in Poland.
WS: Of course, large companies have significantly greater resources. But they are not a guarantee of success. The most challenging part is building competence, knowledge, and quality, which seem unattainable at a certain scale.
Many much larger players acknowledge our competencies and our quality. Of course, it’s important to convert all of this into business success. We are building a group, but we do it wisely and according to certain principles. We focus on turning the knowledge and competencies of our specialists into the success of the team and the brand, and consequently, the success of our clients.
In 2024, do you plan to leverage the already recognizable brand, or will you rather focus on the development of the group?
WS: We have a good tradition of holding a meeting at the beginning of each year where we set our goals. I must say that the plans are always ambitious. The plans for the coming months will be as ambitious as in previous years, and as in previous years, they will be achieved. This is a tremendous reason for satisfaction for the management and, I hope, for all employees who see, feel, and are proud of the results of their work. Annual plans fit into a multi-year strategic plan that we have consistently implemented for years.
JS: Every year, we have similar growth indicators in the range of 30%, which is good and helps with scaling. It’s also worth noting that 2023 was a year of experiments with new business models – product separation, the first acquisition, the establishment of a separate company for ESG matters. All these experiments ended extremely positively. Despite significant investments in the product (we allocated over 1 million PLN for this purpose in 2023 alone), the results of the Netwise group in 2023 are again better than the previous year and in line with the assumptions.
WS: Companies within the Netwise group are becoming strong businesses and are developing independently. If needed, we support them with capital and other resources. They benefit from many synergies with the parent company. Capital development of the group is our particular goal, but I wouldn’t want to reveal too many details at this moment.
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