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1. Can you briefly describe your product, your market niche, and marketing strategy?
RP: In brief, it is a solution that allows companies to monitor their website traffic in real time and initiate chats with those visitors without any downloads etc. Our primary market is the SME (Small to Medium Enterprises) segment and we are finding a lot of success with realtors, travel agencies, hotels and car dealerships.
The marketing strategy is closely linked to the sales strategy which has at it’s core the subscription billing method. This delivers the software to our customer at a fraction of what it would cost were it packaged or sold as a unit. We have direct sales agents in place in Eastern Europe, the UK and the USA who target medium sized companies and identify resellers; such as web development companies to whom we offer good margins and support thus giving us as wide a spread reach as possible.
2. Why Macedonia? It is not exactly the first locale that pops to mind when hi-tech is mentioned …
RP: Well, we originally used the country as an offshore IT destination, i.e. for development purposes only. But, with the economic and political developments in the last two years, for example lower taxes. we decided to move all of our operations here. It is favourable in that we know the territory and the people on the ground from the development work but, from a commercial point of view in that it is an emerging market with massive potential and growth capability. With the political and economic landscape looking very positive, from a growth perspective, over the next few years, we anticipate that we will benefit from this directly and indirectly as foreign investments look to the stock exchange as an investment option. So far as the high-tech element is concerned, granted, Macedonia is better know for its pepper and tomatoes, but, there are some excellent IT minds in the country and this resource is growing all the time. At present, we still have the pick of the best as don’t have to compete with the recruitment campaigns of the likes of Oracle and IBM etc. as they don’t have a presence here. In fact, none of the big names have any substantial development operations, (such as what they have in Romania, Poland & Bulgaria for instance), in the country making our lives that little bit easier.
3. You are on the verge on an IPO in Macedonia’s stock exchange. What would a dot.com issue or flotation do to the local capital markets? Wouldn’t it serve to enhance volatility and thus buttress the market’s reputation as a substitute casino?
RP: There is always the concern that people do not perform their own due diligence when purchasing shares which is why we have been making quite an effort to put in place robust, two-way communication processes that will allow us to disseminate news about the company activity which, we hope will prevent people from making investments as a gamble, but rather, take a look at what we do, consider our product, our strategy and our performance. On that basis, we hope we can eliminate excessive price fluctuations and establish a steady pattern of growth that reflects the business value.
4. Do people here grasp the exact nature of a dot.com? It is after all, hitherto unheard of here … As pioneers, what are you doing to educate them and dispel misunderstandings and misrepresentations?
RP: Broadly speaking I think that very few of the people I speak to fully understand the nature of a dot com. I normally find myself elaborating heavily on why a dot com is different than a traditional bricks and mortar business. Often people are very quick to jump on the very high rates of returns that can be achieved with a successful product but sometimes incorrectly conclude that they are looking in a brand new start-up. Indeed, the product is new, exciting and innovative and sure to be a hit, but, the business itself is not a traditional startup in that we have our sales people in place with matured business processes, payment facilities and a product that has completed development and testing and already has paying subscribers. One of the main problems we face is that a lot of people remember the dot com bubble bursting without realizing why that happened and, in fact, how far along the industry has moved since then. There is, for want of a better phrase, a second dot com boom happening at the moment but in a much more subtle and sustainable manner – I think that the people with the ideas have all grown up a little and have realized that services must generate income…you don’t see us giving our product away for free! (Smiles)
5. What are the lessons Macedonia should learn from the global dot.com boom and bust in the late 1990s?
RP: I think that I may have started to answer this above…simply, they should take a few minutes to understand the underlying cause for the boom and bust cycle that occurred back then. It was a phenomenon where many business people couldn’t understand what the business case was but invested regardless; there seemed to be this innate concept that just because they didn’t understand the technology behind the website, they didn’t have to understand how the revenue was made. In effect, business people threw aside what they knew about business on the basis that the technology would compensate. In a nutshell, they should know that you cannot give something away for free and expect revenue from nowhere, it just doesn’t add up! They should look at the business as a business and make sure that the product actually does function and that the revenue model is based on real sales with a real management and sales strategy associated to it.
6. What can the government do to help you and companies like you? What has it done to date and what are its plans? Have you communicated your wishes and expectations to the authorities?
RP: Wow, that’s a long answer! I’ll try and be brief. For iDevelop specifically, we know that we will need more programmers and a continually improving IT infrastructure. I think that so far, the initiatives in the universities and the push to establish a Minster for IT have been good steps in the right direction but I think there should be a greater pressure put on the central bank and a focus on the fiscal policy to make the e-banking and trading laws user friendly. At the moment, the laws are in place on a local level but there are so many restrictions in place on how income or sales can be realized it makes the process nigh on prohibitive. If the policy making was considered with a system approach I feel that transactions would flow smoothly and that we would see a faster development of this sector which would benefit us all. It is noteworthy however, to point out that any suggestions we have presented thus far have been well received and dealt with in a very positive manner.
7. Macedonia is a highly politicized country, as are all polities in transition. How do politics figure into your financing and marketing equation?
RP: To keep things predictable and sustainable we take our sales forecasts from the markets that are not in transition; i.e. the UK or other Western European countries and the USA. We make an effort on a local level to stay informed of the political road map and take measures to minimize any impact that rapidly changing policy may have. In this case, we are very fortunate to have similar markets to analyze and help with such predictions, which, to be honest, have meant that so far, we don’t really have any significant impact from political movements. Bear in mind that we are not moving boxed products across land which also keeps us distanced from issues that some other companies may have with supply chains etc.
8. Can Macedonia become a hi-tech hub: back-office processing (outsourcing and offshoring), software development, product design, etc.?
RP: I think the answer to this is yes, to a point. I don’t think it can be THE hub, but then I don’t think any single country in the FYR region could provide THE hub. It does have excellent scope for back-office processing, support services, and software development for various niche industries but I think that is fair to say that, with a population of less than 1/4 of that of London, it won’t have the breadth and depth of knowledge and experience demanded by some companies and industries. Without a doubt though, the extraordinarily high level of very well educated young people is a workforce that is ultra-capable and can respond to many market needs.