Precognox is one of the leading companies in the Hungarian IT sector; the company earned its place in the top league not only based on its turnover but also on its particular and high-quality services. The Kaposvár-based company is one of the hidden champions that stands out in the market as a leader in software development.
Precognox is an innovative consultancy and software development company that develops intelligent, linguistically-based search, text analytics and big data tools. The founders, Károly Kása and Endre Jóföldi started working as developers at the US National Institutes of Health, the world’s largest healthcare organization, in 2001. In 2008, they decided to leave their well-paying jobs and start their own business. And their boldness has paid off: “Our product is a text mining service, we deal with the automation of knowledge-based work,” says Endre Jóföldi, summarizing the company’s business profile. According to the CEO, text analytics is like gold mining: a lot of ore has to be collected and processed to extract some gold. Precognox extracts valuable information from huge amounts of text, and heaps of uninteresting data.
Strong, even overseas
Although text mining is the main focus, 80 percent of the company’s revenue comes from software development. That’s how the IT market works, someone has to do the “donkey work”, especially if it pays well. The way the company operates allows both financial growth and experimentation with high-quality innovation. The company’s embeddedness and success are well represented in a recent study: the central bank of Hungary, the Magyar Nemzeti Bank conducted a survey in collaboration with MIT (Massachusetts Institute of Technology) to explore the country’s innovation-driven companies. The research found that 1,100 Hungarian firms, 0.3 percent of all domestic firms, account for 13 percent of exports and 22 percent of growth. Precognox is among these firms. They are the hidden champions rarely talked about in the news. In the 15 years of its existence, Precognox has been involved in many interesting projects, helped develop search engines, and worked with high-profile clients like the Hungarian career website Profession.hu. The Kaposvár-based company has grown into a steady business: currently, it employs 50 people, and 47% of its turnover comes from exports. Since 2015, the company has been putting greater emphasis on rebuilding relations with the U.S., and as a result, they are now involved in several overseas projects. These projects have not only generated significant revenue but also helped the company to keep up-to-date with the industry and provide ample networking opportunities.
Slow but steady
According to the CEO, the company has never required external capital during its operations, it has always been profitable and has been able to grow organically. Building on their capital has allowed for a steady, albeit slow, growth. The patience and the persistent work are now paying off in every respect: the company’s revenues have risen sharply in recent years, reaching HUF 277 million in 2020 and HUF 860 million by 2022.
The Kaposvár-based company still has significant growth potential ahead of it. Endre Jóföldi adds that, despite their confidence in the security of their equity, if they were faced with a promising market opportunity that required raising capital, they would probably take it. The flexibility and adaptability of the management have enabled them to exploit opportunities even in fast-moving times. During such periods, they were able to grow significantly both in terms of the number of employees and revenue. According to Jóföldi, the engine of growth is the quantity and the quality of employee resources and large projects where the company can grow with the client. “The value is not in the means of production, but in the cooperation of people” he points out.
Technology as a savior
Stabilizing the roles within the corporate structure is a priority: the aim is to strengthen the role of managers as strategists having less and less involvement in operations. The owners’ vision is to become the best software development company in Transdanubia and to strengthen their position in the market. To achieve this goal, they have built a stable team, with an employee turnover rate of barely 2% per year. The employees feel comfortable with the company, the management offers exciting challenges, development opportunities, predictability, and stability, which makes it attractive for the colleagues to plan for the long term with Precognox. “This is where our wellbeing manager, Anikó Gáll, has had a big impact over the past two years. If I have one regret, it’s that we didn’t hire her earlier.” There have never been any serious low points in the company’s life, and throughout its existence, it has been growing constantly. The only difficulties were when projects with major clients ended, and new projects had to be found immediately to absorb the increased capacity. The IT market is going through serious difficulties today – Jóföldi points to the large US layoffs affecting the sector. However, the company’s management sees crises not only as a threat but also as an opportunity. “I’m optimistic about the future. I think there’s a need for more and more software, which is why artificial intelligence is not a threat. Rather, I see the technology as a savior because it will allow software to be created that is too expensive at the moment. If AI makes development more efficient and hence cheaper, even such software can be developed.” – explains Endre Jóföldi. As for the question of success or luck, the CEO says that luck is important, but you have to be prepared to take advantage of it.
The article and pictures are from: Bét50
