Muscling Their Way Into the Market

Facing limited domestic demand, Czech phone app developers look abroad for business

Twenty-four-year-old Robin Raszka lives in the village of Hostivice near Prague. As his neighbors are getting ready to have dinner, he is starting work. He "lives" in the time zone of the West Coast of the United States. That way he can follow the latest happenings in Silicon Valley and communicate with foreign clients in San Francisco, New York and Sydney.

"We aren't interested in Europe or the Czech Republic, so to speak," says the designer, who looks to the United States for inspiration. "If you do something here, it will never reach America. The other way round, it works fine."

It was smartphones with touchscreens that paved the way for his success. Two years ago he developed an application that offers suggestions on what to cook for dinner. You enter information about the contents of your fridge into your phone and the application will come up with several possible recipes. This simple invention earned Robin Raszka not only some extra money but also commissions.

More Czechs like Raszka are joining an international community of successful developers. While Czech consumers haven't gone crazy for the new generation of mobile phones yet, Czech developers have confidently muscled their way into the world of new technologies.

Life is elsewhere
"I have stopped using the Czech dialing code +420 [in my emails]," says Razska. "It would look strange. Instead I am using only my American mobile phone number." Only a year ago Americans were cautious about transferring money to his Czech bank account, but as the cooperation developed they soon lost their concerns.

None of the Czech phone application developers uses a Czech domain name for their websites, preferring a .eu or .com address instead. It's easier to find clients abroad this way, says Razska. One of his 10 employees lives in Philadelphia and is in charge of creating an American image for the company. Razska also learned that employees are motivated to work harder if they own shares in the company, so 10% of his firm Tapmates is now owned by staff.

There aren't enough good iPhone and iPad application developers and designers in the Czech Republic, so companies here pamper the few that are available. Besides paying its employees an average salary of 60,000 crowns per month, the application developer Inmite, for example, allows its employees to work from home and to focus on their own projects one day per week.

Because the development of mobile phone application is led by Americans, Razska and his colleagues have entered a competition in one of Silicon Valley's prestigious incubators. The competition committee will, for example, evaluate work relations in the company. Should Razska's company win, Tapmates will receive 3.5 million crowns to be used for development plus three months in California. If they lose, Razska still plans to move to the United States. "It is fascinating living in the country where everything begins," he says.

For people
The international market for mobile phone applications can be "conquered" from any part of the world. While grocery shopping, application designer Jindřich Šaršon's wife used to painstakingly check product labels for additives. Šaršon, 33, realized he could help his wife with her shopping by designing an application for her. It didn't take him long to come up with a program that spots harmful additives and speeds up the whole shopping process. Today the application is available in six languages and is frequently downloaded by Germans and Americans.

Celebrating this success, he subsequently left his job, moved to Hradec Králové and, together with his brother Jan, founded a company, TappyTaps, focused entirely on mobile phone application development. The brothers have hired employees from Ukraine, China, Germany, Argentina and Bangladesh to work for them, using websites on which suppliers around the world offer evaluations of specific workers. "The Czech [labor] market is very anonymous," explains Šaršon. "You have to test people to find out how they work and that is a waste of time with uncertain results."

"There are programs around that will tell you what time the sun sets at the North Pole," says Šaršon. "For God's sake, who really cares? Technological devices should serve everyone." Following this logic, he began work on his next invention. A father of two, he refused to pay 1,500 crowns for a baby monitor and designed an iPhone application to do the job instead, inspired by the belief that it would be useful to other parents beside him and his wife. His app, known as Chůvička ("Babysitter") in Czech, now "babysits" tens of thousands of children around the world. Apart from notifying parents that their baby is crying, it also reads fairy tales, plays lullabies and can make a recording of a baby's cough, which can then be forwarded via email directly to a doctor for him or her to make a diagnosis.

None of the Czech designers want to talk money but the brothers earn hundreds of thousands of crowns monthly. The arithmetic is simple: one third of existing iPhone applications can be downloaded free of charge and the average price of the rest is two dollars. One third of that revenue goes to Apple and seventy percent goes to the designers. If 100,000 people download the Chůvička baby monitor, the designer earns a million crowns. "It is somewhat unstable -- we are getting money now even though we aren't working, but as soon as someone creates the same application for free or writes a bad review on the internet, we are done," says Jan Šaršon, 26.

In the Czech Republic, around 200,000 of the country's 800,000 smartphone users own iPhones. Typically, Czech phone users aren't willing to pay for applications and those that are are reluctant to pay for them over the internet. There isn't much statistical information about Czech iPhone users but it's obvious that a large majority don't make full use of apps. "Having a good phone is more about status than about the need to have the type of phone we use for work," says independent new media consultant Tomáš Hodboď.

A large number of Czech firms haven't figured out how to make use of social media yet and applications are another unknown. While American companies try to implement all the smart ideas available to them, Czech firms are quite conservative. "None of them wants to try out something new," says Inmite co-owner Michal Šrajer. "They all want to know if someone else has already got it, then they decide whether to invest in it or not."

Despite this, the Czech market is beginning to wake up. Only a year ago, app designers were getting negative responses from potential customers but some of them can hardly cope with the demand now. One of the pioneering companies making use of mobile phone applications is the insurer Česká spořitelna, which has recently started offering a phone app especially for processing automobile accidents.

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