35 years in the making
35 years in the making cover
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35 years in the making. Interview with A. Hoogduijn and A. Doelen

published 2021-12-16

From hiring new staff and setting up new marketing department to a dinner with the Dutch King and the Lithuanian President. “We made a very good decision to go to Lithuania,” says former Hyarchis CEO Andre van der Doelen. After running the company for more than 35 years, he handed over his role as CEO to Adriaan Hoogduijn. In this video, two generations of entrepreneurs meet to talk about what it takes to build a successful Dutch IT company like Hyarchis.


Transcription

Andre van der Doelen:

With the arrival of new investors, it was time to hand over the baton to the new generation. Not so much because I felt burnt out but because every phase in a company needs the leadership that goes with it. There are a lot of new challenges which require you to respond well. I think a younger generation is much better equipped for that than someone who has been doing that for 36 years. Now is the time to pass on the baton.

Adriaan Hoogduijn:

I wouldn’t take anything away from your sharpness. But for us I think it’s very important that with the new investors we’re going to get a group of people on board who can help us scale further. I think we as Hyarchis are very good at everything we’ve done so far. But we now have a whole new product suite that we need to roll out. Not only to a much larger piece of the market, but also internationally.

The investors we’ve brought on board have done exactly that with a number of different companies. So, I think they’re a really good match to guide us into the new phase, the new decade.

Andre van der Doelen:

Yes, definitely.

Adriaan Hoogduijn:

Andre and I got to know each other through the ambassador at the time, Bert van der Lingen, in Lithuania. Andre was looking for a new software development location, and he thought he might need a developer. In the end we got about ten times as many people on board here in Lithuania. I was also busy with my own company at the time organizing the Royal visit to Lithuania. The King was visiting all the Baltic States as it was the anniversary of the independence of the three Baltic States. Sigrid Kaag came to our office to open it, with representatives from Booking.com, Centric and other Dutch IT companies.

Andre van der Doelen:

It was very special for me to be invited to a dinner where my own King was present, and the Lithuanian President. You don’t do that every day. I had to arrange a tuxedo very quickly to meet the dress code. It was a very nice opportunity.

Adriaan Hoogduijn:

We didn’t foresee it at all. Initially we had the idea to start there with a very small group of developers. In the end it actually grew into I wouldn’t say the HQ, but the office where the most functions are brought together.

Andre van der Doelen:

A big choice of mine at the time was to bring marketing here. Apart from programmers I think that was the best choice we made. It shows that it’s not just a development office but a full-fledged branch of Hyarchis, which is based in Lithuania.

Adriaan Hoogduijn:

That choice was very difficult and took a long time. Our Marketing Manager was eventually interviewed 4 or 5 times before we could make the decision, not because it was about her, but more about the question: can we serve our Dutch customers in the financial sector, who are used to being served in Dutch, with a non-Dutch speaking person in Lithuania. In the end it worked very well. It can be done very easily but at the time it was anything but certain. And Greta, our Marketing Manager, paved the way for other functions such as HR management and accountancy to be here in Lithuania. This helped us to grow further as an organization.

Andre van der Doelen:

It’s also true that, from the start I was positively surprised at the mentality of the people in Lithuania. From the very first moment it was clear that we were not dealing with people who never ask questions. It was like working in the Netherlands. Ask critical questions if you don’t agree with something. And that has given me great satisfaction from the start.

It gave me great pleasure to hear that and not, as often happens in India and countries like that, to hear ‘yes’ but it is actually a ‘no’. This is a country that is critical of itself but also very ambitious. And our people are very technically and professionally gifted, so we made a very good choice to go to Lithuania.   

Adriaan Hoogduijn:

Not at all, because at that time I was very busy with my own company. I had also just come out of a successful startup that we had set up here in Lithuania. So, I was actually not looking for a long-term commitment to anything other than my own company. So initially the idea was that I would set up the product development center here for Andre. Help him get started and then move on to the next project, which was already in the wings at the time.

Things turned out differently because I had an enormous click with Andre from the very beginning. We are both entrepreneurs and we both come from an entrepreneurial family. The collaboration went really well from the very beginning.

We also had a lot of ideas and based on those ideas, Andre asked: “I have the feeling that it’s not only the product development itself, but more the product vision that we should take a look at. We did very extensive sessions on that in summer 2018. From that came the first ideas for our AI development. The products based on artificial intelligence are now delivering tremendous growth for us. Based on those ideas Andre asked me to take a look at the internal organization and think about how we can better realize the product vision and better present our market proposition. That is where our cooperation started. I presented the 10-point plan to Andre, and he said “Fine, but who is going to do it?” I realized that it should probably be me and I was very much looking forward to that. And the rest is history…

Andre van der Doelen:

At the moment when choices are made you are looking for people with whom you have a very good relationship. You also need the confidence that it can work. You see the end of the product life cycle of document management coming to an end and something has to come next.

Adriaan had a very good vision on this, while the existing management was more reserved. We also had a branch in Amsterdam that had to be sold. So, I really needed a right hand, someone who felt comfortable with me. That was the case from the start. It was so clear that you complement and feel comfortable with each other, because we don’t have the same characters. For me he had to come on board, because otherwise we can’t execute the plan.

Adriaan Hoogduijn:

What I learned most from Andre is simply rely on yourself. As he always says, trust your gut feeling. There have been many difficult moments in the past few years. Sleepless nights, because you have to make another decision about something that you are not 100% sure. The tricky part is that we are developing innovative technology within a bi-located organization. We don’t really have a blueprint that you can fall back on a to show you the way. You have to be very strong and find that way yourself. There is often a very strong undercurrent of feeling that you would like to rely on, but you don’t always dare to rely on it. Then you bring in people from outside to give their thoughts on the matter. Often you come to the conclusion that the undercurrent, the intuition that you already felt, is the one that you should follow. What Andre has taught me is to have the courage to trust this, and to give myself space to make mistakes. That is probably the most valuable lesson I learned from Andre.

Andre van der Doelen:

Yes, for me that is a kind of natural behavior. What I learned from Adriaan is that you need a mindset to achieve something. Of course, I’ve always had that, otherwise we wouldn’t have gotten where we are. Still, you have to create a pace in daily life to settle things, clear your head and move on to the next task. That was always a problem with me, and I still can’t do that very well. But he did a good job of showing me the way. If you accumulate too many things, your head is too full to make good progress. That’s something Adriaan always does, and I follow his example. Finish it and move on to the next thing, so that your head is free to make the next step and the right choice. Because if you make the wrong choice, it’s bad luck’.

Hyarchis has reinvented itself several times. The first time was in 1987, the stock market crisis. At that time Hyarchis transitioned from mainframe to personal computers. A completely different business model. After the internet bubble of 2000 we moved from hardware to software development. A completely different kind of business. After the mortgage crisis in 2008 there is a lot more focus on regulatory compliance. That’s exactly the kind of thing we’re focusing on. Adriaan took care of it completely, the idea of how you should do that and how to fulfill it. So Hyarchis has reinvented itself several times. And will also have to reinvent itself several times in the future.

Adriaan Hoogduijn:

Yes, I think Andre is the beauty of it. You actually enter the project as a kind of heritage keeper. If you sketch the whole history, which started before I was born, you have the feeling of stepping into something that is much bigger than yourself. You are a link in the chain that is called Hyarchis. I now have the honor of leading Hyarchis into a new decade. With the new investors on board, I am able to be a part of that history in a way that’s very special.

We are at the heart of current events. We are helping banks to avoid new fines running into millions, a subject that is receiving a lot of attention at the moment. This is a market that is developing very rapidly and a number of years ago we actually invested a little against the grain. I remember our first talks. You were criticizing me a bit: “Hey, who cares about compliance, it’s a bit of an afterthought, it’s a bit of a must-have, who’s going to work on it? I said: “Andre, believe me, with GDPR and the Wwft we are seeing that more and more regulations are going to be harmonized at the European level. That’s an opportunity that we need to capitalize on and that’s what our clients will soon be looking for, because they have all those documents.

Yes, those documents are fantastic in themselves, but they are also carriers of information. And I think what we’ve done in recent years is to look at them as what they actually are, namely carriers of information. And we’re going to unlock that information and make it manageable, so that you have a very large data lake at your disposal that you can manage as a customer. In doing so, we also help that customer make the transition to data management, and that’s one that’s evolving. Two years ago we only said data management. Today it’s regulatory compliance. I’m curious what it will be in 5 years and what we will call it then.

Andre van der Doelen:

Yes, me too.

Adriaan Hoogduijn:

Yes, the team has changed completely. We had 2 offices in the Netherlands at the time. We scaled back from an office in Amsterdam and Eindhoven, to an office only in Eindhoven. Then we started with a very small club, 5 people in total, I was one of them, in Kaunas, Lithuania’s second city. The team was 90% in the Netherlands a few years ago but is now 75% in Lithuania. And when we started here in Lithuania, we had an average age of well into the 40s. And we used to be a truly Dutch company that did everything in Dutch and was exclusively involved with the Dutch market. We are now located in two different countries and have clients in four different countries. So, we’re moving very fast in terms of development. We are getting a lot younger, we are becoming a lot more international, and we are becoming a lot more innovative.

Andre van der Doelen:

And that is necessary if you look at it from the customer’s perspective, because ultimately the Hyarchis organization is there to serve customers. It’s good that you have an organization that is equipped for that. There are so many new things coming at customers, per year, per month almost. They like to have an organization, a supplier, that is capable of doing a lot of things within a very short time. We have proven that we can do that. Compliments also to the people in the organization who are making all that happen.

Adriaan Hoogduijn:

I think the fun part is that we had an idea, it was very fragile in 2018, about artificial intelligence. We went to customers with that. We had a couple of customers who, even before we had a line of code on paper, said: “We believe in this, we want to be involved and to invest in this, and we’re going to help you develop it for us.”

Since 2019 when the development started, it’s been incredibly fast. We shipped the product portfolio, the first artificial intelligence, to the market within a year. I think that’s the single biggest achievement. A document management package that had been around for 20 years, with as much legacy as you can think of, which involves 20 years of development work, brought to the cloud within 2 years. Made cloud native as an automated SaaS solution and rolled out to the market. And that’s a kind of re-evaluation of our purpose. We’ve really transformed document management, integrated it with AI, and so much of that is down to the team.

Of course, that has a lot to do with the vision and a lot to do with the trust you have from customers. But we couldn’t do it without the team. These people don’t just sit there from 9 to 5, they really give their all. They are in the middle of their career and really want to make a difference with the work that they do. We don’t have a team of employees but a team of co-entrepreneurs who help us achieve our goals. I think that’s the most crucial thing in our success over the last few years.

Andre van der Doelen:

Agreed.

Adriaan Hoogduijn:

What inspires me most is that we are doing pioneering work when it comes to the software development itself. For example, one of our employees, the head of engineering, was interviewed by a large American company. They wanted to learn how we go about integrating data science with software development in the same team. This indicates that we are at the forefront of certain developments in technology. We’re talking about the technology that we deliver to the market, i.e. regulatory technology. Even more interesting is that this field hardly existed in this form three years ago. We are determining what regulatory technology means for our clients and how it is shaped in a general sense. That inspires me enormously. I also really like how we make a difference with the software we deliver. It’s not an idea or an abstract vision that we deliver to the market. We help thousands of people every day to make a mortgage application easier.  Every day we help to prevent banks from getting fines of millions of euros. They can keep their services affordable for customers and ensure that as many people as possible have affordable access to financial products and services.

I think the big challenge is twofold. In recent years we have doubled in terms of turnover and tripled the number of people we have on board. That of course brings all kinds of challenges. In particular, our ambitions always reach further than we can bolster as an organization. In that respect it becomes increasingly difficult to keep pace. In other words, to ensure that we continue to realize our ambitions and at the same time build a good, scalable and solid organization at the back end. The challenge is to transition from what we sometimes call the oldest start-up in the world, to a scale up, versus the challenge towards the market. Hyarchis has a history of trying to go international. That was before my time, but Andre has done that in Germany but also in Italy and Belgium. That went with varying degrees of success.

Andre van der Doelen:

No success.

Adriaan Hoogduijn:

Not been a success, OK. In any case we now have clients in Belgium and Germany to use as a basis for further growth. We think we can do that because the legislation and regulations for which we offer a solution, such as the GDPR, or Know-Your-Customer, or anti-money laundering, is increasingly determined in Brussels. This makes it relevant, look at Basel IV, for all banks operating or established in Europe. So, in the coming years we have to work actively on building better visibility internationally.

I come back to Andre and his gut feeling, I think it’s going to be very important because once again we don’t have a template or blueprint that will help us with this transition to a European organization. How are we going to do that, where are we going to put offices, where are we going to run a virtual office? Those are the questions we have to answer in the coming months rather than years. It will be a very beautiful, very special, but also probably very difficult challenge.

Andre van der Doelen:

Yes, but necessary to achieve the ambitions. And you know one thing for sure, if you don’t try, you know for sure that it won’t work.

What does the future look like for me? I am still involved in the organization as a shareholder. And I do that with great pleasure, because I very much believe in what we are doing. The investors have asked me to continue my participation. There is another aspect in that my son Max is now also in the company. He could have taken a good job in London with Nijenrode, but he chose Hyarchis. That gives me great pleasure. It also gives a kind of continuity to Hyarchis. For the rest I will work more in the background. I had to promise Adriaan that he could always call me, and that he could always approach me if he had something on his mind. Even if it’s just about choosing the right wine or something. And he always will. But I’m going to work a little more from the side and take a little more time for myself.

Any tips for Adriaan? Yes, I think he already knows it: listen to others, but always, always make your own decisions.

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