Interview: A great salesman is half way to success

Geo-applications are developing an entirely unique method that helps mining companies to specify where oil and gas are located. The startup has its lab at the university and an office in the incubator in Brno, but its glory goes beyond the continent. I talked to Marek Goldbach and Luboš Sokol about development of a sophisticated technology, a successful business trip to Houston and sales in a niche sector.

It is said that you are Google Earth for the underground. Can you explain simply what you are doing?

We are developing a Density Mapping Technology (DMT) that can detect anomalies in the Earth's gravity field using satellite data. Currently, DMT is applicable at sea, where it can determine where oil and gas are likely to occur.

Can you point to a place on the map and say with certainty that there is oil?

The oil industry, unfortunately, does not work by pointing a finger at the spot and finding a supply of oil there. Potential oil fields are explored by several methods before the company starts drilling. Keep in mind that research of just 1 km2 costs $ 80,000. Our goal is to provide businesses with information that they should focus on a specific area, not to say, "Here's oil, drill here."

So, what is your advantage?

We are very cheap and can quickly map an area in terms of density anomalies and provide basic information for subsequent research. Companies can carry out further research and then start drilling. We offer separate DMT data to businesses, which is particularly attractive for larger companies, or we offer them a customized analysis.

Is there a competitive company in your industry that has developed a similar technology?

Most research methods in the oil industry are seismic, while we do non-seismic research. There are companies that deal with gravimetry, but we do other things. The principle of DMT is unique in our opinion.

How did DMT originate?

Professor Viliam Vatrt worked a few years ago on the W0 constant, trying to unite the height profiles of countries. As part of the research, he found he could also calculate anomalies in density. He did not seek DMT intentionally, he only tried to use the data he had at his disposal.

Is the method still in development or is it ready?

Professor Vatrt's team is still perfecting it. The two of us are geologists and we process materials, so they are digestible for businesses. We can determine whether geodetic data from university laboratories makes sense and can be commercially exploited. We provide feedback to the development team to know where development is going.

How did the scientific idea originally come into its current commercial form?

In the beginning, the development was slow, at a university pace, and the DMT method was of a scientific nature. In 2014, Professor Vatrt met representatives of Opifer and decided to work together. Opifer has helped to commercialize the product and develop contacts for sale.

This is an interesting beginning for a company. I wonder if you still consider yourself a startup.

Yes, sure. Now we are in the pilot test phase, we are not generating profit, we are working on the development of technology and we are gradually trying to enter the market. We verify the interest of companies and establish contacts with potential customers.

How are sales made in a niche field such as oil and gas extraction?

Entering this sector works only through contacts and one has to be very patient. In the beginning, we did the business on our own, but it was difficult. Last year, we hired a skilled British salesman who has an incredible network of contacts and is able to convince high-ranking people from important companies to spend time with us.

Do you get advice on how to do sales from someone else as well?

We are currently looking for a balance between the views of our salesman and Opifer experts. Chris perfectly understands our field, while Opifer has a general view of business. The truth is, of course, on both sides. A specific meeting takes place with a person who knows the petrochemical industry but the person who decides to buy technology has a business background. It is difficult for us to reconcile our ideas and to make it perfect, but we are trying.

In terms of business, what business are you targeting?

Essentially, all those who benefit from oil or natural gas. We aim towards giants like Exxon as well as about small companies that are not well-known to people in the Czech Republic, but they are significant in our industry. We have never heard of many American companies, but they are bigger than OMV.

You have recently returned from a US business trip. Will you tell me who you met?

We visited several companies in Houston. We have agreed on pilot tests that we are currently processing with four of them. If we manage to engage these businesses, we can establish cooperation with them.

It sounds great! And what about the two others? They were not interested?

With the other two, we have encountered one problem – how to say what we do and not lose our know-how. Companies want to understand how DMT works and require a deeper technical documentation that we do not yet have available to them. Professor Vatrt is cautious and does not want us to reveal everything, but we cannot be secretive. We have to figure out how to have good documentation, but not tell so much that they would then do it without us.

Are you experiencing any other problems?

Yes. People who work in the oil industry have high salary expectations. We would like to hire an experienced geophysicist, but we would have to pay him 8–9000 euros per month. Our investment would burn like paper. That is why we have to compromise and find someone from the Czech Republic, Poland, Hungary or even Romania. At present, much of our monthly budget goes to our salesman's paycheck, but on the other hand, we know that it is key to the success of Geo-applications.

I was wondering whether you do not perceive the fact that the world is focusing on renewable sources while you are concentrating on oil and gas as a problem.

Oil will be needed for a long time. We do not think that the current oil and gas extraction is significantly less ecological than renewable energy. Most people are unaware that renewable energy is not a wind farm in the field, but lithium and cobalt extraction, solar panel recycling, and stable energy production. Just look at electromobility. People support this idea, but as soon as there was a mention about mining lithium in Krušné Hory, people panicked. Renewable resources are definitely needed, but we need to approach them cautiously.

That's an interesting outlook. What are your plans for the future?

In the first phase, we will continue to develop DMT technology to be as reliable as possible and to sell it in as many locations as possible. In the second phase, we want to develop our consulting activities. In the future, we would like Geo-applications to develop into a service and consulting company providing exploration services. One of the main benefits is significantly lower labor costs here in the Czech Republic compared to other parts of Europe.