Interview: Worldsensing CEO speaks to VIA Empresa

Ignasi Vilajosana on having been awarded the prize of “Best Young Entrepreneur of 2015” by AIJEC

Pau Garcia, reporter from a Catalan business newspaper VIA Empresa, interviewed Worldsensing’s CEO, Ignasi Vilajosana.

The CEO of Worldsensing and winner of “Best Young Entrepreneur 2015” emphasizes that the focus on smart cities will depend on the capacity of the authorities to understand them.

In 2008, Ignasi Vilajosana set up Worldsensing with three partners: his brother Xavier, Jordi Llosa andMischa Dohler. On Wednesday, his work was recognised with the awarding of the Premi Jove Empresari 2015. “It is an honour. To be recognised at home is wonderful,” Vilajosana told VIA Empresa. However, beyond the prize itself, the CEO of Worldsensing insists that “the motivation is to create models for new entrepreneurs. We have to look for business models different from that of the traditional Catalan businessman, with a wider and more global vision,” he argues.

And he knows what he’s talking about. If there is one thing about Worldsensing, it is innovation and globality.The company has become a reference point in the sphere of smart cities and Big Data, developing sensors of all types but also software platforms that help to optimise a range of services and processes, from looking for a parking space to synchronising traffic lights. Today the company has around 40 employees and expects that to rise to 60 or 70 in the next year. “A couple of years ago we were in 14 countries and now we are in 35,” Vilajosana says with pride. They expect the turnover for 2016 to be in the region of six million euros.

We hear a lot about smart cities, but do they really exist?

In the past seven or eight years, there has been a great deal of evangelisation, in which we have been one of the pioneers and to get this effort to the marketplace we have paid with our own equity… However, things are starting to mature and the technology is beginning to be absorbed. Perhaps not in the way expected and we are not digitalising cities en masse, but various players are becoming involved, such as stakeholders, citizens, and so on. Barcelona is a good example of the capacity to absorb technology in a rational manner in order to make the city more efficient. That is the way it has been until now, and we will see what happens from here on. Stockholm and Amsterdam are other examples of cities that have become smart to an extent in the provision of their services. I think that in the next few years we will see a transformation following what has happened with Google and New York. “Smartisation” is in exchange for the right to exploit information, public-private agreements that facilitate the process.

Do the authorities see clearly where they are going with smart cities?

They are not clear about it and probably not all of them know how to do it; but it is necessary. Let us not forget that smart cities solve the problem of density. At a time when cities are becoming business centres, the manufacturing of knowledge take place here. There is a problem of density and competition for talent. The pioneering cities know it and have this need. To go from here to having the organisational capacity and the incentive structure to absorb the innovation is difficult. This is where this new trend comes from in which the private sector is taking the lead and paying for the digitalisation of the public space.

How did we get this far?

We find ourselves in a real estate context, whoever buys land and digitalises a car park will be there for eight years, and the information captured is a new value. Google, Cisco or IBM are doing that. Therefore, whether cities want it or not, this will happen. From here on, the capturing of value will become more focused on governance and philanthropy or the generation of business. That depends on the capacity of administrations to understand it today.

You say that so far Barcelona has been a good example, but it seems as if the current local authority is not giving so much priority to the smart city. Can this end up being paid for by a loss of leadership in the digitalisation of the city?

I don’t pretend to get into political discussions, but I think that there is a very short-term vision in terms of investment in smart cities. It is true that the economy is what it is and that the city’s spending priorities have changed towards the social side. A series of problems are being resolved that had not been five years ago, and in that they are doing a series of things well. However, the risk of this short-term vision is to hinder the economic management of an economy that fosters attracting investment, high-value jobs and improved competition. In short, these problems are not being resolved by attacking the problem at its base. The foundations for attracting investment to the city have been laid down. Cisco or Telefónica, etc., have committed a series of investments to Barcelona to develop the concept of the smart city. The structure to make Barcelona a global reference point in this sphere is in place and now it is a little on stand-by. It will be perfect if the priority to resolve these problems today is only a parenthesis to continue investing in smart cities. However, if not, I think that we are making a fundamental strategic mistake.

You also pointed out earlier that your equity has taken a hit from being pioneers. In what sense?

We got into the market a little early and we have had to globally preach the concept of the smart city. We have spent decades without having a sensor in the car park to tell us where to park, or we have spent hundreds of years without a system to optimise mobility, etc. The administrative structures have made it so there is no real incentive for public servants to absorb this innovation because, whether they do so or not, they earn the same. So, why take the risk? To break through this barrier we have had to generate cases of use, funding pilots that show the value of the technology and preaching on a global scale. That has a price, which is the investment we have had to get. Smart cities are now beginning to become an industry in which the return is small, but it is inevitable that they will grow. In the end, the management of population density or public services will make it necessary.

How have you competed in this world from Barcelona, while being a small company?

It is difficult due to the factor of the international connections we have in Barcelona, which are very few and where there is a political issue to resolve. The confidence to attract capital in the context of 2008 to 2014, when everything was murky, was low. However, it has helped that Barcelona is a place relatively easy to attract talent. We also have good universities within the European panorama that also provide access to talent. Moreover, low labour costs during this period also helped, allowing us to have a structure to develop technology at a low cost. By making an effort we have managed to survive.

What would have been different if you had been in the United States?

Perhaps there we would have had 10 times the capital but with much higher costs that would no doubt have made refinancing the company difficult. The fact of being very diesel in nature, with low consumption in what is a long-distance race, has allowed us to arrive at acceptably low evaluations for refinancing the company’s growth. For an international investor it was cheaper to invest in Worldsensing in paying for the creation of this market than in a US company that had raised 100 million dollars and valued at 300 million. And in the end just to do the same thing. That is the only way it has benefited us.

Has anyone tried to buy you out at any point?

There has been a bit of everything, from acquisition offers to interest in relocating the company to the United States. It has been an issue of the capacity to attract capital and of maturing of the market. We have taken the decisions we have and have managed to attract international investment here despite the uncertainties. In fact, the day before we signed the last round of investment was 9-N, and I cannot say that there was no concern. And not about the yes or no result, but rather the instability.

So that everyone knows, what does Worldsensing do?

We do a lot of things! But basically we are a company that offers solutions in the sphere of the Internet of Things in two main areas: mobility and smart cities, and the area of industrial sectors. The aim is to always optimise the operations in these sectors. Within mobility, we help people to park in cities or to adjust traffic lights in a dynamic way to optimise the flow of traffic. In industry, we digitalise the infrastructure to optimise it and provide predictive tools. We did that for the Panama canal or Palau Sant Jordi, for example.

You are in a sector that is constantly innovating. How has the way you approach the market changed since the company was set up in 2008?

The idea of technology has not changed much. We had the vision and what has changed is the business model and how solutions are offered on the market. We were born as a purely hardware company that made sensors to enable a number of things. We have gone on shifting to become a service company in which infrastructure is merely the way of providing a more generic service. This has meant that our core business is now in software and information management, which has caused a different go to market.

How have you experienced this change?

It has not surprised me; I understand that it is a natural evolution of markets. What is true is that it requires a constant effort in restructuring the company. One has to be very attentive to the market, constantly shifting to find the business model. I think that it has been one of the keys of our success: listening and transforming the way of reaching the market not only thinking about our technology but also what clients ask from us.

Which projects are you most proud of?

There are a lot and all of them interesting. One of the most recent and important is with the Mobility and Safety Management Centre in Bogotà. It is a city of 10 million inhabitants where we have created a solution that allows for the integration of all the information from the systems associated with the management of mobility and safety in a single platform. One of the impacts it has had, apart from facilitating internal communication between the administration departments, is to reduce the response times of the police and services to any incident or problem by 12 to eight minutes. That saves lives and increases the welfare of citizens.

Who are your clients?

While the final client is the administration, we do not normally work directly with them due to the size of our company. We work with service providers who manage the project and we offer the technology.

At Worldsensing you are specialists in Big Data management. Would most companies be capable of managing the huge quantity of information generated?

Not all of them, and the ones that can are those that will remain. We are reliving something that happened twice in the past 30 years. In 1995, with the Internet, a new series of companies exploited the net economy and transformed transactions, which began to become virtual. In 2003, with the arrival of 3G, there appeared a series of aerials that created a new network that allowed for the connection of new devices, smartphones. That created a new world of services: personal and mobility. The value is in the transformation of the transactional economy in mobility. And in 2010, a new standard arrived and talk of 5G began. This is the evolution of the mobile network that aids the connection of all physical objects in a new network management. Unlike the previous two waves, the Internet of Things is an intranet. And it has no impact on the transactional economy but on the operational one. It transforms the chains of operative value, things are no longer done in a preventative way but rather in a predictive way. That has an impact on two thirds of global GDP. Those who do not understand and absorb this will disappear. We will see giants fall, beginning with banking.

To carry out this process, will it be easier for them to look for help from outside rather than do things within the company?

The remobilisation of internal capacity is very difficult. They will have to create a whole range of capabilities and internally restructure around them. We will see a rational wave of acquisitions, small companies that become seeds because companies will reorganise themselves around them. Now there are IT and operations departments, but with the Internet of Things they will merge into operational technologies. The competition will be in who is best at offering a service, and behind that will be technology.

About Worldsensing

Worldsensing is a widely recognized global IoT pioneer. Founded in 2008, the Barcelona-based technology provider delivers Operational Intelligence to traditional industries and cities. With over 50 employees in Barcelona, London and Los Angeles, Worldsensing is globally active and has already conducted projects in over 40 countries on 5 continents.

Press contact:
Jennifer Harth
press@worldsensing.com

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