Online Extra: Q&A: Wanda Rapaczynski, Publishing Czar

The Polish entrepreneur tells how she built her empire -- in just a decade

Over the past 10 years, Wanda Rapaczynski has built Poland's Agora into the largest publishing group in central Europe and one of Poland's most successful companies. Agora has grown so big since its launch in 1990 that its ambitious president is now looking to expand abroad. There are few acquisition targets in Poland big enough to be interesting, she says.

It isn't easy being in the media business in Poland, where the competition is tough and relatively few people read newspapers. Yet Rapaczynski, a former banker turned publisher, has emerged as one of Central Europe's most successful entrepreneurs over the past decade. She recently discussed her achievements with BusinessWeek's European Economics Correspondent David Fairlamb. Here's an edited transcript of their conversation:

Q: You left Poland and settled in America years before Agora was established. How did you end up as the company's president?


I came back here when the transformation from Communism to a market economy was starting. I met some old friends, good friends from childhood, who had started a newspaper and needed help and advice. I was working as head of new product development for retail banking at Citibank in New York at the time, and helped out by giving advice over the telephone. And I got sucked in. It became impossible for me to be accountable for two things: Agora and Citibank.

Q: Moving from banking to publishing must have been quite a change.


It was. It took me three years to understand how the production process worked.

Q: So what motivated you?


I'm motivated by being proud of what I do. And I thought that here, at Agora, I had the ideal environment to do that -- and I still do.

Q: Are you surprised by Agora's success?


Yes. In 1991, when we made the first forecasts for the company, we seriously underestimated its growth. We've been very surprised by how we've grown.

Q: Agora was founded almost as a cooperative. Do you still have that culture? What sort of support do you get nowadays from the employees?


Agora was founded by a group of underground opponents to the Communist system. So there was a very strong sense of cooperation and we were worried as we grew that we would lose that. It was particularly worrying when we went public. We thought we might become too formal and destroy the sense of community. So we gave share options to employees and some of them are now very rich as a result. That helped keep the sense of community and cooperation. Staff tend not to leave. They still slave here until 10 at night! We also have a company rule that everyone is called by their first names.

Q: When you look back, what were the biggest steps in the development of the company?


We called the first three years the "heroic period." We made our way up out of nothing. We had hardly any finances. In 1990 we had borrowed $300,000 from the New York Review of Books. Then in 1993 we signed what seemed like two enormous deals at the time: Cox, our U.S. partner, bought 12.5% of the company and we got a loan for $8 million from the European Bank for Reconstruciton and Development. That financed our first printing plant. Cox also became real friends, providing us with lots of advice and help. Then, of course, we went public two years ago.

Q: What about the development of the business?


Until 1995 we stuck to the newspaper side and consolidated our positiion there. But by 1995 we were ready to slowly look outside. We started to buy radio stations. Then two years later we bought 12% of Canales TKP channel. We sold it this year because you need majority control for investments to really make commercial sense.

The next big step is happening as we speak. We're in a postion where we feel the newspaper [Gazeta Wyborcza] is established and the radio stations are going well and we want to expand further. We have the money and we have the clean balance sheet and we have expectations. We have everything it takes to grow. The next two or three years will be the real test for us. We will focus on Poland where we want to get into billboard advertising and television. We're also looking outside Poland because there are too few publishing or radio acquisition opportunities that are big enough for us left here. In particular, we've already looked at radio stations in other Central European countries.

Q: What's so attrractive about TV and billboard?


Billboard advertising accounts for 9% of the [Polish] advertising market. And we need to be in TV. Strategically it is very important. You get access to their marketing databases, which is very important. And, of course, TV represesnts a big part of the advertising spend. The problem is that there are only two commercial licenses, so it's hard to break in. And God only knows when they'll provide more licences.

Q: Isn't the billboard business too dependent on tobacco and liquor advertising, which is now being outlawed?


: It is heavily dependent on tobacco and liquor. The two together account for 25% of total revenues in the billboard sector. But banning them shouldn't pose too big a problem in the long run, because we think there's plenty of other business to be had. In fact, by forcing billboard companies to diversify their sources of revenue the ban might actually help the business. Either way, we want to be a leading billboard player.

Before it's here, it's on the Bloomberg Terminal.