"We are looking to expand and grow for many years ahead," saysDomingo Arochena, president of Indas, SA, a Spanish maker ofhygiene-related products. "For many of us that has already meantgoing outside our own countries." And many more, he suggests, willaggressively seek new markets.
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It would be natural for American entrepreneurs to see in Europe'sfast growers nothing more than a younger version of themselves:Remember when big companies dominated just about any market theytouched? When it seemed ludicrous to try to persuade a big-companyexecutive to leave the comfort and security of a luxury liner to hopaboard what looked like a wobbly lifeboat?
It's certainly true that "we are 10 years behind the States inentrepreneurship in Europe," as Twaalfhoven says. But it's also truethat Europe's entrepreneurs are coming of age at a time when markets,money, and labor have all become globalized. "Because entrepreneursare more mobile physically, they've had the chance to see how thingsare done in the United States and Canada," notes Klaus Jacklein,president of Mayrose International, an internationalreal-estate-development company based just outside Toronto. "Thismakes them much more aggressive in dealing with traditionalbarriers." Translation: one visit here, and European entrepreneurscan easily pick up the kinds of business-development skills thataren't widely practiced back home, from wooing investors with a goodstory to luring employees with stock options.
Take raising money. While there may be talk of developing aEuropean version of NASDAQ, for now the U.S. exchange is fastbecoming the financing tool of choice for growth companies fromabroad. Pierre-Alain Cotte, a native Frenchman who now lives inAmberg, Germany, recently started Strategic Ventures, a firm whosemission is to make Europe's fast growers comfortable with lettingNASDAQ make them rich. In the past, he says, European entrepreneursweren't attracted by the possibility of an initial public offering,because "when you started a company in Europe, you didn't start it tomake money. You started it for your family and for the centuries tocome."
But more and more European entrepreneurs are now admitting to thekind of competitive zeal crisply expressed by Bernard Liautaud,cofounder of Business Objects, a software company based near Paris."If you win in France, it's just a short-term thing," he says. "Youneed to go and win in the United States." Not surprisingly, BusinessObjects went public over the counter in 1994 (see "My MoneyLies over the Ocean," below), taking a path that many of Europe'sfast-growing companies plan to follow this year, according to JosPeeters, former chairman of the European Venture Capital Association.Among Europe's 500, only 59% claim to have no intention ofgoing public in the next three years. As for where the rest are mostlikely to take their offerings, entrepreneurs usually go where theaction is: NASDAQ brings 2.5 times more companies public in a yearthan the exchanges in Amsterdam, Frankfurt, London, Paris, andStockholm combined.
Building a growth company on the Silicon Valley model may involvemore for Europeans than just tapping U.S. investors. Unable to findenough managers who could handle the kind of growth he wanted for hiscomputer-graphics start-up, French entrepreneur Eric Hautemont fledParis and started operations in the heart of Silicon Valley. (See"Forget Paris," below .)
To be sure, most of Europe's 500 have no plans to move into yourzip code. But your customers aren't as distant as they once seemedfrom European companies. Accustomed as they are to crossing fromcountry to country, these fast growers already look outside theirhome countries for close to 40% of revenues. "If you want to growfast in Belgium," quips Rudy Hageman, managing director of RealSoftware NV, "you have to grow abroad." As for future growth,52% of Europe's 500 are expecting foreign markets to account for atleast as much growth as their domestic customers will. (See "Where DoYou Expect to Realize Future Growth?" in "Europe's 500 at a Glance,"below) "The regulations are very different in different countries,but we are able to stay flexible enough to handle that," says Wallyde Jong, founder and president of a Netherlands-based fluemanufacturer that exports 90% of its products. "I myself learnedEnglish, French, and German to do it. It's easy."
Aggressive CEOs like Arochena see another role that U.S. companiesmight play in the future of fast-growing businesses like his own. The53-year-old, who took over his uncle's consumer-products company in1970, has combated the growing competitive threat from U.S. giantslike Kimberly-Clark and Procter & Gamble Co. by snapping upsmaller competitors around Spain. While he refuses to sell out, hedoesn't rule out setting up a joint venture with an American concern."The future could be a collaboration in which we provide knowledge ofthe market, and they can develop new products," he muses. "They mighthave newer technology or be in new fields that we are not in today."Whatever the exact fit, Arochena's central goal remains firm: to keepthe business, which he owns with his two brothers, in the family."It's important to continue," he says, "because in Spain there arenot so many industrial family companies. And we are losing more ofthem all the time. We must continue to grow." (See "It's AllRelative," below.)
Europe's 500 weren't chosen on the basis of that kind ofattitude, but they might as well have been. "Entrepreneurs have acertain way of speaking and acting. It really surprised people tolook around and see 100 others like themselves," says Heinrich vonLiechtenstein, executive director of EFER. "They have felt up to nowthat they were lonely wolves. They discovered that they are not, andthat it makes sense for wolves to get together and sing their songtogether."
As for the exact tune, they could have been warbling "People," theBarbra Streisand classic. The main criterion used for selectingEurope's 500 was, after all, growth in full-time employees from 1989to 1994. Companies that made the list had to reach their peakworkforce in 1994 and could not have added employees through anythingother than internal growth, ruling out mergers. To qualify, abusiness had to have fewer than 500 employees in 1989 and more than40 in 1994. Further, an entrepreneur had to own a controlling stakein the business and be actively involved in managing it. Besides theday that entrepreneurs spent attending workshops, the conference alsoincluded a day mainly devoted to academic presentations. "Thisconference was only a test start," notes Peter Kramer, the Germanentrepreneur.
