"This has given us some strength," says Joaquin Cayuela, presidentof Duplico, SA, a video-duplication company in San Agustin deGuadalix, Spain. "It has given us some pride about what we do.We are the driving force of the economy, and we should have that."
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Additional research provided by George Gendron and Jeffrey L.Seglin.
IT'S AGAINST REGULATIONS: COMPETITION
Wally (Waltherus) de Jong
CEO, InterActive Holding, BV
Age: 42
Company location: Didam, Netherlands
Founded: 1986
Business: Manufacturing flue systems
1994 revenues: 57 million guilders (roughly $35.4 million at presstime)
Revenue growth, 1990ö1994: 543%
Number of employees: 160
When Wally de Jong has questions about his competitors -- Just howmuch are they paying their employees? In what new products are theyinvesting their profits? -- he doesn't resort to cheap gossip toferret out the answers. He's not above that sort of thing; he justdoesn't have to do it.
In the Netherlands, where de Jong's company is based, allcompanies are required to register with the chamber of commerce. "Thelarger you are, the more figures you have to publish, and everybodycan see where your weaknesses are," says de Jong, president ofInterActive Holding, BV, which makes flue systems for gas-firedboilers. "I know my competitors are looking up my numbers, becauseI'm doing the same to them." The system, set up to help suppliersdecide whether they ought to do business with certain customers, ispart of what de Jong describes as the country's tendency to "regulateeverything that moves."
And everyone who moves, he might add. InterActive employs about160 full-time workers but adds as many as 80 temporary workers duringpeak season. "If people are on your payroll, it's very difficult toget rid of them," explains the 42-year-old. "I've had a few cases inwhich people didn't function well, and I've had to pay quite a bit."According to an agreement worked out between the government, theunion, and the industry, de Jong has to pay severance of up to twomonths' salary for every year worked to any employee over 50 whom hewants to terminate, for example. "I'm very afraid to employ anexperienced person," he admits.
It's not that de Jong can't handle fear. When he launched thecompany, nearly a decade ago, his much-larger previous employer tookhim to court, unsuccessfully claiming he had stolen its idea for aflue that would fit new high-efficiency boilers. "Now they are in thesame business we are in, but they are much less successful," he says,noting that InterActive's sales hit $36 million last year, withpretax profits of 10%. Of course, he would never tell anyone how muchhe personally makes. There's no regulation that prevents him frombragging; it's just not considered appropriate. "People here nevertalk about how well we are doing," he adds. "When my parents ask meif it's going well, I just say yes, and that's it. If they knew howwealthy I've become, they'd be shocked and dismayed." -- J.H.
MY MONEY LIES OVER THE OCEAN: GOING PUBLIC
Bernard Liautaud and Denis Payre
Cofounders, Business Objects, SA
Age: Both 33
Company location: Puteaux, France
Founded: 1990
Business: Software that simplifies use of corporate databases
1994 revenues: 148 million French francs (roughly $30 million atpress time)
Revenue growth, 1990ö1994: 4,212.4%
Number of employees: 225
It's not as if the founders of Business Objects actually wanted torun a company in Silicon Valley -- what, and battle that traffic? --but they did want a Silicon Valleyölike stash of cash behind them.
Which is why Bernard Liautaud and Denis Payre, cofounders of thesoftware company with its only offices just outside Paris, took theirthen-four-year-old business public on NASDAQ in 1994. On its firstday of trading, September 23, the company's stock rose from $17.50 toits closing price of $29.50. That 69% increase gave Business Objects,which had annual revenues of $30 million, a market valuation of astaggering $424 million. Liautaud, who serves as CEO, describes thecompany's stock-market success as an "electric shock" to thetechnology community back home. "In France," he adds, "we would havebeen valued three or four times less than we were on NASDAQ."
Which is, of course, precisely why Business Objects opted tobecome the first French high-tech company to go public on NASDAQ,rather than settle for a listing on the Paris bourse. OtherEuropean companies have followed their lead: some 22 of them wentpublic on these shores in 1995, up from 13 the previous year. "Weopened the eyes of a lot of people," Liautaud says.
The exodus is not likely to reverse itself anytime soon. At thispoint Europe's equity markets can't generate the sums that areroutinely raised in this country. Part of the problem stems fromEuropean investors' traditional reluctance to put their money intosmall companies. In addition, Europe's equity markets are simply toosmall to support enough analysts to provide investors with reliabledata on early-stage companies.
Then again, Business Objects' leap to NASDAQ was only part of thecompany's plan to apply "the Silicon Valley model," as Liautauddescribes it, to company building. The cofounders also made suchtypically American moves as raising venture capital, introducingstock options, and adopting English as the company's language. "Wereally don't consider ourselves a French company," declares Liautaud."We're a transnational." -- J. U.
IT'S ALL RELATIVE: SUCCESSION
Domingo Arochena
Chairman and president, Indas, SA
Age: 53
Company location:
Pozuelo de Alarcon, Spain
Founded: 1950
Business: Making personal-hygiene products
1994 revenues: 7.6 billion pesetas (roughly $63 million
at press time)
Revenue growth, 1990ö1994: 46%
Number of employees: 337
