Plan to dominate. The rest will follow.
Philippe Guglielmetti, Chairman of the Board of Integra, leans forward and lights another cigarette. The question on the table is purely hypothetical: how to avoid the dilemma of the post “e-crash” era, where a misstep can lead to annihilation but success leaves you prey to takeover?
“You can’t plan to avoid being acquired,” Guglielmetti says with a shrug. “That’s not a strategy. You plan to be dominant. Then no one is going to acquire you.”
This answer gets a chuckle from the room, partially for its elementary, don’t-sweat-the-small-stuff simplicity. And partly because everyone knows that Guglielmetti, with his soft smile and his large, liquid eyes, is dead serious.
Of course, his strategy is working wonders so far. Guglielmetti founded Integra in 1996, well ahead of the Internet curve in Europe. It has since become one of the leading pan-European providers of Web hosting, integrated e-commerce and Internet solutions. The company’s growth has anticipated the European expansion of the Internet step for step and provides an object lesson in Guglielmetti’s ability to make opportunities out of obstacles.
A self-confessed geek, Guglielmetti recites with some tenderness the old school technology he cut his teeth on: “I worked on a Sharp PC, a TI 57, the HP 41, the Casio FX, when I was a teenager. My first job was at IBM when I was 16. Let’s say, I know what happens when you hit return.”
Given his tech background his next move was clear. He launched a company that made boxer shorts. At its peak, the company sold in 14 different countries but the success was short-lived. “I was, like, twenty years old,” Guglielmetti explains. “We made some mistakes.”
Although he lost his boxer shorts company, its information system was so advanced that other textile firms craved his IT savvy. Guglielmetti began consulting, helping firms integrate incompatible information systems. And he quickly realized that this need was not unique to the textile industry. So he launched a new company focused on providing integration solutions across all industries. His customer base increased exponentially, as did his business.
Then along came the Internet and the nature of systems integration was turned upside down.
“With the arrival of IP technologies, we saw a sea change,” says Guglielmetti. “And instead of saying, ‘Oh, this is bad, we have nothing to do now,’ we said ‘this is wonderful because we know what all the issues are.’ The Internet gave us the tools to do what our clients have always wanted to do"
So Integra was born. And early on it was clear that this would be different from Guglielmetti’s earlier ventures.
“First we decided to focus on market share over profitability,” Guglielmetti says. “This approach wasn’t popular with the VCs. They said, ‘That’s how they do it in America. Not here.’ So we thought, ‘Let’s go to America.’”
This is when Robertson Stephens entered the picture.
“We liked the idea of an American bank that really understood local stock exchange regulations, spoke French and knew what it took to make a young company look its best.
“When I was doing the road show,” Guglielmetti remembers, “my English was not so good. The team went through all my slides. They acted as my editor. My speech coach. And they knew my business. We are like-minded.”
The results of this like-mindedness have been groundbreaking. Integra was the first Internet IPO offered on the Nouveau Marché and the stock quickly became one of the exchange’s best performers in 1999. Subsequently, Robertson helped Integra become the first French company to be dual-listed on the Neuer Markt in Germany.
As a further illustration, Guglielmetti cites a recent crisis the firm faced in the late spring of this year. “We had made a big acquisition, and so you expect some flowback. Then simultaneously there was the e-crash. Our share price really came down and institutional investors stared to question our ability to raise cash. We, at Integra, decided to go for a capital increase to reassure the market. Then the phone rings; it’s Robertson’s London office saying, ‘We think we can make a first-class placement for you guys.’ They knew our situation and had the same idea at the same time. We did a capital increase in ten days.”
Pulling off a deal this fast suggests a certain chemistry. So does the fact that the main conference room at Integra’s headquarters is named after one of Robertson Stephens’ bankers. However, tongue-in-cheek, the name says something about the client/bank relationship.
“I want to be dominant,” says Guglielmetti with a smile, “but I can’t do it alone.”
Robertson Stephens
Investment Bankers