It’s sometimes hard to trust someone at first, especially if they are a potential provider. Can you trust me? Can you trust Merlin/Leonard? Let me tell you the story of my first entrepreneurial venture and see for yourself.
This is the story of a business crash, a blind takeover, a cliff edge climb, doubts, a tunnel exit and a painful release; in short, 18 years of my life. This article is about the first ten years.
SunTseu, a story of a given word
I’ve tried to condense all the lessons I’ve learned from these 18 years of entrepreneurship so that they can enlighten you. As you are going to read for half an hour, I have put a summary of the main lessons learned from these first ten years
- Human beings have an infinite capacity to learn;
- A group of people who don’t know each other and who are put under pressure will naturally bond together;
- It is sometimes the least attractive apple that tastes the best;
- If information is available on a subject, if you bring information and decision closer together by giving autonomy and means, and if you give a clear direction to the team, most people play the game and come up with innovative solutions, which you would not have thought of;
- Holacracy is a great way to manage – but it needs good management control;
- Humans have a natural tendency to make linear projections, either upwards (runaway pleasure) or downwards (depression);
- One should not put all one’s eggs in one basket to “break through” but rather secure different tracks: I have a more pragmatic vision of business today, where I first try to consolidate an activity before launching another one.
- Being an entrepreneur sometimes requires asking yourself how much you are willing to lose personally to pursue your dream;
- Being able to talk about your fears with people you trust and who are on the same level is an incredible luxury as a leader;
- My vision of business is to bring together different wills and personalities to build and develop something that unites and transcends us all individually;
- The world is full of scoundrels – you can differentiate yourself by keeping your word;
- Keeping your word can sometimes cost you 19 years of your life.
Beware I’m going to talk about me and more about me.
Studies: brain flexibility, group manipulation and learning
The story begins when I left school. I was one of those people who, when asked “what do you want to be when you grow up”, invariably replied “I don’t know”. What I did know was that I wanted to be free. As I was very good at studying, I told myself that it would be a good idea to go to engineering school and business school, “that way, when I have to choose what I want to do, I’ll have a pretty good range of choices”.
Direction: the prep school
Preparatory school taught me that human beings have an infinite capacity to learn. You can put high school students in impossible conditions, with a level of difficulty that is out of all proportion to what they have experienced… And after two years, you have competition animals capable of calculating and drawing with ink and ruler the power transmission system of the TGV in four hours.
The Arts et Métiers
What I preferred at Arts et Métiers was the “machining” and the life at school. This three-month sociological experience aimed at erasing the individualism that may have arisen during the pre-prep program – a legacy of the school’s military past. I learned how easy it is to weld a group together and take it in the right or wrong direction. A group of people who don’t know each other and who are pressured naturally bond together. Arts et Métiers is a caring school, fortunately, and the students are committed to carrying on this legacy of brotherhood, but the same mechanisms can easily be used to manipulate crowds.
ESSEC and the learning experience
I can’t thank ESSEC enough for allowing me to be an apprentice during my studies. I learned my trade there, got paid for my studies, and was hired directly. I highly recommend this system.
The beginnings: chaos theory and complexity sciences
Recruitment interviews or the great nonsense of consulting companies
I still remember the afternoon I went to look at the binder of “internships” offered to future apprentices: the glossy brochures vied with each other to attract students (it was the first time a business school had implemented apprenticeship), with large groups and consulting firms fighting to present themselves in the best light.
I had several interviews at these large corporations and consulting firms. I will just relate one of them, where a dozen students were called together. The recruiter briefly introduced the firm, and had this magic phrase: “There are 12 of you, we are only taking one person, explain to me in turn why it should be you”. And the applicants start to give their well-practiced speeches… And I stand up and explain that the values underlying this kind of practice do not correspond to me, under the incredulous eye of the recruiter “How? Vile worm, you think you can refuse an interview?
You’ll see later, sometimes it’s the least pretty apple that tastes the best 😉
Young graduates, sometimes you have to explore alternative paths to find your happiness.
Let’s apply in a “different” box
So I went to the most badly written offer in the binder, coming from an unknown company, of 15 people, located in Les Ulis (Les Ulis!!Can you imagine the horror of going to Les Ulis from Paris by public transport?), but where it was about chaos theory applied to management, about complexity sciences which was to renovate the way we have to manage. , but where it was about chaos theory applied to management, complexity sciences that were supposed to renew the way we should run a company, and where the job was simply to become the CFO. This fit well with my desire for freedom and to learn as much as possible, and these crazy words resonated with my engineer profile and my INTJ profile in the MBTI sense (I’ll come back to this).
I introduced myself, the interview was a formality, and I started part-time on January 2, 1997.
When I say “the interview is a formality”, it is rather that I was never challenged, and I think that the three leaders were looking for someone who would not run away when they presented the project:
- The company was an IT services company (now called ESN) and was evolving in the world of CRM – customer relationship management -, more precisely was an expert on the Siebel software package that salespeople over 40 years old have known.
- That was the facade, because the goal of this company seemed to be more of a sociological laboratory to test a new and quite revolutionary management style (I would realize it later, having only a little experience at the time).
- For example, the new hires were not accompanied at all, voluntarily, and had to find their own job: therefore, they had to introduce themselves to the seniors, so that they could give them jobs on the missions, or internally. You could arrive in the morning and not do anything all day (it’s actually quite frightening and few people did it). This organization produced a great generation of entrepreneurs, who would later start their own companies.
- Salaries were decided by the employee himself after 6 months; the only constraint was to organize a “Council of Elders”, where he could invite anyone he wanted to discuss the positive and negative points of his work, his attitude, his deliverables… It was good practice to invite one of the managers, but not mandatory. Surprisingly, most people were self-flagellating, and often the other staff members insisted on the good points. The few who got carried away and demanded a lot were slapped around by others if they didn’t deserve it. A fairly well regulated system (you must think I’m crazy).
- All this worked because the information was available: everyone’s salaries were known, including those of the managers, the company’s accounts too, every quarter, the shareholder distribution… (I remember that one of our HR assistants went to a training session one day and told how it was going at our company, and she came back depressed because she had been called crazy because “what we were doing was not legal”).
- We could discuss anything, as long as we came up with a proposal. One of the company’s strategic turns was initiated by an employee who had arrived less than a year before.
- Employees were pushed very early on to take on major responsibilities on assignments or internally as soon as they asked for them. For example, after 6 months, I was in charge of accounting, payroll, relations with banks, shareholders, reporting… Incredible!
If information is available on a subject, if you bring information and decision closer together by giving autonomy and means, and if you give a clear direction to the team, most people play the game and come up with innovative solutions, which you would not have thought of.
I didn’t know it yet, but we were in the middle of Holacracy.
Two incredible years of learning
I spent the two years of my apprenticeship at CFO learning more and more, and taking on more and more responsibilities. In particular, I was responsible for the management of the company’s financial position, including fundraising and capital increases. It was a timeless period, completely crazy, with strong growth, leading up to the “internet bubble”, where the company would grow to 50 people in two years.
I was so enthusiastic about the company that I convinced my wife that it was better to put the wedding money (100,000 francs) into the company than to organize a big party. The atmosphere was incredible, with a great deal of confidence in the team and in the future.
Humans have a natural tendency to make linear projections, upwards or downwards: in a phase of euphoria, we think that it will continue and grow and we tend to make overconfident decisions, it’s “the rush to the pleasant”. Conversely, in difficult times, we put on the dark glasses and we don’t see how we’re going to get through it.
We were clearly, collectively, in the “excitement of the pleasant“.
At the end of my apprenticeship, I obviously stayed with the company and became an IS consultant, specializing in finance. I quickly started an assignment at Compaq in Munich, working on financial reporting on Business Objects, and one thing leading to another, I moved to Munich with my wife – who loved Germany and was delighted – and represented the company in Germany (I was 25).
The “Internet bubble” and the creation of the subsidiary
Those who have not experienced it cannot imagine the atmosphere of madness that reigned in 1999-2000:
- The old models were over, we were in the 4th industrial revolution, everything had to be invented.
- The traditional models of company valuation were the subject of mockery, you had to have your own start-up and be the first in your market. Valuation was a function of the lead and the captive user base of one’s site/app/service.
- Profitability was no longer a key success factor – it was even a hindrance, because it meant you weren’t investing fast enough!
- Why make a budget when the world is changing so fast? Your budget will be obsolete five minutes after you finish it.
The “rush to please” had spread to the rest of society ????. It was hard to resist.
So anyone who came up with a business plan that said “start-up”, “internet” or “hypergrowth” would easily raise millions of francs.
The managers of the time were quite sensitive to this discourse: only the provision of services is good, but it “does not explode”. We are limited by a number of consultants, sold at a certain price per day, and there are a certain number of days in the year. The question on everyone’s mind was: how do you become a billionaire without doing too much?
Setting up turnkey call centers
One of the consultants found a technological innovation that allowed to go – a little – in the direction of the “explosive” model: the PCBX. Remember, in the 1990s, your company had a “PABX”, a large telephone box that was rather complicated to handle and to integrate with the rest of the information system, and therefore with the CRM. The “card feed” – classic today – was a nightmare to achieve.
The PCBX was a telephone “PC” and therefore simplified the integration. The idea was to deliver turnkey call centers with the hardware, software (CRM + telephony) and service, all packaged (in SaaS mode today). In short, it was very innovative, even a little too much.
I set about drawing up a business plan, convincing investors, with the managers of the time, and we raised 15 million francs in two instalments. This allowed us to set up a subsidiary dedicated to this activity.
I made the funds available, borrowed from the family and the family-in-law and put 150,000 francs into this new adventure.
At this stage, at the beginning of 1999, I was touring between :
- Reading (UK), where Compaq sends me the week to be the spy at Digital, which they have just bought,
- Paris to discuss the new subsidiary,
- Munich to meet my wife.
When I think that today some of the young consultants I had were complaining about going to spend 3 days in Poitiers at a customer’s…
The subsidiary was created in April 1999 and the beginnings were quite encouraging with two signatures, including a large contract with a hotel group to equip its call centers. I took charge of the installations with my friends in Frankfurt and Amsterdam.
From pride comes the fall
In this euphoric climate, the initial company has gradually shifted from CRM missions to “launching” the subsidiary; to such an extent that the clients seem secondary to the development of this new nugget. Should we put all our forces into this new adventure, and not disperse ourselves in order to reach the break-even point as quickly as possible? Or should we keep all our activities and have a fallback plan in case the adventure goes wrong?
As a fan of SunTseu, we decide to choose the first option, like the Chinese general who, having arrived in enemy territory, burns his own ships, forbidding the return and thus the failure of the invasion.
This attitude crystallizes when we lose Compaq, because of a silly story about a purchase order that was late in coming; the head of our company then decides to withdraw all the consultants overnight, to put pressure on them. Unfortunately, we will never set foot in Compaq again.
At the same time, problems began to appear on the machines that managed the call centers of the hotel group, bringing down the reservation call centers one by one. I remember calls at around 8 a.m. where the call center manager in Frankfurt was calling, furious and desperate, asking for help. It was impossible to do remote support at that time, so we would leave at a moment’s notice to go fix the facilities. We had a toiletry kit and a suitcase in the car at all times so that we could leave for Charles de Gaulle as soon as the call came in. Big stress on the teams…
The bits of candlelight
We will discover later that the machines chosen by the managers did not respect the standards required by the software solutions. All this to save a few hundred euros…
Finally, at the beginning of 2000, voices began to be raised to denounce the masquerade of the “Internet bubble” and investors became more and more cautious. Bad luck, this was the moment when we had to make our third capital increase, which failed.
I have a more pragmatic vision of business today, where I first try to consolidate an activity before launching another one.
Hold, hold and hold again…
From the end of 1999, the cash flow began to be lacking: the parent company’s missions were becoming scarce, and we had set up a support team and a marketing team for the subsidiary, and invested in equipment…
In short, we had to start tightening the screws and the most motivated among us started to give up their salaries and expense accounts while waiting for the capital increase, which was imminent (the same as the one I mentioned above…).
You have to explain to your wife and family that it’s a bad time and it will get better, but you can see that everyone thinks you’re crazy.
For those who will last until the end, we will have worked one year without being paid, and it is the fund of guarantee of the wages which will compensate us, once the liquidation of the company is over. (It is there that you are happy to be in France and you discover that you contribute to a fund which guarantees your wages, look, it is the acronym AGS on your payslip)
For me, that’s what being an entrepreneur is all about: being ready to give up a good part of your personal comfort to start something.
The end of the adventure… and the beginning of another one
This is the end…
At some point, it became clear that this could no longer be sustained. At the beginning of June a meeting was called at the home of one of the founders, and it was announced that the parent company had too many debts and had no choice but to file for bankruptcy. The question was open for the subsidiary.
I had a feeling that this was how it was going to end. I had had discussions with the founders in the previous days who had made me aware of the situation, that we were playing with bad luck, that the subsidiary was healthy, that we could start again… It was titillating to dive into this unknown world of entrepreneurship…
I dive into the pool of entrepreneurship
So I announced that I felt like taking over the subsidiary and getting it back on track with what we were doing before, namely CRM consulting.
How could I have made this crazy decision, when I was 27 years old, living in Munich and had not seen the accounts of the subsidiary?
- I trusted the management team, who told me it was safe. As a reminder, they were my first bosses and they had taught me a lot;
- There was a team of very competent, motivated, autonomous seniors who could take on any CRM project in a large account; they were ready to continue the adventure;
- There were also shareholders around the table that you don’t meet very often in your life; big bosses who had made a fortune, former managers of big groups, heirs and managers of prestigious family businesses;
- It tore me up that everything stopped like that; the alternative was to get hired in a big consulting firm or a big IT company that was recruiting in the technical fields where we were experts.
I jumped in and took over the subsidiary in June 2000 – which became SunTseu in 2001 – for a symbolic euro, corresponding to the shares of the parent company… and that’s when the trouble started.
The descent into hell
I leave Munich, close the German subsidiary, my wife reluctantly quits her job, and we end up in an apartment hotel in the summer of 2000.
I introduce myself to the shareholders and explain the situation: they look at me with a half-horrified, half-disbelieving look that leaves me puzzled at first. I then realized that communication had not been the strong point of the previous management team and that they were not at all aware of the situation.
From their point of view, they put money in a start-up in mid-1999, and that they were going to multiply their stake by 10 or 100 without any risk (I’m caricaturing, but that’s how it was), and one year later they are told that there is no more money, and that the strategy changes completely.
I spent a horrible summer being called day and night by the 70 shareholders who insulted me, threatened me, demanded to be reimbursed… I remember a discussion at 2 a.m. where the boss of the Airbus China subsidiary – which was a shareholder – woke me up and asked me to account for my actions.
Twice I was visited by the police in Les Ulis who, sent by the Paris Public Prosecutor (requested by my shareholder friends…), asked me to come and make a statement about my strategy. A memorable scene where you dictate your business strategy to a policeman, where he tries as hard as he can to understand what you say, and to type with his two fingers on his keyboard what he has understood…
I undertake to study the accounts, take a chartered accountant with me and discover with horror the gaping hole of losses and debts.
In fact, the subsidiary had spent lavishly, hired beyond what was reasonable, and the funds raised had been in the form of convertible bonds, creating a huge risk of non-repayment of debts.
I was received by the two banks of the company at the time, to whom I explained the situation, and who said something like this: “Bravo Mr. Davril, we wish you courage to turn things around… but you have two days to close the accounts. I will realize afterwards that the previous manager had told the banks that our main shareholder was a guarantor for the debts, and that he was not aware of this. The banks met with the shareholder again and the truth was discovered. In short, an avalanche of bad news fell.
Getting out of the hole
Nevertheless, I set up a plan to get out of it: ask the shareholders to give back 10% of what they put in, in exchange for almost all the capital; and the promise that we will pay them back what they put in “one day”. This commitment will cost me 19 years of my life.
I worked with shareholder representatives and a specialized lawyer for a month to define a package that made sense. On the business side, I was fairly confident that we would find assignments fairly quickly because the market was buoyant and we had rare skills.
Elevator to the scaffold
Everything crystallized during the presentation of the plan to the representatives of the shareholders, in an office on the Avenue Montaigne. You know, those offices with double doors between two rooms, thick carpeting, pictures on the walls… In short, quite impressive when you’re 27 years old.
I enter the “office”, which is more like a huge room with multiple spaces, and I discover a scene where my main shareholder and some associates are “laser cutting” one of the managers of one of his companies. The president of this company must be 55 years old, and he has the attitude of a little boy, getting a hard time from his father. He is sent to the corner, and I am called. My heart must be beating at 150 beats per minute at this point.
To reassure myself, I remember thinking, “At least I’m sure I’ll get out of this room alive, and my wife is waiting for me at home. The rest, I don’t know.”
He begins by saying, “So, I hear you blew all my money?”
I take a deep breath, and about to unroll my rehearsed speech, I sputter, my hands shake, I sweat profusely. Finally, I string together a sentence, then two, then go. I try to state succinctly and as clearly as possible the situation, the reasons I have identified, and the plan to get out of it. I finish. Nothing. Silence. No one speaks. 170 beats/min, then 180…
Finally, after a good minute, he tells me, “Mr. Davril, France needs more people like you; we’ll put the money in, don’t worry.” Then he tells me a story from his childhood, where his neighbor wanted to buy his father’s field on which there was an oak tree… I confess that I don’t really remember how it all ended because the pressure was suddenly released.
I will then set in motion the plan to transform the convertible bonds into shares and to carry out the capital increases; this will result, after three years and cumulated with the profits, in a balance sheet with positive equity.
Distribute the stress
The most important thing in the summer of 2000 was to get the senior team together, without which nothing would happen.
First hitch, the day after the announcement of my takeover, a group of seniors set up another company, taking their clients with them. At the time, I had a big feeling of betrayal. Today, I think that they were more lucid than I was and did not give much of a chance to my skin.
Tsépé, Luc, Hassen, Nicolas and Emmanuel followed me in the adventure and became partners, in equal shares with me (well, we don’t have much since the shareholders have recovered most of the shares, but we are equal), and I thank them today for having supported me.
They find themselves quickly on assignment on big projects, but we are constantly exchanging high doses, which allows me to evacuate my stress.
Being able to talk about your fears with people you trust and who are at the same level is an incredible luxury as a manager.
It is my Arts and Crafts and fraternity side that has encouraged me to share actions and responsibilities.
I realize that I have never tried to run a company alone, nor do I really want to. For me, the purpose of a company is to bring together different wills and personalities to build and develop something that unites and transcends us all individually. I believe that a coordinated team of well-connected and willing people can go much further than any one person, no matter how brilliant. And since the fun is in the journey, in the human and entrepreneurial adventure, and not in the goal, we might as well do it with people we can enjoy working with. I also had the feeling that we were leaving with such a fragile device that at the slightest gust of wind, I had the feeling that we would die. Hence the interest in strongly associating my comrades to the success of the project.
From there, it is quite natural for me to share the responsibilities and the benefits, according to the contribution of each one.
Pebbles on the road
As if the road wasn’t complicated enough, there are two difficulties that need to be dealt with fairly quickly:
The liquidator of the parent company
He soon realized that there was nothing to recover from the parent company in terms of assets, and he was frustrated… He saw some attractive shareholders in the subsidiary that I was managing at the time, and he told himself that he would make up for it by extending the bankruptcy to the subsidiary in order to get the shareholders.
There followed some rather painful exchanges between him, my lawyer and me to put SunTseu out of bankruptcy. This ended in his office in Evry, where my lawyer explicitly asked him the following question:
“- We don’t recognize any of the wrongs you accuse us of, but how much would it cost us to have a signed agreement from you guaranteeing SunTseu’s tranquility?
– 400,000 francs (without hesitation) ”
… And I will write him a check for 400,000 francs to put my company in the clear (and I had to go explain this to the shareholders…).
The fact that this official had the power of life and death over my company, and that he decided from my point of view on such a colossal amount of money for me given the situation, left me with an indelible impression of the public sphere.
Is capitalism moral?
I would like to clarify what I am saying here and I recognize the absolute necessity of having a state, which must be the ultimate holder of public force. This is the foundation of our Republic.
The goal of a company is to satisfy its shareholders, it is not good or bad, not moral or immoral, it is “amoral”, it is the construction of the company that wants that. I advise you to read André Comte-Sponville’s good book Le capitalisme est-il moral? on the subject. And only those who have never created one can think that moral principles should govern a company. This has the merit of simplicity and it is up to the public authorities in each country to define the rules of operation for companies.
Since 1833, the Civil Code has established that “Every company must have a lawful object and be constituted in the common interest of the partners.
This does not prevent the individuals who run companies from having humanist points of view and telling themselves that in order to develop their company in the best interests of the shareholders, the employees must be treated with respect, with proper remuneration, and that their work must be given meaning and they must be associated with the results. But this must remain the prerogative of managers.
In the public sphere it is much more complicated to understand the purpose of the state apparatus, and how state agents should make their decisions. The collective interest should come first – in theory – but the problem is that the collective interest is often subject to interpretation. Two different people will not have the same opinion on the matter, leading to endless debates.
Moreover, this leads to a legislative overkill in order to leave as little personal interpretation as possible to the agents, who are often unable to know all the laws and codes they are supposed to swallow, and paralyzing the action of economic agents because of the incessant changes of legislation. All this does not prevent regular corruption scandals in the public sphere, which does not behave any better than the private sphere…
In short, this encourages me to stay as far away as possible from the public sphere.
The absence of a commercial forces me to make a pact with the devil
Once the horizon – a little – was clear, we had to find assignments. And there, a cruel reminder: none of us had ever done sales, we had no network.
So I turned to one of the three former managers, the one who did the sales, and asked him to give us a hand. At that time I didn’t know about all the dead bodies in the closet.
The deal he offered me was to take over as a freelancer, with one of the other managers (who had no business skills), and to pay them 5% of the turnover each.
OK, it sounds crazy to accept such a deal today, but faced with the imperative of getting clients, I put my resentment aside and accepted the deal. This allowed me to find assignments for the staff and have a revenue stream coming in.
The unfortunate quid pro quos to this deal – besides the obscene amounts of money asked for – are quite numerous:
- the two former managers behave rather quickly as if they were managers of the new structure, hire the company without telling me, make decisions bypassing me.
- They have absolutely not learned the lessons of the bitter failure of the parent company. They start again in a delirium of outrageous expenses.
- the second manager spends his days in the office with me “discussing” what to do or not to do… (a nuisance rather than anything else). Often he sleeps on his chair, feet on the desk.
- the salesman ends up proposing the same resources to two different companies and ends up blacklisting us at Société Générale, which has one of the biggest CRM projects of the moment.
Faced with this fiasco, I gathered my comrades and we decided to take them out of the system because, honestly, we can’t do any worse than them…
Again, I pay them a ridiculously high compensation, but I don’t have the time or energy to be resentful to anyone, and I arrange for them to quickly disappear from the picture.
My definition of a boor
I think I formed my view of good and bad marketers at that point. And they are no different than bad marketers. I didn’t want to look like what I saw, which was:
- An ability to sell just about anything and everything, make crazy commitments, and a complete lack of a sense of accountability for what was sold. This often results in enormous pressure on the teams that have to deliver and they quickly develop a strong resentment towards this type of person.
- An inability to understand the services the company is presenting, to make a compelling presentation. I must admit that I have rarely come across a sales person who knows how to make a correct presentation, and I am not talking about a response to a call for tenders.
- A total inability in terms of project management, therefore an inability to coordinate the work on a tender response.
- An ability to embarrass yourself in a client presentation at the enormity of the bullshit he spouts.
- Taking all the credit once the sale has been made.
I’m sure that the consultants/developers who read me must recognize some…
My engineering background prohibits me from selling something I don’t understand, and worse that I don’t know how to do myself. It’s pretty limiting, but at least I don’t find myself having to explain to the client that “it’s not going to be possible” at the end of the project.
From here on out, I’m going to go faster because you have to start getting tired.
Three years to get back to zero
Once the rocks were removed from the road, the rest was rather “easy”.
1/ Working like mules on our projects to regain the confidence of our clients, but also confidence in ourselves, after the failure of our first company. All of us went on missions (including myself, after the cleaning phase of the stables) to generate income.
2/ To build a network among the major clients (IBM, Accenture, Sopra, Cap Gemini…) who have the projects but not necessarily all the resources – and sometimes not the resources at all. Earning their trust through the quality of our services. We often found ourselves as the project manager’s right-hand man because of our skills, but even more so because of our desire to help our clients and never shy away from taking on responsibilities. The fact that we were not part of these large organizations (client side or consulting firms) allowed us to keep our freedom of speech and to bring a “non-corporate” point of view, based on facts, not politics, and to bring solutions. This is how we were able to go directly to the end customers little by little, with the agreement of our partners who were finishing their projects.
3/ Internally, keep what made the richness of the previous company but with a serious management control: information and decision sharing, autonomy, clear direction.
4/ Set up a massive profit redistribution system from the start. We tightened our belts, but every year for 8 years, we had 20% profit-sharing, 300% matching and participation – my best years financially, I think.
The importance of knowing yourself and others
Running a company with several people is not easy. The starting core was 6 seniors including me. We had worked on our personal development with François Boizot (thanks François!) in the previous company and we continued.
It seems crucial to me to know and explain the “natural” behaviors of each person in different situations, cooperation, confrontation, undergoing a situation, in order :
- to be able to identify them and possibly clear up problematic situations ;
- to allow each person to work on areas where his or her strengths are used, which makes the person happier and more successful.
Running a company inevitably gives rise to clashes of ideas, management, tensions, disappointments… Disputes between managers are, in my circle, the most frequent cause of the disappearance of companies.
I think that this work on ourselves has allowed us to get through the crises and to remain united for 17 years.
- to understand through visualization that we are all different in terms of personalities, which can be a discovery for many people;
- to identify your strong points and those of your colleagues;
- to understand how to get your ideas across.
I recommend reading this excellent book: Les types de personnalité : Les comprendre et les utiliser avec le CCTI et le MBTI by Pierre Cauvin and Geneviève Cailloux (my bible).
For your information, I am an INTJ. Yes, that’s Palpatine in the Star Wars representation of the MBTI (definitely, 7 years of mental age…).
In 2003, SunTseu is a profitable company, with a dozen of experts, who intervene on the biggest CRM projects of the moment to work with the IT department and the business on the improvement of the sales force tools. We use the year’s profits to offer our shareholders the opportunity to sell their shares – the share price rises every year thanks to the company’s growth. It’s quite costly administratively but it works; our relative share in the company is gradually increasing.
The end of the collegial decision model
Those three years went by quite quickly, as we were all working hard on our client projects. All of us were on assignment, and some of us were also doing business, administrative management and HR.
At one point, those of us who were doing a little more felt at a disadvantage compared to the others. We went to the green and made our feelings clear. This was taken quite well:
- some clearly expressed that they did not want to be involved in the management of the company and we respected that choice;
- others recognized that they had been a bit off the mark and got involved again.
We then put in place a factual evaluation system, based on scores on different dimensions, and linked the evolution of compensation to these scores. The management was then tightened up to 4 people, with clear internal functions.
2003 – 2007 : the choice of growth
The other choice we made was to grow. When we arrived in 2004, the accounts were clean, the company was profitable, and the employees were well paid thanks to employee savings. But it lacked a bit of “spice”. After having experienced the roller coaster ride, we must have been addicted to strong emotions and the “routine” of a rather stable company was a bit boring. We thought we’d like to grow to 15, then 20, then 25.
So we looked for people to hire, and we were faced with the following dilemma:
- to survive, we set up a system with compensation at the low end of the market, but with a collective variable that, if we’re in a profitable year, blows up the compensation. It’s a great system to keep people, not to attract them. Indeed, it’s quite hard to believe from the outside.
- The experts are all rather attracted by the big principals (end customers and consulting firms, rather than a small structure of 10 people).
In the end, the only people we will manage to attract and keep over the long term are people we met through co-optation. We have only had setbacks with recruitment firms of all sizes. We spend a lot of time in recruitment interviews explaining our remuneration system, which is rather exotic for a small company.
The most dramatic impact for me has been having to lower our hiring standards to attract people. In addition, the fact that these people had not experienced the initial difficulties and were not aware, as the initial core group was, of the risks of business failure, was another difficulty.
The 15-person threshold
There is a real difference in organization and behavior below and above 15 people (it’s the same at 30 and then at 50). You go from a personal relationship with each employee to a more distant relationship with some of them. You are sometimes seen as the “boss” with all that this may have of unspoken in the French imagination. People can no longer tell you everything. This leads to a difficult calibration of the level of relationship and inter-personality that I can afford.
Once these renunciations were made – which are experienced as small deaths for me -, and a reorganization to industrialize the processes a little, we continued our growth towards 25 people.
You enter the world of respectable people
The pleasure comes from the way other people look at you, which is quite different from when you have a company of 7 people and a company of 25 people. Suddenly, you are received in the purchasing department of large groups, and with a little effort you can be referenced. This makes some people make it their main business: I get referenced and I “sell” the fact that I can work with a large account through me (between 10% and 25%).
The counterpart is that when you say that you too, CEO, are going on assignment, they look at you as if the company is doing really badly, so that you have to work! It’s impossible to make it clear that you like it, it’s completely inaudible. I’ll let you deduce what that means about our prejudices.
2008 – 2010 : the crisis
Humans get used to good things very quickly
In 2008, the global crisis hit, combined with the fact that Oracle completely missed its shift to the cloud, and was overtaken by Salesforce in CRM. We suffered the impact: fewer assignments, time to upgrade our skills on Salesforce, lower profits, and an employee savings plan that played its natural role as a shock absorber.
The problem is that a number of employees have become accustomed to having a large variable at the end of the year. As the large variable decreases sharply, a queue forms with managers to ask for increases to compensate for the drop in income. In other words, the opposite of the desired effect! Many employees will leave the company to join other companies.
But some employees showed tenacity, and Daniel, who had joined the company as a junior, joined the codir in these waters. Thanks to various capital operations that will be spread out over time, we will allow Daniel to acquire shares to reach our level.
2012 : we become owners of SunTseu
By dint of buying back shares that we destroyed or offered to employees in the context of employee savings schemes, we ended up approaching the 50% mark in relative ownership. Our shareholders are quite happy to see that the company is growing and that profits are increasing. And one year, instead of selling their shares during the annual buyback plan, some of them tell us, “Actually, I don’t need this money anymore. I’m going to wait and make a profit instead.”
And then it’s a whole different story: the more you grow the company, the more you increase its value and the more you have to pay to buy back the remaining shares. Suddenly, we lose much of our motivation to grow SunTseu. Rather than procrastinate and play rotten, we come up with a final plan to keep our word:
- we propose to set up a holding company, which will borrow the necessary sum to buy back all the remaining shares from our shareholders;
- we plan the buybacks over three years, in order to let the growth of the company increase the share price and thus to respect the different acquisition prices of each shareholder;
- we resign, go independent and announce it to our shareholders so that the message gets across better.
This is how we borrowed a little more than 500 K€ between the 5 of us to finalize the acquisition of SunTseu – 500 K€ that we will finish paying back in 2019, 19 years after the acquisition. It’s a real pleasure to have succeeded in keeping our word to allow each historical shareholder to get out by recovering his stake.
The main lessons learned from these first ten years
And hop, I’ll end where I started (you know epanadiplosis?):
- Human beings have an infinite capacity to learn.
- A group of people who don’t know each other and who are put under pressure will naturally bond.
- Sometimes it’s the worst tasting apple that tastes the best.
- If information is available on a subject, if you bring information and decision closer together by giving autonomy and means, and if you give a clear direction to the team, most people play the game and come up with innovative solutions that you would not have thought of.
Holacracy is a great management method, which needs a good management control.
Humans have a natural tendency to make linear projections, upwards (runaway pleasure) or downwards (depression).
- One should not put all one’s eggs in one basket to “break through” but rather secure different tracks: I have a more pragmatic vision of business today, where I first try to consolidate an activity before launching another one.
- Being an entrepreneur sometimes requires asking yourself how much you are willing to lose personally to pursue your dream.
- Being able to talk about your fears with people you trust and who are on the same level is an incredible luxury as a leader.
- My vision for the company is to bring together different wills and personalities to build and develop something that unites and transcends us all individually.
- The world is full of hucksters; you can differentiate yourself by keeping your word.
- Keeping your word can sometimes cost you 19 years of your life.
A final word
I cannot tell the whole adventure of SunTseu in one time, it misses a lot of things that we accomplished together since 2010: the subsidiary Nova in Montpellier, the diversification on the field of health, and the digital marketing, the approach of 50 people, then the transition where the 5 historical leaders passed the torch at the end of last year.
So much more to tell you! But I am already at more than 8,000 words and it is time to stop this first publication. But you will already understand how my conviction to respect my commitments and to always give the best of myself, whether to my clients or to my partners, was born. For me, this is what being an entrepreneur is all about: ensuring the joint success of an ecosystem. And you can see why Merlin/Leonard is so committed to the customer experience today.
I try to take a moment for the entrepreneurs I meet who want to talk about their current issues. If this is your case, don’t hesitate!