2000-2005: START, SURVIVE AND GROW IN THE STORM.

In 2020, EBRC celebrates 20 years of digital acceleration and progress, which started in Luxembourg to later extend to Europe with a value proposition based on quality and security. In the first part of this 20th anniversary series, Yves Reding, the CEO of EBRC, reminisces the first 5 years of the company: a startup created in Luxembourg, during the e-business bubble, with the goal to provide secure recovery services mainly to the financial services industry.

A startup on a mission: securing the financial sector in Luxembourg

“Back in June 2000, the idea behind the creation of EBRC was to build a recovery center in Luxembourg,” starts Yves Reding. Actually, at the time, the company was called BRC, which then stood for “Business Recovery Center”, with the mission to secure the local financial place. “Several events had occurred months before in Europe: a trading room of a large bank burnt down in Paris, several terrorist attacks had happened in London, etc. Even if Luxembourg was supposed to be a quiet and calm country, we thought it was critical to anticipate such major operational risks,” explains the CEO of EBRC.

The early 2000s were also the first years of “e-business” and the outburst of the internet bubble: On top of the “Business Recovery Center” initial idea, Yves Reding and his team worked on several e-commerce digital projects during that time, and he decided to add an “e” right in front BRC, surfing on that early “e-business” wave. Yet, the business model was still mainly relying on a pretty heavy structure – creating a recovery center requires a building made of brick and mortar, along with significant needs in terms of IT material, etc. – and ambitious engagements had already been taken by end of 1999, six months before the start of the company, by the private shareholders. “In these new economy euphoric times, business plans were often unrealistic, based on exponential revenues, and flat minimized costs. When I started the real life of the company, in the summer 2000, my first objective was to assess the initial business plan with reality and drastically readjust it. First, I had to take emergency measures to ensure level and stable flotation of the overloaded boat. That means concretely generate rapid revenues and push down the costs to ensure a minimum cash flow for EBRC to survive. To launch such a startup, we had to start from scratch and had, at the same time to design, build the services and contracts, find the appropriate resources, and of course, convince clients and deliver on time the new designed and promised services. In a startup mode – all entrepreneurs have experienced it – time flies really fast. It is a unique and fantastic time of life. You have to juggle with multiple dimensions, in parallel: on one hand, strategy, marketing & sales and on the other, architecture, delivery, bits & bytes. We even created our first website internally in a few days,” explains the CEO. According to him, as a startup, the most difficult aspect is probably to position oneself quickly in the market, with fewer resources, attract clients while still designing and developing solutions from scratch and on top compete with big players already established, with huge resources, proven solutions and deep expertise. “Highly challenging yet stimulating times! Not a second to waste!” adds Yves Reding.

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A strategy based on quality, security and proximity

This old version of EBRC actually faced a situation that is still well known today: clients get to choose between the young startup and the industry giants. “Therefore, how to survive in such a competitive environment? If you cannot beat them, join them. But join the best to beat together the other ones! Our strategy was to collaborate with some of those giants who have many advantages but also some weak points. Their branding is out of this league, their catalogues are filled with services, their contracts are robust, they can deliver easily, etc… Yet, on the other hand, they lack flexibility, their products are not customizable, they do not necessarily have a strong relationship with their clients, etc.,” explains the CEO, who adds: “the startup or the local company needs to master and challenge these giants to avoid the risk to be crushed”. In 2000, one of the European leaders, a French-British company pushed aggressively to enter the Luxembourgish market and tried to acquire the young company, and made attempts at high pressure. The management of EBRC decided instead to partner with IBM and in a 4-month period a strategic alliance was signed. IBM’s “Business & Recovery Centre” moved with its clients to the EBRC Centre in the neighborhood that would later become the Cloche d’Or. IBM on the other hand had its own interest in having a local player within its umbrella. “This strategic alliance was based on mutual respect and on an excellent relationship. From the beginning, we built a real win-win alliance, based on trust,” comments the CEO of EBRC.

Back in 2000, the IT business was already seeing the emergence of two opposite trends: some opted for differentiation by offering quality services, while others decided to go for cheaper services. “Right from the start, our goal was to advocate quality and security. According to us, launching a low-cost service from Luxembourg, a country with high living standards and high salaries, made no sense. As the Grand Duchy was also leveraging financial services, we anticipated that values such as ‘quality’, ‘security’, ‘confidentiality’ and ‘availability’ would keep on growing. Bale II and others were already in place, but there were not as many regulations as today”, comments the expert. EBRC’s motto was clear: “together, with trust, in the era of information”.

On 9/11, the terrorist attacks on the World Trade Center and the Pentagon literally shocked the world. But as with most crises, many opportunities arose for EBRC. “One of our biggest international competitors – but also local ones – was betting on low-cost solutions but also on questionable practices. Soon after 9/11, financial irregularities were spotted and the mother company, listed on the London Stock Exchange, went bankrupt. This highlights the necessity to set the right tone at the top and not to compromise on quality and security. At the end of 2001, we were convinced that we made the right choice in picking quality over price and that low-cost services equal inevitable risks”. The next year, the 2-year old company had become a key player, with almost no serious competitors anymore and a couple of tech giants to deal – and work – with, in a relationship of equals. “These partnerships lasted for 4 to 5 years. But as EBRC had become stronger with an internationally recognized expertise, some strategic divergences with our international partners led to stop these alliances by mutual agreement”. EBRC also saw an increased stake of POST Group as its main shareholder.

 

A new status and a bright future

After four years of hard work and challenges, the perseverance of EBRC was finally recognized and all the efforts were now bearing fruit. With a clear vision and services based on quality, proximity, availability and security, the IT company was able to sign key contracts with several German, French, American and Japanese banks. In 2004, EBRC was the third company in Luxembourg to become a PFS (Professional of the Financial Sector, PFS companies do not as such exercise a financial activity themselves, but act as subcontractors of operational functions on behalf of other financial professionals) and launched new offers, notably Managed Services. “A Scandinavian banking player wanted to settle in Luxembourg without having to manage its IT operations. They issued a call for tender, but we did not have a Managed Services offer... The beauty of being a startup? In just a week, we were able to build the adequate offer, answering to all their needs and convinced the executives of the bank who told us we had the best value proposition. Two months later, the client was up and running,” underlines Yves Reding. In 2004, EBRC also prepared itself to ensure the security of the 2005 Luxembourg presidency of the European Union (under the POST Group umbrella), which naturally accelerated the development of the startup as well as the promotion of its services.

Boosted by the success of its strategy, with new offerings and the trust of more and more prestigious clients, EBRC decided to commit to new and ambitious engagements at the end of 2004, while keeping this successful startup state of mind. “To step ahead of the market and of potential international entrants, but also to anticipate new demands, we decided with our major shareholder to analyze a potential new huge project: design, build, market on the international stage and operate our own dedicated high-level datacenter in Luxembourg, based on the best international practices, in order to attract new international clients. Clearly, by the end of 2004, the existential difficulties, the numerous threats and the many nightmares common to most startups and business development from scratch in uncertain times belonged to the past. Positive challenges and new developments were now in front of us. Business was expected to flourish,” highlights Yves Reding.

 

The CEO concludes: “Seizing opportunities, being agile and fast, daring the first step and taking the quantum leap were the keys of our success at this stage. With a clear vision and strategy, you will be able to anticipate the major trends of the market and push new solutions, but you will always face uncertainty. The best way to seize expected but unknown opportunities is actually to build a kind of spider web, develop a rich ecosystem with partners, clients, solutions. It will allow you to listen, be visible, and identify such new opportunities very quickly and therefore to be agile enough to meet the demand before anyone else”.  2005 ended this first step on another positive note, with the signature of Dexia Group, and the move of its IT infrastructure to Luxembourg, which enabled EBRC to realize its ambitious project: in the months to come, a Tier IV datacenter was about to be built, with no investment risks, and was operational after 9 months. The eBRC startup was now in orbit: it was time to change eBRC’s name and become “e-Business & Resilience Centre”.

 

Lessons Learned:

• Beware of Irrational Exuberance, especially if generated by Tech;

• In a startup mode – all entrepreneurs have experienced it – time flies really fast. It is a unique and fantastic time of life. You have to juggle with multiple dimensions, in parallel;

• But keep your feet firmly on the ground;

• If you cannot beat them, join them. But join the best, to beat together the other ones;

• Build a strategic alliance based on mutual respect, excellent relationship and win-win business model;

• Set the right tone at the top and do not compromise on quality and security.

 

Alexandre Keilmann


Publié le 06 octobre 2020