naseba
The story of naseba is almost too incredible to believe …
In 2002, I was living in London, working for one of the biggest conference companies in the world. During the 4 years I worked for that company, I had the opportunity to live and work as a General Manager in 7 different countries.
I was paid very well and taken great care of by the Chairman of the company.
One day the Chairman called me into his office for a review with the company lawyer and CFO. Throughout the review he kept looking at a piece of paper and his behavior was ackward.
Finally, after 20 minutes of small talk, he picked up the piece of paper, a copy of an email, and said to me with a smug grin on his face, “I have unfortunately, fired your friend Sophie Le Ray because I know she is going to start her own company.” He made me understand that he believed I was part of her new company.
Apparently, Sophie, who was a producer had once sent me (out of frustration) an angry email saying something like “we could do this so much better…” I think most people who are exceptional, (Sophie is exceptional) at one time or another get frustrated and think they can do it better when things in the office are not perfect.
Irronically, I never received her email so during the meeting I had no idea what my Chairman was talking about.
However, he was convinced I was going to set up my own company so that day he pushed me out. He didn’t fire me, he just told me to leave.
The craziest part of my story is that I never once thought about starting my own company. NEVER. Neither did Sophie.
Two days after being pushed out, when I moved back to the south of France, I discovered for many months the I.T. department had been reading all my emails including my private account emails. Someone from the I.T department had stolen my debit and credit card numbers, and charged (stole) more than 20,000 euros on them.
Although I do not believe my previous Chairman knew anything about this theft; after being pushed out and robbed, not to mention the terrible feeling of having all my private emails read over many months – I got very angry.
Most people reading this blog will never believe me, but it is true, I never wanted to start my own company.
My goal was to become the CEO.
God works in mysterious ways….
In October 2002, with only 60,000 euros and no outside investment, Sophie Le Ray, Fabien Faure, Adam Fletcher and I launched naseba in one of the most anti-capitalistic countries in the world, France. Our first office was in the basement of an apartment building and it had no windows.
Over the past 6 years, naseba has doubled revenue year after year and I am proud to say none of our competitors achieved what we have in such a short period of time. In October 2006, we took naseba public on the Paris stock exchange.
As the Chairman and CEO of naseba, people mistakenly give me most of the credit for our success. However, naseba exists today because of Adam Fletcher, Fabien Faure, Nic Watson, and Sophie Le Ray. From the very beginning, these people are the ones who made naseba happen.
The last thing Marcus Evans ever said to me as I walked out of his office – is something I have thought a lot about over the past 6 years. He said, in response to me telling him I trusted someone because that person was my “best friend” …he replied: “We are all best friends…”
what an amazing learning experience…
Since we started naseba, I have had 10 people try (unsuccessfully) to black mail me; my brother like best friend betray me; not to mention all the people from the indian subcontinent whom I personally carried on my back up this mountain, only to carry them close to the top and then be betrayed or screwed over. I have had friends and business partners brilliantly lie, cheat and steal from me; a previous board member and friend, whom I kicked off my board because he added no value, dump his “free” shares to purposefully lower our share price by 4 euros. In short, I have been let down and dissapointed by more people than I can remember.
Looking at things postively– all of these experiences (the good and the bad) have helped me grow/develop and learn which ultimately has helped me climb higher.
John McEnroe said it best: “life is one great big learning experience”
Welcome to the big boys
“You lasted a good six months into the crisis before your stock price got hammered. How are you managing the crisis? What have you learned? What is the reason, in your opinion why it went down so much? What are you plans for getting it up? I know you sold a large position of the company when you went public, are you buying back?
Your thoughts?” Voice of Reason, Singapore
The Voice of Reason is my closest friend and one of my former bosses. He is also a large investor in naseba.
This is a difficult blog to do without coming across defensive.
naseba is listed on the “small/mid size company” (MIDCAP) exchange, the marche libre of the Paris exchange – even during good times, the marche libre has very little volume (buyers and sellers).
This exchange has lost 80% of its value since the crisis hit.
Sophie and I are the main share holders in naseba, and we have two private dutch individual investors as well as a few hedgefunds and asset managers.
naseba has been listed for less than 3 years, so in the big picture we are still considered a “start up.”
On paper, in 2008 we had a great year and were on track for an even better 2009 until the crisis.
With that said…
When the crisis hit at the end Oct 2008, our business did not suddenly stop.
Some events continued to hit their targets (on paper) and we had several big weeks of written business.
HOWEVER. Written business is one thing, receiving payments from those clients is what matters.
It seemed like instantly, the world changed and clients stopped paying.
Within months, many clients either went bankrupt or could not afford to pay us; or simply canceled without paying.
When you have a company with operating cash flow budget of about 800K euro ($1.2 million) per month but only 200K euro ($350K) of payments within that month, obviously, you must eat into your surplus/cash reserves or you go belly up.
For several months, (like all companies in the world) we received very poor payments, but luckily we had cash reserves to draw upon.
Survival was our focus…
We lowered our over heads as much as possible, as quickly as possible.
We closed our Cape Town office and one of our offices in Dubai (at the time, we had 2 offices in Dubai)
We also layed off about 40% of the staff.
Our stock price didnt change for a long time because the few share holders in naseba were not selling.
To be honest, our shareholders not selling probably had little to do with their belief in naseba, but more importantly, there was no liquidity in the markets – even if they wanted to sell, no one would want to buy at a good price.
It all started to change about five months ago when a major shareholder, and mentor like friend to Sophie and I suddenly died.
He was an asset manager in Geneva, and his portfolio was liquidated after he died.
Nearly, at the same time, at least two hedgefunds who held about 10% stake in naseba both went bankrupt, and the banks which had financed these hedgefunds took over their porfolio of investments and dumped whatever investments they had on the open market to try and make whatever money back they could to cover the debt owed by the hedgefunds.
That’s when our share price dropped several euros. Crazily, the first trade which brought the share down 5 euros (about 10 million in value) was only a transaction of 83 shares. Less than 300 euro of naseba stock was sold, but it had a 10 million euro negative impact on market cap of the company.
As for your question about us buying back….
Sophie and I can not, nor can any of our family or friends legally buy stock in naseba until after our annual general meeting on Sept. 15th, but yes, as soon as we legally can, we are planning on buying back.
naseba went public with a value of about 26.5 million euro ($31m) but the nominal value of the company today is 12.1 million euro. What are we doing to get the value and share price up?
To be honest, the way investors value assets, whether the asset is a house or a company has completely changed over the past 12 months.
It will probably take us 3-5 years to get our share price back to the level it was when we first went public.
In my opinion, the only thing which matters today, at least in our industry is “profitabilty.”
Therefore, we are focused on becoming as profitable as possible while expanding within our means and diversifying our product line.
What have I learned?
It is difficult question because we have learned so much.
In 2008, the company was pluggin away, and our year was very successful on paper. However, upon reflection, the company had become fat and we wasted money on staff travel, investments, JVs, certain expensive salaries, computers, etc.
Since the crisis, the company has become much more lean and focused.
Every euro spent is double, triple checked to see if its necessary.
The crisis also forced us to make our products better and our overall sales process more efficient.
The company is much better managed and run today than ever before.
When times get tough you get to see who is really with you, and who is not.
naseba survived the storm because of the hard work, dedication and dynamicism of many many great employees… (I am truly grateful to everyone).
LP for example, had a $83,000 commission claim in the month of November 2008, but due to the crisis and cash flow concerns, I asked him if we could break up his commission payments, and delay it over a few months. He agreed and even went as far as telling me not to pay him anything until the business picked back up…
In the end LP received his full commission. We paid him 1,000 euro extra as a token of our appreciation.
Three producers also broke up large commission payments over a few months to help the company with cash flow — each producer got paid 500 euro bonus as a token of our appreciation.
My thoughts?
I think it will take another 18 months or so until the world begins to truly turn around.
naseba will continue to focus on producing great product for the emerging markets, as well as expand our financial information service division and Ambitionlife — with our main focus on developing the company into a large profit making machine.
We climbed very high, very quickly up the proverbial mountain, but due to forces beyond our control we fell down, far below from where we had climbed.
Instead of focusing on the negatives, or how unfair things were, we learned from the fall, got back up and keep climbing…
I once read a chinese proverb that went something like this:
it wasnt until my house burned down did I see the stars most clearly
