“Why did we organise things this way? Well, because we didn’t imagine we could do it any other way”, laughs Cristian Logofatu, CFO, founder and majority shareholder of Bittnet, the first IT company listed at the Stock Exchange.
“We thought we should do the good things that others did”, he adds. He doesn’t want to comment the financial results of 2015, because December is decisive for their business, but also because he doesn’t want to “disclose the market” before informing the shareholders. “What I can say is that if this plan works, we’ll have an eightfold increase in four years. So, ahead of plan. If it doesn’t… we’ll see where it stops”, he says laughing, sprinkling his speech with English expressions. Which means, if we compare with the financial results of the year taken as reference, that this year Bittnet could make four million euro. Is it little? Is it much?
KEEP IT SIMPLE. For two youths a little over 30, one might say it isn’t bad. Especially since it is money made of nothing, of a business started from scratch. With a simple idea, which could have come to anyone. “The story started in 1999, when I developed Credis Academy with other youths, offering Cisco and Microsoft courses for high school and college students”, reminisces Cristian Logofatu. At the Academy, he was in charge of the financial side of things, and Mihai, his younger brother, became manager in 2004. “Until about 2007, we expanded the team and the results of the Academy, but most of all the team, so we received many awards. To give an example: in 2007, Credis was the CISCO Academy of the year in EMEA. There were about 140 countries in competition. That says something. At the moment, on average, an Academy had 40 students, to whom it delivered the technologies of the Internet. Well, we had 2,800. Besides, Credis Academy is currently the largest Academy in Europe, by the total number of trained students”, he adds.
In 2007, the two brothers thought about starting a company that could use the resources of the Academy, but at a different level. “We were surrounded by a team of intelligent young people, hard-working, IT trainers. Their careers were academic… In IT, when you say “academic”, you mean high school and college students, not professors, PhDs. So their careers stopped there. There was a certain number of courses and that was all. You couldn’t do more than that”, explains Cristian Logofatu. Therefore, the two started Bittnet, a company that aimed to be an integrator, that is, to identify and combine technological solutions from various producers, so as to reach clients’ goals. Thus, they offered a continuation of the career to their colleagues in the Academy. “This way, they could learn IT, they could develop and go further. Because at our academy IT courses are not theoretical, they are practical, on equipment or in virtual labs, they simulate exactly what happens in everyday life. This way, trainers configure systems with the students and they learn new technologies before others, so that they could teach them.”
Therefore, the years 2008-2010 were years of growth, then Bittnet managed to make do with its own strength, not depending on the evolution of the market. Beyond the difficulties of any beginning, they had a great advantage. They spoke IT. A language known by almost all companies, by all the computers everywhere in the world. “Yes, we were small, we were fresh and we grew on our own strength. Yes, it was easy to make 300,000 dollars, when the market was 1 billion or 600 million. Although, as studies say, the IT market suffered a strong contraction, too. Gartner, which is one of the most reputed American IT consultancy and research companies says that, while the market was 1.5 billion dollars in 2008, it was only 600 million in 2010”, adds Cristian Logofatu.
And yet, they felt the crisis as well, a smaller one, but it almost took them out of the market. One of the most important hardware suppliers asked them to pay everything down, not taking into account the good payer behaviour of Bittnet. This occurred while our own clients expected to pay at the deadline. “We were lucky that right as we were wondering what to do, Banca Transilvania gave us a loan. It was right on time”, remembers Cristian.
GROW. CONSOLIDATE. GROW. When they speak about the Bittnet business, the two have the the detachment of outsiders. They speak as if the business hadn’t been founded by them and they didn’t own the majority stake. As if they were two scientists in a laboratory, Bittnet were the experiment and they wrote down in an observation notebook the behaviour of their “patient” during procedures. “We set up the company in such a way that it could open at a certain point”, explains Cristian.
Indeed, the two acted by the book – they didn’t take any money from the company, everything was reinvested, growth-oriented. “We got some dividends in 2011, because they would’ve been prescribed. We had some extra money after the share capital was increased and we turned into a joint-stock company, and we had to correct the financial situation”, says Cristian Logofatu. “When you’re growing, all the money has to go into the project. You have to support the growth”, he adds. Therefore, they turned from a limited liability company into a joint stock company, because “it is easier to manage, more transparent and more attractive for investors”, they got an auditor – a company in Cluj, the same as then, auun Board, where they started working with big names from the business - Sergiu Neguţ, former manager of the Centru Medical Unirea network, Dan Ştefan, one of the owners of Autonom, Dan Berteanu – experienced salesman and manager. Moreover, they don’t expect the bank to fund their investments, because it is “not natural”, you can’t ask the bank to wait and, in the meantime, to have it console itself with bigger expenses or ever losses.
“The idea about the Stock Exchange came from the books, from what I’d read, that it’s one of the natural steps in development”, explains Cristian Logofatu.
What is interested to mention is that the two brothers had found equity funding and they were on the verge of signing the contract when they got the Stock Exchange idea.
Then they intend to open local offices. Cluj was the first such company, which proved to be a success, according to the two. “It seems a correct bet, it self-supports. It even contributed to increasing the results of the company”, says the CFO. Cluj will be followed soon by other local offices, but the two can’t say where they will be opened. “It depends a lot on the people we find to work with. Because we adopted the Autonomous model – the manager of the office should also have entrepreneurial qualities, should know the business, should see it as his or hers, should sell and make the business plans. They won’t be mere employees”, the two add. Anyway, they will go to those cities where they already have clients or where there are companies similar to their clients.
The third “way” is regional development, namely opening offices in Europe. Anyway, given the fact that they’re the only ones that can deliver certain types of trainings and implementations, they have worked from Bratislava to The Netherlands. Which offered them a quite accurate perspective of what those markets look like. “We analyse everything carefully. I think we need to get there with full-fledged offices – we need to have a face, someone we know, someone trustworthy, who can offer you what you need. But we won’t dive in just like that! We’ll go slowly, up to the knees, let’s see, is it cold, is it warm? What fish are swimming there? But we have someone who is only in charge of that – special focus on selling abroad”, says Cristian Logofatu.