April 2005
- another IT-related acquisition is talked about - Siveco, the company that kept the headlines lately for getting fat contracts from the Romanian government, way over-evaluated according to the newspapers investigations. There's no smoke without the fire but my bet is that they have solid contracts behind so there's nothing to worry about it - in the sense of Siveco being formally accused of something of course, redtape or corruption that may be. Also, interestingly enough, the parties willing to buy are investment houses and not strategic industry investors - Polish Enterprise Fund and Intel Capital (ok, the last one is representing an industry player, but a rather hardware company though). I think it will be interesting to follow Siveco's growth strategies, I've seen them promoting themselves quite often lately, and a big marketing budget may as well signal (too) little differentiation grounds. Sometimes. :)
- consumption is on the rise - no surprises here, the banks in Bucharest are more and more crowded lately. Not to mention the shopping malls and supermarkets, it's as if it were the end of the world. Also, as a side comment, I noticed plenty of foreign tourists crowding downtown Bucharest and jamming the pubs, it feels just like Prague or Budapest 10 years ago.
- EU formally signed the accession treaty for Romania and Bulgaria to join in 2007, that's old news already. Actually, in the Romanian blogosphere there was this comment that by 2007 Romania and Bulgaria will actually be the only state members in the light of the French and Dutch European Constitution referendum. Which, joke aside, makes some sense.
- in other news related to the politics in Romania - the soap opera from the former governmental party is coming to an end soon with former ex-communist president Iliescu running against former Foreign Affairs minister Geoana for the party presidency. That's because apparently Nastase didn't have the courage to do it, though he was better positioned - other rumours claimed that he was blackmailed. I doubt we will learn it too soon. My bet is for Iliescu, the old man seems committed more than ever to maintain the old communist structures that he had perpetuated over the last 15 years or so. Structures that actually can be very visisble in PSD.
- I went to soft21 last week as mentioned, nothing new or exciting, just did some light schmooze and learnt some conclusions about things "impacting my business" I was well aware of ever since I had already started it. You may want to have a look at some facts and figures from the cover story.
- Basescu, the Romanian president, seems to be very involved in the foreign affairs activity lately, he also is said to have pissed off some French officials. Also, I read a rumour that Razvan Ungureanu, the Foreign Affairs minister, is not getting along very well with Tariceanu, the PM, and as such everything is possible by the end of April. Whatever that means.
Interesting article about blogging as a business that kind of demolishes the idea that keeping a blog can become a lucrative venture. I agree that some jumped on this blog for business idea and I may as well agree they are either enthusiastic or risk takers. However, generally I think the blog is just a tool, no more, no less - both for individual and business development. Pretentiously speaking it can rather become a driver enabling your business model than a direct revenue generator.
Some simply don't get it, some allocate a lot of time to it, some hardly can afford spending some 15-30 minutes a day to do it (me lately). It's true that it may become a good procrastination reason, a time waster or a great learning/communication tool, but the fact is that a blog is whatever one wants it to be. (via dhd)
I've noticed too lately that Yahoo is moving very aggresively by launching lots of new stuff. Also, new bright individuals joining in is a good sign that Jerry Yang is preparing the company for the web 2.0. That leads to the natural comparation to what it is like when benchmarking to Google, mostly because it is being speculated that Google is not using or consolidating its first mover advantages on a series of apps.
If I consider my case in the Y. vs. G though:
- I am a power user of gmail, while I keep the yahoo one for potential spam threats. G
- I am using YM, besides MSN - Google doesn't have any. Y
- I am not using any of the Google or Yahoo's news services, though I believe that Yahoo has an advantage since it is very easy to add RSS feeds and customize the way you read your news through it. Y
- when looking for something I tend to use Google, though for advanced searches I use both. G
- I find Yahoo groups more handy, though I found lots of relevant stuff on the Google's as well. TIE
- I use blogger for my other blog, (this will change soon though), I am not using the Y360, it's not for me. G
So that would be a 3 to 2 in the favor of Google. However, I am well aware that i) I may not have a representative profile for the average user of both and ii) given the fact I am living in Romania some of their services are not interesting/accessible to me. (i.e. shopping or news) Also, even though there is a Google in Romanian (and not a Romanian Yahoo), I am only using the English versions.
A good strategic ground for the above is an old Umair's post.
Reboot is a two-day gathering of cool individuals interested in lots of remarkable stuff. Most of the people whom I read periodically over the web will be there - see for example who will make it this year. This year's edition will be about new emergent ways ahead in the entire globalization context and Thomas was kind enough to invite me to talk about a Romanian perspective. Which I gladly accepted - it's super-cool.
This is the 7th edition and is held in Copenhagen on June 10 and 11 - if you're around make sure you don't miss it. I look forward to being there.
Poli is the short name for Universitatea Politehnica from Bucharest or the school where most of the Romanian engineers-to-be are trying to dechiper which way to go in the working world.
And while the Romanian educational system seems to be outdated in the sense of not being very connected to the business world demands, it seems that the talent pool is still alive and kicking - the school got a #10 place in the 2005 ACM's International Collegiate Programming Contest held in China. (via pk)
For people who don't know what Zapp is - it's the smallest mobile carrier from the Romanian market providing non-GSM standard services. As a aconsequence of low market adoption their value prop was relying on mobile data transmission. Moreover, in spite of their low market share unfortunately they have a very aggresive strategic play with the clients who bothered to pay for their services and who find terribly hard times to opt out (ya know all those minuscule lines from the end of the contract that nobody bothers to read). And yes, I am very unhappy with that, my contract automatically renewed for a year because I had to give them a one-month pre-notice (no more, no less) BEFORE a round year of the contract would end. (i.e. 1, 2, etc). Not anytime in between, just one month before an one or two years period would end.
Anyways, that's another story and I digressed -- now I just got a phone call from one of their representatives for some marketing questions. I was in a good mood and I politely agreed to answer though I had mentioned that I am not really in their target. Fair warning from my side, I am nice guy. :) And, surprise-surprise - one of the questions was: would you consider in the future having an online place where you could easily publish your thoughts or share your photos? Whoops!! It's gonna get so crowded in the space so soon. :)
I recently had an email exchange with somebody from the industry about what to do when facing increasing competitive pressure from the big guys, who may be likely to steal your clients, market share or personnel. My general point in the specific email's topic was that one should look at particular contexts and identify niches where he/she could make a significant difference in the eyes of the stakeholders. Ed's post is actually touching two specific cases: the feature war situations or the compete-on-price ones.
Reading Fred's VC cliche of the week I realized that actually it is applicable in many more situations than the VC world -- specifically this is what is going on in the Romanian market with the real estate. People ask for huge premium prices for the apartments/houses in Bucharest that are not in line with the international market and their book value and hence probably won't pay off in the future. Their irrational behavior relies on Romania joining the EU and considering that after the country will be accepted herds of people will line up for getting an old apartment in Bucharest. Which is more expensive, btw, than the ones in Paris. Why would you do that?
6 years ago I had a boss who'd say about attractive opportunities: "right, it's a great deal, but we cannot afford it". It's simple and it's common sense - a good business principle I always followed and am glad to see it reinforced today by Fred.
"Probably the communication infrastructure is one of the key points. There are high costs for integrated services. If I?m in the office, I have the laptop or my video screen in front of me and I make my calls. I cannot have a video-conference with Bucharest today, it simply doesn?t work. But I can do it with Budapest. The second reason might be the liability of management tenants. We are investing a lot in local management. The third is people?s willingness to move to Bucharest. As for Cisco, we are looking for some Romanians who live abroad, so that we can get them back to work for us in Romania. So, over time, this situation should change, given the size of the Romanian market." [link]
Ok, this is the last answer from an interview with Michael Ganser, VP of Cisco Systems CEE. So for the first part of the answer keep in mind that the guy sells communication infrastructure, though he has a point and makes it - the infrastructure is poor in Romania, and broadband, the keyword of his speech, is EXPENSIVE, which is of course a consequence.
Neverthless, the reason for me quoting this is the acknowledgment of lack of qualified people and the (great) strategy of investing in local ones and mixing them with Romanians living abroad and brought back by the picture of a fat paycheck combined with the great opportunity of creating some value for the community they were raised in. Besides there's no great place like home. :)
I remember back in 98 when Banque Paribas went out of the Romanian market by closing down their only office at that time. Their motives included a strategic global repositioning in the light of the transaction with BNP.
It turns out that now BNP PARIBAS is attacking one of the most attractive segments in the Romanian banking industry - the credit consumer market. It's a better, faster and probably cheaper strategy than building its own network from scratch, considering that players such as BRD or Raiffeisen have already a strong presence.
Credisson is (or used to be until this transaction) Flanco's consumer credit arm and has a good brand in the market (conceived and positioned by Brandient). Also notably Credisson was a pioneer in this market, being the first of its kind in Romania.
The deal is 40 mil euros and represents 3.5x turnover. It certainly makes a nice exit for the investors - Oresa Ventures and Florin Andronescu. Also keep in mind that besides the private equity houses representing Flanco's investors the comapny was founded by Marius Ghenea who is probably one of the most famous serial entrepreneurs of Romania.
My first thought was that I know so many companies like this. However, I guess that this is the type of company that would best characterize most of the ones from Romania - that's very related to the Romanian workstyle and their can-do-atitude, but hey, I guess people from other cultures won't hesitate for a minute to jump in. Definitely the world's most dynamic e-business marketing, design and consulting agency. :) (via Dragos)
My overall impression: young people seem to be very eager (or even desperate) to leave Romania. Some for good, some intend to return.
As far as I could see their educational level is quite good even though they are obviously dis-satisfied with both the incompetence from the educational system and with the lack of appreciation of their skills while they go in the business world. I guess one leads to the other though. Besides, one of their frequent complaint was the lack of choices and lack of advisors, some even claimed they prefer to be self learners, which certainly makes a lot of sense in the context.
As such the reasons for they wanting to leave Romania are twofold: for once the higher educational system is not competitive though the foundation is good, and secondly after graduation they will be exposed to a business environment which i) doesn't appreciate them at their value and ii) is not providing intelectual challenges.
I think that the above together with Deea's impressions (and my comments to them) and my little story from Troniu's create an overall picture of what is going on. (sorry, those are in Romanian only). To some point, if I were to wear their shoes I tend to somewhat agree - also the Romanian society is not very encouraging for a culture promoting the youth, at least not in business.
On a particular note Norwegians seem to be quite happy with Romanians, and actually they just signed a partnership with ASE. (ok, it took them more than two years to have it signed, but still) They are quite optimistic about the future and apparently are willing to pour money into successfull partnerships. If only the Romanian part were to be singing the same tune -- there's lot of availability and opportunities to explore.
Signs of consolidation in the Romanian IT market lately - Siemens just bought Forte and US Ness Technologies purchased Radix.
Both Forte and Radix are IT integrators and software service providers with more than a decade experience in the Romanian market - keep in mind this profile, it signals leadership in a not-very-easy-to-deal-with market from Central Eastern Europe. Besides, my guess is that their value is fair for the market and quite cheap for the acquirers' cash flow.
A short context: after acquiring Dacia a few years back Renault's strategy in Romania was developing a low cost car targeted exactly towards the low end of the market. And not only in Romania but in countries where the purchasing power is low. The name of it: Logan - launched last year and presumably costing only 5800 euros (without any optionals). Moreover, Renault decided to play only the Logan card as last year it stopped the production of all cars made under Dacia brand, even though it mantained the old Dacia logo on the Logan.
So far so good, it appears that Renault's Romanian car brand is doing just fine. Logan sales are up and exceeded the forecasts since last year's launching. And even though it's not my type of car it seems that their value proposition based on brand loyalty and price sensitivity is quite appealing to Romanians - these days, as far as I know, there are still waiting lists for purchasing one.
GooFresh is a way to search for sites added today, yesterday, within the last seven days, or last 30 days.
And via Loic - Yagoohoogle - 2 window search using Google and YSearch.
...in Bucharest, finally, it looks like spring time has taken control, though it is colder than it's supposed to be. Another reason for optimism - just heard it on the radio, we won't have a second round for Bucharest - Videanu is having 53% of the votes while Vanghelie some 20%, after counting most of the votes. I must say I am a bit relieved, though the problems remain actual.
Enjoy the springtime!
...steps down - oh well, he will not run for a new term in December. We're talking about one of the most corrupted people in Romania. He's been under a lot of pressure lately because of disastrous results at all football levels plus of a very bad infrastructure he succeeded to "create" (mantain in the best case scenario) while managing a multimillionaire budget every year.
Is this for real or a post-April 1st prank? It's not in the today's Romanian newspapers but Reuter has something.
Apparently just 20% of the 1.8 mil people with the right to vote from Bucharest cared enough to go out and give their vote. That is very low I think and it signals rather the non-interest or disgust for the political offer one has available in the Romanian political market. If I were a politician I would be worried -- the product is not selling anymore, if we look from the business perspective the problem is that it's just some sort of an oligopoly whereas all products are in the low end segment competing on similar features, somewhat differently wrapped from a marketing perspective.
Even though they tend to position differently, since the target is segmented, deep down the fundamentals of the product are pretty much the same. Or perceived that way. As such, people prefer not to consume it than having to digerate crappy propositions. But of course the politicians are not that worried since most of their positions were secured by financial means in a system that looks very hard to break.
The future does not look very bright since credibility is very much at stake. The only solution that I can see is a rapid change of generations, even though the young are not really prepared to take over, they are fast learners I think. The problem, as always, is that older generations will never give in, and, moreover, created a sick system that is very hard to break from outside -- see for example Basescu's declarations that he will not be defeated by the Securitate as Constantinescu was (a former Romanian president who had publicly acknowledged so).
My guess is that the system will rather break from within - the divide et impera approach. This combined with the nominal vote should be some very important shocks for a corrupt and evil system.The stakes are very high though and it is very difficult to predict which cards to play and when. Besides, there isn't only one master of puppets, on the contrary, there's more circles that reinforce each other and make the whole system strong.
The only good perspective is that, regardless the idiots that are making the political class nowadays in Romania, things will improve because of the European context which forces them to go into the right direction. Painfully and with a lot of mistakes and sacrifices for the little ones, the ordinary Romanians, who actually are supposed to be the main beneficiaries of the outcome the above-mentioned idiots must come up with. But those costs are also a result of the BIG ignorance and talk-rather-than-action atitude that Romanians have in their genes. Sad but true.
Take the previous post as a background - a couple of days ago I had an argument with a friend of mine who was claiming that actually Vanghelie would be the one elected as mayor after two rounds of voting. My friend's reasons: the average Bucharest people are represented by ordinary people who are judging very simplistic, superficial and irrationale most of the time (i.e. people working in IMGB-like types of factories and who start their day with a bottle of vodka and a physical correction to his wife). Initially I was a bit irritated - that was not true, especially since I believe that the Bucharest average is a bit higher that the one from Romania. But then, while arguing, I started to become a bit unconvincing partly because the long tail came to my mind. And I think that this is actual in politics as well - if I come to think of the people layers and who's who there, it starts making sense to some extent. What if...
Some of you may know that today in Bucharest there are elections for a new mayor, since the former, Basescu, was elected to be the Romanian president.
It's nothing but a political play. PSD hardly had anybody representative to come up with, their initial choice, Sorin Oprescu, categorically refused to enter into the competition. Rumours say that Oprescu, who is a MD and who formerly participated without any success in Bucharest elections, turned it down since he didn't want to lose again and PSD label would weigh considerably on his neck. As such, in the lack of a candidate, PSD had the hilarious situation of asking its members: "who has the guts to do it" And there was nobody else out there, except for Vanghelie, who is one (of the many others) eccentric candidate given his background.
Marean Vanghelie is now the mayor in Bucharest's 5th district - the one that is famous for sheltering a certain part of the mafia, criminals, smugglers, gypsy clans - and it is a well known fact that he was elected after he had to please those guys. Anyways, he used to be one of them, so no surprise here. Other things notable about Vanghelie are the fact that he hardly finished his high school, actually he is illiterate (lots of TV or radio stations had increased ratings on shows having Vanghelie butchering the Romanian language) and that his working hours are between 7pm and 5am (as one of my friends put it, this the period of time when most of the money are made -- prostitution, alchool selling, drugs, etc -- pun intended)
On the other hand there is the DA's candidate, Adriean Videanu. This guy apparently has a good reputation, he used to be a successful businessman until Tariceanu offered him a business related portfolio minister. Of course there were allegations about Videanu's reputation, but nothing has been proved and, besides, he makes an ok impression when speaking.
Now, there are 15 other candidates, who are not quite visible, probably because their votes will come from family and friends. Oh, there's another one, Piedone is his nickname, this guy used to get his reputation on tv shows whereas he would present live cases of consumer being cheated in the Bucharest's open markets. Something surealist in its bad taste, definitely not really my kind of show, but probably it had its target.
The polls before today gave Videanu some 36%, Vanghelie 24% and Piedone 14%. Even though I am not particularly fond of Videanu, he definitely is the better choice for people with common sense. Let's hope for the best.
At 2 o'clock there was a very low voting presence apparently. As a spicy detail, I heard on the radio that there was this guy calling at the voting station asking to make his vote over the phone, since he was too drunk to move his ass to the voting booth.
SO now we have an officialized way for the brain drain in Romania. Tomorrow in Bucharest there will be a big fair with universities from all over the place getting under the same roof and pitching the Romanian students-to-be. I won't get into the why arguments - I would just notice that going abroad for studies is one of the most important factor driving the Romanian brain drain.
Now -- is this student fair a good thing? Of course it is, for once Romanian students have the chance to talk directly to the school representatives or alumni and get first hand impressions. Besides, they have a chance to see and compare unis offers in one place, which is more difficult via internet.
Is this a bad thing for Romania? Naturally it is, since the ratio of people just leaving versus the ones leaving and returning is very high. Can the people interested be blamed? Hell no! This represents perhaps one of their once-in-a-lifetime ticket not only to get access to prime knowledge and education but also to principles and values related to a professional and less nonethical business and living environment. And unfortunately access to those things in Romania seems to be very limited.
Now the question is - what is to be done at the national level so that we could reverse the brain drain - brain gain that is. Well, directly, absolutely nothing. It is the right of each individual to go anywhere he/she wants to study or live. Besides, living in a foreign place for a while will, in most cases, add up considerably to one's personality due to the exposure to various cultural differences.
But indirectly there are two very important factors the Romanian government could do: create a healthy business environment and provide the grounds for solid education in Romania. In other words give the people the incentives of making a decent living while having a decent job and they will consider at least returning if not staying for good. A healthy business environment means increasing productivity and booming business (value creation) and this would create the demand for qualified people. A solid educational system would provide those qualified people and would attenuate the present frustrations with an outdated education structure and educators.
Basically, this is how it works out in theory, right? It kinda sounds like an utopia for Romania though, huh? Well, what if I tell you that others have already succeeded in creating such premises?
