„I loved to envision myself as a novelist.” — FL

These are the words of a man who never stopped searching his purpose.

He’s not a novelist, nor a poet, even though he loves to write.

He’s an entrepreneur.

His name is Frederic Lasnier and he is the CEO of Pentalog, but also a startup investor.

He describes himself as „a full french guy”, because he was born and raised in France, by two french parents.

As a kid, he was passionate about a lot of things and this helped him to discover his strengths. Let’s be frank, the best is yet to come when you search your purpose, when you try new things and expose yourself.

Besides doing a lot of sports, he was very keen about photography, so he worked as a photographer for different newspapers.

But because he also shared a passion for writing, he started an advertising company with four of his friends. Well, it wasn’t truly a company, as he says, because they were too young for that. It was more like an NGO, but profitable.

Soon after that, in 1993, they made the first steps of creating Pentalog, a communication agency working in the area of local governments and public bodies.

„It wasn’t enough to feed five people.”

It didn’t take much time until they understood that it won’t bring them enough money. That’s how the IT branch of Pentalog was born (becoming, later on, much stronger than the communication one).

Six years after, in 1999, he visited Romania for the first time. Why Romania?

Well, back then, Frederic was a professor at the University of Orleans. At the same time he had a big idea in his entrepreneur’s life.

He thought about creating a digital product. But his company was too small to leverage a project like that, even though it was generating about 1.5 million euros per year (10 million french francs more exactly, because euro didn’t exist yet).

So when he talked with his Erasmus students about this, a group of Romanians told him that he may find the appropriate conditions in Romania to make it possible.

The next year, they started to create the product with the first team of developers in Brasov. A team of seven people, more exactly.

But why Brasov?

Well, first of all because one of Frederic’s students was from Brasov. But the entrepreneur also believes that the city won his heart because of the feeling he gets when he’s there. He said that Brasov, just like Cluj, makes him feel more like he’s in Central Europe, not in the eastern part.

Although the things started to move, this wasn’t happening as fast as the company expected. They even thought about raising funds.

„Whatever the volume of money we’ll take,

we’ll need some more after and we won’t find it.”

So rather than taking the money they were proposed, they chose to adapt the project.

Frederic still thinks that this was one of the best decisions he ever made. He realised that they were thinking too much about developing the product, and not enough about selling it.

On the other side, they were aware about their competition… which was IBM.

Considering all these facts, they finally decided to reposition their product into services, taking their existing contracts as maintenance. They positioned the Romanian unit as a specialist for new Java technologies.

Basically, they realigned the whole strategy.

They became the leader in France for Romanian offshore services. Because of their constant growth they decided to open several branches on the Romanian territory.

After the first one in Brasov(2000), they opened the second one in Bucharest(2004), followed by Iasi(2007), Sibiu(2008) and Cluj(2011).

„You cannot be a team of ten

people and have lots of customers.”

Being asked about his opinion on doing tech services for equity, Frederic said that it depends very much on how you do it. He’s absolutely positive about the fact that you will have a cash issue very fast, if you choose to propose tech for equity services to each and every client that can’t afford to pay you.

If you want to make it a sustainable strategy, he believes that you need to have a large company. Otherwise, your company won’t be able to deliver a real and professional service. And because „large” is a relative term, minimum 250 people could be a reasonable number.

But let’s step away from the services company lights, and try to see the situation from the entrepreneur’s perspective.

And for this, Frederic wanted to share a personal story. The (short) story of the first company they invested in, by offering tech services for equity.

This was happening at about 130 kilometers away from Paris, in Orleans. A place surrounded by all those famous castles.

Despite the way it begins, we’re not gonna talk about queens and kings and white horses. It’s about a brave entrepreneur, the Jeff Bezos style, who had an online printing shop company. But not only that. The man also had a dream.

„I absolutely need the Ferrari of eCommerce sites!”

You need to have quite an ambition, to make a request like this.

The man needed a beautiful magento platform. But the problem is, as you probably guess, that he didn’t have to money to pay for his „Ferrari”. There was no way for him to afford the development.

Until that moment, Pentalog never thought about proposing a deal that was offering services for equity. But they closed the deal, and finally the man got his „Ferrari”.

In the end, the small company was acquired by Vistaprint, so it was a real success.

Pentalog invested tens of thousands, but they received back millions. They took a modest company and put it on the NASDAQ.

And considering this success, they thought about doing it again and again.

But in order for this to happen, they were aware of the fact that they need to become finance experts as well. At the end of the day, it wasn’t an IT business, but a finance business.

The biggest failure

Or the part where the cream separates from the rest of composition. The „crème de la crème”.

Based on how one reacts during the crisis, you can tell if one day he’s gonna swim with the big fish. Probably that’s why we’re always eager to hear stories where milk and honey don’t always make their appearance on the stage.

Thinking a while about his hard times, Frederic mentioned that digital product. The reason why he chose to visit Romania and seek some proper conditions in order to start working on his idea.

„It ended up with something positive for us, but for a long time it has been a major disturbance on our story.”

Even though they managed to save their investment, it wasn’t the initial plan. They had to transform that product into a service so they could sell it as a SaaS.

They invested a lot of money, resources and most important, time in the product, but maybe this was the cost to discover how hard it is for an IT company to become a product company.

And because every wrong move comes with a great lesson (if you have the proper eyes to see it), that was the reason why they decided not to allocate everything for one product in the future, but to allocate a certain and well-defined amount of money to a bench of products.

This is how Pentalabbs, a startup accelerator and VC, was born.

Since 2010, Pentalabbs is the financial armed wing of Pentalog, and they provide a whole range of IT services for equity.

„Sometimes you have to cross oceans

to get in the radar of somebody!”

This is something that Frederic not only believes in, but he insists on.

And he mentioned this, thinking about a contest for startups organized in Romania. At the end of it, they discovered some really interesting projects.

The only problem(and also the biggest) was that when he proposed to the ones that had the best ideas to relocate in Berlin, for example, so they can start working, the answer was:

„I don’t want to go there, I want to stay in Timisoara.”

They couldn’t understand that the financial ecosystem they need doesn’t exist in Romania. They were too focused on their project, so they forgot to think about marketing, sales or finance.

That’s why Frederic believes that more informal schools are crucial for Romania. In this way, the digital natives which seem to behave like they used technology before they were born, could learn more about marketing, business and even finance.

The majority of people he met in the Romanian communities are more into tech and not enough on the business side.

„Teamwork, Teamwork, TEAMWORK!”

Ask him about the top three things that a startup needs and you’ll get this.

He truly believes that this is essential, because teamwork is the base for future execution.

A „one guy project” is much too risky for him, since he failed every time he tried to do that. So he definitely prefers a team with a really good tech guy, another guy that rocks on the business side, and so on.

The second thing that cannot miss from a start-up?

A true Strategy.

There’s no way you can achieve what you really want, unless you really know where you are and where you should be. He had to say that he’s obsessed about strategy, even though we talk about Pentalog or about a company they chose to invest in.

The last, but not the least… has to be Honesty. And I don’t think there’s much that we can talk about here. You just have to be true to yourself and to your team in everything you do.

Because just as the wise Abe Lincoln used to say, „You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”

Honest people succeed, in general. And as a french entrepreneur used to say,

„ success is economics × honesty²”

*This is a story with key takeaways from the Startup Grind fireside chat in Cluj-Napoca with Frédéric Lasnier.