FME in English // Success Story : Sagemcom succeeds in Great Britain - Interview with Raphaël Fainac

Success Story : Sagemcom au Royaume Uni.
Entretien de la CCI Française en Grande Bretagne avec Raphaël Fainac, directeur executif de Sagemcom UK. Interview en Anglais.

Sagemcom connects the home of the future

Matching consumer’s desires and spearheading the totally connected home… these are lessons that one originally French tech firm is sharing with the British. Yet the traffic runs both ways, says Raphaël Fainac, MD of Sagemcom UK…

An excellent product is a good start for any company, but it is not enough. ‘You may have the best ideas in the world, but they mean little if you cannot persuade others’. So says Raphaël Fainac, Managing Director of Sagemcom UK, one of the most exciting consumer electronics specialists operating in both Britain and France.

Playing to your strengths
Meeting consumer expectations is a key ingredient to success. ‘Our devices are both smart and simple to use. We aim to bring technology to life and create excitement and value from the start,’ explains Fainac. Another element is playing to one’s strengths. Innovative and aesthetically appealing appliances produced by expert engineers differentiate the firm from competitors. Previously Sagemcom found that competing on price and volume, or importing French-style products to the UK wholesale, was not a great strategy. Now it targets a discerning premium market.

Reinventing the projector
Besides meeting expectations, Sagemcom also creates new expectations. Take for example PicoPix projectors: portable, palm-size devices that elevate multimedia capabilities to another level. They carry music, pictures, movies and videos and project bright images up to 120 inches in size. “We created this market from scratch. In a sense, we are the market!” says Raphaël. Sagemcom is responding to cultural change, too. PicoPix can access your laptop, iPad, iPod, iPhone, camera, games console, SD card or USB stick. “With Facebook, people want to share what they have seen and done, so why not with your other devices?"

Heeding the customer
In the UK Sagemcom provides fast broadband wireless routers under licence for BT and Sky, and the latest generation of set-top box recorders with Freeview and Freesat. As Raphaël explains, ‘Our aim is to deliver something that everyone can enjoy, regardless of their technology know-how.’
Another element is listening to the end-user. ‘We have specifically incorporated consumer feedback in the development’, says Fainac. Now 40,000 users participate via their online Interactive Support Community or Facebook page. Point-of-sales demonstrations and videos at Comet, Tescos or Asda entice potential purchasers. All-hours after-sales service is another pivotal feature. ‘The crisis has taught us that shifting a box alone did not suffice’, notes Fainac. ‘We offer a complete solution. The result is a simple step by step set-up process and an intuitive user interface with clear menus’.

Responding to change…
In Britain, Sagemcom aims for the “fully connected home” with integrated media player, home networking (DLNA) and internet. ‘This will change the way consumers use their TV. They can decide what to watch, when and soon where, without missing their favourite programme, thus giving them more freedom, more options’. Later this year Sagemcom will roll out Freesat boxes which customers need only plug into their existing dish to instantly access many more channels. Satellite TV without a contract or monthly payments is good news in hard times, Fainac notes. Now his company is spearheading a hybrid cordless home phone that mimics the smartphone and is simple to use. Another departure is “Sixty”, a telephone which combines retro design with latest technology, and humour. A 2012 model for the Jubilee and Olympics sports a Union Jack design that “pays tribute to our host nation”.

Niches and new markets
Sagemcom prides itself on finding markets. Being the biggest is not always the best. As Fainac admits ‘We don’t want to be a giant brand. We act as a specialist and know our niche markets better than anyone else. We understand how to fill a gap and create value, and we can support our customers. Yes, small can be beautiful’.
For a firm that set up in Britain in 2000, and only became independent from its parent company, Safran, in 2008, the statistics are impressive. Overall Sagemcom employs 6,000 people across 60 countries, and recorded a worldwide turnover of €1.5bn last year, up from €1.1bn in 2009 and €1.3bn in 2010. While 85 percent of the business is still in Europe, they are rapidly moving into emerging markets where barriers to entry are lower and consumers are keen to leapfrog existing technologies. Moreover, Sagemcom exploits its swift set-up logistics to partner with local players. Turnover at Sagemcom’s Brazilian base has risen from nothing to €100m over 18 months. Now they are exploring markets in Argentina, Venezuela and Columbia. R&D takes place in France while production is organised from Tunisia, China and Brazil. Having manufacturing close to the market keeps the supply chain as short as possible. Sagemcom is exceptional within France in producing electronic hardware that competes internationally with American, Korean and Chinese companies. The company “chooses its battles”: it dominates certain fields, like fax and specialist printers, and aims for top spot in connected TV, home energy management, or Pico projectors; but it will not compete in mass markets, such as TV panels.

Personal journey
Raphaël Fainac gained a taste for business at his family’s fur and leather firm at Saint Germain, outside Paris. He graduated with a Masters in Finance, worked in Brussels and Paris for Essilor since 1998, and then came to Sagemcom UK in 2006.
Over six months he audited the market, drafted a plan and embarked on a growth strategy. After 12 months the results were measurable. He is proud to have made an impact, yet admits he could only do so with a fine team – colleagues, stakeholders, the supply chain, ‘everyone you need to implement change. So chemistry is key: people need to see they have a role to play in the success of a company’. Plus he has learned from his host country’s entrepreneurial risk-taking approach and stress on the consumer rather than the product.
France’s education system structured his thinking and made him a specialist, while Britain’s made him a generalist. Raphaël believes his MBA from the London Business School gave him invaluable business skills. ‘I think the mix of the two education systems gave me a broader view on business.’ As for any would-be entrepreneur, Raphaël has clear advice: ‘Don’t just copy-paste other corporate models or products. Good ideas are vital, but 90 percent of success is in the execution of a plan. And assure investors that you know where you are going!’

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