Breaking the codes… That is the ambition of business buccaneers. Michael O’Leary, Xavier Niel or, 70 years ago, Edouard Leclerc have in common to have upset a market which they considered to be not very innovative and competitive. They landed with an argument that hit home against their competitors: low prices thanks to a low-cost organization. “Unlike the heirs, who have no interest in upsetting a functioning that serves them, entrepreneurs of their caliber have not done major studies and do not come from prestigious families. We find this in Steve Jobs or Richard Branson, the founder of Virgin,” explains Frédéric Fréry, professor of strategy at ESCP Business School.
Another characteristic of their success is opportunism. “They were in the right place at the right time. They took advantage of a technological or social innovation: the car for Leclerc, which made it possible to go to large shopping centers. The Minitel then the Internet, then the smartphone for Niel. The Boeing 737, for Ryanair – produced in very large numbers, their purchase and maintenance cost is lower”, explains the researcher. Finally, these buccaneers are often kings of communication. “They position themselves as Robin Hood, defenders of the people against the rich, guarantors of access to goods or services for the greatest number. Populist bosses, in a way.
Michael O’Leary, CEO of Ryanair
“You won’t be reimbursed, fuck you. Who talks like that to their customers? Michael O’Leary, the boss of Ryanair, has made provocation his trademark. Uttering enormities always pays off: as the saying goes, there is no such thing as bad publicity. Joined Ryanair in 1988 as an employee, he was sent to study the model of a low-cost airline in the United States, Southwest Airlines, to import the successful model in Europe. Having become CEO of the company, he will push the cursor to the extreme. To bring down prices, he constantly comes close to illegality, whether in terms of regulations or labor law. First technique: he relies on secondary airports, far from the big cities, because they display low airport taxes and allow more rotations than in an international airport.
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By touting the promotion of tourism and local employment, Ryanair even manages to negotiate subsidies to set up in the region! The company would thus receive between 800 million and 1 billion euros in public aid per year. Another strategy: abandon free services on flights. From now on, passengers crammed into crowded flights must take out their wallets to drink, eat, choose their seat, be entertained. O’Leary has even considered charging for access to the toilets or having people travel standing up. With tickets at 10 euros, he knows he can afford these nasties.
O’Leary does not hesitate to mistreat the flight attendants either. Its pilots, precarious, are often autoentrepreneurs paid on the fly. The hostesses and stewards, never far from minimum wage, also clean the planes – always the same model, to facilitate maintenance. The height of stinginess, O’Leary sometimes sends his crews to the campsite rather than to the hotel, between two rotations. In other words, when a global pandemic shakes the aviation sector, the boss will stop at nothing. It gives the choice between a reduction of 5 to 20% in staff salaries for five years and dismissal. This allows it to get through the Covid crisis and then be able to bounce back quickly as soon as it resumes, unlike other companies which have separated from thousands of employees. Business genius or infamous Thénardier of the skies? O’Leary is surely both. Be that as it may, of all air carriers, the Irish company has become the first in Europe in terms of the number of passengers carried.
Xavier Niel, founder of Iliad, boosted the telecom market with innovative packages
It all started with a computer placed under the tree. At 15, Xavier Niel receives a Sinclair ZX81 as a Christmas present. He then fell in love with digital hacking, to such an extent that at the age of 18 he left his studies in preparatory math sup in order to develop software for the Minitel. A particularly lucrative activity: in 1990, he was able to buy the pink Minitel services editor Fermic Multimedia, which he renamed Iliad and whose activity he diversified. Always with his head immersed in the screens, he launched with the engineer Sébastien Socchard the first French Internet access provider, World-Net. It was shortly after that he came up with a revolutionary idea: a box capable of passing through the same “pipe” Internet, telephone and TV. Still have to invent it. He then develops the technology in-house. In 2002, the Freebox was launched: 29.99 euros per month for the three services combined. In view of its success, the competition is quick to imitate it.
The profits of Free (Iliad) explode, a successful European conquest for Xavier Niel
But the rise of Xavier Niel then comes up against the ghosts of his past. His investments in sex shops come back to haunt him. Indicted for concealment of misuse of corporate assets and procuring, he was eventually sentenced to two years in prison and spent a month in pre-trial detention at the Health Department in 2004. This did not, however, curb his ambitions in telecoms. In 2012, he returned with an offer that would dynamite the mobile telephony sector. Free Mobile offers two packages below all established prices: one at 2 euros, the other, unlimited, at 19.99 euros. All without commitment. It’s a rush: from the first day, 1 million people take out a subscription. Insee itself notes the beneficial effect of Free Mobile on the portfolio of the French.
These blows in the market also have the effect of inflating his bank account. Now one of the biggest fortunes in France, the tech enthusiast uses it to promote entrepreneurship: creation of the Kima Ventures fund, which invests in a hundred start-ups a year, opening of the 42 school, free computer training, inauguration of Station F, the largest start-up incubator in the world… Now the companion of Bernard Arnault’s daughter, Delphine, with whom he has had a child, and co-owner of Le Monde, the geek boss is far from the “bad buzz” of his past. His controlled communication – catchy slogans, skilfully maintained suspense – feeds his empire, which weighs nearly 10 billion euros.
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Édouard Leclerc, founder of Leclerc, squeezed the food wholesalers
This is the story of a young Breton, member of a sibling of 13 children, who succeeded in dynamiting food distribution in France. In 1949, Edouard Leclerc, then 23 years old, opened his first store. In this 16 square meter room, in Landerneau, Brittany, customers find biscuits… 30% cheaper than at other merchants. The trick? Leclerc buys directly from the producer, bypassing intermediaries. The formula is emulated. Other merchants copied him and rallied around his panache, giving birth to the Mouvement Leclerc, an association of independents who undertake not to charge a margin higher than the wholesale margin.
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The rest of the Leclerc story? Growth and determination for low prices. In 1961, there were 175 centers. They are 260 the following year. He then opened the Galec, a purchasing group for Leclerc centres, the objective of which was to consolidate orders in order to obtain more advantageous prices. Then came the 1970s and 1980s, and with them new battles alongside his son, Michel-Edouard, appointed co-president of the Leclerc centers in 1982.
Objective: break monopolies. They are attacking all over the place: fuel, parapharmaceutical products, perfumes, gold, travel, car and utility rental… Only the single price of a book will prevent these distribution rebels from shaking up this market.
These cut prices are also the result of tough negotiations, feared by SMEs and multinationals alike. After sometimes more than an hour of waiting, the manufacturers – specially coached for the exercise – are received at headquarters in a police station atmosphere, where the Leclerc representatives do not hesitate to manhandle the products or to speak out. Once their product is referenced at the national level, the producers still have to negotiate with the regional centres, then the stores. Michel-Edouard Leclerc, ace of communication, has presented himself for decades as the minister of purchasing power. 70% of the brand’s advertisements focus on prices. With success: Leclerc has continued to gain market share.
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The exercise to gain confidence by Guila Clara Kessous, executive coach
“By dint of being in the mold, you end up not trying anything, which can harm your career. An exercise that I call “daring to frame” allows you to do a little violence. Every evening, list what you did not dare to do during the day: put forward an idea during a meeting, invite a superior to lunch, etc. Underline what you could have achieved by starting with the least risky action. This progression in small steps will be both reassuring and effective. »
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