“Compiled from Mr. Emin Hitay’s speech at the 7th Annual Marketing Summit in Istanbul in 2006”
“That was the moment when everything started all over again.” This simple but beautiful sentence sums up all of the innovative and proactive decisions I’ve made in my life. In my 26-year entrepreneurial life, I have started from scratch. Proactive and innovative thinking have formed the foundations of my entire business life, from ideas we brought to life, marketing strategies, the value we add and the businesses we have founded.
Sometimes they ask me, “How does one become innovative?” To tell you the truth, there is no shortcut or recipe. You perceive life that way and live it. Being innovative is a lifestyle, a matter of vision. It filters down from senior management to junior positions. At the same time, it demands courage to take risks, self-confidence, persistence and discipline.
When you are innovative, you can always start over. Regardless of your age or your conditions! You ask yourself “Why not” and start over again. You feel it in every cell of your body, in your heart and even plan it in your dreams. In time, you develop a system of thinking that lets you see what others can’t, do things that others don’t, think of the unknown and what may make life easier. And the rest of it comes easily.
Even so, the innovative thinking might not be enough to yield “miracles” on its own. Consider yourself enrolled to the “University of Mistakes.”
The golden rule is: Life awards those who deserve it and takes it from those who do not.
When you put all of this together, you have the power and drive, and you can start “pulling ‘elephants’ out of your hat.”
I don’t want to talk about formula or prescriptions, that’s why I have chosen to explain my “innovative thinking” model, the fruit of my 30 years in business; and to do this by telling you about my story, the many times that . “That was the moment when everything started all over again.”
CHALLENGES ARE THE FOUNDATION OF AN INNOVATIVE MIND!
I graduated from the Ege University School of Business Administration Department. When I look back upon my life, I believe that this was the first time that was the moment when everything started all over again. When you are 16 years-old, you are full of courage. I went to high school at Kabataş Lycee. I cannot say that I was a hard-working student, but I never failed in my subjects. One day, when we were senior, I made a rather inappropriate joke when answering a question that our algebra-geometry teacher, Mr. Ismet, asked. At the time, we all laughed, but the consequences of this joke became a milestone that would affect my entire life. The teacher did not forgive me and I had to take a make-up exam. I was sure that the teacher would fail me and I’d repeat the class; and thinking that I still had one more year, I didn’t prepare very much for the university entrance exam. My university preferences were almost random. Things, however, did not turn out the way I expected. I passed the Algebra course and only failed Geometry. That year, for the first time in its history, the Ministry of National Education announced a students’ amnesty and I graduated. The score I got on the university entrance exam allowed me to attend my 27th choice out of 30, the Ege University School of Business Administration. I thought to myself: “Alright then, Emin. You’ll go to Izmir, stay with your relatives for a couple of months, then you come back and take the exam again. Then, you’ll get a high enough score to attend Bogazici University and start again.” Well, it seemed like a good plan at the time, and I was confident that I could do it. But today, when I look back, I am happy that I went to that school. The years at Ege University and my life in Izmir were when I acquired the knowledge and experience that allowed me to discover what I wanted in life. I learned a lot there.
Life, however, does not always go the way you plan it.
When I was 18, my father’s untimely death changed the whole course of my life. I had to go to school, finish as soon as possible and at the same time, I had to work and earn my keep.
The challenges that we encounter in life force some of us to think innovatively, take initiatives, and watch for opportunities. Difficulties that challenged me allowed me to form the foundations of my innovative thought system, which later became my way of life.
That was the moment when everything started all over again. When I was staying at my aunt’s apartment in Izmir, her neighbors in the building were complaining that the tap water didn’t reach the upper floors, as there was not enough pressure in the water system. So, I searched the newspaper ads and found a job in a company that offered solutions for such problems and sold water pressure booster pump systems for a while.
After that, I made it my goal to join the IT sector, which, I thought, would be the sector of the future. Therefore, I started working as a system operator at the Institute of Electronic Computation Sciences of Ege University (Today it is the Ege University, Department of Computer Engineering). I was a civil servant now. I was going to school in the mornings, and in the afternoons, I was going to the office to work as a system operator until midnight. I was very successful at school, too. I passed many of the courses with A and in 2.5 years, I had completed the credits required to graduate from the school. However, I needed to wait 1.5 years for the graduation thesis and the history of revolutions course. I spent the time learning different programming languages. They sent me to training courses in Ankara and Istanbul and I got certified. I was working like crazy; I was thirsty for knowledge.
I studied and worked at the same time for about 3 years. I had learned a lot and returned to Istanbul to learn more. I have never forgotten my friends there, though. Even today, we continue to communicate and cooperate enthusiastically with the Ege University Department of Computer Engineering.
THE INNOVATIVE MIND REQUIRES DISCIPLINE AND PERSISTENCE!
Earlier, I told you that courage, persistence and discipline lie at the heart of the innovative thinking system and proactive decision-making. Forming this infrastructure took an eight-year period of my life. This period also served as my first semester at the “University of Mistakes.” If you have an innovative mind, you must learn to make mistakes, live with them, and grow with them!
No matter how innovative you are, if you don’t have the mindset of a businessman, it will probably never work out. On the contrary, it may even harm you. These eight years of my life were valuable years during which I learned to do business and be patient. I acquired invaluable experience. During this time, I laid the foundation of my life as a businessman.
After I returned to Istanbul from Izmir, I started to work at SEBIM (Silkar Electronic Information Processing Center), an affiliate of Silkar Holdings. This company provided information-processing support for Silkar Holdings, and at the same time, it independently offered services to other companies. Of course, what we did then cannot be compared what we are doing in offices today. We had to collect accounting records, enter data into the computers, print out the data, print payrolls etc. The first job that they assigned to me was the Basf-Sumerbank project. I worked on it for about a year and completed it. Then, they gave me a second project, but I told them I wanted to quit. My dream was to become self-employed, and my decision was final. I didn’t have any capital, and my dreams were big. I didn’t know in which sector I should do business. Nevertheless, I was resolute. Starting out in business life four years earlier than my peers had gained me enough experience to see what I expected from life, my vision had expanded.
I was 22, and it was 1980! I was a novice entrepreneur with four years’ experience in business.
That was the moment when everything started all over again. Incidentally, I would like to underline that one of the essential factors of achieving success in life is to want, but you must want it deep in your soul. If you really want something and want it sincerely, it will happen. Sometimes, I write my objectives, those I feel are important, in my cell phone as a welcome message or in my organizer as the first thing to do in the morning, so that I see it every day. When you want something and remember it every day, your brain works, even when you’re asleep, to make your wishes come true. Nothing can stop a thing from happening when you want it with all your heart.
In the beginning, I wasn’t able to found a company; I didn’t have the money. But, if you ask me, it didn’t really matter, anyway!
My late father did business in the textile market for years. We had machines in Demirkapi, which we sold in our small shop in an office building in Sultanhamam. During my childhood years, every summer holiday, for a couple of months, I went to that shop everyday with my father. I was familiar with the sector.
I went to talk to the merchants in the Sultanhamam textile market. I started working with one of the big merchants as a contractor. They gave me yarn lots and I distributed them to weaving factories. They were paying me commission per meter of yarn I sold. I also kept the accounting. This was “real business.” There was not a single accounting mistake in the records I gave them.
One day, I went to Mr. Halit’s factory to talk about new yarn lots. I saw some machines in the factory. They were all covered with rust and were just left lying around… But all of them were valuable… Mr. Halit told me that workers had gone on strike, and they had closed the factory. The machines had become useless. I asked them to give the machines to me. I told them could make them work, and they accepted. We agreed that if I could work the machines, I’d start contract manufacturing and pay them rent. I had some money that I saved from my previous contractor works.
That was the moment when everything started all over again. I rented a workshop in Topcular. In order to pay lower rent, I rented the workshop at the third floor of the building. We had to carry the machines three floors up with hoists.
What did we say? Courage, persistence and discipline! For weeks, I took the 06:45 ferry from Kuzguncuk to Eminonu every morning; then I took the bus to Topcular. I hired two men, and together we cleaned the machines with kerosene and thinner. In those days, I had to organize myself and my work schedule in such a way that I wouldn’t miss the last ferry. If I had to stay longer and miss the last ferry, then I’d have to cross to Uskudar and walk to Kuzguncuk. I was on a very tight budget and I had to be very careful.
And those machines came back to life!
Then, I went to Sultanhamam. I closed good deals with the merchants who contracted manufacturers for producing fabric with round weaving machines like the ones I had. They gave me the yarn, which I wove and returned to them as fabrics. They paid me per kilo. As those in the round weaving machine industry know, when the machine combs through the needles, hundreds of needles get broken, one after another. In other words, all the money we earned in a day, we had to pay for the needles broken that day. And the needles weren’t cheap. The needle importer was making money, not me! I remember the brand very well. The boxes of those Groz Beckert brand needles seemed like boxes of jewels to me then.
Then, I was drafted for the military service. The value of the machines had increased, as there had been an increase in knitted-fabric exports. When I was in the military, the owner of the machines wanted to sell them. He told me that either I could buy them, or that he would sell them to someone else. Of course, I didn’t have the money to buy them and the machines were gone. They left me the oldest two of the eight machines as compensation for making all of them work again. I was devastated, but when I reflect on it now, I see that the game had been played according to its rules. In those days, it seemed unfair to me. I believed I didn’t deserve to be treated that way, but I was acting emotionally, because it was my first company… I still don’t know why, but I sold those two machines to another manufacturer as soon as possible, and I didn’t really care how much they paid. I took the money and bought myself a second-hand, dark blue 1976 Renault 12. The year was 1982.
I opened a Basak Insurance agency. I didn’t earn much, but that was ok, I was able to support myself. Of course, you have to think long-term in the insurance sector; or it is difficult to grow your business. Therefore, while operating an insurance agency I also started trading yarn, though in small lots. Insurance and yarn trade!
Then, I heard that one of the major players of the textile industry had asked a close friend of him to establish a company to trade yarn, they were looking for someone to help, and I had been recommended.
They had been told that I was a hardworking young man. In return for doing all the work, they offered me a partnership in the company, with a 20 percent share. I liked the offer and accepted it. Procurement, sales, collection, payment, everything was my responsibility. We had two warehousemen and one secretary. This business continued for three years. Then, because of some issues between my partner and the yarn supplier, we received no more shipments. I was sitting around, doing nothing all day long. I waited for them to solve their problems for about four months. I was bored. I couldn’t sit around not working. Even though my partner told me that things would get better, and offered to become 50-50 partners, I left.
I rented a smaller place and started wholesaling yarn. I spent all the money I had and borrowed more from others. I signed a bond with a value of 20 million Liras of the day. I was doing business in a small scale, but things were going all right. I was feeling self-confident. I was on the run all day long. I rented an office, a warehouse, and I hired employees. Things were ok, and I was earning money too.
That was the moment when everything started all over again.
AN INNOVATIVE MIND IS ALWAYS RESTLESS
When you choose a life style based on innovative thinking, you are always restless. You always look for new opportunities, new businesses. You spend a considerable amount of your time living in the future. You hope to make a difference, choose a different path and win, beat the odds. Doing what everybody else does isn’t enough. You always feel restless. Your daily life adapts to this rhythm.
In fact, you can’t live on the proceeds and the benefit of a single good innovative idea or initiative for your entire life, either.
I believe there are four important factors that affect the success of an innovative idea: vision, action, value creation, and sustainability.
If you are a visionary, you may have a good business idea. Yet, what you suggest should not point ten steps ahead, you should push only step-by-step in order for your idea to be practical and feasible. There is no sense in investing in a product or service that people might get used to and use in 15 years. Major conglomerates or governments with R&D budgets make these kinds of investments. Having an idea is never enough; you need to work on it and be able to develop it into a project in your mind. Then you need the courage and vigor to turn it into action. Ideas are what we produce in our brains at the speed of light. As they say, however, “It is easier said than done.” When an idea does not culminate in action, it has no meaning. How do you measure your success then?
Action is the arena where an idea is tested! Action is the realization of an idea. Even when a good idea turns into action, it may not be a business that creates value. You have to be careful about this too, and do your feasibility homework well. First, you should ask yourself whether you would buy the product you want to sell. You have to think about this first. You should also be able to create value, or, in other words, make money from the idea that you have put into action or the project that you have developed. This is still not enough; your business should also be “sustainable.” Your business idea should not allow those who come after you overstep you, or lose its utility in a short while. Moreover, if you happen to make a lot of money in a short time, you should not be lulled. You need to keep yourself and your business current.
I would like to give you two examples. The first one is Motorola’s “Iridium” project… As you know, this project was designed to enable people to make mobile phone calls wherever they are on the globe via satellite.
It was a great idea. Using a mobile phone of the day, a large awkward one, you could call anywhere in the world, from wherever you were, even if you were in the middle of an ocean or at the top of the Mount Everest… The idea was great, so they started the project. In other words, they had passed the vision and the action stages successfully. Now, it was time to create value, to turn the business into money! That’s where they failed. Why? Because, when you’re in a car you couldn’t use the phones. You couldn’t talk when you were in a building. You had to lean out of the window to enable your phone to see the satellite! The target number of subscribers was 32 million, but the actual figure was no more than 15.000.
Result: This project was buried in history, never to be remembered, and it resulted in a five billion U.S. Dollars loss. They failed badly in the third of the four stages.
The other example I have is about an enterprise that failed in the fourth of these four stages, namely vision, action, creating value and sustainability. Polaroid!
We all remember Polaroid cameras. You could get the wet copy of the picture you took with your camera in an instant. You waited for a while and the picture became clear… There was no need to wait until you used all the poses in the film roll, then go, and have the film developed. Instant photography, wasn’t this a great vision? This vision turned into action and these cameras became so popular that the project created a miracle regarding to the third factor, value creation. In addition, the consumables, I mean, even the film was produced and sold by Polaroid. However, when it came to the fourth stage, sustainability, that’s where they failed, and because of this failure, they lost the value they had previously created.
Why? Because they didn’t foresee the digital revolution! Today, you can easily take a picture with your cell phone and send it instantly to whomever you want. However, in Polaroid, they didn’t see this coming and failed to adapt to the change. They missed the digital revolution, stubbornly persisted, and, as a result, they went through some very difficult times.
If Polaroid had wanted to, it could have become one of the top digital camera producers in the world today.
For me, the digital revolution was the power that pushed me to relentlessly explore different areas. Business in the textile sector was good, just using the word “technology” was considered innovative at that time; there weren’t even many PC’s around. Thus, all of the four factors came together and forced me to create a sector, open a market for “Automatic Identification and Data Collection,” a field which had never been heard of before.
Today, they call what we do in that sector “offering mobile solutions.”
The year was 1988. We founded Exim with my former partner, Alphan.
I wanted to return to the IT sector, which I had left in 1980; it was in my blood. Alphan had also left his job. We met one day and decided to go into business together in the IT sector. But we didn’t really have any idea what to do. It was very difficult just to get started. At that time, the IT sector was a small market and it was in the hands of major corporate groups. We didn’t have much chance. We had to do something different, find a niche service in the sector. So, we started exploring.
We found a niche service as we went through the brochures of Ege University’s Institute of Computing Sciences. We would do business in Automatic Identification and Data Capture (AI/DC) technologies, which was a newly developing sector globally. We decided to apply to act as Telxon’s representative in Turkey; Telxon was a leading company in the mobile data collection terminals market. European operations of the company were directed from Brussels and head manager was Carl Caekeart. We corresponded with him for a while and he finally decided to come to Turkey.
There is a building just across from the Yesildirek police station, the Demiray Building. In that building, I had a 45 square meter office. 25 square meters of it was my office. Alphan and I put two tables there. The rest of the office was the secretary’s desk… It was February 1988. We founded Exim in that room. I continued my yarn wholesale business at the same time.
Carl Caekeart decided to come to Turkey in April of that year.
This visit became an interesting story of innovative marketing, somewhat like a movie. As a company with two partners who started from scratch and whose only capital consisted of their big dreams, innovative thinking, and entrepreneurship, we had almost no chance of convincing a major group of companies, particularly a foreign one, to work with us.
We told Carl Caekeart the truth years later. He said that he had understood the truth on that very day, but he was so impressed by our self-confidence that he gave us the job. Who knows how much of this is true.
We told him about the big company that we would have in near future (though not on that day) as a perfect scenario with its director, heroes, co-stars, setting, and costumes. And we did it!
It would have been very inappropriate to receive Carl Caekeart in a 45 m2 room. The office next to us belonged to a businessman from Gaziantep, Ahmet. I asked him to lend the office to us for 2 days. I told him we had some business to do. He asked “What business?” I stopped for a moment. It seemed very difficult and far too complicated to explain what I wanted to do. I said “Never mind, don’t worry about it.” But he told me I could use the office, anyway.
I had a friend who spoke both English and French fluently. I introduced her as my secretary. Another friend of mine was working as the Protocol Director of Istanbul Chamber of Industry. He acted as our export director. We bought some ready-made garments from Mahmutpasa, and dried apricots and fruits from the Grand Bazaar. Supposedly, we are exporting these products. A friend of mine had a Jaguar. I had Renault 9. So I asked him and he lent me his car.
Alphan picked Carl up at the airport. He called us from his mobile phone when they got close to the office, so that we could get prepared. I asked my real secretary in the next room to call us all the time. I wanted the office to look busy. I even paid for a general cleaning of the building.
We bought new coffee cups, hung our signboard. There were also porters in Sultanhamam. There were many of them and they did not look nice at the entrance of the building. I told Mr. Hayri, who is still working with me, to go downstairs and tell all the porters that the lieutenant governor had arrived. When I looked outside, I saw that all of the porters had disappeared. In the meantime, Mr. Hayri was standing at the door of the elevator, telling everyone that it was out-of-order. All we wanted to do was to get the guy into the office as soon as possible! Then Carl came, we received him in the office. We told him that we exported textile products and dried apricots. We told about Turkey’s potential and our ability to accomplish the job. Negotiations ended but the decision was not clear yet… It was lunchtime. Our program was to visit the Topkapi Palace with a private tour guide, then have lunch at Konyali Restaurant. We left the office. The Jaguar was waiting for us at the door! I got behind the wheel and set out for Topkapi Palace. Yet, I was not able to work the AC of the car. Worse still, I didn’t know how to open the windows. Of course, I didn’t want to fiddle with the car too much, because I didn’t want to make him suspicious. Each time we stopped at red lights we opened the doors and took some air.
The visit to Topkapi Palace and the lunch at Konyali were quite impressive. Then we dropped Carl at his hotel, making fresh air stops at red lights again. He fell asleep while on the way because of the heat.
Carl said he would announce his decision in the evening. We invited him to Sureyya Restaurant in Bebek. I had ordered the best table, the best wine, and instructed the headwaiter to bring a Dom Perignon, when Carl announced that he would give us the distributorship. Finally, we popped the champagne. We had done it! We had the distributorship job.
After that, we needed to get the distributorship of Barcode printers and scanners. This was easy; because once you became Telxon’s representative, you could get the distributorship of the other companies quite easily. We did not need any more scenarios. We corresponded with both companies and got the licenses. Now, it was time to think about how to create a brand new market for these products and for projects that would work with these products. How were we to sell them? The real challenge was just beginning.
In those years, a few multinational companies in Turkey, like Unilever, were familiar with the business that we were in, because they already had warehouse automation and mobile sales projects abroad. We had learned about this when we had checked the credentials of the companies with which we had begun to work. For this reason, it was easier to convince and sell projects to these companies.
Unilever Algida had started producing ice cream in Turkey. We made them a proposal about “mobile sales and distribution automation” and we managed to sell our project. This was our first big project. Our sales grew as Algida’s distribution channels grew. For a long time, this business provided us with sufficient funds to make investments, recruit personnel, and make progress.
Though the sales figures were not very high, the products were very expensive. For example, the price of a set that we sold was about 7.000 U.S. Dollars. The software on the mobile terminal connected to the main program in the back-office. We were able to easily see from which truck, where and how much Algida ice cream had been sold, the amount of product in stock when trucks returned to the central warehouse, and how much money had been collected etc. Thus, the company was able to adapt its production according to the data we collected, decide which products that they should give priority in production, and control their stocks better. The project was very beneficial for both sides.
There were five of us when we started this business. We had a secretary, a software engineer, an accountant and us, the two partners making the sales. We continued for a while with this nucleus team. Then we started to grow day by day. In 1993, we had reached a turnover of 2 million 700 thousand U.S. Dollars. However, since we continued our investments and recruiting personnel, we still had trouble making ends meet. For a very long time we got by on a shoestring. In 1993, there were 40 of us.
However, things might not always go so well in life!
LIFE DOES NOT ALWAYS GO AS WE PLAN
At the beginning of my entrepreneurship story, I told you that I was also enrolled to the “University of Mistakes.”
If you have an innovative mind, you are also a student of the “University of Mistakes.” They don’t grant you any diploma at that university. Nobody graduates. As long as you remain an entrepreneur, you will be a student of this university. This is called experience, and experience has no end.
They say, “A good scare is worth more than good advice” No matter how well educated you are, you will make mistakes. Experience is a vast ocean and you should not fool around with it!
The important thing is to learn from your mistakes. If possible, leave no ‘what ifs’ in your life. We need to learn from our mistakes and not repeat them. We shouldn’t get bogged down in the past, but focus on the day and the future.
The 1994 economic crisis in Turkey was a big setback for us, as it was for the rest of the business community. Yet, probably our loss was a bit heavier. Our turnover dropped back to 1.5 million U.S. Dollars. All of the projects were suspended. The consequences were devastating for a company that only sold projects!
Our debt to banks, tax offices, the Social Security Administration, and local companies had reached some 700.000 U.S. Dollars. Of course, today, this is not a big amount for companies of our scale. You need to think of the amount of debt in proportion to the size of the company. The year was 1994, there were no projects, we couldn’t make any money, and interest rates on loans were around 225 percent.
Everything we had was sequestered. We were in such a situation that we did not have any properties left to borrow against. Things were not going well in the business, either. We were not able to pay salaries, and some of our employees wanted to quit. It was very distressing at the time… We were under great stress. My health declined. I had a serious lung infection and narrowly escaped death. I was in the hospital for a month.
Incidentally, before the crisis, in 1993, we had decided to enter the fast-food sector as a support for our daily cash flow. Somehow, we managed to meet with the owner of the Sultanahmet Koftecisi restaurant chain. We rented a nice shop in Bakirkoy, on Istanbul Street. We decorated the shop. We were very excited; we were talking about our second branch before opening the first one. Of course, when I look back today, I see that none of these was the correct thing to do.
We ordered products and opened the shops. They had discharged me from the hospital, but I still had a high fever. Though I opened the shop, my fever was 39.5 and I had to go back to the hospital. I shouldn’t have gotten out of bed; my health had gotten worse. My body was very weak. My lungs had blistered and walking ten steps was enough to leave me breathless. We turned over the shops in a short time. However, as I said, you have to make mistakes to acquire experience. Who says that he achieved success without making mistakes is a liar.
Moreover, each new enterprise, each brave attempt is not necessarily an innovation.
I recovered and went back to my work.
Our company had shrunk. We, the two partners, were back on the roads with our briefcases. Those days were very difficult. I had to spend 80 percent of my day struggling to solve our daily problems. We were continuously receiving new repossession orders.
Under such conditions, my living standard hit the bottom too. I had to sell my car. For three years, I used a cab to go between the office and the home and when doing business. But, two years after the crisis, we brought in a general manager to head the company and provided him with all kinds of benefits. The general manager of the company had a car, but as the CEO, I didn’t. You may call this self-sacrifice, or self-confidence, or knowing what you want. I was the boss. I could get any car I wanted when we earned the money, but the general manager was a professional. He had to represent us in the best possible way. For this reason, I’d call it “persistence.”
In addition, I want to underline that in order to overcome the problems, you must never let go of the reins. If you do, the rest will also collapse quickly and easily. You’ll be left with nothing. You have to persist. On the other hand, you could say: “I will let go of the reins and start over.” But then, this remains a failure for you for the rest of your life. I couldn’t let that happen, and I persisted. So, in just 4 years we had paid off a considerable part of our debt and survived the crisis.
Communication during a crisis is essential. Silence on the other hand is the most dangerous thing. You need to be in continuous contact with the agencies and the people that give you difficulties, communicate with each and every member of your team, and motivate them. There remains only one thing: who is going to motivate you? You are alone. If you decide, “I will do this,” then you have to be strong. You have no other option!
How was I motivating myself? I always see achieving minor objectives as steps towards achieving a major success. I was able to turn back the people coming from the tax office to seize my property, I was able to retrieve goods from the customs, and I could send invoices to my customers, collect money, make payments… Each one of these was a motivation for me. If we could finish the day without a problem or if we received orders on that day I was very pleased.
We re-achieved the 1993 turnover in 1996. The crisis cost us three years. We were still in debt in 1996, but at a reasonable level. Still, we refrained from making new investments.
THE INNOVATIVE THINKING SYSTEM ALSO OVERCOMES CRISES
As I mentioned earlier, a business idea born of innovative thinking might not be sufficient to achieve success.
Exim, the sector we created, the projects we accomplished; all these had brought us success. We had achieved a lot. However, we were completely dependent on projects. And when the economic crisis broke out, we received a severe setback.
Therefore, you have to develop your business with innovative thought, add new rings to the chain, distribute the risk, and keep your business going.
I have listed the four important factors of the innovative thinking system: vision, action, value creation, and sustainability. We lacked the fourth one.
The year was 1998.
And that was the moment when everything started all over again. At Exim, we had a technical service department that provided maintenance, repair, and set up support for the hardware products that we were selling. We expanded the field of operations of this department and founded Teknoser. Teknoser today continues its operations with 400 employees.
We changed Planet Gida, the company we had founded for Sultanahmet Koftecisi, to Planet Odeme Sistemleri A.S., and became the distributor of Ingenico, one of the world’s leading payment systems companies. This company had been formerly functioning as a sales department under Exim, but we decided that it should become operative under an independent management structure. Planet Odeme Sistemleri A.S, today has become a company with more than 20 million Euros annual revenue.
In 1998, we established Teknoloji Holdings, as the umbrella company for our three companies.
(Teknoloji Holdings have been maintaining its operations under Hitay Investment Holdings)
In those days, the EFTPOS market was a small one. Sales figures were not high, but the market was growing daily. We had an innovative project. We included Mobitex modems in EFTPOS devices to allow for mobile payments and started selling this new system. We had introduced Mobile POS devices to the Turkish market. In fact, this innovative project was the most significant factor in convincing Ingenico to work with us.
We made our first sale to Yapı Kredi Bank. Afterwards, other companies introduced GSM/GPRS POS devices to the market. Yet, we were already in the market of POS devices working with telephone lines too, and this market had the biggest share together with the Mobile POS devices.
Sales were increasing rapidly. We were working with the largest banks of Turkey. Planet was growing every day. Teknoser grew too, as we signed new service and maintenance agreements.
The gap in the market, combined with our expertise brought us success. We filled that gap in the market very nicely. Only major companies offered this range of services in those days. We provided the same service quality at lower prices, so people preferred us. We had a significant market share.
Having lost four years, we worked vigorously for the companies that made up the rings of our chain. In 2001, three weeks before the crisis, not only were we in no debt, we even had circulating capital.
Thanks to our innovative thinking and entrepreneurial skills, we also overcame the 2001 crisis, in fact this crisis allowed us to grow even stronger.
The 2001 crisis was much deeper than expected. IT sector shrunk by 50 percent. The value of foreign currency was increasing rapidly, but we didn’t have any debt. There can be two management strategies to follow here: Either you shrink and wait, keeping the markets in close watch and attack once again when you see recovery is coming, or, for you, crisis equals opportunity. Contrary to customary practices, you aim for a growth strategy pursuing an aggressive sales policy. But there is a risk you have to face: If the crisis gets deeper, you can also lose what you have in hand and might never have the chance to recover. However, if the economy tends to recover, you can achieve three years progress in a single year. We chose the second alternative. Result: We closed 2001 with an 8 percent growth in a market that had shrunk by 50 percent, and achieved 102 percent growth in 2002. Our strategy was successful. The competitors of all of our three companies had lost a lot of blood, while we achieved a spectacular growth in a shrinking market by following a strategy that none of our competitors could.
INNOVATIVE THINKING IS ADDICTIVE
I have told you that innovative thinking is a lifestyle. It is such a lifestyle that it embeds itself into your cells. You start to see the world as “a wonderland of opportunities.” Wherever you are, everything you see offers endless opportunities to develop new business ideas; in other words, most of the time “you live in the future.” When you combine the opportunities you see with your entrepreneur’s soul, enthusiasm, determination, and experience, in a very short time, you can become the owner of a business at a scale of which you could never have dreamed.
These opportunities come together with the four golden rules I mentioned before and bring success: vision, action, value creation and sustainability!
Iddaa was another example of a successful business idea we combined with these four factors effectively.
It all started with the tender for Spor Toto. With a 17 million US Dollars of revenues, we thought Spor Toto had considerably more potential, so we decided to bid in the tender. We didn’t, however, have enough money to bid. We approached the Cukurova Group, with which we had worked earlier, to bid in the tender together with Turkcell. They accepted.
In addition, the Greek company, Intralot, one of the fastest growing and most successful companies in the sector, joined us. We incorporated Inteltek with 20 percent share for Teknoloji Holdings, 25 percent for Intralot and 55 percent for Turktel, a company wholly owned by Turkcell.
Intralot is a Greece-based group of companies, an expert in integrated game systems, game designs, development, operation, and support. It has on-going operations in various parts of the world.
Inteltek won the tender organized by Spor Toto Directorate and commenced operations in 2002 (the Tender for the Set-Up and Operation of a Central System to Allow Pari-mutuel Betting in an Electronic Medium with Multiple Access).
In fact, our story restarts here once again. If we had contented ourselves with the classic Spor Toto game, today Inteltek would have remained a mediocre company. Working with the Greeks, we discovered that classic Spor Toto games had lost popularity around the world and the new trend was “Iddaa” style fixed odds betting games. Intralot had been running this business in Greece and it had an annual revenue of 1.5 billion Euros.
This was indeed an impressive figure. If they could achieve 1.5 billion Euros revenue in Greece, in Turkey we could easily double it. Even though people have less income here, the population is much larger. This idea really amazed us and we suggested the game to Spor Toto.
Spor Toto’s senior management told us that if they gave us the license for the game without an official tender, they would be sued. They needed to announce a new tender, and they did. There were not many participants. We were already in an advantageous position as technically the Greeks were doing this job and they had the expertise.
And we won the tender on October 2, 2003.
Right after we won the tender, we ordered the terminals from Greece. We received the terminals and started to set them up. We also set up a central system and started to give agency franchises. This was difficult at the beginning, because people did not know much about the game; they were not sure whether or not it would become popular. That didn’t take very long.
Iddaa started out in April of 2004 with “an objective of 1 billion dollar revenue in 3 years.” Thanks to the Iddaa game, the Spor Toto Directorate raised its 17 million U.S. Dollars revenue to 167 million U.S. Dollars by the end of 2004, and to 987 million U.S. Dollars by the end of 2005. Iddaa’s share in the betting games market rose from 1 percent in April 2004 to 37 percent in December 2005.
NO EMOTIONAL BONDS WITH BUSINESS IN THE INNOVATIVE THINKING SYSTEM
2005 was another milestone in Teknoloji Holdings’ history. That year my partner and I decided to part ways, end our 18-year partnership, and continue our business in different fields.
Both the ability to maintain a partnership and the ability to end the partnership is an art. In fact, partnership is the art of appeasement.
Our ideas about the group’s future investments and fields of interests had become very different. We both had innovative minds, but wanted to focus on different areas.
We wanted a clean start, but without damaging our reputation as a strong company in the eyes of our customers, business partners, and business community.
Let’s assume the total existing value is 100. If you want to share this value 50-50, you have to have a solid cash flow and any loans value should be considerably less than the value of your business. Otherwise, the separation would cause turbulence; you might end up with a 10-10 split rather than 50-50. You might lose customers, lose distributorships, and create difficulties in closing new deals.
In the innovative thinking system, there is one other golden rule, which, I believe, is very important. When the business is very valuable, when you’re at the top, sell! You cannot be successful in modern business applying the values and the management understanding of the past. Having an emotional connection to your job, turning the company into a dynastic, multi-generational family business might not be successful in every business model. Sometimes when you sell, your business might get even grow.
For this reason, establishing an emotional connection with your job is not a feature of the innovative thinking system.
At the end of 2005, we sold our shares in Inteltek and left the company. Considering the value created within such a short time, this transaction is considered the most significant and valuable corporate sale to date in Turkey. Our ‘win-win’ philosophy allowed us to complete an important sales transaction by creating substantial value for all parties involved.
This sales story ended up as a strategic success story that was planned through innovative thinking system one step at a time.
Each period has been a brand new start in my life.
That was the moment when everything started all over again.
THE INNOVATIVE THINKING SYSTEM IS OPEN TO DIFFERENT IDEAS
Let’s look at the situation: You have paid off the entire loan, you are in no debt, and you have money. What would you do?
You could say “I am tired now”, and make do with the income of your existing businesses without attempting any big changes.
It is a matter of preference.
Yet, in my life, in my innovative thinking system, there is always investment, value and employment generation. For me, life is not enjoyable without these, without producing, creating value and being beneficial for my country.
What did we say? An entrepreneur is always restless!
Earlier, I told you that four factors ensure the success of an innovative idea: vision, action, value creation, and sustainability.
I may have made dozens of contradicting mistakes, but looking back, I see that these four factors were the philosophy of my life; and I have always been full of enthusiasm. This is what makes me happy. An entrepreneur with an innovative mind cannot live any other way.
The more attempts you make as an entrepreneur, the more investment and employment you can create. Each and every successful business idea will open a new window for Turkey, I believe in this. Thus, when I consider my life, I think that, as Teknoloji Holdings, we have accomplished an important mission in this country.
Today I am 48, and my enthusiasm, my curiosity haven’t ended yet.
I’m sure everything will start over again in the future too…
“Compiled from Mr. Emin Hitay’s speech at the 7th Annual Marketing Summit in Istanbul in 2006”