Hidden Champions. Who are these small but highly successful companies? What does it take to become one? A thread! Inspired by the excellent work of @HermannSimon, @StGuinchard and the French authors of the “Owner’s Strategy”. And the Daft Punk analogy pic? More on this later.👇👇
Simon who created the concept nearly three decades ago finds that hidden champions have three main features:
-They’re market share leaders.
-They are generally small caps (most are privately-owned though)
-They are not widely known.👇
This chart from Simon’s book lays out their playbook:
-They have ambitious leaders and focus on a niche they dominate.
-They grow by staying close to customers’ needs with quality products.
-They innovate and go global.
-They rely on decentralized orgs and top-notch employees.
Hidden Champions, based on Simon’s research, are mainly industrials (69%) with average revenues of $450m. They mostly come from Germany, Austria and Switzerland (but not only) and their financial performance exceeds their peers’.
Bloch, Kachaner and Mignon in “La Stratégie du Propriétaire” have identified other characteristics of successful French family-owned companies that apply to hidden champions (which are often majority-owned by one or several families).👇
In short, the successful family-owned companies they researched share the following traits:
-Their goal is survival/longevity and remaining independent.
-They are frugal, reliable and balance prudence with entrepreneurial spirit.
-By playing the long game, they are resilient.
My friend @LuchesiPhilippe wrote an excellent summary (in French) of this book on @leivrek great blog here 👇
leprojetlynch.com/2018/08/la-str…
What about Daft Punk then?

They have focused on producing quality music in the EDM niche. They have innovated with each new album and have gone global from day one. Obviously, with a career spanning in three decades: they play the long game while being hidden (the masks help!).
The smash hit that really put Daft Punk on the global music map. It doesn’t get old:
Don’t forget to RT and like this thread!
During his recent interview with the French weekly Le Point, @nntaleb insisted on the heightened ability of medium-sized companies to survive: «The firms that survive generally have a medium size. The economic success of Germany with its Mittelstand SMEs is a testament to that.»

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More from @FrenchCMunger

6 Sep
Welcome to Grasse, a small scenic city located on the French Riviera, also known as the perfume capital of the world. It is home to 2 hidden champions in the flavor and fragrance industry. One of them, Robertet, is a 170 years old company and a 70+bagger on Euronext Paris.
Grasse has been at the center of the global perfume industry for at least 3 centuries but the story of Robertet starts in 1850. Jean-Baptiste Maubert and another partner then built a factory, later acquired by Paul Robertet in 1875, which is the foundation of today’s company.
Over the years, Robertet has mastered the art of extracting and distilling essences and oils from flowers traditionally grown in Grasse (roses, lavender, jasmine...) and other raw materials from all over the world.
Read 13 tweets
29 Aug
Another Saturday. Another French hidden champion. Another 25x-bagger listed on the compartment C of Euronext Paris! A collaboration with the excellent @FoxCastlehold!
1980s. Bernard Tapie, the controversial and (in)famous French millionaire-raider is on a shopping spree in the weighing industry. His BTF holdco has already gobbled up Testud, Terraillon...He’s getting ready to make on offer for yet another small company in this sector...
But the man in front of Tapie will turn down his offer and assert his independence. This man is Jean Escharavil. The company he is leading has been owned by his family for 3 generations and he’s not about to let it go anywhere. This company is Precia: a thread!
Read 18 tweets
27 Aug
This is one of the most unknown 100+x bagger (still) listed on Euronext Paris. A mostly untold success-story made in France, combining engineering savvy, family ownership and a relentless focus on the long-term as well as client needs. Gerard Perrier Industries (GPI): a thread.
1990. François Perrier joins the company founded by his father Gérard 23 years earlier. He actually joins Geral, a subsidiary of GPI manufacturing custom-made electric and electronic equipment.
Born in Lyon, Francois graduated in mechanical engineering before getting his MBA in the US. After his military service, he went back to the US to manage the international sales of a company based in San Diego.
Read 18 tweets

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