Formula 3 driver aims to move information provider into top gear after dotcom crash

Gino Ussi is hoping to do a Bloomberg. No, he does not have a grandiose plan to spend his way into the mayorship of New York. He just wants his fledgling firm to emulate Michael Bloomberg's powerhouse company. In a few short years, Bloomberg turned from upstart into serious rival of once-dominant Reuters in the lucrative financial information business. Mr Ussi has similar ambitions for his London-based World Markets Research Centre (WMRC). It is taking on the Economist Intelligence Unit (EIU), which has had the market for providing country analysis stitched up for decades. Global corporate names rely on the EIU for up-to-date information about business conditions worldwide. Opening or closing a factory or launching a product in a new market may depend on it. The EIU has 'a comfortable 60 to 70 per cent of the market', which is worth US$100 million annually. There was another US$200 million apiece up for grabs providing 'vertical' information in sectors such as telecommunications, cars, energy and health care, said Mr Ussi. Ericsson and Nokia, for example, each pay out more than US$10 million a year to information providers. Until now, the EIU's only serious competitor has been Oxford Analytica, which relies on Oxford University dons to scribble some country analysis between giving lectures. Mr Ussi does not have any of the pretentions of a corporate chieftain, at least not yet. His manner is open and friendly, even gentle. Though he has lived in Britain for years, he still has a South African twang from his childhood there. His father is Italian and mother Australian, hence a jocular reference to being a 'mongrel'. However, there is a chief executive's steelyness about him when it comes to the cut and thrust of business. While the EIU has a brand name and its product is good, Mr Ussi claims WMRC, to put it in crude American terms, is kicking butt. 'We are taking business away from them daily,' he said. And he loves the Bloomberg analogy. 'Reuters had a huge market share, a total dominant market position. But absolute power corrupts in the business sector. You become arrogant, you move slowly, you set tight business conditions, your pricing structure is based on your control of the market. 'When a young and aggressive player comes in that is totally customer-focused and value for money-focused, it enables the Bloombergs of the world to take away market share. We are demonstrating that the same thing is happening with us.' Mr Ussi has a background as a publisher of business magazines. But he was quick to cast off that heritage when the Internet came along, declaring the world of business information in print was 'a dinosaur'. He also saw that the Internet gave him a chance to take on the 54-year-old EIU. 'The barrier to entry for a publisher like ours was you couldn't put in a virtual private network globally. The cost was prohibitive. The Internet changed the game.' The EIU's long track record is also its weakness as it has bolted its Internet delivery on top of its old business model. Much of its material was only updated monthly or quarterly, whereas WMRC was reacting with analysis to new events each day, said Mr Ussi. WMRC has a staff of about 220, which includes 53 analysts, 85 per cent of whom have postgraduate degrees and the remainder have doctorates. Daily updates on the 185 countries it covers are pumped out on to its Web site, which corporate customers such as Coca-Cola and General Motors can access through buying passwords. 'The reason they buy our information is the quality of the information obviously, but also the uniqueness of the same-day analysis,' said Mr Ussi. However, it is not going to be a straightforward ride to riches for him and WMRC. When Mr Ussi started up WMRC in March 1996, he had various plans besides just providing analytical information over the Net. He got British entrepreneur Vincent Isaacs to fund the plans through Mr Isaacs' listed vehicle, Ambient. WMRC also got into some genuine dotcomming. It set up the unwieldy sounding portal purchasingsupersite. com. Directories of business sectors were set up to bring in traffic from the purchasing managers' community. Having a smorgasbord of Internet businesses was just great in 1999 and early 2000. No wonder WMRC was then referred to as WMRC.com before its listing in October 2000. Mr Ussi also used dotcom-speak in a flotation blurb, saying the company's product line 'positions WMRC.com in the B2B [business-to-business] Internet sector'. However, he proved nifty on his feet when the dotcom frenzy ended in a crash. During a recent interview at WMRC's Hong Kong office, he said: 'I quickly found that any connection with the Internet space was hurting because it was unfair and incorrect . . . we were a research centre. Any comparatives to the Internet space we disassociated ourselves quickly.' As with so many dotcoms, WMRC found out you can build but the advertising might not come. 'We all know how things panned out . . . as [online] marketplaces are extraordinarily expensive things to get going,' said Mr Ussi. There is more to it than merely putting out a different spin of WMRC being tightly focused on its analysis products. All WMRC's investment was now focused on those operations, said Mr Ussi. He was not afraid to get out his axe either, chopping 35 jobs in October from the purchasing site and online directory operations. Among the casualties was chief operations officer Clyde McConaghy, who only lasted a year after being recruited from the EIU. 'Our big drive for this year is to get to cash flow breakeven,' said Mr Ussi, who has pledged to do it by the third quarter of this financial year, which starts next month. The company is suffering from the dotcom disease of cash burn. The latest earnings report for the quarter to October 31 shows that cash at the bank had dwindled to GBP4.43 million (about HK$49.83 million) from GBP11.79 million a year earlier. In the past, Mr Ussi has hardly set the right example. His total pay jumped from GBP86,250 in the year to January 31, 2000, to GBP186,188 last year, including a GBP70,000 bonus. This year, there will be no bonus and he has taken a 'small pay cut . . . in line with prudent budgeting'. Besides cutting costs, Mr Ussi claims subscription revenues for the analysis products are growing at an impressive pace. The real key number 'that outstrips the marketplace' is the number of new passwords client companies are buying. What Mr Ussi calls the 'upsell' is on average 50 per cent, that is, if company spends US$10,000 one year, it is spending US$15,000 the next. The offer of a free trial period means clients know what they are getting and gives WMRC a renewal rate of 75 per cent on average, much higher than its rivals. Revenues from online subscriptions jumped to GBP1.14 million for the nine months to October from GBP498,000 a year earlier, though operating losses also soared from GBP388,000 to GBP1.36 million, due to heavy investment in setting up the operations, costs that will not be repeated this year. The services are at a 40 per cent discount to the EIU's. Mr Ussi has made it tempting for companies to spend big. One password costs US$9,300, five cost US$12,000, then 250 cost US$35,000. 'The more people that use it, the more cost-effective it becomes,' he said. Its initial life by the dotcom sword has meant WMRC's share price has died by the same sword. From its initial offering price of 86 pence, it was at 14 pence on Friday. Some are seeing the potential, though. The Sunday Telegraph tipped it late last year and Growth Company Investor magazine named the company as one of its top picks for this year. A mutual-fund company has also bought in, though a manager admitted WMRC was a gamble rather than a sure-fire winner. If WMRC is in a race against time to get its operations in gear, that is something Mr Ussi is well qualified to handle. He is a keen amateur racing driver. He won the ARP Formula 3 series in 2000 and was leading the Formula Palmer Audi series at the halfway mark before pulling out to concentrate on opening WMRC's offices in the United States. While investors might worry about their chief executive taking time out in a lethal sport, Mr Ussi sees the benefits. 'There are two aspects to motor racing which I believe have helped me in my business career. One is that it is very fine-tuning to find a half-second,' he said. 'The other aspect is in the actual driving. Unlike any other sport, if you make the slightest mistake, it is the end of the race. The car is racked up in the barrier.' There have already been some mistakes with WMRC. Mr Ussi believes he can show they will not send the company into the fences. Biography Gino Ussi started his career as a marketer for 3M and Shell in South Africa. He moved to England in 1985. He became a divisional director of the Harris Research Organisation before becoming a publisher at Headway, Home and Law, a contract publishing company. Mr Ussi moved on to be publishing director at Touch International Communications where he developed the World Markets Research Centre (WMRC) concept. He led a management buyout of WMRC in March and then sold most of the business to British new-economy investment company Ambient. Mr Ussi is an adviser to the United Nations for e-commerce development in Europe. He and his partner Stephanie are expecting their first child in March. 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