Old-World Upstart (int'l edition)
Icon's tale is a Silicon Valley parable

The headquarters of Web consultancy Icon Medialab International fits perfectly into Brussels' centuries-old buildings. Peek inside, though, and there's nothing ancient about the place: a glass atrium floods bleached wood floors and minimalist Finnish desks with natural light. ''It's quite a difference from my old offices'' with dark carpets and mahogany paneling, says Chief Financial Officer Rens Buchwaldt, a Dutchman who spent 10 years in the U.S. working for NCR Corp. and Bell & Howell Co.

Different, but American-style nonetheless. Like many European startups these days, Icon Medialab models itself after Silicon Valley companies. Icon's path to success reads like a Valley parable: Four thirtysomethings pool their savings to launch a Web design firm in a former warehouse. In four years, their startup grows into a $200 million-a-year operation, employing 2,200 people in 19 countries.

And like other European tech companies, Icon has looked to the U.S. for partners and customers. Icon opened a San Francisco office a year after its launch. In 1999, Icon bought New York Web consultants Nicholson NY for $32 million, and in June it picked up U.S. rival Insight Technology Group for $27 million. ''We have to grow in America,'' says CEO Ulf Dahlsten. That has helped it land marquee clients such as Motorola Inc. and New York's Metropolitan Museum of Art. ''We didn't know they were European, we just knew they were good,'' says Emily K. Rafferty, the Met's senior vice-president in charge of the museum's Web site.

In some ways, Icon has it easier than many of its European brethren. Sweden--where the company was founded, only moving headquarters to Brussels this autumn to get closer to customers--boasts an informal management style that dovetails with the Silicon Valley ethos. ''California and Scandinavia caught the first wave of the New Economy because they both reject hierarchy in business,'' says Mark Bandler, an American who joined Icon in Stockholm before heading to San Francisco to manage its office there.

As Icon grows up, though, European sensibilities are forcing the company to tone down its brash style. While Scandinavia is informal, it also values modesty--about as rare in Silicon Valley as ancient buildings. Instead of treating founder Johan Stael von Holstein as a hero, the Swedish press has vilified him for flying the Concorde and driving a Ferrari. ''He's considered too brash, much too American,'' admits Helga Baagoe, the company's communications director.

And like many Silicon Valley upstarts, Icon is learning the downside of fast living--and fast growth. The general tech sell-off, bad press about von Holstein, and plunging shares at U.S. Web consultancies such as Scient and Viant have combined to batter Icon's stock this year. Shares now trade at about $13, nearly 60% below their February peak. ''People are asking questions about the entire sector,'' says analyst Brian Skiba of Lehman Brothers in London. And yet the company ran its first operating profit in the second quarter, and Skiba has a buy on the stock. He predicts a $30 million profit on sales of $300 million in 2001, up from an expected $60 million loss on sales of $200 million this year.

In spite of Icon's embrace of Silicon Valley culture, it remains a hybrid. During the summer, for example, Icon's European workers insist on taking off a full four weeks--pushing down third quarter results. ''It's a cultural thing we can't change,'' admits CFO Buchwaldt. Maybe that's for the better. When it comes to joie de vivre, America could stand a lesson or two from the Old World. online
For Q & A with Icon Medialab CFO Rens Buchwaldt, go to

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EBIZ Europe Cover Image, link to ebiz table of contents
EBIZ Contents for issue dated Oct. 23, 2000

Silicon D-Day (int'l edition)

TABLE: A New Plan for the Old World (int'l edition)

TABLE: Harnessing Silicon Valley Culture (int'l edition)

ONLINE EXTRA: Profiles of Cirlab...

ONLINE EXTRA: ...and some of its spin-offs

Old-World Upstart (int'l edition)

ONLINE EXTRA: Q&A with Icon Medialab CFO Rems Buchwaldt

E-Mail to Business Week Online

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