25 - The boy who captured the future

Franco Lofranco has created a fiber optics company that has made Canada proud

This boy in front of me has created a company that, less than one year after its incorporation, is worth at least half a billion dollars. His name is Franco Lofranco, 31, a Canadian of Italian heritage. He had a dream: creating a company as strong and important as Bell Canada. In a little less than 11 months he succeeded, and today Stream Intelligent Networks Corp., of which he's cofounder and CEO, is one of the most interesting Canadian companies in the field of digital communications on optical fiber networks.
This means high speed and top reliability in transmitting great quantities of data, which is what banks, public boards, and private companies are looking for, and in fact they form the core of Stream Intelligent Networks' customer base. Moreover, five months ago Bell struck a deal with Stream, to the effect that Bell will be supplying its customers an integrative service via Stream's cable network.
This is how Franco Lofranco's dream came true, and quite fast, since now Bell and Stream are partners busily building the future. "Yes, the future," says Lofranco. "It's here, in these glass fibers as thin as hair, where light, not electricity, is carrying the voice of people speaking on the phone, TV images, or the huge amounts of data computers can handle."
While he's saying so, almost with gratitude, his hands play with a small piece of cable.
Considering your dream came true, where do you go from here?
"First of all, I'll go and lay down cables in Toronto and then in all major Canadian cities. Then I'll take a look at the sky, or rather, I'm already doing that."
What do you mean?
"I mean that Stream bought a license for Canada-wide data transmission worth 22 million dollars. We're the only company owning such a license. So, if a new company wants to offer cellular telephony in Canada, we are in a position to offer it the necessary services."
Like Bell Canada did...
"I'd say yes. Bell closed the deal with us because we demonstrated our reliability and competence."
What did this reliability and competence consist of?
"Competence is due to hiring the absolutely best managers and technicians in Canada for Stream Intelligent Networks..."
You must pay them handsomely.
"Of course. The best never comes cheap."
What about reliability?
"That's due to financial institutions trusting our projects. Although it wasn't easy to convince them to trust us."
Why wasn't it easy?
"Maybe because, while appreciating our plans, they saw them as risky. They told us: best wishes, you're good. But they didn't fork out a dime. You see, this is a field where great profits can be reaped, but initially great investments are required."
How did it go?
"Well, after running around chasing Canadian banks, receiving compliments but no money, we managed to get the trust, and therefore the credit, of a British investment bank, Apax. Since the British were giving us credit, Americans did the same, and since the Americans gave us credit, the Canadians followed suit. The result: we assembled a start-up capital of 40 million dollars. Then we spent 46 million more to purchase the plants."
Does this business require such heavy investments?
"Yes, it does, but it also guarantees high paybacks, because we are creating an infrastructure essential for the future life of our community. In practice, fiber optics cables are becoming a determining factor in development, as much as water, sewage, roads, electricity. Just think of the Internet: it's not only become an everyday tool for working and trading, but it acquires hundreds of thousands of new users every day. Now, to make an easily understandable paragon, the huge flow of information moving on the Internet cannot run on an ordinary road: it needs a motorway, fast and safe. Fiber optics is this motorway. And the Internet is merely one of the 'cars' running on this motorway. If you put all this in relation to the whole of Canada and North America in general, where the use of technology is massive, you'll have a precise picture of the situation."
Did you mean to do this job, or did it just happen to you?
"Look, I have degrees in Mathematics and Political Science. Once I finished my studies, I immediately realized that if I had pursued traditional jobs I would have starved. Nowadays jobs must be invented. I also thought I had to work my way upwards, so I worked for two years for an import-export company, moving constantly between Toronto, Mexico City and Monterey. Two years later I had acquired a businesslike mentality, which was what I wanted. So, with two friends I founded Netwell Communications Internet, in Toronto, and started to enter the field of telecommunications, and to get acquainted with fiber optics and their applications. At that point in time, with a bit of boldness but aware of my abilities, I took a look around and said to myself: 'I want to create a company as big as Bell'."
You succeeded, it seems.
"Yes, in theory, because we are Bell's partners; in practice there's still a difference, don't you think? At least as far as yearly budgets are concerned."
When you decided to be like Bell, what did you do?
"First there were three of us: myself, Marco D'Armento and Mark Etherington. We compiled a business plan and with it we involved five more investors. In short, the eight of us represent Stream's founding nucleus, with Mark Etherington, who was a high manager at Bell, as chair. The rest is recent history, also because we were officially born in February of this year."
How much is your company worth today?
"In our field such assessments are difficult. Companies in our line of business, with a turnover of, say, 20 million dollars, got sold for two or three hundred million. All things considered, we may say that Stream should be worth about five or six hundred million dollars. But these figures bear little significance, because in our industry the prospects of a company, how it built its own future, matter more than its patrimony."
How many people work for Stream?
"As of today, 45, but they will be 200 by next May. Let's hope we'll be able to find them."
Why do you say so?
"Because finding skilled staff is not easy. This is exactly what hinders the growth of companies like ours. In this field, a skilled technician cannot be found at every corner, nor it is possible to train him inside the company. There's no time for that, because any demand for new technologies or new applications must be answered in a timely fashion. Anyway I feel confident; I'm half Italian, after all, which means I'm an optimist."
Let's talk about you, half Italian and half Canadian. Half Canadian because you were born here; half Italian because you're the son of Rocco Lofranco, a well-known member of our community who's the representative of Region Basilicata and was a reference point for the world of soccer. Our question is this: When does your Italian half come out, and when your Canadian half?
"When I have to be creative I'm completely Italian. I told you I had to invent my own job: well, when I wanted to understand what kind of job it was to be, I turned to my Italian side. My Canadian part came out when I wanted to give an organic structure to the job I had invented. In short, Italian fantasy and Anglo pragmatism. Don't ask me which side I like best, though."
Why?
"Because I need to be, constantly and equally, both Italian and Canadian. I'll add that maybe this is the real dimension of second- and third-generation Italians, I mean the sons and grandsons of those who came here 40 or 50 years ago. We are people with two languages, but also two hearts and two brains; we disavow nothing of Italy, which is our background, but we cannot ignore that our present is Canada. I think that by living in this dimension we can be more useful both to Italy and Canada: we are those who can bring our countries into the future. I read somewhere this is the greatest dream."


(translation by Emanuele Oriano)

Publication Date: 2002-12-22
Story Location: http://tandemnews.com/viewstory.php?storyid=2200