Saturday, August 2, 2014

Top ten things to know for an entrepreneur the first time you come to Silicon Valley

      Some weeks ago me and my team we were sitting at the Mi Media Manzana offices in Lima-Peru, working as usual... when a long awaited email arrived into my inbox. The subject read: "Congratulations !..." . I knew exactly what that meant, I've been waiting for this e-mail to arrive for several months... this meant that we were going to Silicon Valley, we had been selected to participate in the BlackBox Connect program. In their own words (better than mine) this program is a "unique opportunity for non-US startups to access resources and scale globally during a two-week immersion program".

      The two weeks at Blackbox were amazing. Learned a lot from the program, from Fadi Bishara and from the other entrepreneurs from all over the world that were part of it. 
*If you want to know about their incredible Starups, here they are
Picture taken by the awesome photographer Marta Tomczyc 
I stayed for an additional week after the program ended, meeting a lot of interesting people. It's really a unique place on earth for an entrepreneur. I'm leaving the Valley today and wanted to summarize the main takeaways from this three weeks at Silicon Valley. Basically, if you're an entrepreneur, have a startup and you're thinking about moving here, this is what you should know:

1.- If you want to raise money here, you have to move to Silicon Valley
2.- People don't have time. Be short, really short. Say what you do in 7 words.
3.- There are millions of Startups competing here. There are several VC's investing here. The odds to raise money are low, but usually higher than anywhere else.
4.- VC's are in a position of power. Someone told me during these weeks "In the end... everybody in Silicon Valley dreams to start their own fund and become a VC. Business Angels want to become VC's. Entrepreneurs want to exit, and then become VC's. VC's want to become bigger VC's"
5.- You'll never raise money in the first meeting with a VC, neither in the second. If the Startup is within their scope, they invest only when they see an upward trend over time in the entrepreneur. 
6.- Valuations are higher in Silicon Valley than anywhere else. Here's an interesting article on early stage startup valuations in Silicon Valley.
7.- This is the place where the most talented people in Technology from all over the world come to work. The best of the best come here, period.
8.- Competition for talent is harsh. The best are here but that doesn't mean they'll work for you. There are millions of interesting startups and yes, on hiring you also compete against Facebook, Google, Intel, etc. Equity is a must, but usually not enough to hire someone. Gets an inspiring/persuasive leader on an extremely interesting project to get someone working with you.
9.- Pay it forward. This is real. People will help you without asking anything in return. Is hard to understand an ecosystem so fiercely competitive as this one, but at the same time has this strange coexistence with an uninterested and real belief that is good to help others... Capitalism should be like this everywhere not just here don't you think? :)
10.- Networking is really everything. This is how you meet new people that could eventually be on your team, how you learn from other entrepreneurs, how you meet your future investors, how journalists get to know you, how you meet your future cofounders, etc. Your network and therefore your reputation is really your biggest asset by far in Silicon Valley. The topic is so relevant here that I'll dig deeper on Networking on Silicon Valley on a later post.
11.- Don't ask for favors to people who don't know you, people will get pissed off. It takes a while to understand, but it's a mix of getting right points 9 and 10. The order is important. First you meet people, get to an initial relation. Second you offer help. Third, if the person you know wants to and trusts you, they'll offer help to you. That's  more or less how it works, don't go asking people you don't know for favors.

I'm sure there's much more to learn from this place and it's people... and this is the reason I'll keep coming back to Silicon Valley.

Monday, February 17, 2014

My 4ht StartUp - Hello Online Dating, Hello "Mi Media Manzana"

    Around the beginning of 2013, I realized that I'm a serial Internet StarUp Entrepreneur. I became very aware of it and knew this is what I'll be doing the rest of my life.  I love the chaos, the ups and downs, the ever changing tech environment, the speed and the growth, and the impact that the work of an individual person can have and the value one can create in early stage ventures.

    In July of 2013 I initiated what is now my 4th Internet StartUp. "Mi Media Manzana" is the first company to bring the Online Matchmaking business model to the Andean Region and aims to position itself as the leading Online Dating company in LatinAmerica in the next few years. We focus on serious, long-term relationships for non-married people over 30 years in the LATAM region.

    My experience as a CEO in my past three StartUps has been a complete rollercoaster. Here a post (in Spanish) on my view on How's the life of a StarUp entrepreneur in Latin America: Trabajar en una Internet StartUp. My first attempt to build an Internet company from scratch was in Barcelona, Spain. I got together with an amazing guy with a lot of experience in the printing industry that had a revolutionary idea: bundle several orders in the same Offset plate before you print, and you could save up to 70% in costs. Basically the idea of "Low Cost" Airlines applied to Offset Printing but using a website to get the needed volume of similar orders. This is how "ImprimaOnline" was created.

    I managed to raise money and launch the website in a year. I was the CEO and managed this company until it got close to break even around 2009. Then when the crisis hit Spain very hard, I decided to move to Peru for my next venture. In this first experience I learned the basics of Online Marketing (SEM, SEO) and also two important takeaways:
  1. Always raise more money than what your Business Plan says 
  2. Learn to launch the first version of your web FAST ! (one year to launch in retrospective is crazy ! Too much !) 
    Later I went to Peru for my 2nd StartUp: a B2B Marketplace for LatinAmerican companies, kind of Alibaba for South America. This venture failed pretty fast. After 6 months we quit because we realized that It would require enourmous amounts of capital to sustain a business like this one and we wouldn't be able to compete against players like Alibaba. This was my first failure (financial failure). but not in terms of learning. I learned:

    3. Fail FAST ! If your gut is telling you it won't work, cut your losses and do it fast. Not only you   save your investor a lot of money, but also you save your precious time and also you gain credibility.
   4. How to build a team. Learned the capital importance to have small but high performing team. It's impossible to build a company with nothing short of the best talent available. Given the difficulty of the task, you'll need it very soon...
   5. The technology in the end, is irrelevant. Sounds awkward to work in Internet StartUps for a living and say that the technology is irrelevant but it's mostly true. It doesn't matter how good is your website, It'll always be easy for a competitor to copy in a short time. The competences you develop and how fast can you adapt to change on the other hand, cannot be easily copied.
    6. I also learned how to step in front of an investor and tell him that he just lost all the money he had invested. You have to be mentally ready to do this if you work in Internet StartUps.  

    My third venture, the most interesting so far was AdondeVivir. Right after the failure of the B2B Marketplace, I got together the team that I had assembled for this venture, the same Business Angel (incredibly he decided to invest again in us after the first project) and we created a Real Estate Classifieds portal.

    It was an amazing ride. In 5 years AdondeVivir became the market leader in Peru and was acquired by a venture capital firm from the US for 7 figures valuation. We became the first ever peruvian StartUp to appear on nationwide TV (on a daily basis) and also the first ever to raise money from a VC fund from the US. Here's my goodbye post on my experience in AdondeVivir.
My main learning takeaways from this experience were:

     7. Learn to raise money ! We were on the edge of bankruptcy several times. I was lucky enough to raise money shortly before we ran out of it. To raise money is one of the single most important traits an entrepreneur has to learn. What you need to raise money is a "bullet proof" Business Plan, a good reputation and you have to have the ability to be persuasive. The takeaway is this one: If your business idea is not good enough so other people want to put money on it... maybe it's not such a good idea after all...
   8. Don't sleep until you reach break-even. Seriously... don't. You have to start thinking on revenue and monetization, from the start of the company, even if it's not the main goal at the beggining. Don't delay it. Don't procrastinate it. Don't say "We'll build traffic first and monetize later". Either you're Twitter or Instagram that can build huge valuations without really selling anything... or you're like 99.9% of the other StartUps: If you don't generate revenue before you run out of cash, you're dead. Don't sleep until you reach break even, and when you do... if you do it... throw a huge party to celebrate this incredibly difficult achievement.
    9. If you're the CEO, be careful to lose control of the company. Once you sell a big enough chunk of your equity, you wont be making the calls, you won't make the important decisions anymore. Are you ready to do this? Is it worth the money you're raising? Is it really necessary? It Can be or not, but think really carefully when doing it. I lost control, and even though I think it was the right decision... my job stopped being fun after that point... I lost all interest.

    Now I'm just starting my 4th venture, Mi Media Manzana. I realized, after carefully researching data and figures, that the Online Dating market in Latin America was completely disregarded. eHarmony retired from Brazil, has almost no presence in the Andean countries and no one is looking to this region. It has the right demographics and enough Internet penetration to bet on it. The challenge is big because right now there's no market, we have to create one from scratch. To create a market that doesn't exist like Online Dating, in a conservative and very religious society like the LatinAmerican one, means to be able to change a social behavior, to change the way people think when they think about meeting a potential partner. To change all the prejudice around security, to explain how it works and make people believe on it, to be able to monetize and to change the social stigma, etc, are all big challenges we'll have to overcome if we want to succeed. It's a very big challenge that will take some years to do... To have that challenge as a job and create hundreds of thousands of happy couples in the process... That's a fun job to have :)

Friday, June 28, 2013

Adios AdondeVivir !

WoW… qué viaje. Hoy es mi último día de trabajo en e-Holding (AdondeVivir), empresa que fundé, de la que he sido Gerente General desde Agosto de 2009 y a la que en Abril de 2013 decidí renunciar. Aquí algunas de las cosas que se me vienen a la cabeza en el cierre de esta etapa.

Hace algunas semanas me llamaron para hacer una breve presentación en la Universidad del Pacífico en la que me pedían que describa un poco cómo ha sido mi experiencia al trabajar en una Start-Up y tuve el espacio para poder reflexionar un poco sobre mi paso por e-Holding. Pensé en estos cuatro años y lo primero que se me vino a la cabeza fue una Montaña Rusa.* Creo que es la descripción más adecuada para el tipo de trabajo vivido en estos cuatro últimos años en e-Holding. Nos ha pasado de todo: hemos estado a punto de quebrar varias veces, hemos competido contra empresas que tenían 10 veces más presupuesto de Marketing que nosotros, nos han tratado de “jalar” a nuestra gente de otras empresas, logramos levantamos capital de un Venture Capital de USA, ganamos un premio a la mejor web del año, me llamaron clientes a felicitarme y también me llamaron prácticamente a insultarme, cambiamos nuestra web 3 veces, se nos cayó la web N veces, pasamos de un modelo gratuito a uno pagado, hicimos la 1era Campaña de Marketing Social en Redes Sociales con Somos Techo y hasta acabamos saliendo en televisión !. De “Montaña Rusa” este trabajo lo tiene todo: Emociones extremadamente fuertes, subidas y bajadas muy rápidas, mucha velocidad, la impresión de que te vas a morir (“quebrar”) pero sobre todo… el trabajo más divertido del mundo. Ser manager de una Internet StartUp es tan divertido que cuando empieza a dejar de serlo… cuando el tamaño, los procesos, la falta de autonomía** o la falta de retos profesionales te hacen ir a una velocidad más lenta, simplemente acabas por aburrirte. 

Nuestra empresa pasó todas las etapas de una StartUp clásica, desde el inicio literalmente en un garage en Barranco con Willy, Rubén, Pedro, Christian y Horacio, pasando por la capitalización de Business Angels con Hans para luego recibir fondos de un Venture Capital de USA.*** Luego de este último hito la empresa pasó a formar parte de NAVENT, con lo que nos enfocamos de lleno en, nuestro portal inmobiliario. Con NAVENT aprendimos a enfocarnos mucho más en la parte comercial, haciendo la transición de ser una empresa “Techy” enfocada en la producción de tecnología a ser una pequeña “Maquinaria de Ventas” enfocada a la generación de ingresos. Personalmente logré aprender muchísimo con el ingreso de NAVENT. Nunca hubiese imaginado que en tan poco tiempo pudiese aprender tanto en el campo que me apasiona que es el del Management de empresas de Internet. La capacidad que tienen para hacer crecer un negocio y multiplicar sus ingresos varias veces en poco tiempo; medir todo pero enfocar a todo el negocio solo en los indicadores clave; discernir entre ingresos relevantes y los que no forman parte del Core Business;  ver los gastos hasta el último centavo;  rapidez en la toma de decisiones difíciles... entre otras cosas, son algunas de las cosas que he podido aprender en este tiempo del equipo de NAVENT y en particular de su CEO Nicolás Tejerina. No tengo sino palabras de agradecimiento para ellos.

La parte más difícil de tomar la decisión de dejar e-Holding fue la de dejar un excelente ambiente de trabajo, con un equipo de gente increíble, algo que nos costó mucho tiempo construir. Sin embargo, me voy satisfecho de dejar la empresa en un muy buen momento: con un equipo estable de gente excelente, con buenos números de tráfico, listings, clientes, una plataforma tecnológica muy buena y sobre todo lo más importante y difícil de lograr: una empresa rentable.

¿Qué queda ahora?

… lógicamente 

… empezar todo de nuevo !

*Ver aquí presentación sobre “Montaña Rusa StartUp”)
**Excelente Post cómo influye la Autonomía en la Motivación Laboral (y cómo se pierde ante la falta de esta) aquí:
The Secret to Feeling Energized at Work? Autonomy
*** e-Holding fue el 1er caso de una Internet Start-Up peruana en recibir fondos de un Venture Capital Fund de USA.