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 :)