April 4, 2011 § 3 Comments
We’ve all had that urge to become independent and start a business for ourselves, then, the risk of leaving a “safe” life settles in. This is when the battle between risks and dreams unleashes inside our heads.
In the case of idealista.com founder Jesus Encinar, dreams and perseverance won the battle. Without any experience, in real estate and technology he decided to start his web business in the already crowded online real estate market. His determination of doing things better, and differently is what in the end helped become the leader in the Spanish market.
On the other hand, Alberto Torron, of todotaladros.com, has been able to find a truce in the war going in his mind. At least for now. One of his best friends, Javier, who works in the banking sector, was afraid of getting laid of because of the financial crisis. At the same time Javier’s, wife needed to pay taxes for a few more years in order to opt for her pension fund. Because Javier was power tool and drill freak, they decided to start selling them on e-bay as a part time thing. Later they decided to open their own site, and then another two, dealing with gardening tools and headphones, and this year they are on their way to make € 300,000 in revenue. Not bad, for a company being run only by two people in their free time.
Alberto works at Telefónica. When asked when was he going to leave his answer was: “I don’t know, I love my job and I am good at it.” I think everybody in class was astonished by his remark. Torron went a little further and said that the company wanted to grow little by little. More silence.
In a world were dot coms are raising capital as fast as they are losing money here is a guy who wants to take it slow. And I agree to some extent. I think it’s great that he diversified the risk by not leaving his job. They tested the market and, not only that, his company managed to come up with a profit the first year! Plus, they plan to break even and out of debt in the next 6 months! What to do next?
Well, everybody know that a truce isn’t eternal. Someone always has to win the battle. In this case, I think Alberto should focus on his new venture as much as possible. He is practically the only player in the online market in his category here in Spain, but he is so small any big company can come up and take it very quickly.
Maybe he could do what Julio Alonso, did. Take a sabbatical, raise money, see how it goes and then, if all else fails, he could go back to his old job. Not many people have the opportunity, and if I where in his shoes, I would definitely go for it.
March 30, 2011 § Leave a Comment
According to Business Insider, Rachel Sequoia, presented an idea at February’s Venture Capital Fundraising Club in Silicon Valley.
I don’t know if this is a prank or not (although many people are suspicious, nobody has been able to confirm it) but looking beyond it, I found this video to be an incredible learning experience. Her pitch is spot on. Never mind the mistakes and quirkiness. I’m talking about the way here presentation was structured: a) presenting a problem or situation b) making people relate to it c) present the idea or solution (product) d) present a business model and a way to monetize it, e) request funds and show what are they for. All of this in less than 4 minutes! I don’t know how other people’s presentations looked like, but I am sure that hers was completely different, and that is what made her stand out.
Now, is this idea feasible? Logically it doesn’t. But I think mankind has proven that logic is not its best quality. The best example: bottled water. Even though most of us can get it practically for free, we buy it from companies that sell it at ridiculously high prices. Their selling proposition: environmental healthy, pure, water that comes from the alps, etc. To me, it sounds a lot like what Rachel is saying in her presentation. Maybe her pricing strategy is a little off, but I can imagine the commercial for her company: “A young man with a suit walking through a big urban area. He crosses the street and we can see a lot of cars in a traffic jam. There’s a closeup of an exhaust pipe from a cab, then another from a truck. We can see all the black smoke coming out. The man coughs as he walks up to his apartment door. As he opens it, he immediately drops his things and goes to the living room, opens a jar of Nepalese air and breathes.” Yes, I could totally see this happening. The more I think about it the more it makes sense from a business point of view. Environmentally it’s a whole other issue.
So what do you think? Is this a prank? Do you think that selling air could be a business idea?
March 23, 2011 § Leave a Comment
Yesterday Jorge Mata came to class. His first words were: “Being an entrepreneur is all about ego.” Then he said: “I have raised a little more than $100 million dollars in capital.” That got everybody’s attention. Having worked at different positions in banking and consulting, Mata described how his experience in different departments in the previous companies he worked for helped deal with all the aspects of his ventures. The only thing he struggled with was sales and marketing. Seriously?! In any case his presentation consisted answering questions from our class. Although he stressed the EGO part many times, for me he was a very down to earth guy who took the time to come and share his story. He was very honest and never hesitated when answering our questions. Among the things he said, the ones that stood out for me were the following:
- “You can start a company without any money” I never got to ask him how.
- “Choose your VCs carefully.”
- “Choose a VC who is willing to share risk.”
- “Don’t trust a VC that asks you to put money into the company. When its your money in the line, you get distracted trying different ways to get it back. Entrepreneurs need focus.”
- “Share information with VCs but be careful they learn very quickly without investing and could take you out of the equation.”
- “If you do get a VC, use him as a credible communication tool. You are likely to attract more VCs”
- “The cultural part of business is essential. A sandwich for lunch in Palo Alto is ok, but in Madrid it is very different.”
- “Explain your value proposition in a clear way. Tech businesses are complicated, imagine you are talking to your grandma.”
- “Investors are looking for business that are scalable.”
- ” It is all about EGO. You have to believe you can do it. You have to believe you are right.”
- “Don’t worry the board of director is there to control you.”
- “The Team is essential. A good idea doesn’t take care of the payroll. You need people who are commited.”
- “Treat your Angel investors like if they were your family. A happy investor is an investor who invests again.”
Overall, great advice from an amazing and focused entrepreneur.
March 17, 2011 § 1 Comment
This is one of the keys of WeblogsSL’s success according, founder and CEO Julio Alonso. He was the guest speaker at today’s Tech Startup class here at IE.
There were a couple of things that caught my attention about him. First, his story about entrepreneurship was quite different from what I expected. For him, it all started when he realized he enjoyed blogging more than he enjoyed consulting. It wasn’t that he was bad at consulting, he had being doing it for 10 years and apparently he was very successful. To make a long story short, with the support of his wife he decided to take a sabbatical for one year to try to find if blogging about his interests in technology could be profitable. If his crazy hunch didn’t work he could always go back to his old job. This is what I didn’t expect. I recently read a quote by Sean Parker (Ex president of Facebook and Co-founder of Napster) which said “As an entrepreneur you have to be willing to be poor.” But Alonso, or at least that was my impression, had everything under control: “The only investment I made was the cost of opportunity”, he said.
Alonso managed the company the same way he managed the decision to go into the blogging business. Starting with only one blog dedicated to technology, Xataca.com, Alonso was determined to keep the company bootstrapped with a positive cash flow. This was in 2004, so I figure that his job as a consultant and the dot.com crash had a lot to do with this decision. Today WeblogsSL has 40 blogs in Spain and 3 in Brazil, dedicated to very specific topics. All the the blogs average around 75 million views, and 16 million unique visitors per month. To put this into context, its a little bit less than what big media groups who own El Pais, and El Mundo (both leading Spanish newspapers) get in their websites.
What also amazes me is how well he understood the business from the beginning. He knew that the people he had to hire to write in the blogs had to be passionate about it, just like he was. This added a lot of credibility and anyone who stumbled upon any of them and was interested got immediately hooked up.
This brings us to the title of our post. Alonso said that audience who visits his blogs can be divided into 2. Paratroopers, who come usually from Google traffic, and churchgoers, regular visitors. The percentage were 30% and 70% respectively. Initially, all the traffic was coming from Google, but as time went by its fan base grew very quickly. This means that Weblogs is in control of its audience and does not depend on anyone to continue to grow. Part of Alonso’s strategy is to diversify as much as he can. That’s why he keeps launching new blogs.
For me, the key take aways from his visit were to be focused and determined. His commitment to content an interest resonated with my way seeing things and I think Alonso was one of the few people who anticipated that the internet would be a truly democratic media made by the masses. I’ll leave with one quote he said which I liked very much: “The internet is measured not by geography but by interest.”
March 15, 2011 § 1 Comment
Ok. I finally did it… Granted, the fact that opening this blog was mandatory in my IE Business School “Managing The Tech Startups” class had a lot to do with it, but I’m writing am I not?
So what am I going to write about? I don’t know. I mean, for the following weeks you can expect a lot about IE and the Tech Startup course. What will happen in between only God knows. I might even write in Spanish.
This was something I’ve been wanting to do for some time, so if the first posts make no sense or they are too weird just bear with me and give me a chance to get the hang of this.
There. That’s my first post.