Posted 2010-05-06 at 11:02 pm
Interview done for Latin Vision
What do you need to be an entrepreneur?
The most important thing is to have a dream and a team to execute it. You can have the best idea but if you don't have the team to back you up, it will never become a reality. Another important aspect is to be willing to sacrifice your time and effort 24/7 since a startup will require all your time and energy, and patience, a lot of patience.
What did inspire you to start your business?
The #1 Rule of Business: "I looked for a necessity and found the solution". In our case it was using the borders for technology and creating the first Mexican Internet company to go public in the United States. We managed to create the best sites with the best young minds. Since Tijuana Mexico was known for a lot of things, but never as a technology hub, we found out that we have the best minds that can be as productive as the teams at Silicon Valley, at a fraction of the cost. We achieve this without any cultural barriers and I found that to be our competitive advantage.
How did you finance it?
At the beginning it was mostly friends and family for the first round and angel investors for the second round. I tried to stay as far away as I could from venture capitalist and toxic pipe financing.
Being Hispanic…Does it have any influence on your business?
Of course it does, once again there is a huge necessity for Hispanic sites in the U.S. When we learned that there were no video game sites for the Hispanic community, we decided it was time to act. Especially in a 60 billion dollar industry that is now bigger than box office revenues, music and DVD sales; I knew there was a niche.
Univision just came out with this study about Hispanics and video games. They report that Hispanics have a greater propensity than non-Hispanics to buy in-home and portable video game systems. They are not as price sensitive. Hispanic respondents were 15% less likely than non-Hispanics to say cost was a primary reason for purchasing video games. Many still consider themselves beginners with more than 50% of Hispanics labeling themselves a "novice" level player. Only 30% of non-Hispanics claim that status.
In the face of adversity, how do you decide to keep going?
As any startup we had our ups and downs, but we all had the same screen saver in each computer: "Failure is not an Option". Even when we had some minor setbacks at the start we learned from our mistakes; we became frugal but never once did we sacrifice quality. We set out to be #1 and in less than two years we won best website in Mexico in 2008. We have also managed to close deals with MSN Mexico, MSN Latino, Terra, Yahoo Mexico and Playboy Mexico, and since that point we never looked back.
What is the biggest challenge your business has faced?
The first six months of 2009, since all the startups around us were going under, angel investors were scarce and we had to fire our CEO and trim the fat. Advertisers were cutting down as much as 80% of their advertising budget and everyone thought the world was going to end. What happened next was what I call the “Bubba Gump Shrimp Theory”, meaning that since most of the other startups went under the ones that survived got a bigger piece of the pie. What started out as one of the worst years in advertising history, ended up with us being cash flow positive in the last two months of 2009.
If you could change one thing about your business, what would it be?
I would love to educate the Hispanic and Latin advertisers, since they still believe we are an inferior market and because a video game publisher will spend 250,000 dollars on a two week ad campaign for a new video game in the U.S. However, in the Latin and Hispanic Market they want to spend 10,000 dollars for the exact same campaign but for one month. Advertisers need to believe more in the Hispanic and Latin markets.
What was your childhood ambition?
It depends since my life shifted every couple of years, so when I was a young child I wanted to be a veterinarian, then I wanted to be a businessman, then a diplomat and as I grew older I wanted to own a publicly traded company.
Tell us about three entrepreneurs that you admire?
Steve Jobs because he understands that you have to reinvent yourself and because they fired him and came back with a vengeance.
Warren Buffet because he still believes that companies should actually make money.
Carlos Slim because he saw an opportunity and he took it. I might not agree on his monopolistic ways, but you have to admire the richest man in the world.
For business meetings: breakfast, lunch, or dinner?
Nothing like a power lunch, and there must be positive energy in the room.
What sacrifices on your personal life did you have to make in order to become a business success?
A lot of sacrifices, since I work 24/7. We have our staff meetings on Saturdays (and anyone that doesn’t show up gets fired), instead of buying a house for my family I invested in Busca Corp. Unfortunately my family time is limited, since I travel most of the time and not to mention eating junk food regularly. I gained 20 pounds and most of my hair is gray.
What is your favorite quote?
I would have to say again "Failure is not an Option"
Is it difficult to be unconventional?
Yes since most of the people around me still think I create $500 dollar websites, and when I tell them that we spent over two million dollars in our platform they just don't get it. Especially in Mexico where we are still five years behind when it comes to the Internet. But at the same time this creates an opportunity that we are taking full advantage of.
Biggest mistake made?
Hiring what I thought were the best big law and accounting firms, since you can get the same exact service from a small and decent firm at a quarter of the price. And hiring a CEO from a top Internet company and thinking he would have a magic formula to make us just as successful. A startup is a whole different animal and does not survive on a 9 to 5 mentality.
Do you consider yourself an innovator? Why?
Yes I do, because I knew that if Tijuana was at one moment the Maquiladora central of the world, then it could very well be recognized as a Tech Center. We have the talent, the capacity and what our interns and workers don't know, they learn. We have the best mix of both worlds when it comes to technology, there are no cultural barriers and I think I found a way to show the world what we can do.