Thursday, March 31, 2011

Looking for an apartment? Idealista.com

Well, my dear readers, another post directly from IE Business School! First of all, let me be careful with my comments since I realized our VIP professor Enrique Dans is a frequent reader of this blog and is closely looking at everything that is going on here, jejejeje (that's how you laugh in a blog in Spanish).

Unrelated ideas apart, last class we had a talk on business internationalization with Jesus Encinar the founder of Idealista.com a website where you can find and advertise real estate. Jesus talked about the opportunity he saw when seeing all those ads in the newspaper that had really poor descriptions of the things being offered. He admitted not being the first one to enter this market and in his opinion before getting in a market where there's no one, think twice!

Jesus approach is very customer driven and instead of promoting real estate all over Spain he decided to specialize in Madrid first, the largest city in Spain with a population of more then 3 million inhabitants in 2007. He started not charging anything as most online business do to create a brand image and then expanded into other regions in Spain, Barcelona and Valencia and after to other countries close by namely Italy and Portugal.

He talked about the challenges faced at that time when services such as hosting and development were not that developed with few players and he had to spend 1 million euros in a platform, something that you can rent today for as low as 250 euros per month. I must say here that in a business plan that I'm developing in another class for a web development agency we also decided not to offer hosting services since nowadays there are so many players offering this service and to add value in this market is almost impossible.

Talking about internationalization, Jesus strategy was to be in places where competition was low and that he could be close to the business. Italy for example consumed all the EBITDA for three years but since it's close to Spain didn't require a strong local presence. The same applying to Portugal where actually Jesus doesn't even has an office running everything from Spain. Another interesting thing that he mentioned was not having different companies and investors in each country, concentrating all in Spain where there's no need for complicated accounting and price transfers.

That's an interesting session and made me think about a campaign that I'm working on in another class that's for the Argentinian market and that we are running everything from Spain. It's amazing how with the Internet you can have a business in a country and run it from another but I agree with Jesus that you still have to manage the business locally and even though he travelled half of his time in the beginning he still travels once a week to the international locations where his business is.

Last, my question to Jesus was why to go to Portugal after working in Spain and Italy that are five times the size of Portugal. He replied saying that the question was why not to go given that there were clients in the border of Portugal that were looking for real estate there and given the proximity and extra cost not working out this opportunity would just give room for another competitor to take it.

Well folks, hope you enjoyed this post, I'll now prepare for my next lecture tomorrow with Alberto Torrón from Todotaladros.com. Meanwhile I'm leaving my apartment here in May, anyone interested? Or should I just tell my landlord to put it in Idealista.com?

Tuesday, March 29, 2011

Share your style at Chicisimo

This Monday we talked with Gabriel Aldamiz-echevarria, and I thought my name was long, from Chicisimo, a place where girls can share with others what they are wearing. Gabriel was a very technology development guy and it was when discovering Popsugar and SugarInc that he realized how services for girls were still unexplored, mainly in Europe.

He had no idea about the business model and this is still a problem that he faces on his website. He believes, though, that this is not an issue if you can provide value to the customer, in his case the girls. Well, between you and me we know that most Internet millionaires actually never had a business model and sold their businesses for millions and they were even a step back most times simply with an idea without providing any real value.

Our talk should be focused on PR so let's talk about it a little bit. He mentioned about belonging to a community, and starting from the bottom. You don't really have to go to the Wall Street Journal right in the beginning while without a brand you'll be competing with thousand others. He said that a good way to start is to get close to bloggers that like the kind of things you work with and once you become important and go to mass media, try to know not only the owner of the media but the people working for him. He gave us the example of the Wall Street Journal where he knew who was writing about fashion there.

Some of Gabriel's comments were similar to some I found in an article on Inc.com they say that it's critical that people know what you're doing but sending emails out to everyone won't help (look at what you read in your inbox). It's important not only to create a relationship and going to events and trade shows, but also to add value as Gabriel suggested. By that he meant knowing what journalists will be writing about, adapting your content and delivering value that would be harder for them to generate (don't you like when someone makes your life easier?).

I guess that's a summary of the main points discussed and keep in mind that PR if done properly can be as good as going to TV and in most cases: it's for FREE!!!!

Thursday, March 24, 2011

Selling your car? Coches.com

Last wednesday we had a talk with the man who created coches.com, Iñaki Arrola. This was an interesting and different case compared to the others we've seen so far since the idea came from a traditional business Iñaki was already working on: selling cars. He also said that he was not the first one to do this on the Internet and according to him the most important thing is not to have a new idea and that sometimes taking a bit from what others have done makes the difference. There's something like that in a Kotler's book saying that 90% of the ideas are not new at all.

Iñaki, like one of our previous guest speakers, Julio Alonso, is the kind of guy who also likes to start a business with his own funds. Anticipating cash flows and reinvesting is his main strategy. Well, in my financial management class that was indeed the idea but coming from the land of the interest rates, Brazil, I believe postponement with interest can make the difference sometimes.

Another thing he mentioned and that made me think about a business that I'm thinking with a friend is the lack of a tech guy in the team when you want to develop an online business. Indeed, while writing the business plan, I had no clue on how many servers to buy, the kind of software, costs involved, etc. Without the help of this friend it would take me twice the time and I would end up with an external person to lead the development team. He also talked about the importance to have balanced skills within the team, it really doesn't make any sense to have 5 marketing guys in a start up.

Last, we're discussing a little bit about the business model and since we're talking so much about the relationship with dealers I asked him: how about me? Can't a sell my car on coches.com? And he replied: yes, and it's for free. And I go: what? For free? What you mean? And Iñaki replies: I'm more interested in the traffic they can generate and charging the dealers which represent great part of the business and can pay for their ads. Well, I sort of agree with building traffic and maximizing your valuation as many businesses do (what are social networks in the end?) and I also agree that showing traffic to dealers makes the difference in pricing but I'll leave here a secret tip (don't tell anyone that I did it), of a website in Brazil that sells cars and charges everyone, doesn't matter if you're short or tall: www.webmotors.com.br. I know I shouldn't be giving gold mines away but since it was a nice chat and in business a good network is everything why not to help? ;)

Monday, March 21, 2011

Almost live from IE: Talk with Tech Entrepreneur Jorge Mata

A couple of hours ago we had a talk with tech entrepreneur Jorge Mata here at IE Business School. Jorge was the founder of MyAlert in 1999 and since then founded many other businesses and also started funding high tech start ups himself. You can read more about him on his LinkedIn profile.

The discussion was based on Jorge's experience in raising capital for his ventures. So far he raised more than 100 million dollars since he started working as an entrepreneur with MyAlert in 1999 at the age of 36. He explained that at that time it was relatively easy to get money since everybody believed that the Internet was a great opportunity with a great future potential. Everything changed, though, in the beginning of 2000 when scalability became key. Personally, I've always believed in the importance of a business plan to minimize lack of focus and Jorge replied by saying that in innovative ventures the problem is that in most cases the business model is not clear and it's key to be flexible in that regard and to adapt. Even though having revenues is still not mandatory to obtain funding, according to him more investors are paying attention to them, mainly in Europe.

One of the most interesting points of this conversation for me was his discussion of not giving away too much of the company in the beginning but balancing resources for growth with the potential gains of a future sale. Questioned about being more a fund raiser than an entrepreneur, since he is known for developing his businesses and selling them, Jorge smiled saying that there are different entrepreneurs, those who always want to do different things and those who want to work on the same thing forever. Well, from the corporate world I can see that this was quite common in the previous company I worked for with directors jumping up and down in the organizational chart. Also, I guess for someone who has innovation as the fuel to move on, it must be really tedious not to go for the next venture.

A last thing I would like to mention was the importance Jorge puts on the relations he has with angel investors where in most cases there isn't clear contracts stating responsibilities as it's the case with venture capital funds and industrials. He said that "since this relationship is highly based on trust I make sure these people always get their money back. They believe in you and by establishing these strong ties you can always rely on them in the future." This is something that I also find very important and I must say that a good network, where there's trust is fundamental for personal and professional growth.

Wednesday, March 16, 2011

Our lecture with guest speaker Julio Alonso from Weblogs SL

Alright, today we had our first lecture with Julio Alonso from Weblogs SL. It was quite interesting and Julio talked about the business, its financing and KPIs. There were lots of questions and the competition for one was fierce, I still have one that I'll mention in the end and I'll try to get it answered by posting it in his blog.

About the business, Julio shared with us that he was working in consultancy and that his passions for blogs and support from his family were the main motivators to start his own business. Actually, he still keeps his own blog that you can check: www.merodeando.com. As it's often the case, people thought that by leaving his job he was crazy but he went for it since he was spending more time blogging than working as a consultant.

Weblogs has a series of very specific blogs, written by real bloggers that talk about the things they like. According to Julio this is key to differentiate these publications from ordinary newspapers and magazines where journalists are not necessarily specialized in the things they write about. With that, each of these blogs attracts a very specific audience and Mr Alonso can sell target advertising space to companies that will most likely have higher conversion rates and increased brand awareness in these publications than they would anywhere else. As a matter of fact, Weblogs promotes that when selling ad space on its blogs by showing the audience of each one of its blogs to the advertiser, for an example check the audience of Enrique Dans' blog.

Even though these blogs allow very targeted ads, there is also a conflict between social media where people share their opinion about something and advertisers that want to promote their products and obviously don't want their ads close to bad reviews. Julio mentioned that the priority is still to have good content and real opinions and that they prefer to loose an ad opportunity in the short run rather then their traffic in the long run. I entirely agree with this comment and it reminds me of a case we've seen in another class here at IE where a company decided to create a blog with content generated and moderated by an ad agency where bad comments were being filtered what generated huge image problems for the brand.

Julio also talked about the funding part, and said that all the resources for growth have been internal. The development of the blogs was also done internally. Even though the beginning was tough, with their first month with sales of 100 us dollars, he believed the opportunity was great being the first to establish a network of specialized content in a market still not well explored in that sense, Spain. Another thing that allowed him to fund everything on his own was the fact that Weblogs has always been a lean company (with no secretary until today), and his desire to avoid conflict and misalignment with externals. Coming from a family of entrepreneurs and having taken a family venture course last term, I must say that one of the biggest reasons for a company to fail is the lack of clear objectives and more focus on conflict handling rather than managing the business.

Last, Julio talked about the importance of analysing his business and understanding his readers. For that he uses Google Analytics, which is free and he is able to understand in detail where traffic comes from (searches, referrals, direct); the most used words in searches leading to his blogs; where these people come from; the sort of browser they have; their average time in each page; etc. In another course that I'm talking we talk quite a lot about online advertising and the tools Google provides, if you want to know in a few minutes what Google Analytics can do for your website check this video:



Well, before this becomes a book, this is my question for Julio: you mentioned about the specialization and unique content of your blogs and how important that is. In Brazil your first blog was Motorpasion, that talks about cars but in the country there's a lot of very specialized and well known publications in the sector such as Quatro Rodas and in a good number of cases your blog actually refers to these publications. Based on that, how you define the segments you want to be in and how you believe you're adding value in this case given that most of these publications are off and online, allowing client interaction?

Monday, March 14, 2011

Coming up Guest: Julio Alonso, Weblogs - March 16th

Alright let's get ready for our first lecture where we are going to have Mr. Julio Alonso, founder and CEO of Weblogs, the largest Spanish online vertical media company. Founded in 2005, it currently hosts a total of 41 publications (38 in Spanish, 3 in Portuguese) with a total worldwide monthly audience of over 15 million unique users.

He will be talking about growth with self-generated resources (yes, you don't always need to go to the bank), the importance of analysis and metrics (hey, see where your money is not coming from).

Want to know more about him? There is a little video here:



Questions for him? Send me by tomorrow... hurry up!

Starting the Blog

Well my friends, here we are starting this brand new blog. For those who don't know me let me tell you that I'm attending a MBA at IE Business School and that this blog talks about the stuff that will be discussed in one of the electives that I'm taking: Managing the Tech Startup, given by professor Enrique Dans.

This course will talk about going from the idea, to its feasibility, getting the resources and implementing it. Guests from different online companies will come to class and talk about these topics and I'll post their view about these topics, my views about them and you are all invited to send comments. Also, you can visit my colleagues blogs and also view what they have to say about it (I'll be referencing their blogs here soon).

Well, if you're thinking about starting your online business this can be a good start with a structured view from some people who succeeded in the online world. I hope you enjoy the discussion. I'll try to let you know in advance who will be in the lectures so if you are not a IE student you'll also have the opportunity to ask questions.

By the way, since I'm doing this for free click on the ads on the page so I can have a free beer with my colleagues by the end of the term. If you are around Madrid let me know, you'll be our VIP guest!!!

Saludos ;)