[Customer Seduction – disclosed interview] Empreendemia

Time has come to reveal a bit of the mystery behind Customer Seduction ebook by disclosing pieces of content. Enjoy the disclosure of interview #6 with Luiz Piovesana – Co-Founder and CEO at Empreendemia – HQ in Sao Paulo, Brazil. (Please note that here it is presented the complete interview, while in the book all the information gathered will be mixed and restructured for easier learning.)

The case study presents ways how a b2b marketplace can test the concept, develop the concept in small validated steps, get first users and turn into a scalable business.

(photo source: brasil20.org)

Adelina: What is Empreendemia?

Luiz: Empreendemia is a Brazilian b2b marketplace, a social network where SMEs have profiles and can do business between themselves (find suppliers and business clients). It also contains a portal with content for SMEs. It was launched in 2009. Now the marketplace gathers 20K companies and the portal attracts 140K unique monthly visitors.

Adelina: What is your business model?

Luiz: Well, we have the users – the SMEs, and we have the customers – 50% of users pay for higher visibility, but is not our main income, we have big companies that pay to get to this network of SMEs, this is the main income at the moment. So we have to do direct sales to big companies. But this is not a scalable business, and now we are fixing this (will mention later).

Adelina: How did you shape the business concept? Were potential customers involved?

Luiz: I wanted to build tools for SMEs because I noticed the difficulties they face while working as Junior Entrepreneur in Brasil Junior and JADE. I said we can make this better and we started researching.

First we ran a qualitative research, we had a list of questions. We went to some small companies that you can find on the street. After 20 interviews we realized it is bullshit, not really helpful.

Then we decided to show a concept and get feedback on that, so we made a 10 slides presentation and we presented it to people with experience in internet markets and SMEs markets. We made 15-20 presentations (adapted after each discussion) and we got a lot of feedback. As soon as we noticed the feedback was the same, we stopped researching and started building.

At the same time we were writing on our blog, so we were always getting some awareness. We started the project development with a software engineer. We tested some mockups on potential users.

After 6 months of research and testing, we started actually programming. One month before the launch we invited beta testers on our platform, we attracted them through the blog and made them leave us their emails.

Adelina: Did you do anything special when you launched?

Luiz: When we launched in 2009, our blog (which later became the portal) had already 32K visits a month. Was good to launch with this coverage. Also, we made an event in the form of a competition for startups where we officially launched Empreendemia. The event was so great that next year we repeated it, but we replaced startups with our target group.

For the first weeks after launch, we invited the beta users to get feedback on the product and find bugs. New users could only be invited by existing users. So we only used our blog and the viral part: users getting other users. We had no money for advertising. We opened it to everyone in January 2010.

Adelina: How are you planning to develop it further? You mentioned you want to turn it into a scalable business.

Luiz: We went to do field research, we spent time inside SMEs to get to know more about them. Today we are building several tools to offer to SMEs, like tools to manage finances, to manage projects. This tools will be inside Empreedemia, people will be able to build their own customized applications inside the platform, through APIs. It is like playing games on facebook when you don’t have to get out of facebook, but the games are made by someone else.  It will be the same with us.

We had this vision from before, but back then we did not have enough resources. We had to prove we can get the attention of small businesses and then we can offer them more.

Adelina: How did you test this new concept?

Luiz: We did interviews with current heavy users, those that are the closest to us. We researched their daily activities, how they organize themselves and we checked if there is a demand for the tools we want to offer: a to do list, a CRM tool, a tool to make invoices, project management tool and financial planning tool. We checked what was their demand for these tools, how they use them currently. Later in the interview we asked about what we wanted to offer: a box with all those tools, not just individual tools.

Then we made prototypes – only sceens on powerpoint and we went to interview other people and checked how to make better prototypes. Now we are actually building the first tool and other developers can make their own.

Adelina: So you are really a lean startup. How is this concept embraced in Brazil?

Luiz: In Brazil people talk a lot about lean startups, but very few actually make it work like this. Startups don’t really apply lean, but they pray to lean startup god. You don’t learn just by reading, you need to go and do the tests, build real MVPs. It is not easy to measure, to define key metrics and to work on results. A lot of people just stop after first experiments.

The startup ecosystem today is big, lots of people just try and they just mess up. Most entrepreneurs in Brazil are first time entrepreneurs, they don’t have any background running a business. People are not as lean as they can.

People are afraid to fail. It is ok, you can go step by step and know that every milestone you reach is stable and you can learn from that. For this to happen you fail, you learn, next time you do it right because of the experience. We all fail until we do it right only one time. All the failures help you build your success. You need to fail to do something nobody has done before.

Adelina: What do you think it made the difference in your case? 

Luiz: In Empreendemia we like to iterate, we do small tests quickly, we learn something, we improve quickly. We were doing this since beginning of 2009. We wanted to grow quick, but not to build a big product and then sink.

When I finished working in JADE I had almost 5 years in the Junior Enterprise movement. This experience helped me a lot.

I knew I do not want to work with a big company because they are too slow. I experienced working with some startups and then I said ok, this is really cool.

Also, I have an engineering background. Engineers run tests al the time, they expect failure and learning. They move forward and get to build something. But in business the mentality is not the same.

 

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