Colombia isn’t just a place where Whartonites go every winter break to down shots of Aguardiente, binge on their favorite Colombian cerveza or dance salsa in Bogota’s swankiest discotecas. It’s also a booming economy with a burgeoning tech scene.
Nouras Haddad, Diego Marino and Jaime Oriol (WG’14) are among many entrepreneurs gearing up to disrupt Colombian e-commerce with their startup Lentescol.co. Lentescol.co is an online contact lens retailer that joins a handful of startups banking on Colombia’s e-commerce growth prospects, including Rocket Internet’s Linio.com, which just raised $16m to build Colombia’s Amazon counterpart.
A few months after launching Lentescol.co and bagging the Best Consumer Startup award at TheNextWeb’s Colombia Startup Awards, the 3 founders took time out to share their story with us.
Wharton Journal: Tell us how you got together at Wharton. How did the idea for Lentescol come about?
Diego Marino: The idea came from all three of us looking at e-commerce opportunities in Latin America. I was focusing initially on contact lenses, because I liked the healthy margins and recurrent nature of the business. At the same time, Jaime and Nouras both liked the economic growth that Colombia is going through and looked at several different product verticals. We decided to work on it together and started researching the market in February before spending the summer in Bogota building the company
WJ: You had quite a busy summer leading up to the launch of Lentescol.co. What’s been the most challenging aspect of launching the site? Any interesting summer stories to share?
Nouras Haddad: I think one of the most challenging things about launching was the fact that we set ourselves a 7-8 week period for doing it. This would allow us enough time to test the demand for our service and decide whether we would continue developing it post-summer. But at the same time that put a lot of time pressure to get the whole company up and running in a period of time which is aggressive for a country like Colombia, where things tend to move slower than in the US.
DM: I agree, and I also think that we were a little surprised by how reluctant some companies were in working with startups. Some logistics companies would not meet with us because we did not have an office or any sales yet. We had to convince them to take us on as clients, even though they were not exposed to any risks in working with us.
WJ: We’ve seen a handful of Wharton-born startups focusing their sights on e-commerce in Latin America these past few years. But many are balking at the logistics, payment and legal challenges involved in starting up an e-commerce business in the region. Share with us your view of the Latin American e-commerce landscape – what unique opportunities and hurdles do startups looking to enter this space face in LatAm?
Jaime Oriol: There are definitely unique challenges and opportunities connected to doing business in markets that are still developing. The market is growing and many people are entering the internet and e-commerce market for the first time. This means that people are not used to paying over the internet and are reluctant to give you their credit card information. In our case that means that although we have a fully functioning website, the majority of our sales are still supported through telephone, chat or email before closing. People need that validation and human contact more than they do in the US. Being customer-centric and always trying to delight the customer is received very well there, and we believe it pays dividends.
On the other hand, we found a lot of resistance from current incumbents (optometrists that sell through retail shops) that resist adapting to the new technologies and cheaper prices that we offer. They are currently threatening our suppliers not to sell to us and they are going to the regulatory entities to try to shut us down.
WJ: With much of current e-commerce growth in LatAm coming out of Brazil today, what trends or opportunities do you see in other markets like Colombia that make it an attractive market for e-commerce startups like Lentescol?
DM: We found Colombia attractive since it is a decently sized market (46m people and 50% internet penetration that is growing 20% p.a.) while at the same time not having many of these services being provided online yet. Especially with contact lenses we felt that the first-mover advantage was significant so we decided to focus on a market that we could be first in. It also was my home market so it made it easier to start out. Colombia has also been investing in bringing in entrepreneurs, by making it very easy and cheap to register a company and start operating. Of course, Brazil and Mexico are bigger markets and are still very attractive for many industries.
WJ: What’s next for Lentescol post-launch?
JO: We launched in late July and are now focusing on growing sales and acquiring customers. We are also trying to optimize some of the processes around order fulfillment and reporting, as well as experimenting with different marketing channels to try and minimize our cost of acquisition. We were also very happy to have been able to partner with a local charity, Fundacion VolVer, to provide a pair of glasses to a child in need for every box of lenses we sell.
WJ: What advice do you have for other Wharton MBAs looking to start up while on campus?
NH: Stay focused. That is really difficult while in school, but all the successful companies that come out of school tend to have that in common. You will inevitably need to make many trade-offs, and will have to compromise. So think about your priorities and commit to them. Other than that, use the resources available here selfishly. Talk about your startup to anyone who will listen, including your classmates, professors, guest speakers. And lastly, start early and try to validate the idea quickly. You don’t want to spend 2 years here working on something that has no future, as these two years are ones with really high opportunity cost. Now excuse me while I go and listen to my own advice.