When you are not in Silicon Valley

Situational awareness is a concept I learned from the aviation industry that pretty much describes everything I want to say here.

I’m a tech-startup founder, an admirer of what Silicon Valley (SV) embodies, and a long time follower of the personalities that came out of that place. I don’t live there, I don’t have any contacts there, I’ve been there only two times before (both paid by YCombinator) and I don’t have any way of moving there even if I wanted to.

For the few months leading to the founding of Toky, and until late 2016 more or less, I was obsessed with the SV way of doing things. I was consuming startup advice originating there, reading VC Twitter like crazy, checking TechCrunch daily, and following founders with huge investment rounds running their companies from San Francisco.

All of that knowledge shared for free is fantastic but if you don’t realize you have to adjust it to your reality it will end up killing your startup sooner rather than later.

In Silicon Valley, but not really there

For example, access to funding in Latin America—where Toky was born—is significantly harder than it is in SV or in some countries in Europe. I remember that getting funding for our seed stage in Mexico was so hard because we are a SaaS company and most of the investors back then didn’t have experience with it or with our industry in general. They were funding B2C or marketplace deals only.

Things that people take for granted in SV were an ordeal for us. Basic things like getting a credit-card processor to work took weeks, Stripe didn’t even exist here when we started in 2014, and the one we used instead ended up not working reliably for payments outside of Mexico so we had to take care of that too.

Purchasing a bunch of subscription software to “streamline processes”, like project management tools, monitoring tools, hosted services for open-source free software, all come from the idea that you should optimize your time for running your business in the most efficient way but what you need to account for is that paying $100/month for a project management tool that could have been just a Google Sheet, or paying $50/month for a hosted WordPress blog when you can do it for $5/month installing it yourself, quickly add up to what is lunch money in SV but could be a weekly salary for people in Mexico or other countries.

When you have millions of dollars in funding you are expected to optimize for maximum growth at the expense of profitability, but when your funding is slim, you have to focus on what is most important for keeping your startup alive, maybe profitability or maybe something else. As Paul Graham puts it, you need to be default-alive [1].

Once you have reached a state where you no longer worry—too much—about running out of money, then making optimizations make more sense. At this stage, paying for project management tools becomes an investment and not an expense, and having to worry about updating your WordPress site can be delegated to a hosted service provider.

Read everything you can about how to do what you want to do but have your own playbook that is in accordance with your reality, otherwise, you will just end up frustrated and most likely, with a dying business.

[1] If you want to start with general knowledge about how to create a tech-startup, check out Startup School by YCombinator. It’s offered free of charge and with the best intentions.

Deciding when it’s time to make the jump

When I tell my story of entrepreneurship to friends they always have the impression that I’m braver than they are for having the guts to quit a perfectly fine job to embark myself in the journey of starting a business. The reality however, is quite different and much less romantic than what people usually think.

I was not brave or smart in any way. I didn’t really know what I was doing. I had a lot of energy and I was very lucky. You can safely say I was a complete ignorant of the risks involved in starting a business.

I think a huge amount of young founders don’t really know what they are doing at all when they start. What we have in common is usually that we have very little to lose and substantial amounts of energy focused into making a single goal become a reality.

Taking my ignorance aside for a moment, I did realize that I was probably never going to be in a more comfortable position to take the risk of creating Toky so here’s a list of the things that worked out for me to decide it was the right time:

I had money saved up

Not a lot, but around 4 months worth of living expenses. No debts.

Good health

I felt very strong physically and mentally. I was eating good and exercising a lot. My mind was also in a good place.

I changed my environment

I had just moved to Mexico. I didn’t have friends, family around and I didn’t feel like being home. Everything felt like new and I wasn’t attached to anything.

The change inspired me

Moving from Asunción to Mexico City was a shock in every way. From living all my life in small towns and cities to suddenly being in a gigantic city surrounded by millions of people made me see the world differently. It made me feel that I was maybe capable of doing things I thought I couldn’t.

I was focused on a single objective

My wife received a big promotion and with that came a salary increase for her. I felt that I could fail with Toky without being afraid of becoming homeless as consequence. This mental state was fundamental at that time because it subconsciously gave me permission to risk everything I had and freed my mind to solely focus on Toky.

I felt supported

I built an MVP of Toky and with that I went to pitch it to Wayra and to my surprise, they decided to invest. This is probably the single biggest signal I received it was time to make the jump. That’s exactly what I did in September 2014.

As you can see, I was not brave at all and I was really lucky to be in the position I was when I decided to start Toky. I can only take one merit out of this entire situation and that is that I recognized the opportunity and I didn’t let it escape.

Every person and situation is different but maybe after reading my experience you can relate to it in some ways. Maybe you are hesitant because you are afraid or feel unprepared and for what it’s worth, I don’t think you will ever feel prepared and that’s okay.

Focus or fail

It’s so easy to fall into the illusion of work where you can spend hours doing something that feels like work but that in reality is not contributing anything to the health of your startup.

I fell into this trap many times during the initial 18 months of Toky by attending to conferences, doing interviews for media outlets in Paraguay and in Mexico, actively seeking attention for my “successes” with Toky and generally enjoying the praise I was receiving from the public for being “brave and smart” for having created a tech startup.

I was enjoying myself feeling important. It’s an addictive feeling that’s so hard to let go of and that’s so toxic at the same time.

I felt like a winner back then and ironically, I was absolutely certain that I was great and that Toky was going to turn out to be a huge success. It’s ironic because today, after almost 6 years and having survived all sorts of shit-shows, I still need to remind myself every day that I’m more experienced now so that I can gain the confidence I need to execute.

I wasted many months working on the wrong things and focusing on unimportant stuff. My fellow batch founders in Wayra were doing exactly the same thing and no one was telling us we should be focusing on our businesses instead. Many startups on my batch died, and I don’t know enough to make a fair judgment here, but I’m sure the lack of focus was one of the main reasons for this outcome.

In 2015, and after realizing we had an expiration date because we were quickly running out of money, the shock of learning this fact opened our eyes and we were forced to work on the right things or admit we were going to fail.

In a memory that I can recall vividly, I remember Oscar and I walking around Parque México in Mexico City discussing that we needed to change focus and start charging money for our product or that otherwise our days were numbered. After a few walk-arounds that park, we turned Toky from a B2C business into B2B.

A similar view of the one we had that day during that walk in Parque México

After that, our attention-seeking addiction slowly started to vanish and we slowly also started disappearing from the visible world. We locked ourselves down and started building the product that we have today.

In an unsurprising turn of events, we saw that the world didn’t actually care at all about us. When we chose to not show ourselves any more people hardly noticed. It was a new reality that was hard swallow but that we learned to move on from eventually.

Focus doesn’t receive enough attention and is a piece of advice that is easy to accept but very hard to follow. I’ve been there myself and I get it, but this time you need to not just listen, you need to act.

Determine what’s important for the success of your startup, determine the order of importance of each thing, and focus on one (or a small few) thing(s) at a time.

Have everything written down in paper

At the beginning of a new project everyone is super energized, hopeful and ready to bleed for the end goal. Hopefully those days will never end but if they do, you have to be prepared and protected.

You have to do an explicitly targeted work to keep the relationship with your business partners healthy. You have to truly care about their wellbeing and you have to mean this. It has to come from the inside and you have to make time to talk about it regularly.

The above advice will keep you from ever having to recur to the legal papers I’m talking about here. The order is important. Invest in your relationships first so that you don’t have to fall back to the legal documents ever.

Having said that, every aspect of your business deal must have a paper counterpart. How much everyone owns, vesting periods, what happens if someone decides to leave, how to decide if someone is no longer a fit and what to do about it, how is decision power divided, how to fire a cofounder, how to handle dividends, how to decide if you want to sell the company, etc.

This post is not about creating a comprehensive list of the things you need to consider for the contract between you and your partner. It’s more about bringing to your attention that you need to protect yourself and everyone involved by having all rules of the game very clear from the very start.

Remember that creating a startup is already stressful. You don’t need yet another worry to your anxiety bucket if for any reason something unexpected, like a cofounder wanting to leave, happens.

Who to take startup advice from

Everyone has an opinion on everything and a reason to think they are right and that you are wrong. Ironically enough, this post can very well be one of them, but I’ll let you make that decision yourself ;-).

When I was going through Wayra, the startup accelerator Toky was part of in 2014, the advisors hired to help us were coming mostly from the corporate world. They all had relevant roles and academic titles proving on paper that they made the time to learn what they came to advise, but the disconnection between how they did things at their jobs and how things can be done in a tiny startup that is more dead than alive, didn’t seem to be evident to most of them.

I remember being forced to make a huge spreadsheet with user acquisition projections, how much we were going to make in sales, and how things would look like in 5 years. It made complete sense to them that we should be spending time on multi-year projections instead of on building a product and actually selling it.

On another occasion, I remember we were having meetings and attending law firms to meet Intellectual-Property lawyers who were helping us patent everything we built. The only problem was that we didn’t really have anything worthy of a patent at that time but they were following a timeline that I’m sure made sense on paper but in reality, was completely useless and a waste of time.

Why weren’t we meeting product people and working all the time on user acquisition? Why no one was noticing that we didn’t have an infinite runway and that we should be focusing on improving our metrics to look more appealing to potential investors so that we can survive another year? Why was all advice assuming we had a huge budget of millions to pay people to come to visit us and buy our product?

I’m sure everyone there had good intentions and really wanted to help. I met great people there and I know one of the reasons we still exist as a business is because they gave us the seed money we needed to take off. The last thing I want is to sound ungrateful.

My point is that you should listen to every piece of advice and opinion you can, but giving your maximum attention to the ones coming from people who had been in your shoes before or that are in a place where you would like to be in the future.

Like making charity with other people’s money, throwing startup tips from the comfort of a safe corporate salary, is just too easy to not do it. Always take them with a grain of salt.

Picking your startup idea

There’s plenty of advice out there about how to do it, but based on my own experience, it all comes down to two fundamental things: how much you love it and how are you going to make money with it.

The idea—the product you are going to build—is going to stay with you for years to come so you better feel passionate about it and be ready to think about it every day for years.

In my case, it felt natural to start a telecommunications startup because that’s what I have been doing for the past 6 years at that point. I liked it, I felt passionate about it and learning new things on the subject became like a hobby of mine.

Obsession is a strong adjective but it pretty much describes my feelings towards this industry and how much I like it.

Toky’s first office in 2014 was the kitchen in my apartment. We were enjoying ourselves just as much as we do it today—it never felt like work.

My point is that your likelihood of succeeding with your startup increases significantly if you are building on top of something you truly love, being in an industry you find interesting and when working on your product doesn’t feel like a burden. You have to love doing it.

Then, there’s the ability of your idea to generate money. You must think about this early on even if you are living with your parents today or have no responsibilities with other people like significant others for example.

Doing it for the money as motivator is debatable and I’m not saying that. What I am saying is that the discussion about how you are going to turn your time and expertise invested in your idea into tangible wealth must be addressed since the very beginning with yourself and with everyone else involved in the risks you are going to take.

The thrill of starting something new and those days of working tirelessly with an excitement expression on your face are going to, undoubtedly, dry out some day and when that day comes you will want to have the assurance you can pay your rent, health and food while you rest and recharge energies.

In the perfect world, your skills, your idea and the industry where your product is going to exist all intersect at a point where making a sustainable stream of income is possible.

When we started Toky we were completely ignorant of how to run a business and we barely talked about how the product was going to make money. It seems like I didn’t follow my own advice and you are absolutely right to think that.

What saved us was that we picked the right idea where our combined skills made it possible to actually build something useful inside an industry that was growing at an accelerating pace. We basically jumped on top of a wave that carried us with it and that ended up compensating for the many things we disregarded during our early days as a company.

It wasn’t luck how we chose the idea, product and the industry—that we did well because it was an informed decision—but it was definitely luck how the industry was growing so fast that admitted so many products to coexist without saturating the customers and allowing us to make money in the process.

So don’t be us and don’t rely on luck so much. Have the idea, product, industry and money conversation early and as often as necessary.

Repurposing this space: how I got where I am today

In July this year, my blogging career will turn 10 years. I still remember how excited I was when I wrote my first post and when I decided to “turn pro” by purchasing this domain 😂.

Looking back you can see things in perspective people say, and I can clearly see now how life changing that decision was.

I didn’t know back then but this blog fundamentally changed the course of my life for the better and I want to share with you what those things were.

Organizing ideas

Communicating ideas is hard. Communicating ideas in writing is even harder.

Writing regularly helped me structure my thoughts in a way that was easier for people to digest and when people can follow what you are trying to say, you unlock a new level in living life.

English

I don’t suck at English as much as I used to.

I was never good at learning languages and I think that remains unchanged, but forcing myself to write in English and making a plethora of mistakes in the process, made me decent enough to be able to communicate with a wider audience and thus increasing the amount of opportunities I had access to.

Contributing to open-source

After getting used to writing in English I was finally comfortable with writing publicly accessible emails, reading documentation in this language and speaking it without being so afraid.

This step led me to contribute to the Kamailio open-source project with a module called CNXCC.

Contributing to open-source is the best form of curriculum-vitae a programmer can have which takes me to the next part …

My first remote job

I met Carsten in 2012 after his company was hired by the company I was working for back then in Asunción, Paraguay. He is a cool and a very smart guy and after a while working side by side with him, he offered me a position at his company working remotely.

I resigned to the “safe” job I had and went to work for him and his company in Germany from the comfort of my home in Asunción. I did this against the advice of my parents and this is also another big learning for me: friends and family always want the best for you and they usually advise you against taking big risks but at the end of the day, rewards that are worthwhile only come from taking those risks.

Anyway, the module I wrote served as a proof I’m technically capable of doing the things I said I could and that landed me the best job I ever had (after Toky 😜).

He took a chance with me and I’ll forever be grateful to him for that.

The very last picture at my, then, previous job.

Moving countries

Months after starting working remotely my then girlfriend (today wife) got promoted to a position that required her to move to Mexico.

I didn’t take it easily but I ended up moving with her and I’ve been living in Mexico since 2014.

In retrospective, I know my decision to follow her was easier to make because I would not be resigning to a career in Paraguay and because I could take my job with me by continuing working remotely. This wouldn’t have been possible at all if I wouldn’t have taken the risk of working for Carsten in 2013. Win-win.

By this time in my life I was already very comfortable with taking risks. I was young and naive but somehow, the decisions I was making were surprisingly right and I was getting along with uncertainty.

First 5 seconds in Mexican soil. I was moving to Mexico City without ever having been to this city before.

Founding Toky

We are now in September 2014 and about to make the single biggest decision in my professional life.

Being the risk taker I was (am?) I was looking for the next big challenge and against all reason, Oscar (my cofounder) and I decided to start a company, Toky.

He moved to Mexico and I resigned to that lovely job I had and it took all of me to be able to do it. I really loved it and I doubted doing it until the last minute.

Neither of us had any idea about how to run a business but we did it anyway. The only thing we were sure of was that we were very good at the things we specialized at: me at telephony and him at product design.

This part requires a lot of elaboration and I’ll do it in future posts but what I can tell you right now is that so many things happened between then and today that the overused saying of “roller coaster of emotions” falls short compared to what we went through.

The next chapter of this blog

If you look at my previous entries you will notice this blog was about technical topics regarding telephony.

I still am an engineer and a programmer at heart but I feel like this time around I should blog about my six years of experience running a company that had very few chances of succeeding but did it anyway.

I’ll be telling anyone willing to read me how I did it in the hope of helping other people do the same.

An update after almost 2 years without posting

I can’t believe it’s been almost two years since my last post, time flies.

I’m gonna make this short and concise:

  1. I started my own company, I am now a startup CEO and cofounder 🙂 .
  2. A previous post is the project that started it all. It has mutated quite a bit and turned into Toky, a product that was built from scratch and that I am proud of, specially in the technical POV.
  3.  I don’t blog anymore, as a matter of fact, I spend my days coding and coding with not much time to write about anything other than Toky. You can find my recent posts in the Toky Blog.
  4.  I no longer maintain my opensource projects. I’m really sorry about this but I don’t have the time to do it anymore.
  5. I don’t reply emails about questions on these projects. I used to reply them with apologies for not being able to help them, but the number of emails kept increasing that they became a burden so I simply stopped replying. Again, I’m sorry about this, it’s not personal.
  6. I may go back to blogging soon.

BRB 😉

 

 

Sigapy: a failed attempt to create a product in Paraguay

A little more than a year ago, I created a service which main intention was to provide my fellow Paraguayans living abroad, an easy way to call home using their smartphones. It was not like Viber or Tango app, you could actually call to land lines and mobile phones, and of course between Sigapy users.

There’s no specialized service like this in Paraguay, and I wanted to fill that void with something new and easy to use, and so Sigapy was born. It was conceived as an academical project but soon it started to appear exploitable as a commercial service, but the environment for this kind of business in Paraguay isn’t the best (actually, it’s horrible) and I had to shut it down for my own juridical sake.

Today, I decided someone else can give it a try, because it’s a more or less mature product and can easily be adapted to someone else’s needs.

Check out the videos and the landing page I created. The videos are in Spanish, but the flow can be understood by anyone.

NGS

NGS

UPDATE: with this project, I won a place in the 4th generation of startups of Wayra Mexico. More updates to come in the future posts :).

NGS, or Next Generation Support, is a project that I created to participate in the TADHack event. It is about improving the user experience we have when we call to customer support, and it takes advantage of the new telco technologies we have today, to create a product that tries to fix a rather common issue which is the bad quality in customer support systems.

What NGS has to offer?

  1. Everyone has a smartphone, and there’s an app for everything, why not for a specialized customer support?
  2. It’s really annoying to navigate through the IVR menus. It’s easier to directly go to the option you want, with a click.
  3. It can be completely free, the only thing you need is an Internet connection.
  4. The customer would be able to call from literally anywhere in the world, using Internet, no toll-free numbers at all.
  5. Call center agents can know exactly who’s calling, where is he located, and what does he want, and with this info a better customer experience can be offered.
  6. The customer can take advantage of the current technology, with HD voice quality, chatting, video calling, screen sharing, etc.
  7. The customer can know exactly who is behind the phone, with a picture, an email, a full name, and he can rate the experience he had with the agent.
  8. In summary, improved customer experience from every angle you can think of.

Opensource communication technologies I used

  1. Kamailio
  2. rptengine: this one belongs to the Kamailio project but deserves special mention because it powers the media relaying. Extremely important
  3. SIPjs
  4. Freeswitch
  5. CSipSimple: compiled in library mode, it allowed me to use PJLIB to create SIP apps for Android.

I posted below, a few screenshots of the software, and I’m planning to add more and release the code during this month.

This is a work in progress. The project has only 3 weeks of being alive, at the time this post was written.

Screenshot_2014-06-05-20-33-52 Screenshot_2014-06-05-20-34-00 Screenshot_2014-06-05-20-34-17 Screenshot_2014-06-05-20-34-21 Screenshot_2014-06-05-20-34-32 Screenshot_2014-06-05-20-34-39 Screenshot_2014-06-05-20-35-59 Screenshot_2014-06-05-20-36-15 Screenshot Screenshot-1