My experience as an entrepreneur

The world is more and more of those who create their own work opportunities, and there is less and less space for those looking for existing jobs.

In the next 10-15 years, new technologies and the changes they entail will cause a devastating strike to up to 35% of the universe of careers and jobs. A remedy for this is the path of entrepreneurship, an option that has been gaining ground among new entrants to the labor market, especially by replacing jobs that have ceased to exist.

To understand the force of this change, imagine the convergence of the development of computers, networks, sensors, artificial intelligence, robotics, digital fabrication, 3D printing, synthetic biology, cognitive computing, etc. leading to ever-faster computers to create even faster computers, as demonstrated by the Kurzweil curve. Currently, we are all connected all the time and using tools that were only available to governments and large companies a few decades ago and we have not seen 1% of the change that will occur in the next decade, which will probably happen at a higher rate than Moore’s Law’s (twice the capacity and half the price every 12 to 18 months).

Well, it was with the will to endeavor and beginning to see some meager technological advances that, in 1989 I entered business school. Since elementary school when, with two other friends, I participated in a venture that produced posters of our favorite rock idols, I loved the freedom to be able to follow my dreams and wanted this to be my way. However, it was not this time yet. Our small venture depended on the father of one of us, owner of a toy industry, to actually produce such posters we would latter sell. But I had my first experience as an entrepreneur, liked it and moved on.

Throughout this trajectory, I lacked humility and excelled in daring. In the university I learned, and took some time to unlearn, that arrogance was a good quality to be improved. Being overconfident has made me fail a lot and nothing better than failing for one to learn. On each of these occasions I changed the course, and, more importantly, I was clearer about what I worked for, that is, what was the purpose guiding me by.

With the possibility brought by the Internet to empower the individual, my main motivation as a professional was always to create conditions so that each one could express his/ her best. I did this in a book publishing house, creating a business model that would allow to those who did not have access to buy books. I did this in an NGO, amplifying the voice of the common citizen to assert his/ her desires. And I continue to do this as a consultant, improving the efficiency of governments and non-governmental organizations, and strengthening networks of micro and small entrepreneurs.

I know that I can be really creative and use this characteristic as well as the experience gained in developing businesses to sustain creative and innovative processes. With these cards in hand, I threw myself into the experiences I tell you in this post about my three projects, their results and my learnings.

Let’s get down to the facts!

Publishing company

In 1997, coming back from a sabbatical (which I did not yet know that had this name) in New York, I accepted the challenge of creating and directing Seed Editorial, a family-owned publishing company, later renamed A Fantástica Fábrica de Livros (The Fantastic Book Factory).

Aside from the fact that we edited and produced 92 children’s books, which sold more than 3 million copies, the transaction was never profitable and changes in the market and in the door-to-door distribution channel led us to close the operation five years later.

What made my eyes shine was that, having a bold business model, low costs and an alternative distribution channel, we would sell books for a share of the 92% of the Brazilian population that, according to the survey Retratos da Leitura no Brasil (Brazil’s Reading Portrait) — CBL 2000–2001, had no access to the book market and only read what they could borrow in libraries or at school.

What went wrong?

1. The federal government, through a book distribution program for schools, decided to greatly expand the purchasing the books, at low prices because of large volumes, flooding the market with books distributed free to those who could not afford to buy. That is, what could have been a market niche, has been turned into a public policy to donate books with tax money.
2. Distributors were well organized and divided the regions of the country between them. That is, if I would not sell to one of them, I would not sell in that region at all. And because there were more publishers than distributors and as a consequence of the opening of the market, promoted shortly before during president Collor’s administration, books of lower editorial quality entered the country at low prices and distributors negotiated hard to buy for less, further compressing our possibility of profit.
3. As we had experience with this market from the writer’s side, my father’s profession, we thought, “If a writer gets 5% copyright, let’s become publishers and take all 100%!” That thought did not stop for a simple reason: being a writer, you have no risks. As an editor, the costs are all yours and the product can stay in the warehouse indefinitely if you do not have a good market solution.
4. Moreover, I had no experience in this market and the family business was organized in such a way that meetings at which decisions would have to be made on the basis of evidences were marked by emotions, characteristic of fraternal relations.

It was good while it lasted; I visited other parts of Brazil and witnessed how this market, with its aura of romanticism, should be approached with pragmatism. Until today it is possible to find our books in libraries, schools and talons all over Brazil. I thank my family for the opportunity and trust and customers and suppliers for the partnership.

Cidade Democrática

In 2008, I had my eureka moment during a lecture by Steven Johnson, when I saw the opportunity to improve the quality of communication between politicians and society in the wake of Web 2.0. First I tried to offer it as a commercial product for possible partners, but after a couple of attempts I realized that if I really wanted it, I would have to roll up my sleeves and do it myself. That’s how I started Cidade Democrática (Democratic City).

We began with a website — with first beta version allowing anyone to identify an issue (problem or proposal), associating to themes and territories — which then gave rise to the establishment of the non-profit association, Instituto Seva, later renamed after our main project as Instituto Cidade Democrática, which is to complete nine years next November opening frontiers in the citizen engagement field.

In this period, we pioneered the use of the Internet to engage citizens, created a social technology recognized by the Banco do Brasil Foundation and FINEP, held 14 ideas challenges in São Paulo and Pará, created four thematic or regional agendas, mapped the Brazilian citizen engagement ecosystem, identifying 600 initiatives that benefited 380 thousand people with a total budget of USD 27 million, created the first ontology for social participation favoring the integration of databases and the creation of a collective intelligence in this field, raised USD 1,25 million in financial resources and were recognized by FINEP (3rd place as open innovation technology in public policies), Catraca Livre (Finalist at Sustainable Citizen Award) and Deutsche Welle (nomination as best innovation).

What was fundamental for me to fall in love with the idea and to be sure that I had to start this new initiative — besides the issue of social participation in politics — was the possibility of giving people more power. As executive director of Cidade Democrática I did this in politics (I did my master in public administration), glimpsing that the Internet and data science would completely change the way citizens say how they want their taxes to be invested. We thought: “Politicians will no longer need to guess the will of citizens through researches. They will simply buy our report, read the data, and say, ‘Wow, this group of people wants this project in this neighborhood, so I’ll do my best to meet this demand’, and having a good evaluation, would be re-elected.”

What did I learn from Cidade Democrática?

1. In the process of finding partners for the work I was about to begin, I met the president of Movimento Voto Consciente (Conscious Voting Movement) who suggested that I meet Henrique. A couple of months after we first meet, in the beginning of 2009, we sat down to have a beer and he said: “Man, it makes a lot of sense for me to work with you at Cidade Democrática” and I did not think for two seconds before accepting his offer. As says Nancy Lublin from Crisis Text Line, work with people who are passionate about what you do, not about you. Without someone like Henrique, with whom I could share decisions and work, this path would have been much more difficult and tortuous.
2. When we were to register the domain, we had some conversations about what it would mean to create a .com and we thought: “No one will ever want to share information with us knowing that in the future it can be sold.” So we chose to create a .org, which would give greater assurance that the data would not be sold to a political party, for example. We have taken this path for the good and for the bad. On the good side I believe, immodestly, that we are a reference to an ethical action in the field, who knows, inspiring forms of self-regulation. It has also opened doors for us in the academy and with partners from open data, free software and also with rights advocacy movements. On the other hand, we gradually lost space for new initiatives, which came with a lot of gas and a discourse updated from the learning that we always seek to communicate in a transparent way, such as Nossas Cidades and Update, or for initiatives with business models that included the sale of data and proprietary software, such as Colab. It was a choice that led us to where we are now, and where we can contribute to consistent thoughts and sophisticated and powerful solutions, such as the pushing democracy together. I wish there will be room for all different business models in this field.
3. We have pivoted the business model two times. We began with the website, where we hoped to achieve two million active users, move to the open innovation challenges, having Open Ideo’s as a reference, offering a product to be bought by anyone wishing to build a local agenda and, finally, we are changing to a new technology based on Pol.is software. In all cases, using data is part of the business model, that is, getting data on what people want for your city or neighborhood, working on that data, and delivering a strategic report. Where is our bottleneck? In active citizens and good proposals. As we said, before moving on to the open innovation phase: “The plan went well. Only two million users were missing from the platform…”
4. I am among those who believe that collaboration is at the core of the human kind. Were it not for the willingness of humans to create things together, as they say Humberto Maturana, Clay Shirky and Stephen Johnson, there would be no cities, markets, families, companies and countries and almost all of the stories (inter-subjective realities) that allow us to collaborate flexibly in large groups, as Yuval Harari accounts in his recent book Sapiens — A Brief History of Mankind. However, our incentive system confuses this inherent drive and, as in any competitive market, in the third sector collaboration is far from being the predominant practice. Organizations need to compete for existing resources and, for this, work in silos, throwing aside the possibility of synergy gains that could exist if they worked otherwise, in my view an absolute need when it comes to social impact. Our search for joint operations and protocols and common agendas has been a constant in these years, but the perception is that we live a reality of an expanding universe, with each one taking care of being able to differentiate and stand out in the scenario of foundations and other clients. Contrary wise, in the last two or three years, we have experienced a great contraction, with many initiatives closing doors. A pity and a loss for the citizen who needs to be heard and the politician who wants to govern better.
5. Building a good institutional team is essential and challenging. With the restrictions of resources that come with the execution of work plans that do not consider the costs necessary to hire and train, in addition to the costs associated with contracting, when it is the case, we always worked with a team dedicated to the projects and only two or three people in the institutional area, including myself.
6. Our organizational culture requires the ability of self-management, work from a distance and shared decisions. The benefit of building together is enormous, although always accompanied by a longer time to decide, especially at times that require a change of route. Our greatest achievements in managing the eight-person team included drawing up individual work plans, a career plan foreseen to increase pay for company time, additional training or assumed legal responsibilities, and peripatetic meetings that, was Aristotle did with his pupil, allowed for us to deliberate on daily issues in the walking path between my house and our office when I would meet Henrique by his house.
7. Still on staff, we were always oriented with a sense of purpose and, therefore, having a mission, vision, strategic components and KPIs has always been fundamental. Throughout our journey, we had an initial strategic plan and two updates in 2013 and 2016. This helps us keep our focus on what’s important every day.
8. A good part of the resources needed for our operation came from friends and family, in addition to myself, reaching over USD 500 K. Almost none of this came back to anyone who invested. They were donations in the name of the cause and in trust in the team and in my conduction as director of the organization. But our history, as expected, is very much related to the partners we had along the way, since it was they who brought most of the resources into the organization. After some years of personal investment and the occasional resources raised through small services provided by the Institute, especially with Avina and Fundação Prefeito Faria Lima, in 2012, we had the first major contribution from Omidyar Network. The donation had a matching funds component, ie a portion of the funds depended on we being able to raise more funds. Fortunately, in early 2013, with the intervention of Brazil’s Federal Government, we were contracted by Norte Energia to create a development agenda for the region of influence of the Belo Monte dam plant, which has yielded our largest contract to date and helped unlock Omidyar’s conditioned resources. A year later it was the turn of IBM that in addition to helping us with financial resources and connections with their partners, offered us what they call service grants, providing its consultants to help us with strategic planning, technology roadmap and business plan. Finally, in 2015, Open Society Foundations joined this select group and supported a project that would be the crème de la crème of all that we had learned up to that time. In addition to these, we have raised via crowdfundig and had other partners such as BrazilFoundation, BVSA, Instituto Betty e Jacob Lafer, São Paulo City Hall, Várzea Paulista City Hall and Escola AHÁ, among others that helped us reach almost USD 700 K in funding as grants or income generation for services provided. Without these funds rose from outside our inner circle nothing would have been possible and our achievements walked pari passu with these donations. I am eternally grateful to all those who believed in our work and were together in the path.

After nearly nine years of working in the area of ​​citizen engagement, I get the perception that we still have not found the way to the innovation that the Internet allows and the political world asks for. As Peter Diamandis in his famous six Ds says, any information that can be digitized, ie turned into zeros and ones and read by computers, so that it can dematerialize, demonetize and democratize access, passes through a deceptive innovation period before being disruptive. In my view, we have not yet reached the disruptive stage.

I learned a lot from this experience and, at this point, I do the movement to pass the baton to my colleagues who, with more courage and a lots of love for the cause, can move on from the repositioning and pivoting to the Pushing Democracy Together new technological solution.

What would I have done differently?

Well, I would have done a lot of things differently, but I will highlight the following four:

1. I would have kept the focus on the number of users on the website obstinately. This is the key indicator for the change we want to make and nothing could have been more important than knowing how many active users we had on the platform on a daily basis.
2. I would have made investments in technology through a house team. We made huge investments, considering our size, but the maintenance and even improvements requested by our users base always suffered because we did not had an internal team to do this. Being a technology-intensive organization, I would have struggled to have an internal team of developers.
3. I would have offered alternative rewards for the citizen participants, since the adhesion of politicians by means of directing public spending or creating laws was advancing with so many obstacles of different natures.
4. Passion is important, but cannot blind, as says Steve Spinner of RevUp. From the beginning, I have heard from many people that this would not work for several reasons. Some of them were right and some were not. I would have been much more based on numbers to help identify what is going wrong and how we could improve the operation. As passionate as a person is, having good numbers to rely on when making decisions is absolutely critical.

Enzima

Exactly one year before the foundation of Cidade Democrática and soon after six years between a master’s degree and positions in the public sector, with passage by a social business accelerator, in late 2007 I founded Enzima Consulting with the mission to accelerate transformations for public benefit. Since then, this has been my main source of income, even in the period when I was without pay from Cidade Democrática.

In biochemistry, enzymes are catalysts and I thought the name was good if the desire was to promote the articulation between the objectives and actions of the private, public and citizen sectors to achieve the Millennium Development Goals, updated today in the form of the Sustainable Development Goals.

The fundamental, from the perspective of what I do well, I love to do, people need and are willing to pay for, is still the possibility of empowering people, in the sense of opening possibilities.

The moment we live in Brazil, with fragile public entities and governments without money, asking them to invest well the resources of taxes, even if necessary, is not promising for creating value because of scarcity of resources in the public sphere, both to invest and to hire consulting services. Companies, in turn, have been emerging with force as being able to promote change, create value and improve people’s lives. This is where I focus my creative energies.

With pleasure I have dedicated myself to widen possibilities — or to empower if you don’t have problems with fashionable words — people who choose to create value through companies, offering specialized consultancy for micro, small and medium businesses and also for individual entrepreneurs focused on strengthening networks allowing these enterprises and entrepreneurs to connect, realize their competencies, vocations and attributes and exchange this at the local level.

To give an example: a restaurant can offer a space to hold meetings or product launches when not serving meals. An architectural firm can help neighborhood businesses improve their facilities. Having these people to be in touch, supporting and learning from each other, including through workshops with peers is how I see my contribution to the business ecosystem.

Thinking a little bigger, coexistence and interaction promote opportunities for joint mobilizing agendas, in the format of Collective Impact, a concept that includes objectives and common indicators, mutually reinforcing actions (synergy), constant communication and a backbone structure responsible for keeping the focus.

As FA Hayek said, the biggest issue with capitalism is that it was named by its enemies. Capital is just a byproduct. Capitalism is, in fact, a constantly expanding system to increase cooperation between strangers. The more you expand the co-operation between strangers, the more the economy grows. Hyper connectivity is all about that. The advancement in human progress is a function of how we deal with strangers. Without further advancement, we are able to do business only with our family and close friends. Productivity will explode in places and circumstances where cooperation is enhanced by connectivity, increasing the level of trust between people.

To the necessary mindset shift from scarcity to abundance and collaboration, I have used with interesting results, the scorecard methodology as used by Dan Sullivan, in his Strategic Coach, with two groups of entrepreneurs who I have been accompanying, providing resources to improve their business and strengthen their communities.

What have I learned at Enzima?

1. The business was always commanded by myself alone, so, without governance challenges, I am able to maneuver the boat from my will, based also on good conversations with friends and professional partners.
2. With my background, working as a consultant, participating in projects according to the needs and linking payments to deliveries, has worked well for both sides, being especially interesting to work in partnership with other consulting firms, expanding the playing field and working with teams that I can not hire. During this period, I have worked with Instituto Publix, Instituto do Homem e Meio Ambiente da Amazônia — Imazon, Fundo Vale, Government of Pará, Reserva da Biosfera da Mata Atlântica, Ashoka, Infraero, Fundação Telefonica, Fundação para o Desenvolvimento da Educação, São Paulo City Hall and Fundação Itesp.
3. Although our archaic Brazilian code of laws requires increased attention to leap from one model to another, the format of a consulting firm is good enough to require little effort in day-to-day management.

As for the idea that motivates me today to foster communities of entrepreneurs and professionals who are inter-supportive, I am still not sure if I want to have this for myself or if I prefer to offer as a product so others can benefit. As of now, I prefer to have both: for myself and for others. I have already chosen a small group, which does not reach ten people, with whom I want to stay with close contact. Of course, new people can always come up, but the ones I have already chosen to be part of my day to day professional life know this and with them I have exchanged ideas and messages on subjects that interest us, which has been productive and promising, apart from being a real pleasure.

This is my main occupation today, offering great opportunities to learn, positively impact people’s lives and make money.

I am happy if you have taken advantage of the reading and say, to those who do not know, that I am particularly inclined to accept invitations to conversations that could result in the strengthening of the business ecosystem, especially those that produce results.