Founder Interview - Building an Online Network of 3 Million Users in Brazil
I’m an advertising person by training, a journalist almost by chance and an entrepreneur by temperament... For six years I was the editor of UOL's homepage. UOL is the leading Internet portal in Brazil. In 2006, together with three partners and an investor, I founded Brancaleone, a communication and technology start-up.
When I started working at UOL I was an advertising professional and a novice in electronic media and felt like a black sheep on a team of online journalists. It was the year 2000 and the Internet was beginning to break out of the early adopters’ niche here in Brazil.
"I felt like my role was to act as an interpreter for people who were new to the Internet, a kind of guide to the virtual world for the average user who was just beginning to explore the Internet."
It was a major challenge since UOL was the main reference point for Brazilian online content at that time.
How would you say the web has evolved in Brazil from when you were the editor in chief for UOL in 2000 to now? How do you see it evolving in the next 5 years?
"Many things have changed since then. Web portals are still relevant, but Internet users have taken an active role in the hierarchy of content."
Orkut (google’s version of Facebook launched in 2004) was also an important turning point on the Internet here in Brazil. This social network arrived in Brazil when lower middle class people were beginning to buy computers and, even more importantly, when Lan-Houses (internet cafes without coffee) were sprouting up all over the country. Orkut brought a feeling of active involvement and visibility that allowed Internet users to see themselves for the first time in this new medium. Creating self-content had a significant differentiating aspect for this audience, it allowed them to recognise their own identity by profiling and expressing themselves next to their peers.
I see this way of interacting on the Internet becoming more sophisticated over the next five years. It can clearly be seen that younger Internet users (children, pre-adolescents) are much more critical of content and features, and also much more involved in collaborative projects. So I look at the future with optimism, as a tendency to move from passivity - a maturing process - taking even greater advantage of the possibilities to participate, interact, criticise and build collaboratively.
How did Migux come to life – how did you come up with the idea, and what has it become? How did it grow to over 3M users?
Migux was born of a desire to bring all the collaborative and creative potential of social networks to children. The insight resulted from seeing how seductive and enjoyable Orkut was for web users, while it was prohibited to children. So we began to talk about the project with the children who were closest to the team, listening to their opinions and funny ideas with due respect...
"The speed in which Migux grew was shocking, even for the founding team. When the social network was launched it was even smaller than it is today and had fewer tools. I remember we put it on the air on a Friday (a mortal sin for developers...) and when I checked the admin on Saturday and looked at the Feedback & Suggestions we’d received I was stunned: there were plenty of messages from children saying they loved it! The product grew virally among children - in a few months we reached one million registered users."
I believe the success of Migux lies in the fact that it allows children to interact and express themselves by creating and sharing their “works of art” online in a fun way. Something else that makes Migux attractive is its general theme: the illustrations are funny and charismatic, and although it has an ecological and educational appeal, it is put forward in a fun and not schoolroom kind of way. Because of this, we were honoured by the International festival “Prix Jeunesse” for having content highly appropriate for children. Even so, we avoid being politically correct as much as possible!
Do you have co-founders? How did you choose to work together? What were your biggest challenges building Migux and how was it funded?
Yes. I met my co-founders João Ramirez, Antônio Graeff and Carlos Freitas while we all worked for major web portals. We have very different backgrounds, but we have a certain ideological affinity and have a lot of fun working together! The major challenge in building Migux was that we didn’t have similar products to compare it to in Brazil. We didn’t have specific parameters; we only had know-how in relation to the general Brazilian audience. And it wasn’t easy to find professionals with the required skills to join our team...
"Migux had initial investment of R$1M (Equivalent to £400K) and reached break-even in January 2010, just 18 months after launch. We remain a very lean team, with 6 hired employees."
What is your business model? Was it set from the beginning or did it evolve as the community grew?
Migux was conceived based on a subscription business model. Our profitability benchmark was Club Penguin. But we quickly saw the product was better suited to a prepaid model and we repositioned it. Migux has its own currency, called “drops” to fit into the ocean theme of the website, where children can build their own “Migux” avatar, choosing from various sea-life forms, picking colours and looks. Drops can be bought via SMS, online payment or bank payments.
"Since the roll-out of SMS payments, we’ve seen most transactions happen via SMS, and they now represent around 20% of all drops sales revenue."
Another important revenue stream is white-labelling - a local mobile operator is our first white-label customer, who uses not only Migux services but most of all the Migux brand and credibility to win parents and acquire young users.
How do you see Migux progressing/growing in Brazil in the coming 10 years?
We are seeing Migux consolidate its position as a leading and high-quality virtual product for children. We want it to continue to grow into the starting point for everything that’s fun for children on the Internet.
But we don’t know exactly what the future holds for Migux. It has achieved a large audience rapidly, which has also accelerated our interest in increasing its commercial viability.
What we are sure of is that with a user base of more than 3 million children, we are an important reference point for this segment in Brazil, and we intend to keep this distinctive position and credibility we have earned on the Brazilian market.
Do you have competitors in Brazil? Are there other successful similar networks in the rest of the World? Do you have plans to grow the business internationally?
There is not yet a similar product built here in Brazil. Club Penguin, which now belongs to Disney, is an example of a worldwide success.
Migux was conceived to communicate with children anywhere in the world – we’re planning to launch the Spanish version for the rest of the Latin American market in the first half of 2011.
"Europe and North America are also target markets for us, but aren’t in our roadmap yet and would have to be opportunistic expansions – we’re open to local partnerships to launch Migux in those markets."
Have you always had the entrepreneurial bug and have you had any mentors along the way?
I think I’m an entrepreneur much more by temperament than by desire... They tell me I played with business rather than with dolls when I was little, but I think they’re making that up.
"In regards to mentors, I think I’m a good listener in general. I’m a bit of a sponge; so whenever I meet insightful or interesting people who captivate me, I end up absorbing knowledge from them, making each encounter a small mentoring session."
Although my father and grandfather are both entrepreneurs, my inspiration comes from further afar: my Italian great-great-great-grandmother, whom I never met. They say that when she was a young woman, she decided she had to bring tomato sauce from Naples to Brazil. I haven’t been able to find anyone who knows how this business turned out, but the image of this young woman travelling alone for over a month on a ship in the late 19th century to realize her dream business has been my true inspiration to follow my entrepreneurial drive.
On a lighter note, name one website you wish you’d founded, and a Female Internet Hero.
I would love to have created a Brazilian website called “Estante Virtual” (Virtual Bookshelf). I really don’t know if they’re making money with this product (I hope they are!), but I think it has an enormous intangible value. The website lists and makes available for sale almost all books in second-hand book stores in Brazil. In this apparently simple yet very professional way, they are making it possible for people throughout Brazil to buy used books even cheaper. I’m a fan! I’m not a person who has heroes…
"In fact, the most attractive thing to me on the Internet is the possibility to create a collective intelligence where each person is important through collaboration with everyone, versus individual success."
What would be your one piece of advice for women starting up in Brazil?
For a woman who wants to begin doing business in Brazil, I would say:
“Look, honey, don’t sit there thinking about being a woman, just grab a machete and blaze a trail…”
And to women bringing their business to Brazil?
"Brazilian consumers still have a great thirst for brands that pay attention to them. If you want to make a difference, come prepared to truly know your public and interact with tham. And very important, don’t forget the sunscreen!"
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