Hosted by Hans Tung.
Today on the show we have Fabián Gómez Gutiérrez, CEO and Founder of Frubana. Frubana is a one-stop operating platform for restaurants – with B2B ecommerce and fintech offerings. It aims to make food in Latin America more accessible and currently operates in Mexico, Brazil, and Colombia. Before founding Frubana, Fabian is the expansion leader and an early employee of Rappi, Latin America’s 1st Super App. Fabian receives his bachelor of engineering from The University of the Andes in Colombia. Frubana is a GGV portfolio.
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Hans Tung 01:17
Today on the show, we have Fabian Gomez Gutierrez, everyone calls him Fancho, CEO and founder of Frubana. Frubana is a one stop operating platform for restaurants with B2B e-commerce and FinTech offerings. It aims to make food in LatAM more accessible, and currently operates in Mexico, Brazil, and Colombia, with more countries to come. Before founding Frubana, Fancho is the expansion leader and early employee of Rappi, LatAMs first super app. Fancho received his Bachelor of Engineering from University of Los Andes in Colombia. Frubana is a GGV portfolio. Welcome to the show, Fancho.
Fabian Gomez 01:54
Thanks, Hans. Thanks a lot for the invitation today, very happy to be with you here.
Hans Tung 02:00
I’m very proud to have you here as well. You’re the first LatAM guest we have had on The Next Billion show. For our listeners who have not been to the country of Colombia, what are some of the things that are uniquely Colombian, that we should make them be aware of and fully appreciate the mission that you’re on Frubana?
Fabian Gomez 02:20
I’m going to speak about Colombia, but also a bit about the region. Colombia. LatAM America, in general is a middle-income region, with a lot of people starting to jump into tech, a lot of the economy is moved by small and medium-sized businesses, and a lot of informality, so there are many opportunities to work there.
Hans Tung 02:56
In terms of LatAM, I remember when we first started investing in LatAM, we were struck by the amount of GDP in each country, and the rising middle class in the relatively high GDP per capita in emerging markets, between $7,000 to $9,000 per person per year. When we looked at the region, there were only two languages spoken: Spanish and Portuguese.
Fabian Gomez 03:25
I would say 1.5, because I don’t speak Portuguese, but they understand me, and I understand them. So it’s less than 2.
Hans Tung 03:34
Okay, I’ll take 1.5. It’s more homogeneous than looking at Southeast Asia, India, Europe, and you have over 600 million people in the region, so it seems like a fantastic market to build a lot of great tech companies. But if you also look at the number of unicorns so far to date, that’s a smaller number versus the other regions. What do you think about that? Do you think it’s changing rapidly?
Fabian Gomez 04:02
I think it’s changing rapidly. We’re seeing in a number of companies, that are in their initial growth stage, trying to take advantage of the opportunities here. The internet penetration was not here 5 or 10 years ago, as it was in Asia. But now, we have full internet penetration, people use Facebook and WhatsApp here all day. The other big structural reason is there’s no capital flowing into the region. I remember our first fundraising in Rappi, I would say the seed round was a “Simone thing”, he managed to do it, but when we were doing series A, we had to sell LatAM because investors were used to looking at countries. When you look at LatAM countries individually, they’re fairly small, except for Brazil. I think what changed was thinking that LatAMa is a region that has 50 cities with more than 1 million people, like very dense cities with 600 million people in total, and have the GDP of China, double the GDP of India. When the market understood that, and that there was internal penetration, everything started flowing into the region.
Hans Tung 05:29
That’s very true. You mentioned Simone— you were one of Rappi’s first employees, then which has become LatAM’s first super app, what made you decide to join them? What was your experience like the first few years that you were there?
Fabian Gomez 05:44
The short story with Simone and with Rappi. We had a friend in common and I was in his house the day he was doing his first order. I thought: Wow, this is amazing, I really liked what these guys were doing. This was probably in June or July, 2015, the carrier’s name was Johnny— I remember that I remember that guy perfectly, I was so amazed with the ordering and things arriving so quickly, that I started bugging him on changes that could be made with what I experienced on the app. Around 3-4 months later, he told me: “Hey, come and change it yourself. Come work with us, and let’s build a huge company.” At that point, I was in consulting, and told him I can’t it as I had an sponsorship from McKinsey, and was planning to go for an MBA in the States. He kept convincing me to work with him and build a great company, bringing all your friends with MBAs from consulting, and continue building a great company. That’s what happened.
That was an amazing start for my, if I may say, career in the industry. I was there for two years and a half, it was a time of unbelievable learnings. The size of my ambition was reduced, and that team had an ambition that went from the south of Chile to the north of Mexico. I got to understand that that we were uniquely placed to build companies to do more and give opportunities and solutions to everyday problems in LatAM, and that it could be done. It was great, there were so many things to do in the day to day, because we didn’t know a thing.
Hans Tung 08:07
What were some of the things you did, and the learnings you had at Rappi?
Fabian Gomez 08:13
My role at Rappi was to set up the first 15 or 20 cities and expand to new countries. What I learned was to understand how things work in the in the real world, and then to start putting technology for it to scale. For example, at the beginning, we had hundreds of people calling restaurants to prepare orders. If we had to, we did that because scale was growing so fast, but we needed to unterstand how it was working. I would say understanding the market, how it works, and then putting tech to scale is what I learnt at Rappi.
Hans Tung 09:14
You played a key role in building the city launcher team for Rappi, especially during the rapid expansion period across LatAM? What were some experiences that you learnt there to help you do better in Frubana?
Fabian Gomez 09:33
The number one learning from that was about building teams. There’s also understanding the problem and skill set needed for that specific role, setting it up and helping people. It’s not just bringing the correct person but putting them in the correct scenario so they can add value quickly. In this type of companies, like both in Rappi and Frubana, it was like two years and two years. We needed people to add value really quickly, and the way to do that was to tell them what to do, but also what not to do. When I bring someone into for Frubana, I always do a 100-day plan, inspired from the US’ presidential 100-day plan, we have a list of what we went them to do.
Hans Tung 10:45
The founders we back really understood how to make everyone else a lot more effective. One person cannot learn everything, unless you’re Steve Jobs, you maybe are different. For most people elsewhere, you need to figure out how to empower your team to be more effective in deciding, and what to take on and what not to.
Walk us through your logic, how did you come to the decision that you would leave Rappi to do your own startup? We love founders who end up working in a fast-paced environment, learned a lot, contributed a lot, and then decided to do something on their own, because they understand what it takes to go from zero to 10. And then again, they found the foundation to eventually go to 100 on their own. Please walk us through your logic.
Fabian Gomez 11:41
The idea of Frubana is of shortening the supply chain of food, which was on my mind long before I started for button in 2012. I wrote my university theses. And it was actually the name, the name of my thesis of my, like, final project of the university was Frubana. And Frubana comes from the combination of “fruits” and my family’s farm name. So, it’s shortening that. That idea of of helping, like shortening the supply chain was in my mind for a relatively long period of time. But I think I needed the Rappi experience to see like, okay, like we can do, we can move a big part of the GDP with technology because like before Rappi I saw technology as Google where you move, like Google or Facebook? Yes, yeah, you move information around. But now for the idea of Frubana to work, we needed to move tons and 1,000s of tons and millions of goods, physical goods. And this is a big chunk of the GDP. So I with Rappi, I kind of understood that could be done and that we could scale things with technology and some things against it when we’re not ready. I would say like that was that was the big learning. Recently my sister sent me a screenshot of an email I sent her when I was only like six months into Rappi . And I paid her $10 for every restaurant she visited, literally to do surveys for the idea of Frubana. I would say it’s something that has built up in pieces. And then the moment that really changed everything was a conversation with Andres Bilbao in Sao Paolo. Yeah, so what happened there like I had this idea in the back of my head, I didn’t like to imagine doing it so far, like, Bilbao, helped me start.He was like, Okay, why don’t you start it? Like?
Hans Tung 13:52
At that time, we saw in other countries, like in the US and Asia, people were very willing to share ideas, resources and encourage each other to do something on their own. That entrepreneurial spirit is the energy that makes the engine of a country’s economy in progress and evolution rise. It is extremely important. Another thing that strikes up being I can resonate with, is the usage of technology. You mentioned the internet penetration rate us using technology to bring efficiency that wasn’t available in that time. Five years ago, 10 years ago, the user base just was not big enough. Now it is very different. How does that play into your thinking that now is right time for you to do your own thing?
Fabian Gomez 14:51
Yeah, that that helped it. And they’re like I would say they’re two LatAMs. There’s not a ton of a very privileged people like blood is a very is a country with a lot of differences between like social classes we have we have a big disparity. So I would say maybe in 2015, 2018 like we had a huge rise in the penetration of this privileged people, which I like, thankfully had my education, had everything so I, I was part of it. And and that helped a lot like to start the consumer companies that were focused in the, in the top of the pyramid, for example, the Rappi, the Uber and the 99s. But no one was doing anything for the bottom of the pyramid. So yeah, also, like the other big change is that democratization of that access, because if you come to a nice part of LatAM, like it will look like any neighborhood in the States or in or in Europe, or whatever, but when you go but but the real LatAM, like 90%, like the 90%, but none of them is like that. In 2017 2018, that started to happen, the democratization of the access to the internet, to like trust this type of platforms, to some banking and payments. Like when that happened, I think Frubana was ready to start are people like the people we work with these farmers, like small and medium sized farmers, and also like restaurant owners, and these restaurants. It’s the $3 or $4 restaurant, delicious store, $3 restaurant, but it’s still a $3 restaurant. So, it like many things have to change. So, this happened. And I think that change was like in the 1718. And that was when I was like personally ready to lunch. The market was getting ready to lunch. So I would say a bit of luck being the right place the correct time. And also wanting to do it.
Hans Tung 17:01
Yeah, that’s one of my favorite books is Gladwell’s book Outlier. And to see the right to be in the right place at the right time, but also doing the right thing to be prepared for it allows you to build something extremely interesting afterwards, especially after 10,000 hours of hard work. Speaking of 10,000 hours of hard work, you saw your dad growing mango and lime papaya from your early age as he scaled his business deal with gold challenges. How does this shift your thinking?
Fabian Gomez 17:27
So my father, I learned a lot with my father. He had two likes, I would say Monday through Friday, he was a corporate guy and employee and then on the weekends like we were into agriculture. I spent many Saturdays in his office. Everyone in his office knew me since I was like 8 or 10. I remember his first Acer computer. He had real time tracking of the cars of the company at that time. I was like so amazed. And it’s something we’re doing for about an hour. So, there’s learning from both sides. So that side like was amazing to learn. And then on the other side, on the weekends, he was a farmer, and we went like all Saturdays or Sundays to the farm and we planted but then when I when I started to learn a lot. Because we produced limes, we got paid like, I don’t know, 30,40 cents of the dollar per kilo. And then because of Rappi at that time, I was already in Rappi, I went to restaurants and they were paying like $1 per kilo. And it’s like what is happening so in 24, 48 hours, price goes up 100%. Everyone thinks intermediaries are bad. Like they’re like bad people. They that was what I heard. But intermediation is not bad. The reason there was intermediaries is that there was no data. Like there’s absolutely no data, my father planted lime, because his neighbor had lime orchard and ask him to do the same thing. So what we understand we had to do was use a data driven approach to doing the same thing. Starting an ecommerce, that alone doesn’t do any difference like it’s, it’s, it’s a commodity now. But what does the difference is that we have a lot of data, like we know which restaurant of which category in which they ask for what. So now we can forecast seven days, it doesn’t seem like a lot for imperishable seven days, it’s magic. So, when we have seven days of a good forecast, we build tools that go directly to farm and ask for prices and quantities. And I would say like, that was the big breakthrough that we could do there.
Hans Tung 20:47
So you may have the right training at Rappi, you had the right upbringing, seeing how your dad scale a food business and learning how to use leverage technology to do better. The penetration rate in LatAM is growing. So as a consumer base, a lot of people on it, including the the farmers and the restaurants you’ll be working with. And you have I think you end up getting the blessing of Simone to do this. Once you have all the right ingredients. The first product you built was an app for farmers, which you described publicly as a total failure. How do they come about that he’s decided to help farmer first and what were the lessons you learn from that experience?
Fabian Gomez 21:46
Yeah, so we actually did like demand, a little Shopify for restaurants. But then, like procurement was a big issue. So, when we wanted to do procurement, Frubana was 100%, or 90% fruits and vegetables. So, like we really had that big focus only in how to buy from farmers. And we started this Frubana farmer app. It was a huge failure. Farmers was not used to using it. Data plans are scarce. So basically, it was a big failure, like, like only a couple of 10s of farmers use that. And it really didn’t scale. And then I think like the big thing was spending time with them and understanding how do you sell today? How do you do it? And they did like the amazing thing was they did everything through what’s up, they sent the picture to five people they knew in the wet market. And they got a quote. And we were like, wow, that’s that’s really like you really need like three points of data like price, quantity. And then a picture for quality. Those are the three points of data we need a was like, well, you can do that through what’s up. So there was actually a person in our team, who had joined just joined as a senior member of the tech team. And he had his startup before taxis via WhatsApp, like he sent like the it was a WhatsApp bot. We learned that from his interview, I was like, Okay, now you’re going to come in, and we’re going to do that for farmers. It worked a pretty well. And now it has scaled to like I would say, yeah, we get 1000s of quotes a day a with this mechanism. And it’s seamless for farmers. But it was not seamless. For us. We had to do a lot of integrations. This was before WhatsApp business. So we literally had like to, I don’t know if we should see this though. But to play around with how WhatsApp worked and have a little machine piping and sending out messages in what’s now and their API’s and stuff like two years ago, like we didn’t know there was or there was and we played with it around to I won’t say improper things here.
Hans Tung 24:53
And then, you know, for your servers to work. You have to have both the restaurants and farmers come together on your platform as you decide to think through doing this, how did you think you were best model? Do you take the inventory risk? Or not? Do you want to build a b2c business? Or a CVC? business and pure marketplace? How did you think through what to do and decide that, you know, on your current business model?
Fabian Gomez 25:31
Our first big decision is who is our main use or main, that’s your main user main customer. And we had a big discussion if it was the restaurant or the farmers, and it had pros and cons. But basically, what we understood is, like, we have to serve well, that middle class restaurant of LatAM America, to scale, and then when we scale, it will be good for everyone, including us, including farmers. If we think a lot in the farmers from day one, it wouldn’t scale because like some dynamics change, so that was the decision. And important decision to make. First it was an old drink. And, and basically, once we knew that a and then why restaurants with one b2c drop size is very small, like less than 10 kilos, a big retailers are huge, but they have a lot of power. And they hire McKinsey and BCG and stuff to to tighten the screws on the on the other side. And they pay like 60 days out, so it wasn’t an option. And then we were like within small stores and restaurants. And we decided to start with restaurants because it’s the one we can add more value to in the short term. Maybe in the long term. We’re thinking other in other segments, but like a restaurant uses like 100, 150 SKUs, with a few SKUs we really sold the big piece of their procurement product. So that was the first decision. And that changed a lot for Ghana. And there’s no overlap between the restaurants that Rappi worked with and the restaurants you’re serving that overlap is not much that overlap is very slim, because deliveries are premium service in LatAM. Yeah, for the top 10%, 20% of population of the primary ours, right. Yeah, we’re in the in the bottom. So I would say that’s how we chose restaurants. A What was your other question?
Hans Tung 27:47
Once you choose the restaurants, what was the operational model you want to serve them is going to be a b2c model where you take the inventory of the goods that you’re selling to them, or the tools to do marketplace model and just facilitate the exchange of goods between the restaurants and the suppliers and the farmers?
Fabian Gomez 28:04
We have the two models, but like the first decision was to a to take the inventory. And like we build directly, like we would directly build for the restaurants. And we take the inventory, I’m quoting here, because it’s actually like point, like, in in any day at 9pm, we would have like 1.3 days of inventory. And that’s 6am we would have like 0.3 days looking back, it’s really, really short. We do everything order base, but or order. It’s not our it’s not real restaurant orders because lead time is greater, like the thing for from the farm is greater than a than what the restaurant knows, he has to work like he orders the last night the last minute at 10pm. And he wanted the next day. So, we need three days. We base everything on the forecast. And the like the forecast is or his order system, like basically we will get the forecast. And we close in on it. And then a like we have this automated system that puts all the orders, everything comes in. And it’s like just in time to go out for the for the restaurant.
Hans Tung 29:40
As you’re designing the system, how much were you thinking of it’s a place for restaurant to discover new suppliers versus working with existing suppliers, and usually how many layers of suppliers on your system do you see between the farmers and the actual restaurants? Is that direct? Or a couple layers of middlemen?
Fabian Gomez 30:11
Yeah, so in the system there was in place, we saw four or five intermediaries. There is farmer, truck driver, a wholesaler, then like the little retailer, and then probably the distributor. So that’s the usual chain. In 70% of the goods, like we sell in Bogota have the fresh goods, it’s only us. That changed a lot of dynamics. But that 70% is not a is not a limited number, like we are actually the same product, we buy it in different steps of the of the chain. So what we can forecast we buy direct from farm, but then, like, when you have a forecast, or some like you never get the exact number. Yes, in some SKUs, you’re above in some SKUs, you’re below. So basically, what we do there is whatever we’re below, we rely on the wet markets with our same software, and we buy with a couple of hours of lead time. It’s a whole system that takes a lot of decisions based on a decision tree. And, and we get to a we get to two things that we have to balance. 1 or 2% waste on one side. Because if you hold inventory, a like usually waste goes up a but then like fulfillment is also at 99. So like we’re playing like in the one or 2% range in each of the variables of having less than 2% waste, less than 2% stock outs. And that’s the big balance to be done. Right.
Hans Tung 31:47
I remember when Robin and I went to visit you and your team in Bogota in February 2019. In the series of beautiful in the middle of the city, you can see the mountains. We’re having a nice lunch, and I ask you this question on where’s role of tech in your business over time? And you mentioned exactly what you said just now and just feels like the more data you collect over a longer period, the better the algorithm will get. How has that pan out in the last two and a half years from your seat round to now in terms of the tech advantage, the data advantage, you’re able to accumulate overtime?
Fabian Gomez 32:26
I think that has been one of the big breakthroughs. Number one, the amount of data we have collected, like we can collect from restaurants has increased a lot like more restaurants more SKUs. We decided not only to rely in the data with the transactional data of us. So now we have added like four three buckets, like some external like the weather, like soccer games, like pay days, that really have a big effect in how LatAM spends his money. Like in in LatAM, if you go, the 30th of a month to a restaurant is full, if you will, the 29th like no one has money because we all get paid on the third month. We don’t have a big culture of saving money. So, it’s, it’s a big change. They’re like we’re not German that I know, it’s equally distributed during the days no like, like, we spend all the money in the first days of the month.
We have done some song like we have, like brought in some sources of data that we’re still experimented but we see huge correlation with like, for example, like people counters in some restaurants, like visits to our like when we see that traffic to our website come up. But also like is is getting into the into the forecast. We have done a really good job at like the team has done a really good job in putting in more variables finding which are significant, like have a significant impact in the forecast. And then starting like machine learning engine engines that helped us with a better forecast, like we’re a lot better than a year and a half ago. And demand is very volatile right now because of all of COVID A so like, I would say like once things get a bit more normal, like that algorithm is really going to be a lot more accurate.
Hans Tung 34:36
He mentioned that this is only a one or 2% in the stock house is also one or 2%. But in the existing food supply chain, sometimes the waste could be as high as over 50%. So now you you’re helping the entire value chain to become a lot more efficient. What were some of the stories that you can get from restaurants or from farmers who appreciate or not What you’re doing for them because you’re also cutting out the middleman with losing jobs?
Fabian Gomez 35:05
The first employees of Frubana was our intern CEO, David, middle Stanford, Stanford MBA grad. He was doing his summer with us. A, and basically, I remember the first days, we went to a plaza, like, this is a Spanish blue-eyed blonde guy in the plaza of bogata. Like, he really stood out and everyone told us like, like, no, everything here is cash. And it’s cash only. And I remember we said, like, no, we’re going to do a bank transfer. And they were like, the guys literally sat on top of the potatoes. And it’s like, we’re not giving anything until it’s here. So fast forward two years later, every, like 99% of the payments are electronic, and all farmers and all the middlemen in the in the blast that now trust Frubana to give their goods without getting paid, and we pay like once a week, or like once every 10 days. And it’s like, I think that like that shows how in two years, like the trust that wasn’t there in a system now is like now farmers, middlemen and everyone in that system trust us.
Hans Tung 36:36
You mentioned COVID earlier. And I remember, during that period, you were very transparent with your board on exactly what you’re going through and involved every one of us in your decision making. Yet when we look back, you know, over 70% of the restaurants were shut down or reduced their operations during COVID, you still grow your base by five 6x. And you triple the size. We were there. So we know how you end up doing it. But it’s still amazing to see that happen in hindsight, in its totality, walk us through how you decide to make these decisions along the way in how has the interaction with the board help or not, in terms of giving you the confidence to make those decisions?
Fabian Gomez 37:22
In March, when COVID hit LatAM, there was a big decision to be done of extending runway. So I think that decision, we didn’t doubt it, like it was like it was a decision that had to be done a and we reduce CAC, we reduce a lot of expenses to have a long runway, so we could think a bit. I had the support of of you and the other people on the board of taking that quick decision that that was very, very important for a future of the company. But after a couple of weeks or a couple of months when everything was a bit more dear. Like a we sat down as a team on zoom, and we thought like we’re really building the company in 2025 or 2030. If we’re thinking of building, like, if we’re building that company, like in 2025 or 2030 restaurants will be there or we thought like restaurants will be there. A like so. So it was like we had to take some short term decisions to get through a COVID but not in the structure of the market up full of restaurants were really believed that people were going to continue eating two, three times a day in the future. And it makes sense to continue building the same the same business. So with that in mind, we said okay, number one, we have to have runway, and cut expenses down so we survive the cold period like the winter. Our unit economics really improved through this period. Like we went like we learned a lot about how to acquire and how to grow a what a restaurant buys in the platform. So that was also great. And I would also say like before COVID like the one of the biggest changes was going from the fruit and vegetable app to the everything store from restaurants. We needed that like we needed an order size because order size was dropping so fast that we said like okay, restaurants need other things. They told us like, hey we don’t want to go out like we want to buy from you other stuff. And we quickly like the thing quickly got other categories in, non fruit and vegetable went probably from 10% to 55%. Now, so I think like that was another big change. And I would say the, like the support of the board in this in this period was incredible. Because as an entrepreneur in a big shock. Frubana is a 36 months company, a and that point, we were probably 17 months old. Half of the life of Frubana has been COVID. Yes. So like we were at that point and having the support of other people having your insights of what what’s happening in Asia, having a like the other board members.
Hans Tung 41:11
I still remember back in 2003, when GGV invest in Alibaba, of course, hindsight being 20 2090, more than 95% of the value of Alibaba was built, after stars, Asia started. So he said, Today, now being the COVID, to now his half of the life of Frubana is a great anecdote. And at this point, I’m gonna give a special shout out to my colleague Madhu, who loves spend time improving operations, and his life quite a bit time with you and Andres and others, always try to figure out how to improve the unit economics. As you work with many investors from many VC, VC from a work with the you have selected Well, what are some of the things that you find interesting? Oh, that was good from, from the VC firms you work with? Because a lot of funders, I’m sure ask you, as they have multiple offers in a very hot market right now. You see multiple rounds getting done spend a couple months, how do you choose who you work with?
Fabian Gomez 42:13
These are VC firms are its people. So like, I think like in that bucket of the person, also, and then we think about the firm. So, like those two things are very important. A, in terms of the of the of the firm that might be like easier to share here a like what I what I feel a like we have taken the decision is firms that number one, have had similar experiences elsewhere. So it’s very valuable here in LatAM America, I believe, like the future is already in the world. Just study it’s not uniformly distributed. Like Asia happened first. Us happened first. Now, like we’re getting here, so so if we can get like this peak, like these insights of what the future looks like, a I think that that’s amazingly valuable. And that like prevents a lot of mistakes and helps us to get a lot of things right so so I would say like that a we’re in the in a business that that that like to be honest, like needs like we need a lot of capital to get LatAM like we want to be number one player in LatAM in this in this category and we’re on our way there so it’s also important to have firm that can support you in different stages. On the people I feel I have like very nice informal relationships with each have or have or have like formal and informal relationships. I wouldn’t like an investor where I feel afraid. I’m very transparent like I like to be transparent. I like to show numbers. I spam you with messages and this is what we’re doing this is what you’re doing when they’re getting them I want a that person a like to be someone feel I can do that with and they’ll bounce back with Hey, that sounds like a great idea or no Probably not. Or hey let’s think this other thing or focus on one thing like I love that openness. It’s about the people have have really like telling you what they think on a personal level on a professional level. Yeah, on every level.
Hans Tung 44:53
You also recruit well. One of the reasons why we decided to co-lead a series A was the fact that you’re able to identify and recruit talent from India to join you, India doesn’t have the GDP per capita LatAM has. But it is a highly competitive market and lots of innovations going on. And you see skill happening there now, so be able to learn from all markets, not just us, not just one or two countries in Asia, but globally, just being very open to try things this extremely, extremely impressive, about how you how you learn how you think how you evolve. And the best founders we back have always been the one that evolve and grow and mature super rapidly in a sector that’s rising. What prompted you to be this way? And what gives you the confidence that you can recruit someone from India to join you and be effective?
Fabian Gomez 45:48
Like I said before, like I believe the future is already in the world, we just have to look where we can bring talent. The first conversation with Ankush, how to convince him to come to LatAM, I spoke with him after poking him on LinkedIn. And I sent him pictures of the beach in the north of Colombia. We had a couple of conversations professionally and deep conversations on how to scale. And then it’s like, on the personal level, it makes a lot of sense to come to LatAM, it’s the region that I think will have the most like relative growth in the in the next decade or so. It’s a region of doing opportunity. It’s a region where people that have experience, and is a bit of advertising, if anyone wants to join, just shoot me a note.
But basically, we learned a lot from him. We disagreed a lot and we learned from each other. He would tell me that I look too much at numbers, to take decisions. One of the values in Frubana is we take a lot of decisions based on numbers, but he was like, Hey, guys, you’re doing too much analysis. Like, like, let’s, let’s, let’s do these two or three ideas. And he told me like, give me the trust to go to Brazil, or most important market and lead the expansion there. And then nine months afterwards, I can say it was the best the best decision ever now. So Sao Paolo is the largest market for Frubana now. So I would say it’s, it’s amazing for other founders. I encourage other founders to bring diversity of thought. Like there’s other important types of diversity. For me, that’s the most important one a lot, or a very important one is diversity of being in thoughts and ways of doing the same thing. It really did a big change. I think it was also a great experience for Ankush. He’s now going he went back to India to have his to have his beautiful twins. And a and he started his company soon. So, I think that I’m looking forward to becoming an investor of his company as well.
Hans Tung 49:16
I’m waiting for a zoom meeting with him. It’s so I mean, therefore what we do what we do, therefore we have the next billion podcasts, and a Vlog version as well. To share knowledge on a global basis. I know geopolitically everything is tough. But when it comes to ideas and innovation, it’s extremely global. It’s a free flow of these ideas and talent that makes life much more interesting than then otherwise. And last question for you is that as you look towards the future of football, and all those sorts of lessons and changes and learnings that you have picked up to this point, and you did a lot. What are the opportunities and challenges you think you still need to overcome or take advantage of over the next 36 months?
Fabian Gomez 50:18
I would say, number one dream that we’re focused in, is in scale. We’re only in 2% of the doors in LatAM America, there’s around 2 million restaurants that sell around 300 billion, they buy 100 billion, and we’re only so far in, in in the 1% or 2% of the doors like 40,000 restaurants. Dream number one is expanding that base to plus 10% of the restaurants in the region for me. Then number two, what like we’re not any more that that fruit and vegetable shop now word that everything store for a restaurant that solves older issues in procurement. So really understanding which of the products a that they buy, they can like, we can be a solution for them. A some like many with brands that come into our platform nine a marketplace model nine different models. Other like we’re starting, like for some products that have lower levels of differentiation, a, like we’re starting to do our own brand. Now only a that we started a recently, that’s having like, initial, like, very good initial direction. So, like getting a lot more a of that share of what our restaurant needs, solving more SKUs for them, like in in the restaurant points of view. And then like we would have a very a big business in top line. It’s a real business that has a real but low margin. There are two other things that we’re going to do. And that we are doing baby steps in number like number one of those other two things is a financial service, these 2 million restaurants are unbanked they like no one lends money to them. So, we’re starting to do some like baby steps with POS systems like lending to them when we understand the data. And when we understand the sales. So, there’s a huge opportunity there. And then there’s another bucket that is a software, like we like there are some opportunities that we think disappear and other than don’t. So we’re first focusing in getting a lot of the doors getting a lot of penetration. And once we do that, like the other one is like inevitable it’s going to happen. We’re just starting to do or trials there. Yeah.
Hans Tung 53:45
I mean, one of the most exciting things for us to lead the series C was the fact that you willing to try financial services and have been thinking about it. We saw that happen with Square capital, obviously in Asia with Ant Financial. And it’s just fascinating to see that 10 years ago, every company was becoming a software company. And now every company’s becoming FinTech company. There’s amount of data in knowledge of how the users, customers, and their needs and, and their lifestyle makes a huge difference in terms of coming up with the right FinTech service for them. That’s very data driven, and knowledge driven. This is a huge opportunity. And it will like the most important thing is it will add a lot of value to these 2 million restaurants like it’s something they’re really need and no one can give it an adequate price because they don’t have the data like we think we’re the best position to having the data to do it at a very convenient price for them.
Over the next 10 to 20 years, b2b commerce, b2b FinTech is going to be massive, especially for the unbanked worldwide. Like David Vélez from Nubank always like to say Buy Now Pay Later was started in Brazil first. It’s very interesting to see what we’re going to be building next. So, it goes to the final section of the of the interview, which is the quickfire session in which we asked, you know, three, four questions, and you don’t have to think too much and just give quick answers. The first one we always like to ask is the who’s the entrepreneur and a founder that you admire the most and why?
Fabian Gomez 55:45
The entrepreneur I admire the most is Simone, because he gave the big vision for LatAM five years ago.
Hans Tung 55:52
Second question is what is one book that you read recently, or ever that you like that you will recommend?
Fabian Gomez 56:18
21 lessons for the 21st century, a great book by the author of Sapiens. It really made me think, on the on, like, in the sixth century, like what’s going to appear? What’s going to this disappear, thanks to technology, and how like the social structure of the world is, is going to change when these changes occur.
Hans Tung 56:41
What is one habit that you have that has changed your life?
Going out to the street to visit or restaurants once a week. I travel a lot, but I try not to lose the habit. And it’s visiting restaurants visiting the streets speaking to, like, the people in the street are where you learn the most. So, I tried to put the discipline a team or have at least like one field day, a week or every two, two weeks, and it gives you like a real view, like a real sense of what’s happening on the world. Like, I hate being a laptop founder.
Hans Tung 57:23
You both learn extremely quickly, you’re very curious about many things. At the same time, we have a strong empathy for the bottom 80% bulk of the pyramid, you have a strong empathy to help them. And that’s what we saw in many great founders who ended up building amazing businesses, you got to have that empathy and intellectual curiosity. Thank you for the interesting interview.
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