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Bootstrapping A Latin American Social Networking Powerhouse With 50 Million Users: Sonico CEO Rodrigo Teijeiro (Part 2)

Posted on Saturday, Jun 11th 2011

Sramana: What was your next step after you lost $70,000 from your personal portfolio?

Rodrigo Teijeiro: When I lost that money, the markets were still at a point where the boom was up and running. I knew the business models of all of those companies intimately and knew that I could run one of them. Most of those companies were getting financed with practically no knowledge of anything. I had done some websites in the past, so I had a bit of experience. I had made a page called FreedomToInvest.com.ar that contained all the links necessary to trade. I covered trades for futures, options, all the different currencies, almost like the Yahoo! Finance site. I also have some science-oriented websites that had a lot of traffic. When I was 20 I built a PowerPoint presentation and raised $300,000 from three different investors.

Sramana: What was the thesis of the company you were looking to create?

Rodrigo Teijeiro: There was a company called MP3.com, and the company was worth $8 billion on the market. It solved a problem for indie bands because it let these bands promote themselves online. The idea was that the bands could sell their music online and destroy the monopoly of big music business. I figured if the GDP for that company in the U.S. was $8 billion, it would be very substantial in Latin America as well.

That company grew to the point where I had 25 people working for me with 40,000 indie bands represented. Six months later, NASDAQ collapsed. Here in Latin America only 2% of the people had Internet connections. It was very hard to make headway and any money off of the traffic that I had. A year and four months later I had to close the company. The $300,000 I initially raised was supposed to last me for six months, and I was able to get it to last for just over a year; however, the intent was to raise more money. After the crash I could not raise more money.

That was in 2001 and I hit a low. The company I started went bust and I had to fire 25 people. That was the worst thing I ever had to do. As an entrepreneur you hire people away from other jobs, sell them on a vision, and make them promises. To fire them, it was horrible. I had lost $70,000 in my investment accounts. To top it off, I had broken up with my girlfriend. At the same time, as an economist I saw that the Argentine economy was heading down the drain.

Sramana: When you reached that low point in your life, what was your next step?

Rodrigo Teijeiro: I had never finished my education, so I decided it was time to hit the books again. This time I decided to go to the U.S. and study at USC. At that time, at the end of 2001, I started dating again. My girlfriend told me she would only go to the U.S. if it was to a warm place, so I had to find a place on the West Coast. USC was the only school I applied to, so I am lucky I was accepted. I went there at the end of 2001 to finish my bachelors. All of my friends were already graduating from various universities.

This segment is part 2 in the series : Bootstrapping A Latin American Social Networking Powerhouse With 50 Million Users: Sonico CEO Rodrigo Teijeiro
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