The importance of encouraging the savings culture, adapted to today’s technological society, was what inspired Octavio Novelo to create ZaveApp, an enterprise he launched in Mexico this year and which in 2016 will be operating in the United States and the European Union. Gutiérrez Martínez is one of the 33 innovators in the ebook Hablan los protagonistas.
Could you give us a description of your business? What service does ZaveApp provide?
The simplest way of describing the concept is like an electronic piggybank, a moneybox in a cellphone. It's the same old moneybox we're all familiar with, but transferred to the era of digital payments. Now that we use payment methods like debit or credit cards, we've created a moneybox you can have in any smartphone and which can be topped up precisely through your debit and credit cards.
When did you start collaborating with the entrepreneurial ecosystem in the country?
I've been an entrepreneur for four and a half years. When I finished my degree I worked in the financial industry for almost six years; I left in June 2011. First I set up a website that was a marketplace for housing in the capital, and I did that for two years. Then, for several reasons –including the fact that the product didn't really take off–, the idea of ZaveApp came up, inspired by something that had occurred to us over ten years before. But because now we knew about programming and apps, we saw we could develop our own product. And during ZaveApp's first year I gradually began to spend more and more time on it, leaving.
Do you consider yourself an innovator? Why?
Yes, because I think the important thing about innovating is to develop products that are easy to use. It's difficult to innovate in general, but it's even more difficult to come up with an idea for something so simple that it could have a massive scope. And this is where I think we've been successful at ZaveApp –with myself at the head, but backed by a great team– in coming up with two concepts that are in widespread use and are familiar to everyone, such as moneyboxes and the idea of rounding up. So if you look at it this way, we're not inventing anything –what's groundbreaking is that we're transferring this to a digital platform, with all the advantages that offers. So I believe innovation doesn't necessarily mean inventing something from scratch, but bringing together pieces of processes and things that are already there and that people can use, and then packaging it all in a very attractive and easy-to- use format.
What was the motivation for your project?
Some time ago –about 12 years ago–, when I was studying, there was a competition on how to encourage saving in Mexico. And I saw as a student how difficult it was to save, because basically it implied having to have two accounts, and if you don't have a place where you can physically separate the money and set it aside, it's not saving. What we also saw back then was that a simple way of collecting the money was through cash payments. When you go to retail establishments they ask you if you want to round up the amount to make a donation to some foundation. That's great, it's perfect to donate to a foundation, but why couldn't you round it up to your own benefit and send that money to your savings? And that was the first idea.
Then time went by and I became a technology entrepreneur, and one day it occurred to me that I could do that with an application and offer it to all bank users. We picked up the idea again two years ago. We spent one year on research and development, and in January 2015 we launched a beta version –at first non- transactional– where we learned from the users, we understood their motivations for saving, what amounts and what periods. At the end of May 2015 we launched the real product, where you can now save towards different goals.
So the motivation arose out of how difficult and boring it is to save, even though we all know how important it is. It's like something everybody wishes they could do. We're trying to make a product that's supremely easy to understand and use and creates interest so people are actively saving money.
What are the challenges or obstacles facing entrepreneurs in Mexico today?
The last two years have been very important, and much progress has been made in the so-called entrepreneurial ecosystem. As I said before, I think this is an irreversible worldwide trend –it's positive, but we can't afford to miss the boat. What's been done so far is very good. It's great that it's being done, but we still need to do more. I think we're in a better position that we were two years ago. And there's a certain volume of incubators and accelerators such as Wayra, from the Telefónica Group –which is the one we're with– that didn't exist in Mexico five years ago, and that's very positive. But we're still very far from the way the number-one innovation ecosystem works at the global level, namely Silicon Valley.
I can cite our example, in my country, in Mexico, where a very good idea has now been approved and validated, and which we've just pitched to several European banks at the end of last October –we've been with you at BBVA. It's taken me one year to raise the first 100,000 dollars in seed capital from someone like Telefónica, to get them to believe in us so we could move forward. You can do that in two weeks in Silicon Valley.
So, yes, we are better, but we still need to be much faster at making things happen, all the players in the ecosystem need to be faster –the accelerators and the venture capital funds, the entrepreneurs themselves and the government processes. I think we're doing better than two years ago, but there are still many areas with room for improvement, from my point of view especially in terms of speed.
How would you define the DNA of the Mexican entrepreneur/innovator?
There's a lot of innovation in Mexico, because I believe that the best entrepreneurs are shaped by adversity. As we come from a background where many things that can go wrong, do go wrong –because the country isn't perfect–, I think that gives us an edge to be creative, substantially more creative than our peers might be in countries we think of as being fully developed. If they help us catalyze that aspect with the right ecosystem, I think Mexico could become the source of companies with a genuinely global reach, but we're still lacking certain ingredients.
I've been in Silicon Valley and in London, and as far as the people there are concerned, I'd say we have the same capacity, or sometimes an even greater capacity. We need to complement that with a world vision, so that if you come here to propose an idea and you say "I'm going to create an app that's going to operate in 180 countries", people in your country will believe you and not tell you you're a dreamer. That's why we've already opened our company in the United States, and in 2016 we're going to be working there and in the European Union, with ZaveApp.
In your opinion, what’s the role of official and non- official bodies in entrepreneurship?
They play a very important role, particularly in the initial stages, because they can be the ones to offer a less mercantile and more long-term view, with a social dimension; they can give you the early support to help your idea get underway. An idea that may just be a simple drawing and a concept. So yes, they're essential.
I'll say it again: the foundations are already in place and they work, the only thing we need to improve is the speed of response. If you bear in mind that 80% of companies go under before they've been operating for two years, each day of those first two years as a company is a long time. So the faster things move forward, the more we can reduce the project's risk level. So we can learn how to have more standardized and more streamlined processes.
How would you define the financial opportunities for Mexican entrepreneurs today? And why?
There are very good opportunities, particularly in view of Mexico's geographic position. If we consider that up there, in the United States, there's a market of 300 million people, and that you can design a product in Mexico at a much lower cost than from a base in the United States, the opportunities are enormous. The only thing is –and I say it again,– to make that work, the whole industry has to move in a more streamlined way. I think we're the most advanced ecosystem in the whole of Latin America, along with Chile, and the advantage we have over them is that here the internal market is 120 million people, as opposed to a much smaller population in Chile. I would rate our country and Mexico City among the top ten entrepreneurial ecosystems worldwide. And we can go even further if we improve the issue of the speed of response.
How do you see the future of innovation in Mexico?
I think this ecosystem is going to become even greater. More people are going to graduate from universities or from companies and want to innovate and become entrepreneurs in the field of technology or in startups. I think there are going to be success stories and failures like everywhere else in the world, more failures than successes, but that's all a source of wealth for the country, both in cultural and business terms.
I think the process is unique, and everyone tells it like they experience it, but I think we have to find a real connection between the big companies that already exist and the startups, because in the end any business means sales, and to sell you have to make a product that's useful for someone else. So if the big companies can collaborate with startups in testing and designing products that can meet their specific needs, I think this would be a win-win situation. Because you can resolve a serious headache for a big company that's unable to find a supplier of the same size as itself, because startups have more agility; and a startup can also find an important sales channel to give them the level of survival they need at the start to continue developing, and that will lead to more of that kind of customers.
In my opinion, we're going to see more of these accelerators backed by a sponsor in the form of a large company. A specific case, now that we've just been in London is Tesco, which is a chain of supermarkets like Walmart. It sponsors an accelerator exclusively for its own retail sector. So basically what they're looking for is to encourage startups that can help them improve their business. I think this type of incubators is the future that's up ahead. These accelerators are becoming an extension of companies' RMB and that's a good thing.
What advice would you give someone who wants to become an entrepreneur in Mexico?
There are several points I could make, but I think the most important and the thing I see for myself every day is that I don't believe it's a good idea to graduate from university and go straight into becoming an entrepreneur. There are impressive success stories like Facebook, but they're one in million. The fact is that experience reduces your chances of failing. That's why the advice I would give is always to work beforehand and to nurture your experience with someone else's money before going out to do your thing, because you're going to nurture it and you're going to continue nurturing it.
To reduce the chances of failure, I think the first thing to remember is that it's healthy to gain experience by working for someone else –in all aspects, from learning to delegate through to learning about the different areas of the company and understanding where you can add value so you can then get out there and do something specific. My advice is this: work first for somebody else, and get some experience. And you're the one who'll spot an area of opportunity in some part of the process inside that company, and from there you can begin to think what it is that you can fix and make more efficient by doing it on your own. You'll start to think about, and then you'll reach a point where you have to bite the bullet and make the leap. But you have to validate it beforehand, ask a lot of people if they see what you're seeing, because that's a mistake a lot of people make –they design products that only they want to use.
Octavio Novelo points out that one of the areas of opportunity in the Mexican entrepreneurial ecosystem today is the speed of response in the entrepreneurial processes. He says work is done to streamline and standardize the process, Mexico could make significant progress in the sphere of entrepreneurship and innovation worldwide.