Russ: [00:00:00] Thanks for downloading the 17th in our series of episodes of the csuite podcast that we’re recording in partnership with the European PR Agency Tyto, and their own ‘Without Borders’ podcast, where we are interviewing leaders of unicorn companies to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications. My name is Russell Goldsmith and my co-host for this series of interviews is Tyto’s founder, Brendon Craigie. And today we are thrilled to be joined online from New York by Mariano Gomide de Faria, Co-founder and Co-CEO of VTEX, a company that provides fully integrated end-to-end omnichannel commerce platforms to major global brands. VTEX reached a unicorn status in September 2020 after it had raised $225 Million in Series D funding and that reached a $1.7 billion valuation. Welcome to the show Mariano, do you want to start by giving us a quick introduction to the business?
Mariano: [00:00:59] Yeah, it’s an honour to be here with you and all of the production. Thanks for the invitation. Yes. So VTEX is originally a Brazilian company. We founded, Geraldo and I the other founder, and so we were colleagues from university. We made Mechanic Engineering together. As soon as we got out of university, we have found we created VTEX. And VTEX was a software company for Brazilian industries on the textile industry. That’s where the name came, like VTEX, for textile industry. After seven years we in Brazil, it is not as you have in Europe or in the US that you have a kind of a financing for this kind of high-risk entrepreneurs. So, we needed to make ourselves fully bootstrapped, financing ourselves with some side business. And one of the side business that we did really well was plenty of e-commerce. So, any time that we needed money, we just open the door, and we did another e-commerce project. Some of them became very famous in Brazil. And in 2007, we were approached by the Walmart organisation, asking us to develop a platform for them to Brazil and it was a massive thing for us. Back there we have nine people. This history of Walmart can be a book by itself, but after seven months on our RFP, we won the RFP of Walmart. We deployed in one year the project. It was a big success. And then VTEX born to the world as one of the bunch of guys that could do amazing things with code. And a lot of other companies just follow Walmart by hiring VTEX. We came from 10 clients in 2009 to around 232 clients in 2012. Then we started to open to all other countries in Latin America: Chile, Mexico, Colombia, Argentina… In 2016, we were the leaders, clear leaders in Latin America bigger, much bigger than SAP, Salesforce, Oracle and Magento. Back there before Adobe, we decided to go bigger, so I moved myself to the UK to St Albans, close where you are.
Russ: [00:03:23] Absolutely yeah, we just discovered that, just 10 minutes away.
Mariano: [00:03:27] Yes. So, I moved myself to St Albans, UK, we opened the European headquarters. Now we have presence in Europe and also Asia by Singapore offices. We open also the US offices. We keep growing. We have kind of a very specific from offer to the market. The market is coming to our position. So, we offer what we call the fourth wave of digital commerce platforms. We have the first wave, on prem, The second wave, the SaaS. Basically on-premises in the 2000’s, SaaS in the 2010, boom with Salesforce, then three years ago we were seeing the booming of the headless. We do believe this third wave of software for digital commerce will have more three to four years. And then we will see the ramping up of the fourth wave, that’s where we are positioned. What we call the composable software. Gartner, the institute Gartner starts to talk about the composable software. And VTEX is kind of the representative of the composable software. So, we are in a scenario that we can deliver complex scenarios of digital commerce in a very, very fast pace. I can give you an example. Like we are dropping companies like Samsung, Motorola, Whirlpool in three months’ time, is fully integrated with ERP and all the legacy systems. So, this is what makes us a unique offer, and that’s why we are having a good momentum in the market.
Brendon: [00:05:05] What do you think’s been the sort of secret to having that long lasting success?
Mariano: [00:05:10] Brendon, we decided in 2011 that, actually, we realised, we learned from the Walmart project that software cannot be a just an automation of process. Software should decide, software should have knowledge inside. And normally when a provider comes to a client, the provider, asks the client, what do you want to do? Because it used to be there for 30 years, the software industry, a kind of the willingness of the business area and the IT area from the client guide, what to do with the software. But actually, the knowledge of digital commerce came too fast in the world that the talents cannot go inside the organisations in the level that the organisation needs. So the lack of talent inside all the organisations in the world and it’s quite normal to expect that because it is an industry that there is no university, it is an industry that is no young one of 18 years old will dream say, “Oh, I’m dreaming to work for digital commerce.”. No, they dream to work for banking, for consulting, to be an entrepreneur, but not to work for a retailer, digital retailer. Obviously, that creates a lack of, today more than ten thousand, I would say twenty thousand jobs in the industry that we cannot fulfil, our clients cannot fulfil. So, this reality, it’s the same since 2011 and it is increasing the lack on a yearly basis. We still in 2021 after Covid on a massive digitalization, and there is no university with a course of four or five years that form digital commerce operators. So, we are far away from the maturity of this market. In this scenario, clients cannot hold or wait for process and talents to come. The only way for them to thrive is to access knowledge directly from the code like we do with Uber as individuals, we access knowledge. We are not accessing an app that calls a car, we access the knowledge of creating a network of trusted cars that without knowing the guy that would be on the other side of the wheel, we can trust our children. So, what makes us unique is that in 2011 we decided that we will not hire anymore an account executive or a BDR or a project manager. We decided back there that we only will hire digital commerce experts from the retailers, from the field. So, our account executives, our CSMs, our solution architects, they came from managing operations in the digital commerce and the digital commerce, it is an empirical science. It’s like riding a bicycle, you cannot teach how to ride a bicycle, by books. It’s going to take 10 years and it’s still not working. But instead, if you put some children, five years old, six years old, on a bicycle, on a ramp and let them go, I can bet that in one afternoon they’re going to know how to ride a bicycle. So, this is the digital commerce industry and we bet on that. That was the biggest bet of VTEX in terms of knowledge. And then I can combine with the second one in terms of product. We were fighting companies like SAP, Oracle, IBM, companies that are like hundreds of billion dollars valuation. And we were like, absolutely nothing. So, we needed to do something different to be unique. And since 2011, we are using an architecture, that is a multi-tenant SaaS for all our clients, one unique set of code with a one unique set of infrastructure, really multi-tenant for all our clients, that gave us the ability of evolving the software in a fast pace. I want to aggregate the third dimension that would make us unique. I don’t know, but I guess Latin America is probably the worst-case scenario in terms of complexity for retailers. A mid-sized retailer in Brazil, Mexico, Colombia, Argentina, if they do not operate with multiple fulfilments, multiple carriers and I mean more than 30 carriers, if they do not operate with multiple payments, if they do not operate with multiple promotions, multiple landing pages, multiple Web stores, if they do not operate with a complex scenario, sharing inventory through friends, through platforms, through stores, integrating sellers, selling through other sellers, if they do not make that, they will not survive. So, this complexity, created in the VTEX software, something unique. We can allow today enterprises to go to market in a very complex scenarios, in an easy way of configuration and not in a complex way of customisation and big projects and big budgets. Yes, when the scenario is quite simple, one distribution centre, one carrier, one ERP, then we are regular competitive. But when you have like a global operation, multiple fulfilments, multiple languages, multiple teams, management teams in four or five countries and sharing the same data, the same platform, B2B, B2C, B2B2C, B2E in the same operation, then it’s our playground. So, I don’t know, we are unique, but we are unique for this kind of demand. When you have a complex demand, we are unique.
Russ: [00:11:18] That’s fascinating, hearing that whole kind of progression and journey of the business. It leads me on nicely because I mentioned, as I said, that you got to unicorn status in September last year. How would you say the perception of the company has changed after reaching that milestone?
Mariano: [00:11:33] Well, we have twenty-one years of history. Until last year, actually, until 2019, to be precise, we just made seven million dollars on a first round in our entire history. And from 2019 to 2021, we did, yes, three hundred and sixty-five million dollars in two rounds. We brought good investors to the table. I don’t think it changed absolutely nothing inside the company. I do believe it changed a little bit the minds of our partners and clients, a lot of them, they call me and say, “What? How come? I didn’t know.” And actually I would bring Russell and Brendon, a situation here that probably for the ones that lives in the UK, and in the United States or mature countries, it’s going to be kind of weird to think how interest could be a Coke machine. When a country has a Coke machine, you know, Coke machine where you put a coin and the Coke comes back, so it’s pretty, pretty simple, like obvious. We have these in the UK and the US for like decades. But actually, I live, I am 44 years old, I lived in Brazil that we didn’t have a Coke machine, and the reason we didn’t have a Coke machine and the country didn’t have a Coke machine, is because in the emerging market, if you do not have a stability on your currency, you cannot have a Coke machine because the hardware could not hold changes in the coin and changes the coin, it is the inflation that pushed them forward. So, the value of the goods becomes outdated very fast. So, you cannot have a Coke machine when you have countries with uncertainty in their currency. And when I am visiting a lot of emerging markets right now and a bunch of them have now Coke machines. So, we are seeing a revolution in the world happening, and this is an underdog revolution, the emerging markets now have Coke machines. That means a lot. That means that it’s a no inflation environment. With a no inflation environment, we have the interest in a kind of a sustainable level, five percent, six percent, four percent with this kind of environment, then we have VCs, ventures, private equities, growth funds because now everything is more predictable.
Brendon: [00:14:09] That’s maybe a good jumping off point for the next question, which really was you’re one of the few Brazilian unicorns out there. And we were kind of curious to understand from you, how does the Brazilian tech ecosystem compare to, say, your experience of Europe and North America?
Mariano: [00:14:27] Today, to grow up and create a company that reaches this kind of valuation, it is much more what the valuation represents to the ecosystem of Latin America than the valuation itself. The valuation means that we have a more than three hundred size from Mexico, Colombia, Argentina, all Latin American countries, from Hungary, from Romania, from Poland, from India, from Thailand, from Malaysia. We have hundreds of SI’s with creative engineering. If you see the world, Brendon, the creative engineering are being made in five big regions: China, Russia, India, Eastern Europe, and Latin America. So, if we can arbitrate the creative engineering of that regions, the emerging markets and translate these into knowledge to the companies that is in the mature countries that to buy software in a very good price point, then we can also create a spinning wheel. It’s a self-fulfilling prophecy because, the retailers that are in the UK, right now, if they need an e-commerce project, they would need to pay like five million pounds or even a £700k of implementation for the front end. And with the exact same quality, you can implement that these for £50k. So, this is the old way of making money, these arbitrage of assets. So, it means a lot for a region to have not only VTEX, but several other companies coming on that valuation. We didn’t have for the last 15 years, none unicorn. And in the last two years, we have more than 10, right now. So, it is a reaffirmation and the revolution that’s happening and not only in the emerging markets of Latin America, but also all the emerging markets in the world, they are creating hundreds of unicorns. Today, I would say easily only Brazil has more than 80 unicorns to come for the next three years. We used to be the country of the iron or the country of the mill or the meat or the country of the soil. But now we are becoming a region of the digital commerce industry as India it is for call centre, as France it is for food. Then we have a question on Italy as well. But that there’s a global reference for service and products and Latin America is becoming one of the regions that can provide the world with a digital commerce service.
Russ: [00:17:03] I was just picking up on something that you mentioned where you were talking about, over so many years, you’d raised say seven million or so and now another 300 plus. Has that changed you in the way that you deal with those investors? Because that’s obviously such a massive difference. Have you had to change the way that you approach, or does it not matter whether it’s seven or 300 million?
Mariano: [00:17:27] You know, it is like life. You cannot act as you have 15 years old, as you have 30 years as you have forty-five years old. Once you have kids. The level of risk, the way you communicate what you have as a value changes all over the world with the learnings that you have. So, for sure, we are changing a lot. Geraldo and I, the C-level, the managers, all the team, they are changing on a daily basis. Two years ago, we were 350 people, now we are more than fifteen hundred all over the world. We have thirty-two countries with active operational VTEX. That’s a big challenge. Until four years ago, we can manage like in two time zones, the entire operation of VTEX. And now we need to manage people in California and people in Singapore. How to bring talents from digital commerce, how to attract. We used to call, and we call internally how to crack the code of the sustainable attraction of those talents to the VTEX. Because when you go to the US and you want to hire a digital commerce expert and you make a LinkedIn announcement on a kind of a vacant slot saying, “Oh, we want an account executive,” there’s a lot that do not match with the willingness of the digital commerce expert. So, we create other ways of approaching talents, even from the university. So, we build up a program that is called Tetrix, Tetrix, the challenge Tetrix, it is the biggest university challenge in the world. Last year we had seventy-five thousand students competing for one prize. That’s a goal, a trip all around the world, visiting the best digital commerce operations all over the world. And why we did that, why we sponsor that with other companies. We create and we sponsor it because we want these seventy-five thousand students from Engineering, from Economics, from Business Administration to understand that there is a massive industry waiting for them that pays well, that’s fun and has a huge impact and it is a future proof career. And this is not well communicated. And we decided to make the education as our main social impact. So we took the responsibility to do this in a global scale.
Brendon: [00:20:01] That’s brilliant. That’s very inspiring and very creative way to attract talent. What was it that made you decide to change your headquarters to New York?
Mariano: [00:20:09] We don’t have this concept of a big global headquarters. We do believe a global company is actually the sum of local cultures. When you say like, “Oh, we want our company to have the same culture”, come on, culture is something that you’re born with. It’s in your people, in your home country, you will not have the same culture. But you yes, you can have the same principles. Yes, you can follow the same north. So, what we discovered is say if we have headquarters around the world, we will be more local. So, we created one in Europe, we created one in Brazil, we created one in Latin America ex-Brazil, we created one in the United States. So, in the United States, we have three offices, one in Fort Lauderdale, one in Philly and one in New York. New York is the main one. But for example, we will create the first coworking for digital commerce in Philly. And there is no such of a headquarters operation in VTEX. Yes, the main two offices for sales and operations are in the UK, London and in New York, but the main product head office it is in Rio de Janeiro, Brazil. So, we are very shallow in terms of hierarchy. Geraldo and I, we are field operators. We came from the field. Now we need to transform ourselves into a more a big role of CEO management. And we are learning fast to do it. We have an internal joke, Geraldo and I, that we might not be the most intelligent ones in the world, we certainly are not the ones with the more pocket, big pockets in the world. There’s only one thing that we can do that’s and then we will defend and stand our ground there. We will be the first company to react to feud insides. So, we will keep the top of the career in VTEX there is no management position, the top of the career and all the ones that work for VTEX knows that is the account executive one, the solution architect one and the CSM one. This is how high you can reach your career in VTEX. And these are, maybe lonely paths. So, it is a different way to approach the hierarchic thing. It is not the manager that receives more salary, it is the one that aggregates more value in front of the client, that receives more stock option and more salary. So that’s the way we build it, not by design. I can say Russell, Brendon, we did this because we need to survive and to survive, you need to put your best team in front of your clients to guide them, not only to support them. This is the wrong word. Software vendors that say, “No, we’re going to support you.” This is not what clients want anymore. Clients want to be guided. Clients don’t want to be supported anymore. So, I do believe we reacted faster than our competitors. That’s why we have the recognition of IDC as the leader in the world and Gartner as a visionary. So, we do believe right now as Covid accelerate three, four or five years, the wave of these d-commerce, I do believe the complexity will arrive to the UK, to the U.S., to Germany, and when complexity arrives to the table, then the wave will come to VTEX. So, we are very optimistic for the future.
Russ: [00:23:58] On that thought, how has Covid actually impacted the business? Because I guess we’ve seen a huge rise in e-commerce. So, in that respect, I guess you guys have grown over the last twelve, fifteen months.
Mariano: [00:24:10] I’m going to explain to you the way I explained my wife. Sabrina asking me obviously, in the middle of Covid and say, why you are so worried about VTEX, why you are working so much. And I explained, say, look, Sabrina, imagine that we have two kids, Bento and Maria, and they were learning how to ride a bike. And then we are doing that like, you know what every parents do, like buy the helmets and the protections and do the basic lessons with the small wheels and daily basis evolution and then I was with her in UK, during the quarantine and I was with the kids in the streets trying to get them out of the house. And I was teaching them, and I have an idea to show Sabrina and said OK, this is the best way so we can learn what is happening in the world right now. I put them on the ramp, and I took the helmet and took all the protections and I let them go and Sabrina starts screaming at me and says “What are you doing?” I said, “This is what Covid did with all the retailers in the world.” They need to learn not anymore in months or years, but they need to learn in weeks what to do. And yes, they will fall. Yes, they will have some bleeding and some scratches. But at the end of the day, they will learn, and this will change the retail environment all over the world, that’s what happened. All the companies with the very pragmatic approach on work shards, legacy owners, family-owned business with board meetings every quarter, during Covid board meetings was made like every week and changes in the management in the way you understand what means omnichannel, how you manage your merchandising, the way how you manage supply chain. That was a big thing during Covid. So, the industry, the brand manufacturers, and retailers, they evolve. Clearly, five to 10 years in their mindset. How to approach the digital. And the results will come for the next years, we are seeing this all over. So, we were impacted by a huge wave of demand, the volume came to the roof. And we are very proud that we were there for our clients. Clients that from absolutely nothing needs to change 500 physical stores. Clients as, for example, a pharma in Colombia that we receive a call from the government of Colombia, say, “Please put the pharma live as soon as you can, because we, the country needs them live.” And we were there, we put them live in three weeks’ time, fully integrated, so I am very proud what we did in the last one year and a half. I do believe if it was not the e-commerce industry, the world would face Covid in a different perspective. If covid had happened 20 years ago, the outcome would be completely different. The thing I’m very proud is the logistics. You know, us as consumers, retailers and brands always complain against the logistic team, the logistic companies, the carriers, but actually they made their show. They show off what they can do during the Covid. They hold the world economy in their hands without all the risk that is being in the streets delivery. So, I’m a fan of the logistic ecosystem that we’re creating in the world and the world should recognise what they did. And I think we will see like 10, 15 years of big impact in the digital economy because of Covid. Obviously protecting regarding all the losses that we have on a human perspective. But in terms of a digital economy, Covid was a catalyst.
Russ: [00:28:22] So what about now that, hopefully we’re coming through the other side of it. What would you say retailers need to look out for? Is there one or two trends that you’re focusing on?
Mariano: [00:28:32] Yes, I do believe the conversational commerce will hit really, really heavily. So, countries like Brazil, one of the biggest countries for WhatsApp in the world, WeChat, all the conversational platforms are evolving, and we’ll take a more predominant role in the navigation. So, the browser will lose a little bit of the strength, the conversation will come up and then is a funny thing, the United States, for example, a massive market. They just have one message platform, that’s IMessage, right? They do not use WhatsApp. They do not use WeChat. The country has not been prepared for this new wave. So are we going to see something interesting that countries from East part of the world will show the way of what’s going to be the next waves of technology, so live commerce, it’s booming in Asia now it’s starting to come to Europe, to the UK, to Latin America and the United States. Conversational commerce, if you’re going to buy through WhatsApp, it’s going to be a big wave, so this is where the company should be prepared too, because this is the real thing. This is the real omnichannel. So, we just bought a company we announced it two days ago called Suiteshare.com. That’s a company that does a very specific app. They link the website to a WhatsApp of the salespeople inside your physical stores. So, it’s obvious, right? People are willing to buy, and you have salespeople waiting clients to come. Just link them. And that company does this in a very, very smart way. So, we bought them and now it’s live for all our clients. So, the role we act in VTEX is to make our clients future proof. We take the responsibility to guide our clients in this futureproof category, and sometimes they are not able to do it by themselves because they do not have access to information, they do not have even the talent to access the information. So, we do believe it’s our board and our owner to guide them in this. It’s new oceans to come, right? So, these are the two big trends that I’m seeing. We are also understanding that global trade with a unique layer of inventory, it is a big trend. So, you see brands I don’t know like, C&A. So why C&A should have one inventory per each country that they act. Once you go to Amazon UK, and you see a big stake of Amazon UK fashion coming from and delivering from China, delivering from Taiwan, delivering from Bangladesh. So, the global trade, it is a reality, and some countries just didn’t realise it yet. So, this is not a trend. This is a reality, but the reality that is not in the table in the retailers. So, if digital commerce would be a human being, we would be born right now.
Brendon: [00:31:39] Brilliant, it sounds like you’ve got so much on the horizon that you’re really engaged with. A key part of these discussions, Mariano, is talking to unicorn leaders and getting their perspective on issues around communications and culture. And it sounds like this is something that you’ve kind of had to address a lot, you know, given your global team. So, it would be interesting just to get your perspective on what’s been your approach to building awareness and differentiating yourself in the world as VTEX.
Mariano: [00:32:08] One of the things that we did and it’s generating results is we created a playbook of attracting and evolving talents to the company. And on that playbook, although we hired digital commerce experts, the first phase, it is only soft skills. So, we have an attribute that we call the ‘go to person’. Today, if you do not communicate as well as you think, probably you will not be as efficient as you can be. So, we need to find people and sometimes the best way of communication is to be a committed listener, right? So, integrity to clean your mind, to really understand the perspective of the other and not try to protect yourself. We call this the power of vulnerability. Normally, when you hire people from big companies, even the big techs, they come with layers of protection. I know. I did. This doesn’t mean and absolutely nothing, right? What you did in your past is expressing yourself. So, the past actually doesn’t matter. It’s your expression in the daily basis that will show what you did, not your accomplishments in the past. So, the way of communicating with the precision, it is the secret of any company in the digital commerce, because we need to have in the same table, twenty-two years old, incredible developers with a 40-year-old, merchandisers, marketeers, and they should talk the same language. You are from the industry Brendon, and you know how hard it is to put them to talk in a very high-performance environment. We have a group in VTEX that works directly to the C-level that only takes care of the conversation level of the company. We call that group the conversation holders. So, it is very important to us once we grow with a multicultural environment to have the same level of conversation, and I do believe we are one of the standards in the world right now on that, and we are very proud of it.
Russ: [00:34:24] What about internal communications, Mariano, because obviously, you talked just before about how much the company has grown, so you’ve now got people in all different territories. I’m guessing people have been working at home and remotely as well. How are you addressing, communicating with the team, and keeping the culture of the company at the same time? Because we have talked to a lot of leaders over the last year who have been onboarding new employees who haven’t met their colleagues, haven’t been to an office, yet a culture of the company, as you mentioned earlier, is still such a key part. But if they’re not in touch with people, that’s quite hard to achieve, isn’t it? How are you managing that whole internal comms process?
Mariano: [00:35:07] Yeah, so we do not have a big human resource department. We split the responsibility of the human resource to all the leaders in the company. Because evolving people is a daily job. It is like to be math oriented or to be tech oriented, to manage people and to know how to guide your team, it’s a daily job of any leader. So, we have our rituals, right? We have a demo Friday where the company joined together every Friday, we have the all-hands… During the covid, I made myself available on an open channel every day for 30 minutes for any employee in the world. But every single day for one year and two months. Now, we are doing weekly basis because Covid in some countries are a little bit smoother. Now we have the chance to do once a week. But until three months ago, we did, I did personally an open channel with all the employees, 30 minutes a day at five pm, Brazil time, because sometimes people are alone, sometimes people are desperate. Sometimes people just need a word from someone, and it was a transformational thing for me to understand what is the role of a leader. Sometimes it’s not only guide revenue, gross margin, sometimes you need to just be there for your team and from intern any intern can just be in a 30 minute meeting with me until today in the company. And people use this. Yesterday, I received a lady that I don’t know her, Maria is her name. So, Maria, you are live in the UK, right now! She just been 30 minutes in my calendar, I saw it. I asked Lucilla and Lucilla works on the chief of staff team and I say to Lucilla, ‘Who is Maria?’ And Lucilla said, ‘Oh, Maria is an intern that just joined VTEX’. And I said, ‘OK, fine’. So, I was there for her, and people say, ‘Oh, but you have more important things to do because you are the CEO of the company’ and I say,’ No, I don’t’. If I do not be there for the team to guide them, we will not spread the message. So, it is a physical effort to spend time with your team, with the ones that are joining our team. So, I do probably 50 percent of all the interviews on the final interviews of all the employees of the growth area of VTEX, still today. It’s time consuming, yes, it is a big time consuming, but that’s how you keep culture, accessing from the top name to the bottom name, a kind of a same level, this accessibility. And they can learn from the founder what to expect in the days that they will be with VTEX. So, there is no other word than hard work to keep communication happening. We have a lot of rituals. We do communicate with a lot of playbooks. We do write a lot of letters to each other. When we express yourself by letters, there is no interpretation. You can create the context and you can explain yourself. Sometimes when you communicate verbally, the other ones are in a different context with a different crisis and they are not so, the integrities not one hundred percent there. And this miscommunication, it’s always a mess up, right? I have an internal statement that I said. I say always that two intelligent guys, unrelated from culture, whatever, two intelligent people, if they have the right dimensions in timing and the category that they are having the discussion, they will agree. So sometimes it is just a matter of finding the right dimensions to discuss, because sometimes you do not agree with that tactic for the next 30 days, but you do agree for the next five years. One part is talking about five years, and you are talking about 30 days and you just you just don’t stop to say, what dimension are we discussing? And when you stop and ask the dimensions, a lot of things become clear. There’s a consulting group called Vanto Group. Olga Loffredi, is the CEO of Vanto Group. She was the one that taught VTEX this level of conversation. So, I do believe now we are ready for this chaotic environment and to control the chaos, you will lose every single company that bets on, “Oh, I’m going to now control the chaos,” they will lose. It’s impossible. And by the way, chaotic environments are very productive. So, it’s better to you to create a layer to the chaos, to organise itself than to try to control it. That’s how we act at VTEX.
Russ: [00:40:10] Some brilliant stuff that you just shared there, and I loved the story of Maria, that’s absolutely great. And what about as an external spokesperson, your role for that? Is that something that you enjoy?
Mariano: [00:40:22] So we do a lot of public speeches. We own our own Institute of Education in Cambridge, inside Churchill College. We probably have like more than 100 events all over the world that we sponsor, or we are the owners. This is a public communication. So, when we take public communication in the table, we do not only talk to investors, we talk to partners, we talk to clients. Last week I was in Austin talking to an SI, what will be the future of an SI? I didn’t speak about VTEX. I was there to tell them what is my vision for the next five, 10 years of the SI industry, and if we agree on that, then we can be partners. So public communication is something that we train, and we guide. The kind of the c-level and high-level management of VTEX, they are all ready to talk in behalf of the company to attract talent, to guide our partners, to guide our clients. And, yes, VTEX is becoming big enough. And yes, we do have a central PR area that now is under Astha Malik, is an executive that is the first woman in the c-level of VTEX and we are very proud of it. Astha is joining from five years in Zendesk. So, she just joined one month ago, 15 days ago, and she will be running as a COO of growth. So, she will be one of the ones to control this communication to the exterior of VTEX.
Brendon: [00:42:07] Thinking on staying with the subject of communication, Mariano. What has been the biggest communications challenge you’ve faced along the VTEX journey? And how did you overcome it?
Mariano: [00:42:20] So diversity is a big challenge on communication. It’s a big topic all over, right? And if you over communicate, you will suffer. If you under communicate, you will suffer as a company. So, what’s the right level of communication on that? I was discussing with one marketing guy from one specific country that we did an amazing thing. We hire, for one specific country, we hire for three months only women. So, we stopped all the process with men, and we just followed with women. Obviously, the feud was really like, say, “Oh, you are blocking us to evolve.” And we say, no, there’s some things that are more important than evolution and the messaging and curation of what you stand for, it’s very important. So, we did that and then came the challenge. Should we go public and say that or should we not? It was a big challenge because if you are proud of promoting diversity, maybe it’s not the right way to approach it. Maybe you just commit yourself to do it without the willingness or without the proudness of announcing it. In the other way if you do, you’re going to inspire other companies to do it. So external communication, it is a big thing. So, we did these two years ago. We wrote a piece of document, the condition of satisfaction, what we will not open hand to achieve revenue or margin what we will not open hand even to achieve that and say, no, this is OK, we will lose revenue, but we will not open hand of these principles. So, we wrote a piece that today’s three, four pages that all team of VTEX in the world have this piece as their handbook that shows the outcomes, the milestones, not in the old language of a vision and mission. No, no. It’s more pragmatic. What’s the outcome that we will fight for? This is it. Are you in the north of that outcome? If you are not, something’s wrong. So, I struggle with communication failure as well. I remember to hire a vice president of a big retailer to be one of our success managers in Brazil. And she was so afraid that she was not tech oriented. And I told her, look, ninety nine percent of the things that you’re going to do for the next six months will fail. And she said, why did you hire me? And I say, because we’ll fail. And I know that you are a fast learner and I’m fully convinced that in one year you will become a giant because you learn to fail. And she said, ‘You are crazy, but I will go to VTEX’. She came, she spent six months. My God, it was terrible. Then she started to catch up and then she started to guide IT departments of a big retailers that she thought was never possible before. And it’s amazing how you can really put yourself at risk as a company to create great individuals. They will be loyal to you. They will be passionate to your cause. And that’s how you create a company.
Brendon: [00:45:47] That’s really inspiring. We’ve got a couple more questions left. We’ve obviously spoken a lot about VTEX, but we understand that there’s quite a few interesting things you’re involved in outside of VTEX, the digital transformation course at EICOM, the European Institute of E-commerce Management at the Moller Centre in Cambridge University. You touched on that, I think. Can you tell us a little bit more about those?
Mariano: [00:46:11] So, one thing that we realised that we need to engage would be how to transfer knowledge and not how to sell knowledge. So, the retailers all over the world, they want to access knowledge and the consulting companies are selling knowledge by a very expensive price, not only in money, but pricing time. They sell knowledge through like one, two-year projects. This is not enough; it is not sufficient to allow them to survive. So, we decided to create, when I arrived in the UK, 2016, I went to Cambridge to look for good courses, to indicate for my partners and to indicate to my clients. I didn’t find, I didn’t find in all the other big universities in the world. The courses were made by professors, not by field operators. Then it has a big difference. As it is an empirical science, you should bring people from the ground, to be there. So, I call some professors that I know that are good and what I mean about Professors – Ian Jindal, the chief editor of Internet retailing, Zia Daniell, Chief Content Officer for Shoptalk, now in The Insider. Brian McBride, the former CEO for Amazon UK. I called those guys and said, “Look, I will invite a lot of executives to the Cambridge school and I’m inviting you to teach what’s the field teaching you?” They accepted promptly. So, we bring those guys from all over Latin America, Asia, UK, United States, put them there to transfer the knowledge to their students. And the impact and the results were unbelievable. The institute is called Eicom.org. The rule that I put there is a class can be as max as 20 people. And a country can have only three people max. So, we force diversity, cultural diversity, and we have people from Colombia. We have people, a lady from Saudi Arabia. So, this is the diversity, the exchange of knowledge through the high level. And I do believe we can create a layer of a very, very pragmatic, and field-oriented leaders that can come back to their companies and really make transformation. And this is, it is nothing related to VTEX. If we put better leaders and we do believe VTEX has a good product, they will naturally find us. But this is the way we can impact the world by education. It’s already five years down the road. Eicom launched the certification. Do you know the certification for financial world called CFA? Very famous. Now Eicom launched a certification for the digital commerce world. You go and it’s the first and only certification for global digital commerce operators. So, you’re going to be tested on P&L, on marketing, on logistics, on merchandising, and the approval rates, not surprisingly, it’s under 10 percent. It’s interesting, so we do believe we can make a difference in the educational arena. We have several projects on that. Events or companies. One of the ones that I’m most proud is called Women in Digital. It is a program specific to train women for the Digital Commerce industry. So, I believe all the other companies should do the same because, the world is running faster than ever. And the government and the public sector of education cannot follow the velocity. So, we need to help them. We need to be inside the universities, the basic elementary school. We need to help them to bring the digital as a native thing.
Russ: [00:50:06] Just one other thing, because, and I don’t know how you find the time for all this, but I also understand you’ve got quite a bit of an interest in the digital commerce in Latin America as well.
Mariano: [00:50:16] So that’s how everything started. A guy called Marcos Pueyrredon, that’s the VP of VTEX and shareholder of VTEX as well. He started this institute in Latin America. And this institute become like huge, now controlling all the events adjoining high level, joining entrance level analysts into knowledge dinners, knowledge breakfast, events, fashion events or B2B events. So, the institute now, it is a very central piece of the content for Latin America, and we are very proud of supporting them financially. Other companies, even our competitors, SAP, Adobe, Oracle, they are also supporting the institute. So, we are very proud of having these. You know Russell, you need to have a culture of give back. If you don’t, you are not ready to the next wave of demanding of leaders in the world and this culture of give back, we decided in VTEX to put all our effort into education because it is the instrument that we do believe can make a difference. So, the institute I do myself at least one or two weeks a year, full time dedication to be in the stage, to talking to small audiences in the interior of Peru. I went to Costa Rica, it is a very small country to talk about what to do, what the retailers should do it. We need to make the knowledge available if we want the digital to become huge and I mean huge, it is a 70 percent penetration, not 12 as we have right now. Some countries we have 18, some countries we still have five. The average, I would guess 12. 12 is absolutely nothing. When this industry arrives in a 30, 40 percent level, then the party will start. So, until that, we should put all our effort to transform countries from bottom up means from inside the university giving them, for example, the syllabus for their MBA courses, what to teach, how to hire professors, how to train professors, how to convince executives to be professors. This is our role, we do believe not only my team, but my partners, my clients, they expect these from us.
Russ: [00:52:50] Mariano, that’s probably a great place to leave it, because your passion for this whole industry is unbelievable and it comes through so, so well. So, we’ve been chatting for an hour. I know you’ve got to go off to another meeting, so I’m going to have to end it there. But honestly, thank you so, so much for joining us. It’s been an absolute pleasure listening to you.
Mariano: [00:53:09] It was an honour and congrats, Brendon, Russell. This space that you have is only fulfilling what we are talking, right? To bring knowledge and translate the knowledge in a very simple way, in a simple format. So, I’m very proud to be here. Thank you very much.
Russ: [00:53:29] Wow, Brendon, he was so passionate about everything that he was talking about.
Brendon: [00:53:35] Yeah, Mariano was just incredibly passionate about his business. But also, I think the digital commerce industry in general. I mean, I think the things that I really took away from that, which I found as being very compelling were, we talk a lot about purpose in the world of business and communications, and we also talk a lot about how there is shared value in and having purpose because it’s not only good for your business, but it’s also good for the communities that you operate in and I thought the real laser focus on education and the development and nurturing of the next generation of talent was something that came through very strongly and was very inspiring and made a lot of sense as both in terms of giving something back to the world, but also in terms of really propelling their company forward. And then from a communications standpoint, I think there were lots of really interesting things that Mariano talked about. But I thought one thing that really got my ears perked up was when he talked about how that chaos creates a very creative environment. And that company should not try to control chaos, but instead try and put structures around it and harness it in order to drive the greatest benefit for the company. So that was something that really stood out for me.
Russ: [00:55:02] Excellent. Yeah, good summary and picked up on some excellent points. That’s actually it for this episode. So, if you want to find out more about VTEX then their website is simply VTEX.com. We’d love to hear your comments on today’s chat. You can share them on our Facebook, LinkedIn, Instagram, or Twitter feeds or in the comments of the YouTube version of this podcast. And those are all linked from the top of the website at csuitepodcast.com, where you’ll also find all our previous shows and supporting show notes, plus links where you can subscribe or follow us for automatic downloads of each episode via the likes of Spotify and Apple. And if you like what you’ve heard, please do give us a positive rating and review. We’re, of course, available on all podcast apps just search for the csuite podcast and hit follow or subscribe. And don’t forget, you can also subscribe to the Without Borders podcast from our partners at Tyto, all the details for that are on their website. So just head to TytoPR.com and click on the podcast link in the top navbar. If you are a unicorn leader yourself and you’d like to be part of the series, please do get in touch by the contact form on the website at csuitepodcast.com plus of course, anyone can get in touch with us too, with any feedback that you have. And finally, if you want to reach me, you can do that via Twitter using @russgoldsmith or you can find it on LinkedIn, but for now, thanks for listening and goodbye.