Andrew: Hey there, freedom fighter. You know me. I’m Andrew Warner. I’m the founder of Mixergy.com. It is home of the ambitious upstart, the place for people who really strive to do big things. And I bring those kinds of entrepreneurs here to talk about what they did, how they did it, what they learned along the way.
You know when you, my listener, my fan, come up with an idea and it sounds great, but it suddenly occurs to you, “This idea is going to take a lot of money . . .” Well, today’s guest had that kind of idea and he got the money. He got $57 million. He raised it. At least at the time, he wasn’t anywhere near Silicon Valley, but he did it. He raised the money, $57 million. And then you might realize if you’re starting a really big project, “I’m going to need big partnerships. I need a big company in order to pull this off. I don’t know that I could even get into those big companies.”
That’s what happened to today’s guest, but he got in. He got component makers like Qualcomm to partner up with him. He got content marketers like Disney, blue chip partners, to go along with him. He got cell phone carriers around the world to partner with him. Again, a guy from way outside of Silicon Valley doing all this stuff and still you’ve never heard of the company he started, chances are.
The company is called Zeebo. And today you’re going to find out why and what happened with that company and about the striving, ambitious, accomplished entrepreneur who did it. His name is Reinaldo Normand. He is the founder of Zeebo, which created inexpensive consoles with inexpensive games. Today, he’s running his latest startup. It’s called Innovation², which advises large companies that want to understand Silicon Valley and technology.
My interview with him today is sponsored by a company that will help you schedule with anyone. If you want someone on the phone in email to actually respond to you, to see you in person, you’ve got to check out Acuity Scheduling. I’ll tell you more about them later. And if you need a developer, later on I will tell you why my sponsor is the best place to go. It’s called Toptal. But first, Reinaldo, welcome.
Reinaldo: Thanks for having me, Andrew. It’s a pleasure to be here.
Andrew: By the way, that was an exceptionally long dramatic intro for one reason. I did an intro to one of my past guests that was Nathaniel Pearlman that was a little lackluster and I said, “I better put more work into it beforehand.” So, I wrote that intro for you. I looked at you as I was saying it. You seemed like you were into it, like you were proud of that kind of introduction.
Reinaldo: Definitely. I think it was the first wireless gaming consoles in the world, actually one of the first devices that used a SIM card and work with carriers after cellphones. It was way back in 2008.
Andrew: And think of all the different parts that had to come together for you to create it. And it all started in 2006. You were in the shower. What happened in the shower?
Reinaldo: Yeah. It’s a cliché, I know. But actually it’s really what happened. At that time, I was running in Brazil a very large for Brazilian standards company that represented games in Brazil from Sega and some Japanese developers. I was running their mobile division, just started. And then I said, “Why gaming companies are not in emerging countries? Why are they not making money?”
The reason was very simple. They were not making money because of piracy. Because in the games business, it’s like the razor and blade business. You make money on games to pay the hardware. The hardware costs a lot and all of the games were pirated. So, I had this idea of a wireless game console for emerging countries where it would download the games to the console over 3G networks, which were developing really fast in most of these countries. I had this complete vision in a shower in ten minutes. So, it was kind of crazy.
Andrew: So, no cartridges–that means nothing for people to pirate–and inexpensive so they didn’t even need to pirate it. It all happens so simply that it’s wireless. The first call that you made was to whom?
Reinaldo: It was to my boss at the time. I was running this mobile division and he was the chairman of the company. He was in Europe at the time and said, “Look, we need to do this. I have an idea that will change things and change how games are done in emerging countries.” And he goes, “What are you talking about?” And then I said, “Well, let me explain…” So, I explained to him and he was very excited. He came back early from his trip and we started to think how we would do it.
Andrew: Now, you were at a company that had the resources to pull this off. Why did you tell your boss your whole idea, knowing that he could really just easily go off and do this maybe not easily but more easily than you? Why?
Reinaldo: That’s a good question. I think we need the vision and we need to work in a very nimble environment to make things happen. What I was trying to accomplish was a worldwide wireless gaming console to compete with the leaders of the marketplace. At that time, it was the Wii, PlayStation 2 and the Xbox. And in Brazil at that time, ten years ago, it was unprecedented to think globally, to think about a mass market product outside of Brazil. So, I was thinking since the beginning to do something outside of Brazil.
So, I told him that we need to do that in a different startup, found it in the US and raise money with venture capitalists in the US so we would be able to tap into the ecosystems of other countries as well. So, answering your question a short way, the company had the resources for the Brazilian markets only, but they didn’t have the mindset or resources to go after the whole emerging ecosystem in this market–China, Russia, India and Brazil and Mexico.
Andrew: And that’s where you were thinking. You wanted to go global. How did you make it clear to him that this would be your idea, your business, you would own it and not his company?
Reinaldo: Yeah, well, actually it’s all about trust. You need to trust people. I trusted him and he made every part of his word true in the years afterwards. Of course, I controlled a smaller part than I wanted to. But it was very new for me to go after the US market, raise money in the US, running a global company. That was very, very hard at that time. Today it’s easier. But at that time, it was very hard.
Andrew: And still not easy.
Reinaldo: No, it’s still not easy. We were doing hardware before Android and iPhone, basically. We didn’t have the tools to create a new operating system. It was very tough. We needed chipsets. We needed components. We needed prepaid cards. We needed to make a deal with carriers, which was unprecedented.
Andrew: I want to ask you how you got all those because that’s really impressive. But I’m even curious about a step before. How did you know what pieces would go into creating a console?
Reinaldo: Well, basically I was a gaming guy all my life. So, I understood a lot about the console market, how it worked. So, first of all, we needed the chipset. So, we started knocking on the doors of the usual suspects–Intel, Qualcomm, Freescale . . .
Andrew: Sun.
Reinaldo: Yeah, which was owned by Intel, Sun Microsystems, which had Java, Motorola and Texas and so far, so on. The second part was to have an operating system. At that time, there were no options. Actually, there was Linux, which we would need like kind of a Google to create a version of Linux, like they did with Android. So, it was not an option for a startup.
We had Java, which was kind of a mix between an operating system and a platform. And we had Brew, which was owned by Qualcomm which had all the pieces that we wanted. And we had Symbian from Nokia, but Nokia had a competitor, which was the N-Gage, which was a portable console which looked like a phone. So, we basically had the deeper conversations with Sun and Qualcomm at that time.
Andrew: How did you get into them?
Reinaldo: Well, in a lot of time, they are cold calls.
Andrew: You would just sit in Brazil, make phone calls on Skype?
Reinaldo: Yeah. Well, actually it was to their phones. I tracked the director of partnerships and I just called him. I had the one or two friends from this company from Brazil to introduce to the person in the US, which were not the right person, but I kept trying, just calling people.
Andrew: So, if I go to LinkedIn right now and I do a search for director of partnerships at Qualcomm, there’s someone who does that and all I have to do is be persistent enough to get through?
Reinaldo: Yeah, there are many actually. There are many people who do that. So, I was kind of sending emails to everyone.
Andrew: What’s the craziest email that worked for you?
Reinaldo: Actually, the craziest one, I called the right guy, believe it or not. I called him, “Hey, I work at this company in Brazil, which is a public company.” That helped because it was a public company. “We want to this and this and this and this, create a new wireless gaming console for emerging countries. We were interested in your technology.”
I basically called the guy directly. I found his phone. I don’t remember how. He said, “Oh, that’s interesting. That’s unusual, someone to call me without…” That doesn’t work. That’s what all people tell you, cold calls don’t work. In my case, they work at least half of the time.
Andrew: I see. You were calling from a publicly traded company that you worked for, but this new business that you were pitching to them was not this publicly traded company.
Reinaldo: Exactly.
Andrew: I see. So, you basically got to trade in on the company you were working for. I love that. That is so freaking clever.
Reinaldo: That’s exactly the point. They didn’t know anything about Brazil. The emerging countries were becoming more famous after the BRIC acronym. People were starting to look at emerging countries at that time. The only thing I had is we are part of the [inaudible 00:10:27] public company, even though it’s a very small public company for US standards. The company was valued at $30 million to $40 million at that time. So, it’s the one that’s negotiated on the penny stock in the US. It was very small. But for Brazil, it was large.
Andrew: That got him attention. By the way, when you said BRIC, we’re talking about Brazil, India and China. Those countries were especially interesting because they’re emerging markets and they’re really big, full of lots of people. You mentioned also earlier that you were a gaming guy. Let me quickly understand what that means. It means that when you were a kid, you got Atari like a lot of other kids, right?
Reinaldo: Yeah.
Andrew: How old were you when you first got the Atari?
Reinaldo: Four.
Andrew: What did you do with the Atari that other people might not have?
Reinaldo: When I got the Atari for Christmas, 1979, I basically spent like eight hours playing after opening the gift. My parents didn’t know that.
Andrew: You sat up and you played with it because you were so addicted. You literally wrote the book on gaming, by the right, right?
Reinaldo: Yeah.
Andrew: For the Brazil market, you explained the history of gaming, as I understand it. You moved on after you were four years old playing Atari for eight hours. You then created–here’s in my notes–at 11 years old, you created what was it, something to do with square root?
Reinaldo: Yeah. Actually I developed it at school, a method to solve square root by a different method, just doing some calculations in your mind instead of following the traditional rules. It’s funny because my nickname was [inaudible 00:12:02] when I was 11, which was a privilege for me for having it. But all my teachers thought I was cheating. I basically solved all the equations and all the problems in the exams without following the method.
Andrew: I see. So, they thought you were cheating by having some kind of calculator snuck in?
Reinaldo: Exactly.
Andrew: But at what point did you get into hardware for games? At what point did you start to make it or get involved with it?
Reinaldo: Yeah. It was at Zeebo, actually. I started first when I was . . .
Andrew: So, even though you were a gaming guy, you didn’t have much experience with hardware except that you played with hardware.
Reinaldo: Exactly.
Andrew: That’s what I’m getting at. If I were to sit down with you today and think–actually maybe I wouldn’t be so befuddled by it. If were to sit here today and say, “How do you create a console?” I guess that would kind of make sense. I would think, “Where do I get some hardware for it?” No, the hardware would be stumped. How did you know what hardware would go in? How did you even know that chipset was important?
Reinaldo: Google, basically.
Andrew: I see.
Reinaldo: I was a spec freak. So, I knew all the frames per second, all the chipsets that existed on the PC side and on the console side because I was a game journalist. My first company was kind of IGN of Brazil. It became the largest portal in Brazil.
Andrew: The largest what?
Reinaldo: The largest gaming portal in Brazil.
Andrew: Got it.
Reinaldo: I knew a lot of the stuff, so which chipset was inside the PlayStation or the Xbox, how that worked, etc. So, I was very curious and I had some knowledge about that. Then I started research about cellphones because at that time, cellphones were incorporating the first 3D chipsets. Then I started to compare this chipset from Qualcomm from Texas Instruments, right? How powerful they are compared to a PlayStation 1 or how powerful they are compared to a Dreamcast.
Andrew: And Reinaldo, this is just you Googling to try to understand this?
Reinaldo: Yeah, Googling.
Andrew: I see, just sitting online saying, “Here’s a chip. Is it the most powerful? How does it compare to others when it comes to energy usage, that kind of thing?”
Reinaldo: Exactly, energy and power in terms of graphical capabilities. So, this chipset would have a say PS1 graphics or PS2-like graphics. It’s different to compare ARM and Intel chipsets because they have different architectures but you have some ways to do it. I was basically Googling.
Andrew: So self-taught.
Reinaldo: If Google didn’t exist, I would be in trouble.
Andrew: That’s impressive. What did you get first? Did you get the first partner or did you get your first dollar of investment?
Reinaldo: No. We were renegotiating first the chipsets. So, that’s what we got from Qualcomm first.
Andrew: So they agreed with you that if you could bring the money, they would give you these chips.
Reinaldo: Yeah. Basically that’s their job, right? It’s not a big accomplishment, but they were willing to work experimentally with us in the beginning. We would be very small scale for them, right? They were used to sell hundreds or dozens of millions of chipsets per year. It would be like a very, very tiny fraction. So, they liked our concept because they wanted to bring their chipsets to other kinds of products. These are some guys, emerging countries that make sense. Let’s work with them on a hardware level.
Andrew: I see.
Reinaldo: Then if we had the Qualcomm, this software would be almost a given because at that time, there was no Android. There was no other operating system. Windows C was very expensive. So, basically if you work with Brew, which was the technology that Qualcomm had at that time, it would be much better. So, we basically got their commitment to work and to sell those chipsets and their technology tools. They were treating us as a handset manufacturer in a way, a very small one.
Andrew: But what’s impressive about that is that you got them to think of you that way and not some crazy guy with a crazy idea and also that they’re willing to work with you when you had nothing. You had nothing but a bunch of phone calls.
Reinaldo: Exactly. It was a PowerPoint presentation and the fact that we represented Sega in Brazil.
Andrew: You mean the company you worked for represented, not the company you were starting and partnering up with.
Reinaldo: Exactly.
Andrew: Okay. I want to get to how you raised money, but first I need to talk about my sponsor, which is Acuity Scheduling.
Get this, Reinaldo. I had a bunch of customers sign up for a product that I was selling for $1,000 and I didn’t want them to go online and interact with it. I wanted to get to know who these people were and I wanted to do it in a professional way. Professional does not mean emailing every one of them and saying, “Hey, when are you free for a call?” That’s a pain in the butt for them, pain in the butt for me because we have to go back and forth to schedule.
So, what I did was I went into Acuity, AcuitySheduling.com. I added my calendar from Google into it. You can do it with whatever calendar you’re using. I said, “Here’s my availability. Here are the questions I’d like them answer for me before they schedule,” like what’s your Skype name? What’s your phone number? Why did you buy this?
And then I took that–I could have actually used Acuity Scheduling’s website, but instead, I decided to embed the new calendar they gave me on Mixergy’s website. I sent them a link to a page with my Acuity Scheduling calendar embedded on it. I said, “I’d like to talk to you. First of all, thanks for buying. Second, I’d like to talk to you. Pick a time on my calendar that’s convenient for you and let me know if none is.”
The beauty of that is if someone picked Monday at 11:00 a.m., the next person didn’t see that as an option, so there’s no double-booking nonsense. It’s really professional. When I sat down to make my phone calls one after the other, I didn’t have to hunt down where’s their phone number. Acuity Scheduling got it for me. I didn’t have to worry that they’d forget because Acuity Scheduling sent them a calendar invitation and sent them an email the day before and about six hours before I think I scheduled it.
All that stuff is super well-handled when you’re using Acuity Scheduling. If you’re listening to this interview and you’re hearing Reinaldo talk about how he called up Qualcomm, Sun Microsystems, Motorola and all these other people and you’re saying to yourself, “I’m a hustler too. I’m going to start calling all these companies or I’m going to have someone in my team call all these companies,” if you have a team, you want to be professional too.
Go to Acuity Scheduling, setup a calendar and when you do, you’ll be able to not say, “Hey, Qualcomm, can I talk to you?” You’ll be able to say, “Qualcomm, can I talk to you? Here’s my calendar. You pick whatever date is comfortable for you.” There’s no back and forth that wastes your time, makes you look unprofessional and keeps you from talking to customers.
That’s your goal. You want to talk to potential customers. You want to talk to your current customers. You want to talk frankly even to enemies, people who are competing with you and make it really easy for them to get on a call with you or really easy for them to meet you in person.
Go check out AcuityScheduling.com and add a /Mixergy at the end, which means go to AcuityScheduling.com/Mixergy and they will give you 45 days to try the whole thing for free. That’s kind of crazy because I know there are some people who only need this 45 days, who only say they’ll go on an ad campaign for 45 days and at the end of the day will cancel and never pay Acuity. It’s totally fine.
I believe if you try it, you’re going to love it and when you’re ready for it, you will be a customer for life. I’ve had my Acuity Scheduling account for I don’t know how long, almost as long as I’ve had Mixergy. Go check out AcuityScheduling.com/Mixergy. Reinaldo, thanks.
Reinaldo: That would be great at that time.
Andrew: Yeah, you would have loved it. 45 days, you could have locked down Qualcomm, Motorola. You could have locked down Disney. You could have done the whole thing in 45 days.
Reinaldo: Definitely.
Andrew: Let’s get into how you raised your first money. One of the reasons why when you got out of the shower you called your boss was yes, you wanted some feedback and you wanted to think it through, but in the back of your head, you were also thinking about money, weren’t you?
Reinaldo: Of course. We were creating the hardware, a complete ecosystem, actually, right? Hardware, software, operating system, the device itself, controller, drivers, prepaid cards, marketing, relationship with carriers, retailers, that sounds expensive. Actually, gaming consoles at that time, they spent billions of dollars to create their machines, like the PlayStation or Xbox.
So, the first thought in my mind is how much would we need. I had no idea. I had never done this before. So, everything started with I think it was about $300,000 in seed capital from the company, the Tec Toy.
Andrew: They gave you $300,000?
Reinaldo: Yeah, in this new subsidiary in the US.
Andrew: And in return, how much of the business did they get?
Reinaldo: They got a lot because at that time, it was not common for startups to rise in Brazil. So, the deal was I was the founder and I would run the company. I had a vision, but they would have a lot because they were providing a lot of things.
Andrew: More than you?
Reinaldo: Yeah, more than me.
Andrew: More than you even, okay. Fair enough. You ended up with a good size of the business anyway.
Reinaldo: Yeah, being very honest. At that time, it was not in the culture to have the founders to run everything in Brazil.
Andrew: Meanwhile it’s shocking to anyone listening to us who will hear for a few hundred thousand dollars, the founder lost control of the company right away. But fine, that’s the way things were in Brazil. When are we talking about, the mid-2000s?
Reinaldo: 2006.
Andrew: 2006, okay. So, then the next group of money, as I understand it, you wanted to be more strategic.
Reinaldo: Yeah. Well, we needed a chipset and we needed operating system. So, it was a no-brainer to either have a strategic investor like Qualcomm or Sun or NVidia or one of those guys. We talked to all of them. We had no idea how to raise money. It was completely naïve and green. The people in Brazil, they had no idea as well.
So, basically my first hire was an American guy. I moved to San Diego in 2006. He worked at a handset manufacturer. He knew a lot about logistics and the supply chain part. I went and negotiated with all those guys, with no mentors, no anything at all with the game publishers and carriers and after 18 months–
Andrew: 18 months?
Reinaldo: Yeah, 18. We go the first trench from Qualcomm. It was $5.4 million.
Andrew: What did you do to convince Qualcomm to invest $5.4 million in the business?
Reinaldo: I think first it’s the enthusiasm that I had. I basically said it was going to happen. There was no other way. The second thing is the emerging countries, like I said, were picking up at that time. In 2006, mainly China and Brazil were starting to become more important to the rest of the world. So, I think the timing was very, very important. If it was today for instance, in an economic crisis, I wouldn’t be able to. But at that time, Brazil was seen as a potential country for many companies.
The third thing is cellphone technology was starting to jump to other devices. As I said, we were one of the first devices that were not a cellphone who had a SIM card and a data plan from a carrier. The other one was Amazon Kindle in 2008. They launched first, but we had our first prototype before the Kindle in the market.
So, I think it was a mix of enthusiasm. We had the parent company of Zeebo in the US, Tec Toy when we launched. They had the infrastructure in Brazil and had the relationships with game publishers, with retailers, etc. So, Brazil would start as the initial market for that. So, all the infrastructure was in place. We needed basically money, technology and games and everything else.
Andrew: That’s a lot of pieces. But you said something about enthusiasm, that they bought in partly because of your enthusiasm. I might use a different word, determination for you.
Reinaldo: Yeah.
Andrew: I heard from Jeremy Weisz, our producer, that when you wanted to come from Brazil to the US, you had to convince your board. You had to convince your investors to say yes. What did you say to them that made them finally realize this guy is going to do it one way or the other?
Reinaldo: Yeah. Basically I told them if I don’t go to the US, I will go to New York to work as a waiter in a restaurant and after some time, I will buy a chain of restaurants. I never had the money to do it alone. So, basically I was like six months into the company, the parent company. I told them, “Oh, fuck, I’m going to do this with or without you.”
Andrew: With or without you. And all you were convincing them to do was come from Brazil to the US so that you could work with them in the US.
Reinaldo: Yeah.
Andrew: And that’s the kind of determination that I feel you have, that we’re not–I want to make sure to communicate it well enough in this interview. That’s what you keep exuding every time we talk.
Reinaldo: It was really a lot of politics and a lot of convincing to do, which may sound normal for people who are born here in the US or in areas like Silicon Valley, where people are entrepreneurial for 50, 60 years. But it was not common at that time. Everybody thought I was completely insane at that time, and I was in a way, which is good.
Andrew: What do you mean by insane?
Reinaldo: Well, it was something impossible, basically, to compete in the games market, to start a new gaming console. To create a game was already difficult for the current platform. But to create a competing platform that would face Nintendo, Sony and Microsoft with no money at all and coming from an emerging country, which as not respected at that time, it was completely insane. We had no experience at all in doing hardware, in doing this ecosystem, even in doing games. We were just launching games from Japanese publishers into Brazil or American publishers into Brazil.
Andrew: You never created your own games?
Reinaldo: Well, a long time ago, they’ve created for 8-bit consoles. We were talking about PS2 quality at that time, which was much more difficult. Just one game cost millions of dollars to make.
Andrew: You mentioned difference in culture too. You told Jeremy in the pre-interview that when you were in Brazil, you wanted to buy a notebook. To buy a notebook at the company you were with, what did you do?
Reinaldo: I needed to ask for authorization from the CEO and tell him why I wanted to buy the notebook, why I would use that kind of notebook and basically write a report.
Andrew: We’re talking about a notebook with paper.
Reinaldo: Yeah, like a Sony Vaio.
Andrew: A notebook computer.
Reinaldo: Yeah.
Andrew: Got it. Meanwhile, in the US, when you needed to buy, what happened?
Reinaldo: Yeah, when I arrived in the US it as funny because we needed like ten computers for our first employees and developers. I told the board and said, “Hey, I need to buy this computer for this and that,” using the same rationale. They looked at me like, “Why are you telling us that?” I’m just explaining why I need those notebooks. The culture in Brazil and in most emerging countries, people don’t trust you until you prove otherwise. Here in the US, it’s the opposite. People trust you until you prove otherwise.
So, the consequences of lying and the consequences of doing something bad are much harsher here in the US. So, people trust you, but if you fuck up, basically you have something called accountability, with was a concept totally alien for me. Believe it or not, this was 10 years ago.
So, basically they told me, “Put in your credit card and then we will reimburse you.” And I went to Best Buy and I bought like ten computers.
Andrew: Interesting. They’re trusting you and then they’re also asking you to trust them to reimburse you.
Reinaldo: Exactly.
Andrew: I see what you mean. There’s an implicit trust.
Reinaldo: Which is a very simple detail and most people who are born in the US, they think this is normal, but in most countries I’ve lived and I’ve done business with, it’s not. Even today, people say, “How can I lock this guy into something that if he does something bad, I can recover my investment or recover my goods. It’s really a matter of trust.
Andrew: So, now we have investment. We have the chips, the hardware, essentially is ready to go. It’s time for you to get the cellular companies to work with you and the developers to work with you. Which came first?
Reinaldo: Actually, before that, we needed to develop our own hardware. Qualcomm provided just the chipset. We needed to build our board. We needed to build a device.
Andrew: Let’s take a look at it. It looks beautiful.
Reinaldo: Yeah. This was the device. We needed to design the device, the controller, everything.
Andrew: Yeah. For anyone who’s listening and I know most people do, it looks very silvery like the MacBook Air-type of design.
Reinaldo: It actually was pretty good looking at that time, even today.
Andrew: Even today.
Reinaldo: Basically, we need to hire a Chinese ODM, original design manufacturer. These are the guys who design cell phones for the big manufacturers. They basically build the board with the support from Qualcomm and our engineers both in the US and Brazil. Then after that, we needed to negotiate the data because basically inside of this console here is a mobile chipset. It’s kind of a cell phone or smartphone on the side of the device that plugs in the TV.
So, we needed a SIM card that goes inside with a data plan from mobile operators. At that time, it was so hard. It was, I think, the most difficult part to negotiate with the operators. I negotiated personally with a Brazilian carrier and a Mexican carrier besides negotiating with Chinese and others. They were all very difficult to work with because they had all the power in the world, the distribution channel and they didn’t care about very tiny a startup trying to do something new and cool.
Andrew: Even though you were essentially going to be buying all this coverage from them. You were going to be paying them a lot.
Reinaldo: Yeah. There is that. We were too small. One year for us at our best would be like a small cellphone manufacturer from Korea or from Germany at that time in both Brazil and Mexico. We were not important even if we were very successful because the scale of the cellphone business was so large that we would be very, very tiny.
Andrew: So, how do you convince someone when you have no hand? They have the upper hand by far?
Reinaldo: I don’t know. It was enthusiasm. It was naiveté, in a way. I think in Latin America, you need a lot of charisma because everything is personal. So, you need to hang around people. You needed to make people like you. You needed to create a case. What I told them is, “Look, you are going to be the first in the whole world to create this kind of thing. So, that’s a business case for you. That’s a business case for your company.” So, I tried to play on the egos of the decision makers that they were doing something really important.
Andrew: I see. And it’s not just about helping you with your very limited market size. It’s about expanding beyond the cell phone and being the first to go beyond the cell phone.
Reinaldo: Yeah. We would be a busies case for all other businesses outside the cell phone industry that can use your data plans. So, we would be something that has never been done before. Actually, it had never been done before that time. Only Amazon had something similar on the Kindle in 2008. They launched at the end of 2008. But we were negotiating Latin America first, which was way behind in terms of mindset. It was very, very tough. So, I tried to, in a way, help them to see the potential. We were opening the doors for another business line that they might have.
Andrew: You also said, “I befriended them and I stayed a lot of time with them until they came close. What did you do? What’s your thing? My thing is I would take someone out for scotch. What’s your thing? What would you do?
Reinaldo: My thing, it’s really different. I’m 100% honest. People at the beginning, they don’t believe me. They think I’m playing games, etc. But over time, they see that I’m very transparent and very authentic. I don’t butter up people. I don’t do any kind of corruption or deals under the table.
It’s basically being honest. I say, “Look, I’m an entrepreneur. I have this. This could be something really awesome. We have this great company behind us in Brazil. We have this great company behind is in the US, which is Qualcomm. And we are doing something new. We want to do that with you. So, help me to make this business case happen. It was very honest. You might be surprised how honesty and authenticity opens up doors with people.
Also, I tried to go from bottom up. First, the entry level guy, like the coordinator and then the manager and then the director and then the VP and then the CEO. I’ve learned that if you go top down, it will stop at someone in the managerial level because like I said, I was not included. This could not be done. He would find an excuse. That’s very true.
So, I got the confidence of these people. I was always honest and authentic. I was lucky to find people that shared the vision as well. Part of this is lucky. If I had, let’s say, corrupt guys and people that wanted advantages, etc., that would have never been done in Latin America. In the US, I believe it would have been done anyway, but not America. I was lucky to find the good people inside the carriers to sponsor the project. It was a very straightforward relationship.
Andrew: So, now we have–it seems like we’ve got all the pieces in place, right? Am I missing something?
Reinaldo: Yeah. There is more. We needed the games. It’s a new platform. So, without games, there’s just zero. There’s nothing. So, I needed to convince the publishers, which was along with the carriers the most difficult part. The situation was the following–you have those big publishers make millions of dollars making games for PlayStation, Xbox and Nintendo. Here comes a guy with something in the paper or in a prototype phase to say, “Hey, divert your resources to us because we are going to be huge. We are going to compete with these guys.”
So, that was actually the hardest part because nobody took us seriously. Everybody understood the product and the benefits, but in the games industry, they always say, “Prove to me that you have a viable platform first with millions of devices sold, then you jump it.” It’s always like that.
Andrew: Because how much money are they going to be investing to create a game for you?
Reinaldo: Not a lot, like $1 million.
Andrew: Really?
Reinaldo: Yeah, less than $1 million.
Andrew: Less than $1 million, more than $500,000?
Reinaldo: Yeah. The cost was of a high-end mobile game. But there is a cost of opportunity. So, if I allocate this team that’s doing Call of Duty or FIFA for PlayStation, I will need to have ten people removed from this team to create something for Zeebo. That’s not only the investment, but it’s the cost of opportunity. They would be leaving something that’s already on the table and that makes them millions of dollars per month and invest in something new.
So, in a way they were right, in a way. But I think they suffer from a lack of vision. They should have a department just to help Emerging platforms. And actually, some of them did later on. There are so many emerging platforms at that time. That was very tough, very tough.
Andrew: All right. Let’s get into how you got them to partner up and what happened with FIFA, the soccer organization. Let’s talk about how you–but before we do . . .
Reinaldo: Okay. Go ahead.
Andrew: Before we do, I want to talk about my second sponsor, which is a company called Toptal. If you’re at an organization, kind of like the one that Reinaldo just talked about where you know there are other opportunities you should pursue. It’s not just about the money it takes to pursue them, but you know your team is already over-extended and you can’t divert any of their attention to a new product that you know is going to be a good idea or that you should at least try, well, what you need in that situation is to hire developers who can do it for you, developers who can work with your guidance but are smart enough to work on their own if you need them to.
That’s why I recommend for that situation and so many others you go to Toptal. That’s top as in top of the mountain, tal as in talented. They’re going to get you the top talented people. What they are is a network of developers who have been pre-screened, vetted, who have really gone through all kinds of tests to make sure they’re the right people.
And when you need to hire a developer, you go to your contact at Toptal. I can give you one or you can get one yourself, and just tell them, “Here’s what I’m thinking. Here’s what the project is going to work like. This is how it’s going to be. Here’s how I work. Here’s how I’d like the new developer or team of developers to interact with my current team or with me.”
You just go back and forth and you explain it to them and your contact will help you think through the project and help you come up with the right person. Actually, they’ll find the right person for you. They’ll go to their network. They’ll find the right person and they’ll say, “Here. This is the person we think is right for you. Talk to them. If you’re happy with them, you can continue. If not, no problem. We’ll find someone else. But once you get started, they will guarantee that you’re going to be happy.
Toptal–if you go to Toptal.com/Mixergy, you’re going to see they’re doing something incredible for Mixergy listeners, two incredible things, actually. The first is they’re going to give Mixergy listeners 80 free Toptal developer hours when you pay for 80 and they also have a no risk trail period of up to two weeks. That means if in two weeks you’re not 100% happy, you will not be billed, but the developer will still get paid. Toptal is incredible.
If you need a developer, go talk to them. In fact, if you want me to introduce you, just email me, Andrew@Mixergy.com, I will intro you. All right. Toptal.com/Mixergy–thank you guys for sponsoring. Do you know them Reinaldo? Do you know Toptal?
Reinaldo: Yeah. I’ve heard about them but never used them.
Andrew: How do you know?
Reinaldo: Google, I think.
Andrew: Just Googling around you found them.
Reinaldo: I needed that many times to find the good developers.
Andrew: I could be wrong, but I’m pretty sure when I first found out about Toptal, the developer was living somewhere in Brazil. He’s a digital nomad who nevertheless built a really serious business that got money from Andreessen Horowitz. Usually digital nomads build these small lifestyle businesses. He’s building an incredibly sized business with a lot of funding from deep pockets. Anyway, Toptal–I’m grateful to them for sponsoring.
The first developer, the first content creator that you partnered up with, who was it?
Reinaldo: Well, it depends. The first contract we closed was with Gameloft, which at that time was not as big as they are today. Then we partnered with Electronic Arts, EA.
Andrew: How did you get Gameloft?
Reinaldo: Basically showing the concept. They had something that the others didn’t. They were a pure mobile publisher at that time. So, they had the more interesting platform because they were not making billions of dollars on consoles. So, they needed to expand. They already had games on Brew, which was our operating system and our platform at the time. So, it was easier because they already had the code and the games that needed to be ported.
Andrew: Did you also have an experience, kind of a tough experience with Gameloft before?
Reinaldo: I had some tough experience with all those developers, like people leaving me in the waiting rooms for some time.
Andrew: I’m kind of talking about how when you ran a company called–was it called Outer Space?
Reinaldo: Oh, yeah.
Andrew: What happened with Gameloft?
Reinaldo: Actually, it’s funny because in 2000, Gameloft was a content publisher. They were not making mobile games. I had this GameSpot or IGN of Brazil and they wanted to buy my company. We weren’t in good shape and I went to New York to negotiate with the CEO of Gameloft at that time and he was kind of using very interesting technique of persuasion, which was trashing my company all the time, saying that I suck, that I didn’t know what I was doing, I was too young, I was naïve, etc. At the end, he made an offer in a piece of paper that he would buy my company. It was in 2000. But two weeks later, the bubble burst. We have never heard from them again.
Andrew: Wow.
Reinaldo: The NASDAQ, remember, the crash of 2000.
Andrew: Yeah.
Reinaldo: We were about to be sold to them and we weren’t anymore.
Andrew: Did you get depressed after that?
Reinaldo: Not depressed, but very sad. Getting depressed does not make things better. I figured we should find a way. The good thing is I had no debt at that time. All the internet companies had millions of dollars in debt to investors, to parents, to friends.
Andrew: Heavy expenses. And you didn’t have any of that?
Reinaldo: No.
Andrew: Your connection to Gameloft at this time wasn’t through that. it was a whole other group of people at Gameloft when you came back with Zeebo.
Reinaldo: Totally different. Yeah.
Andrew: How did you get through to them? How did you find the right person and convince them?
Reinaldo: At E3, the Electronic Entertainment Expo, it’s a fair in LA for the games industry, we requested meetings with all those guys and basically found, let’s say, people that took care of Latin America at that time or the Americas and we requested a meeting with them, we send a presentation and they got interested.
Andrew: Okay.
Reinaldo: This time, they were very nice and very open, very straightforward.
Andrew: They didn’t trash your idea first before partnering?
Reinaldo: They were just negotiating. At that time, I didn’t know that. I see the point. So, we got EA. We got some Japanese publishers as well. We created a studio to make our first-party games. These are the games that the hardware manufacturer launches with the console to showcase the console. That was very difficult to convince people to do because it’s a lot of money to make our own games. But it’s necessary. If you see all the video game platforms, they have first-party games, like Mario for Nintendo, Zelda or Halo for Xbox or Gran Turismo.
Andrew: Why is it important for them to create their own games too?
Reinaldo: Because the industry works in this way. If you do not have an install base, they do not want to support you. So, when you launch a console, you have zero install base. So, you need to create something that excites people and showcases the potential of the platform. In a way, it’s the same for any piece of hardware today.
If you don’t have apps or software to support that platform, it will probably fail. The iPhone is a big success and Android devices because of apps, because of killer apps. So, in the games business, the same thing but it’s even more important. It’s much more expensive to make those games. So, we started developing five games that were created by a studio that we setup. It was very tough to do because we needed to spend a lot of our funding in creating games ourselves.
Andrew: How much money did you have to spend to create your games?
Reinaldo: We spent–the first round of $5 million, we spent like $2 million.
Andrew: $2 million. Wow. Of the $5 million?
Reinaldo: Yeah. It starts off with basically you. You pay when you can in the future. Let’s say we have obligations with Qualcomm buying chipsets, etc. But we put them 18 months away so we were able to raise money to pay them. If we failed, we wouldn’t have money to pay anyone. So, all these obligations were differed.
Andrew: Okay.
Reinaldo: To the future rounds of investing and it worked.
Andrew: Then you finally launched and you charged how much for it?
Reinaldo: At that time, it was $199 in Brazil, which was more expensive than the PlayStation 2 due to taxes. The legal PlayStation 2 in Brazil at that time was like $399, but the pirated one was about the same price.
Andrew: So you were down to the same price as the pirated version.
Reinaldo: Yeah.
Andrew: Wow.
Reinaldo: It was very tough.
Andrew: By the way, I’m not wowing you, I’m wowing that someone is actually pirating hardware in Brazil and selling it for $200?
Reinaldo: Actually, the hardware is original, but they were importing the hardware without paying the due taxes.
Andrew: Got it. I see.
Reinaldo: So, if you were to import a PlayStation at that time, the PlayStation costs, I think, $179 when we launched Zeebo, PlayStation 2. The price for the end consumer would be around $399 to $499. That would be the price you should expect from a legal product. But actually, they were selling for $199, like 10% more or 15% more in the US market. So, they important the hardware bricks at that time. They declared in the customs as bricks.
Andrew: But it was really hardware in the trucks.
Reinaldo: Yeah.
Andrew: You know, this is . . .
Reinaldo: We were a real company competing with counterfeiters basically and pirate guys that were very organized and very large. They sold in the large chains. That’s what bothered me.
Andrew: The pirated stuff was being sold in the large chains?
Reinaldo: Yeah. It’s like Walmart or Best Buy not paying their taxes and selling illegally imported hardware.
Andrew: This was one of the things that really bothers me about taxes. They’re supposed to be encouraging the local economy but they’re crushing the local entrepreneur, which is going to be the best hope for the local economy.
Reinaldo: Exactly. It’s a game where just some people win. Generally, the people who pass the laws are financed by a lobby or industry lobby. That is exactly what happened in Brazil. One guy, they have the Nintendo partnership and they manufactured the Nintendo consoles locally. So, in ’98, way before Zeebo, he lobbied in the congress and they passed a law to put 200% to 300% of important duties on game consoles. Theirs was not affected because it was manufactured locally. But anyone who manufactured in China or outside Brazil would pay like 200% to 300% in taxes. So, it was tough. It was very tough.
All right. You now are creating your own games. You’ve got everything set. You launch at $200, which is kind of rough that it’s competitive with someone who’s bootlegging. How does the console do in the beginning?
Reinaldo: It did not do well because it was too expensive. That’s why I’m talking about that. So, it sold, let’s say, 50,000 units, something like that. We needed to lower the price subsequently in order to compete.
Andrew: I saw that you just kept lowering and lowering and lowering, actually, when I was doing research.
Reinaldo: Yeah. We were competing with the mafia that import PlayStation 2s illegally. We were 100% legal company. So, actually we’re taking a hit on each console sold to make it affordable. Also we made the mistake to position the console as an alternative to the PlayStation 2. It’s basically saying, “I’m a new soccer player and I want to be competing with Messi or Pelé,” the best of all time.
So, we learned that lesson in Mexico. So, in Mexico, we launched it as an educational platform for casual people with casual games as well.
Andrew: How did that go over?
Reinaldo: The games changed, everything changed for the Mexico launch with the learnings of Brazil.
Andrew: How was that? Did that work?
Reinaldo: Yeah. It did work. In Mexico we sold much more and we were much more successful in Mexico with this strategy.
Andrew: How did you know to go educational?
Reinaldo: Huh?
Andrew: I could understand going for casual games. That seems like a natural direction after learning that by competing with the Xbox, you just are over-shooting here. But how did you know that you should also go for the educational market?
Reinaldo: Yeah. We wanted families. At that time in Latin America, games were perceived as evil, as violent and most families were very afraid of their kids playing violent games on PlayStation or Xbox. So, if we position ourselves as a family platform with education, access to the internet, which was very spotty at that time and casual games like, let’s say, Bejeweled or things like that, that would open a new demographic for us. So, that was a rationale in Mexico that worked really well.
Andrew: I see. That makes sense. I’m actually looking at this one reviewers review of Zeebo. He’s Brazilian, so this translation that I have is not super clear. But he says, “Hey, all you Brazilians who are banned form Xbox Live, how about dropping this life of piracy and experiencing a national game where you can download a legalized game for just $9.90. Just buy a Zeebo, forget this whole chat over the internet, pretend that you’re back in 1999 and pay $300 for it,” which I guess was the price at the time.
Reinaldo: We got a lot of backlash because we were compared by the gamers, the hardcore gamers, against the PS2. We were less powerful than the PS2 in terms of graphics. Then of course we had games that were not up to the level of production of PS2 games. So, we made a mistake on the audience. That’s something we learned on the Mexico launch and after that on the China launch.
Andrew: Okay. So, then things started to make sense. You went for the educational market. You reached outside of Brazil. Everything is good but there was one force that was more powerful than the mob in Brazil and that force actually came from both Cupertino and Mountain View. It was Silicon Valley. What did they do? I’m sorry. I’m just going to go off camera for a second to adjust.
Reinaldo: Okay.
Andrew: What did the Silicon Valley people do?
Reinaldo: Okay. So, in 2007, the iPhone was announced. In July or June, 2008, the App Store was announced and iPhones started to sell a lot in most developed countries. And then Google came out with Android and launched some very good handsets. It was in 2008. It was catching up. In 2009, Google and Samsung and a lot of partners were launching very good Android phones for emerging countries.
So, what we noticed, we took a while to notice that our developers that were developing games for us because we were the only option in emerging countries, they were starting to migrate specifically to Android and to iOS, more Android than iOS at that time because we were competing in emerging countries.
So, we saw a shift of developers going to Android. We saw that too late, actually. We thought that phones wouldn’t be our competitors at all and they were. So, the threat of iOS and Android started to hurt us after we launched in Mexico in the late 2009. So, we go back to the developers and they say, “Hey, I love your platform. I love what you’re doing. But we have now 50 million Android phones on this market that we are starting to develop for it or we have 50 million iPhones that we are allocating our resources to develop again for it.”
So, we started to be left behind by the game developers with good reason because they have better opportunities and that affected our business a lot, even after we’d raised a lot of money, we were very successful in Mexico. Where did you put the $50 million that you raised? We talked about $1 million or so going into your game creation. We didn’t talk about–where did the rest of the money go?
Reinaldo: The first $5 million or the overall amount?
Andrew: After the first $5 million?
Reinaldo: Okay. So, a lot was spent on working capital for buying chipsets and buying hardware components. I would say 40% to 50% of the money was spent on buying components.
Andrew: Okay.
Reinaldo: I would say 30% was spent on creating games or porting games form our developers. So, at this time, we told developers, “Hey if you don’t have the team to create a game, we will create it for you. Just give us the code and we will do that in house in our studio. That was a way to compete.”
Andrew: Wow. I see. That makes sense.
Reinaldo: We were also offering them a minimum guarantee for some of the titles. So, “If this does not reach this amount, we’ll give you some money.” So, we were allocating money for that. And the rest was spent on personnel and marketing.
Andrew: So, with all this money being spent invested in the business, you suddenly start to realize that Android is a better direction. When you do, what is the rest of the team, what do the investors and the board members say to you?
Reinaldo: So, in 2009, as soon as we launched in Mexico and we launched in Brazil and in Mexico, I already knew that we would move need to move to Android because Brew and Java would be dead in a few months. I conveyed this message to the board and the board did not agree with me. They thought that Android was not a threat and that Brew would last years. We would need to consider this option in the future, but not now.
So, I was kind of very frustrated because I knew that Android would eventually kill us because the developer support was going to the direction of Android. So, that happens. That’s when I’ve learned that having control is the best thing ever for a founder.
Andrew: You as the founder ended up with what percentage of the business at that point.
Reinaldo: Less than 10%.
Andrew: Less than 10%. So, you didn’t have a lot of say in this business. You were screaming about Android. They said not yet.
Reinaldo: I was the public face of the company. I was the guy who dealt with initially with the carriers and then again developers. I gave the overall strategy of the company. So, in a way, I was running the company strategically. We would go to this direction with this and that. People heard me and they were very nice. For decisions like that, we need to create more games in house. It took a long time to convince the board, decisions like let’s move everything to Android.
Andrew: I see.
Reinaldo: Look at their position at the time. We spent like tens of millions of dollars and now you’re saying to me that’s not enough, that we need to scrap everything we’ve done and move to another platform that we don’t know anything about, develop from scratch, new hardware, new software, new chipset…” basically, that’s what I was telling them. It was very scary at that time. But the word is not made of people who are scared.
Andrew: Were you personally scared?
Reinaldo: Of course I was. I was scared because if something went wrong, it would be my fault, right? But that’s the right decision to make and that’s the right thing to do. But I think we had so much done so fast with not a lot of money actually because we spent like 100 times less than a console manufacturer to do what we did in record time. People said, “Things are good? Really? Why change?”
Andrew: I see.
Reinaldo: I think the focus of most of the people were not in the content, but more in the device, in the hardware, in the business. We were actually building an ecosystem, which is basically fueled by software, by content. I was the only one with that sensitivity at that time because I was a gaming guy. I knew how the industry worked.
Andrew: According to Wikipedia–the world did shake out that way. Android did become the platform. Today, if you were going to redo this thing or Ouya kind of redid it, you’d do it on Android the way that Ouya did.
Reinaldo: Definitely. We didn’t have Android when it started. So, Android didn’t exist.
Andrew: And then when it did, you eventually realized, “This is what we should be building on.” But man, when you spend tens of millions of dollars going in another direction, it’s so hard to say, “Here’s this new thing. We better try this instead. Let’s scrap all of that.”
Reinaldo: Actually, this is something that a lot of people don’t know, but I had kind of a rogue team inside Zeebo to start working on Android without the authorization of the board just to see the potential in terms of graphics, in terms of drivers, etc. We created a very small prototype already running Android.
Andrew: Skunkworks.
Reinaldo: Yeah.
Andrew: So, actually on your homepage for a long time, it said, “Stay tuned, a new Android console is coming . . .” What was going on that kept that Android console from coming out?
Reinaldo: Yeah. I think people realized it was too late. Actually, I left the company in 2010. So, I sold back my shares at the end of 2010 when I was in China when I realized we wouldn’t move to Android as fast as we wanted. People moved to kind of a tablet-like device, completely different from a gaming console.
Andrew: You mean at Zeebo?
Reinaldo: Yeah.
Andrew: Okay.
Reinaldo: When I left. The company went to a tablet educational device. They realized that the iPads and the others were much less expensive with much more content. It’s all about the App Store.
Andrew: So, that didn’t work either.
Reinaldo: No.
Andrew: And then eventually it looks like they did say, “We’re going to come out with an Android device,” but probably ran out of money before they . . .
Reinaldo: They realized that they couldn’t compete with Apple or other Android publishers in this market. We were undercapitalized and we didn’t have an App Store.
Andrew: How did it feel to leave a company that you created?
Reinaldo: Well, it feels really bad, mainly when you were right in many instances, right? But it happens. Let’s move forward. I cannot be–
Andrew: You can really just move forward like that? I need a little mourning period a little anger period. You don’t need that?
Reinaldo: I had a lot of anger and mourning, but what does that do to your life? You need to move forward.
Andrew: In your anger moment, what did you do?
Reinaldo: Well, I was just angry. I’m not a guy that would try to shoot people or do things like that. I was just frustrated. The rules were very clear. I accepted the rules. I didn’t have any other chance, by the way. I was recently emigrated to the US. I was under a visa. I couldn’t, let’s say, shout how much I wanted because I was under a visa and people sometimes they reminded me that I could be going back if I didn’t behave. I didn’t have the control, basically. I didn’t know how to start a company in the right way.
Andrew: After that, you took a little break and then you created…
Reinaldo: Yeah, just a little break and then I started a social gaming company focused on Brazil, which was 2Mundos.
Andrew: 2Mundos–and this created games for other people?
Reinaldo: Yeah, for platforms like Facebook and mobile.
Andrew: I see.
Reinaldo: It did really well and then the social gaming market crashed in 2012-2013.
Andrew: Okay. Did you make a profit off of that?
Reinaldo: Yeah, I did. The company still exists and it’s doing well, but not a high growth or scalable like Zeebo was. Zeebo was very close of being a one-billion company–very, very close. It was very powerful.
In 2009, we were like the talk of the industry. Everyone was talking about us. I learned later that Sony was concerned about us from Sony guys that left Sony. I actually learned that last year. Two guys told me that they were very concerned about Zeebo, the threat of Zeebo in emerging countries. It’s a pity. What can I do? I simply couldn’t do anything without a green card. I was, let’s say, sponsored by the company and every year I needed to renew my visa. So, I was under constant threat of go back.
Andrew: There’s something I’ve complained about on these interviews, which frankly does no good anyway, but I can’t help it. The US should just say, “This guy is really smart. How do we convince him?” We should have like a delegation of people who go to talk to top entrepreneurs, top developers and try to convince them to stay in the country instead of the opposite, which is make them feel like in any minute they should leave.
We should bet thinking, “This is a guy who we want here because eventually he’s going to create jobs. He’s going to get funding. He’s going to build stuff.”
Reinaldo: Look at the situation. That actually made my life miserable because I couldn’t fight as much as I wanted to for the things I thought would be the right thing to do because I was under this, let’s say–it was not a threat. It was like a message, like, “If you don’t like it…”
Andrew: Leave, which means go back home to Brazil, where for a notebook computer you’re going to have to justify yourself like a kid who has to justify candy to his mom.
Reinaldo: Exactly. The company I founded was sponsoring my visa. But I didn’t control the company. A lot of mistakes that I’ve learned and I always tell people–always control your company at least until series B or C because the entrepreneurs know what they are doing. The other people, the executives or board, they don’t know what they’re doing most of the time, not because they’re not smart, but the entrepreneur is vested. They have a vested interest. It’s his life or her life on the line.
So, the second thing is I always have a mentor. I didn’t have one, which was a pity. If I were in Silicon Valley, I’m sure I would be very well-mentored. Actually when I came here, a lot of people wanted to help me or to mentor me and ask why I was–I was not the CEO of the company.
I was a founder and VP of business development. As I said, I run games, negotiation with carriers, overall strategy but I was not running the company because people in San Diego thought I needed adult supervision. And I did when I arrived. I arrived very green. I didn’t have any experience in the US.
But in Silicon Valley, I would say people would mentor me. Everybody here told me, “Why are you not the CEO of this company? Why do you not control this company?” But then people did not understand how I came up to be coming from Brazil with not tradition. I needed to have a corporate sponsor to fund me in the US. I needed a visa. That’s the only way to get a visa. I couldn’t go to the US and have a visa.
Then the investment made by a strategic investor was not in the best, I would say, interest of the company itself. It was in the best interest of the investor, which was fine. They were very nice. I cannot complain about them. But those things help a company to not become competitive. You are competing with Sony, Microsoft, you need to be the best at everything. You need to do everything right.
Andrew: And this is what you are doing right now. You’ve started three other companies since Zeebo. We’re revisiting the past here to understand what you learned from it. One of the things that you learned is mentorship and that’s what you’re doing now. You’re a mentor. One of the things you learned is that people need advice.
Reinaldo: I do that for free with entrepreneurs like I was, like myself that I see that they don’t have any guidance.
Andrew: How does somebody get you as a mentor? What do you look for in a protégé?
Reinaldo: I look for someone committed to what they are doing, someone smart and humble that wants to learn, basically and, of course, that are doing something that I think is cool. It’s natural. I mentor some very successful entrepreneurs in Brazil that are doing really well. But I try to help because I didn’t have mentors. I arrived in the US at 27. Actually, I arrived in the US when I was 30 years old.
Andrew: Speaking of mentors and protégés, how does Alex Dantas know you? How does he know everybody? He’s the one that introduced us to you. I would never have known that you were a possibility for a guest except for Alex Dantas. How do you know him?
Reinaldo: I met him at an event of the Brazilian community.
Andrew: I see. What is it about him that let you stay in touch with him?
Reinaldo: Well, he’s a smart guy. I think he reads people really, really fast and he understands people that are students and are not and has a talent for meeting people. He’s a very straightforward guy, very transparent. I like people like that.
Andrew: I do too.
Reinaldo: Yeah.
Andrew: All right. I’m grateful to him for introducing us. If people want to follow up with you, what’s a good place for them to go connect?
Reinaldo: They can send me email to RN@Innovation2.co.
Andrew: Okay.
Reinaldo: Or follow me on Twitter. My handle is @RNormand.
Andrew: Cool. Thank you so much for doing it. We now have lots of different ways to connect with you and I appreciate that. And for everyone out there, my two sponsors who you heard me mention are Toptal–remember if you need a developer, go to Toptal.com/Miergy.
And then other sponsor is the sponsor that’s going to help you actually get on a phone with people, actually schedule in-person appointments with people, actually get to have those meetings that would get lost if you have to go back and forth and try to pick the right date, that is called Acuity Scheduling. You can find them at AcuityScheduling.com/Mixergy.
Finally, if you like this interview and you like my style of interviewing, please tell your friends about it. I am hoping that we can keep on growing here in 2016. The best way to do it is by putting on the best freaking program that I can so that you will go tell your friends about it and encourage them to subscribe.
If you can, please go to their phones and just subscribe for them and tell them, “I’ve got a great podcast for you. Just give me your phone and I’m going to subscribe it.” There’s no installation required. Just go to whatever podcast app they have on their phone and subscribe them to Mixergy and tell them to listen. It’s that good and we’re going to keep making it better.
The reason it’s good is because people like Alex Dantas, who I’ve now known for a few years, who keep looking out for great guests who don’t get covered much on TechCrunch. Frankly, Reinaldo, you were covered of TechCrunch for a long time until you stopped raising money. Once you stopped raising money, TechCrunch stopped writing about you. To me, that’s when the story becomes really interesting.
And I couldn’t do that, I couldn’t do those kind of interviews without people like Alex, without people like Jeremy Weisz, who pre-interviewed you, our producer, without people like Andrea Schumann, who put a bunch of research for me on my screen here, including your full LinkedIn profile, links to your Businessweek article. You were in Forbes magazine, tons of stuff she put together for me. I couldn’t do this without Ari, who’s going to be publishing this interview.
It’s a really good team of people here. We love putting these interviews together for you. If you like it, please subscribe and tell your friends to subscribe. If you hate it, please tell me because I love getting negative emails. It’s the best way to improve. People who are the angriest and the most frustrated often have the most to teach. Reinaldo, thank you so much for doing this interview.
Reinaldo: Thanks for having me. It’s a pleasure to share my story and I hope it can help a lot of entrepreneurs.
Andrew: I do too. I know that you did. I appreciate it. Thank you all for being a part of Mixergy. Bye, everyone.
Reinaldo: Thank you.
