The Challenging Path of Entrepreneurship: Persistence and Consistency with Alejandro Bustamante

1. Welcome and Presentation: The Story Behind Success

Hello, welcome to one more episode of Among Entrepreneurs from Magneto Pymes. Today we talk to Alejandro Bustamante.

Alejo is a co-founder of the company E - Core Digital Performance, but he also started a company called AdMusic. We want you to tell us all your experiences, especially about “that which is not so well known” and what is not so much talked about on the path of entrepreneurship.

“Very happy with the invitation, happy to share a little bit of knowledge here, let's say the stories that led to these eight years of entrepreneurship that have brought us a lot of value and lessons, learning and so on.”

Normally, it just comes out The beautiful thing, where we are doing well. Here we want to delve into the The reality of entrepreneurship.

2. How Do You Summarize Entrepreneurship in One Word?

This is a very profound question. When talking to entrepreneurs, two extreme paths can be seen in the answers:

1. The slope of slaughter: It's too hard, it's effort, it's a path of “suffering”.

2. The slope of extreme optimism: “This is the best”, everyone must undertake, seeking freedom.

The Middle Way: Challenges, Fun and Persistence

Alejo likes to go by El Camino del Medio. Entrepreneurship is a path Challenger, but also “full of fun”.

“Obviously [it's a path] of ups and downs, and of moments like tension, complex moments, but at the same time with a lot of satisfaction, and a lot like small victories.”

If I had to summarize it in one sentence, I would say that entrepreneurship is a long story consistency or persistence more than anything else. In addition, it has a component mystical: is “believe in what you cannot see”.

3. From Employee to Founder: The Signal That Led to E - Core

Alejandro was coming from corporate world. What's intriguing is the business combination: E - Core (digital marketing) and AdMusic (music producer).

E - Core, which is their main vehicle and “your baby”, emerged from the academia.

The Market Opportunity: Students and the Cost of Digital Marketing

Alejo and his partner, Santi, were professors at the Universidad del Rosario and at the EAFIT University, while they were working at Successful Trips.

At that moment, they realized something:

1. Every time they finished a class, students would ask them for help with their digital marketing strategy.

2. When recommending companies to them, the students returned saying: “It's very expensive, we don't have enough budget.”

This situation was repeated during six months in a row.

“There we saw that there was a huge opportunity, let's set up a business.”

4. The Key to a Successful Society: Trust and Criteria of Justice

Santi and Alejo were friends for a long time. They had worked together in a company called CDiscount.

Choosing the Right Partner: Beyond Knowledge

While complementary knowledge (operation, sales, finance) is important, Alejo believes that they are props. The fundamental thing is:

1. Similar Justice Criteria: Faced with difficult decisions (which always come), partners must have the same vision of what is fair, almost “without talking”.

2. Absolute Trust: Society is like a wedlock. The relationship must be strong.

For this reason, they carry out partner committees weekly (without fail) to talk both about corporate issues and about life, projects and dreams.

“We avoid carrying our suitcases with stones, and we tell each other everything we feel.”

5. The Early Days: Structure, Pillars, and Customer Acquisition

The process of setting up the business was a teamwork between the two of us. Literally, they took action the same day they decided to take action.

The name E - Core came from the idea of focusing on Core of your customers' business (generating sales).

The Three Pillars of E - Core: Fair Pricing, Performance and Education

In a “napkin” defined the pillars to respond to the needs of the students who identified:

1. Hard Discouter Structure: Fair and highly competitive prices.

2. Specialization in Performance: Focused on the generation of sales.

3. Education Model: Sharing knowledge.

To Action Instantly!

They bought the domain and set up a window of 15 days to get customers.

“I got a customer, I got a customer, and how much are we going to charge? Whatever it is, even if it's free...”

Santi brought a customer (OMB) and Alejo brought two (More Finca and Magic Media). Of those first three brands, two are still customers after eight years.

6. The Transition from the Corporate World to Entrepreneurship: A Secure Bridge

Many entrepreneurs give up everything to go after their dream, but Alejo and Santi's journey was more sure and responsible: build the “Poquitos Bridge” without jumping into the abyss.

Initially, servicing all three brands required little time (6 PM to 7 PM), but the burden began to grow:

• From 6 to 8 PM, then to 9 PM.

• Then the Saturday and Sunday all day.

The Exhausting Balance: The Schedule Decision

La “snowball” it became a big sacrifice, making it very difficult to balance personal and work life. This forced them to make a difficult decision:

“Come on, every morning until 6 in the afternoon we work at Grupo Éxito, from 6 to 10 at night we share with our families and At 10 in the evening we started working on E - Core.”

They worked from 10 PM until “one of us will be left sepia”. This allowed them to build the bridge while validating the business idea.

Recommendation: One can do a process paralleled and validate the business idea with “small steps” (e.g. getting a customer, buying the domain).

7. The Tipping Point: When One Partner Took the Leap

After eight months at that exhausting pace, they had a crucial conversation during a work trip in Cancun.

“Either you resign, or I resign, or do we close the Call, because we are going to get sick.”

The Risk Pact and Accelerated Growth

They decided that Santi I would give up, because I had better Skills For the operation (interpreting data, implementing guidelines, SEO). To be fair to taking the risk, they came to an agreement:

“You will continue to earn the same amount you earn today in your current job. If the company can't afford it, I pay it from my salary.”

Alejo risked the 100% of your salary and Santi risked his job. Santi resigned the following Monday and, with him full-time, the business grew much faster. Then, came the pandemic, a trigger that led to the entry of Alejo later.

8. Team Building: Don't Depend on the Founder

From scratch, they structured the business so that “the business wouldn't depend on us”.

Since they had their jobs, the expectation of getting money out of the business was “zero”. Everything that was billed was I reinvested 100% in starting to hire a team with the Skills suitable.

The Evolution of Profiles: From Generalists to Ultra Specialists

Companies go through a transition in their profiles:

• Beginnings: Profiles generalists (people who know a little bit about a lot of things). Stefania Ortiz, the first employee, learned everything: pattern, development, etc.

• Maturity: Profiles specialized (people Ultra specialized in Meta, TikTok, LinkedIn, Google).

9. The Importance of Numbers: Roadmaps and Financial Myths

Alejo criticizes entrepreneurs who wear themselves out on sophisticated business models (mega, vision, values, SWOT matrix) without first having done a financial model.

The Roadmap and Financial Simplicity

His vision was very simple:

1. Let's project how much we're going to sell.

2. Let's project how much we're going to spend (super basic).

3. Let's see if it gives or doesn't give, and how long it's going to take to give.

“For me the finances in a business it's like the most important, most elementary part.”

From the ground up, they created a “Roadmap” which was that projection of what was going to happen. Santi's wife, Caro, realized his obsession: “Do you guys look at the roadmap all the time?”

10. Dismissing Vanity Metrics: Focus on Sustainability

There are many “vanity metrics” in business: number of employees, turnover, followers on Instagram. Entrepreneurs are obsessed with them.

The Two Fundamental Indicators

The really important metrics are those that help the business to be sustained over time.

1. Net Margin (or Life Margin): How much do you have left at the end of the exercise? This number is more important than sales.

2. Cash Flow (Cash Flow): Companies go bankrupt because of cash flow, not because of profitability.

“If you stop billing today, How many months to live?”

Key Indicators for Entrepreneurs

Once the previous two points are OK, more sophisticated indicators can be incorporated:

• CAC (Customer Acquisition Cost): How much money are you spending to get a new customer?

• Repurchase Rate: (For product businesses).

• Churn Rate or Abandonment Rate: (For service businesses).

The focus should be on eliminating “ego metrics” and focus on the durability of the business.

11. The Strategic Turn: From Volume to Sustainability and Focus

Alejo confesses that vanity metrics fell during the first few Four years.

“We wanted to be the largest company in the country by number of customers, and our understanding of Hard Discounter It was to be The cheapest.”

This resulted in two giant errors: a volume paradigm and margins that are too narrow.

• Peak: More than 200 active brands and a team of more than 80 people.

• Today: circa 80 to 100 active brands and a team of 30 people.

The Cash Flow Crisis as a Signal and the Restructuring of Services

The business was responsible for showing them the signs: they had a cash flow crisis. The portfolio grew and the volume was too robust.

This coincided with a strategic consulting process where the first step was Focus. They were losing focus on services (they were making social networks, web development, etc.).

Three services were defined Core:

1. Digital Guideline: Focused on Performance.

2. SEO optimization: Both technical and content.

3. Marketplace Service: Help sell on platforms such as Mercado Libre, Amazon, Falabella, and Rappi.

This transition, which included the closing of the transaction in Mexico, resulted in a lot of business more solid today, even if it makes less money than it was four years ago.

‍