16 May ANDA WATCH – JOSE DELMAR
Anda is platform for family communication and connection that contributes to maintain and enhance the connection and communication between family members even and despite the distance. Its first product to meet this goal is an intelligent watch with 4G connectivity for children that has been a success in Latin America. Among its growth plans, the next step is to enter the U.S. and European markets with a watch for adults over 65 and a second watch for children. José Delmar, founder and CEO shares his experience and plans as a Euro-Latin startup.
What are the main challenges faced by startups as they grow?
We are currently in conversations with different partners to reach the North American market and the European market. We are interested in the North American market by volume and in the European market we have taken into account two factors: the demographics with an adult population over 65 and the purchasing power. Our product is not cheap and we are targeting an audience that values the quality and multiple capabilities of our watch, which is much more than a tracker and is therefore willing to pay for it. We have seen that there is a niche business creating a new product for that adult population (65+) that I mentioned before.
On the other hand, the children population (children up to 11 or maybe 12 years old) is also one of our targets. In families where both parents work and want to be connected with their children, but without giving them access to a smartphone that exposes them to innumerable risks, we have created a product adapted to this need for safe and dynamic communication without having to use the open internet with such young children. We believe we can become market leaders by focusing on underserved segments of the population as the ones mentioned above… and another niche we think of is pets… Why not?
When we enter Europe, we want to follow the model that we have developed in LATAM, to work with a telecommunications operator, as for example we have done in Mexico and Peru with América Móvil. Surely, this is not the most profitable expansion model for us as a company, but in compensation it brings us closer to a larger base of potential clients. By creating an alliance with a telecommunications operator in Europe, we will be able to scale up this model. It is a model compatible with selling through retailers or own stores as we have done in Peru.
We would also like to think about opening a store in each country but now we have almost no stock! So that plan will be implemented only by the end of 2019.
What are the main challenges faced by startups when they expand into Europe?
In our case, the great challenge we face is the financing to grow. We have more purchase orders at this point in the year than we had in all of 2018, but we need to finance ourselves in order to continue producing watches. There is still a lot of risk aversion in LATAM, Venture Capital funds still do not finance as they do in more mature markets as the US or Europe and that’s a big challenge around the issue of financing.
Another of our challenges is to work on the marketing of the product and the company because until now everything has worked by word of mouth. Our sales in 2018 have been produced with a CAC less than $10, which for the type of product and market is a remarkable success.
We are at the level of any high-end smart watch that produces very large companies worldwide and we are already leaders in our market segment, but it is necessary to develop hardware upgrades and content development (apps and others that only our product is able to absorb offering an appropriate experience of use given the technology and components we use). The important thing is to have a structure as light as possible because “in house” development is very expensive and our bet for the next phase is to outsource as much as possible to save costs.
Key learnings/recommendations for companies planning to grow
As I mentioned before, it is key to have a light and flexible structure. Today we are 10 employees and that helps a lot from month to month.
Of course, you have to differentiate yourself and have the best product. We were clear right from the start: if we compare ourselves with the competition, our product is much better and we sell ten times more, but surely, their costs are much lower than those of a small startup like us are.
Being an entrepreneur is a continuous learning process and an unimaginable effort. Coming from a world as competitive as law, after leading one of the most important law firms in the country, I confess that I never thought being an entrepreneur was going to be so hard! You have to work hard for what you want!