Press Room
Fall 2011 Newsletter: New Partners, New Awards, New Staff
New Strategic Partnership in Colombia
We are thrilled to announce that we have signed a contract with a major new partner in Colombia. Carvajal Tecnología y Servicios is a well-known Colombian company with operations in 15 countries that is already working with both shopkeepers and their suppliers to develop innovative technology solutions. To give just one example, they are working with the Colombian government to offer financial services to lower-income communities via a payment network installed in small retail stores. Their other products include business intelligence, e-commerce platforms, and Business Process Outsourcing (BPO) and Information Technology Outsourcing (ITO) services, among others. Carvajal Tecnología y Servicios is part of Grupo Carvajal, a Colombian company founded in 1904 with seven different operating units and nearly $2 billion in revenues.
As part of our alliance Carvajal will be deploying Tiendatek in shops throughout Colombia and together we will be developing and commercializing new products for consumer packaged goods companies, financial entities and others. In a small world twist, we worked with shopkeepers involved with the Carvajal Foundation several years ago to test and refine the first Tiendatek prototype.
The goals of our partnership are ambitious, and we’ve already gone public with the announcement, so stay tuned for exciting operational updates.
Frogtek Wins Major Competition For Mobile Startups in Europe
In dramatic fashion, we learned in September that we had won first place in Vodafone Mobile Clicks, described by the New York Times as the biggest competition for European mobile start-ups (we are a global company but our main technology office is in Spain). Our CTO Guillermo represented us at the finals in Amsterdam and later collected the prize money of €150,000. More than anything we were humbled to be mentioned in the same sentence as so many impressive companies.
You can see our presentation for Vodafone here and an interview with Guillermo immediately after the awards ceremony here.
Frogtek Mexico Reaches the Finals in the IniciativaMX Contest
We are also proud to announce that we were chosen from over 50,000 applications as one of the 50 finalists for Iniciativa MX, a TV show in Mexico that highlights the best social initiatives in the country. This unique program brings together the leading television channels to create awareness and support for social entrepreneurs through a reality-show format. Fortunately we didn’t have to live in a camera-covered house and received over $100,000 in support as well as a very solid stamp of approval. Moreover, all of the finalists were recently invited to have breakfast with the President of Mexico Felipe Calderon!
New Operational Strategy in Mexico
We are preparing to implement a much more aggressive sales and deployment strategy in Mexico and to help prepare we have created new sales roles as well as convinced a seasoned entrepreneur (see bio below) to join our team. As part of this planning process we are now riding in the delivery trucks of a key partner visiting over 40 small stores per person per day and at each stop we are testing different sales pitches and pricing models in order to refine our value proposition. We will have much more to report here in our next newsletter.
New Web site at Frogtek.org
It was well overdue but we finally have a new Web site. The new Frogtek.org (or Frogtek.com) has new information about our products, activities and awards and we will continue to add content in the coming weeks and months. Check it out!
Team in Mexico Grows
We have grown the team in Mexico in order to accelerate deployment, mostly recently with a very experienced entrepreneur in his own right.
Marcos Eshkenazi. We are extremely excited to have Marcos join our team as he is already a successful entrepreneur with a long record of building companies from the ground up. In total he has founded 15 different companies and accumulated more than 18,000 “flight hours” related to building start-ups. Among his companies are: Digital City, the first distributor for Movistar (Telefonica) in Mexico; Avizpate.com, an online travel comparison service; and Chikabum, the first company to bring custom content to mobile phones in Latin America. Marcos is also an investor in Frogtek so we want to give him a double welcome. Welcome Welcome Marcos!
>Echoing Green opens their annual search for social entrepreneurs
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>Exciting video about the Vodafone Mobile Clicks award
>We are still a bit dazed after receiving the first award at VMC, we frankly never expected to be the winners. Vodafone has gone one step further and published an exciting video about the competition and the awards ceremony:
>Frogtek Wins Vodafone’s Mobile Clicks Competition!
> We could not be more thrilled to announce that we are the 2011 winners of the biggest competition for European mobile startups, Vodafone Mobile Clicks. A special congratulations is also in order to our CTO Guillermo who represented us both in Spain and at the European finals in Amsterdam.
More details about this competition and our business model in general can be found in a (very) recent article on the New York Time’s Web site (copied and pasted below).
Metric for Microshops: Frogtek Wins $206,000 to Help Shopkeepers in Emerging Countries
By CIARA BYRNE of VentureBeat
Published: September 16, 2011
Spanish-American startup Frogtek just won the biggest competition for European mobile startups, Vodafone Mobile Clicks, with its app to help small shopkeepers in emerging markets run their businesses.
According to Frogtek, a Mexican stall-like, microretailer stocks an average of 1000 products from 25 vendors and it is often managed with nothing more sophisticated than a paper notebook. Frogtek wants to change all that with the help of the $206,000 (150,000 EUR) prize.
The product consists of a bar code reader connected to a mobile application running on an Android smart phone. Every product sold is scanned and tracked by the application. This means that shopkeepers can, often for the first time, track inventory, calculate daily sales, identify best and worst selling products and order online from vendors. Access to these simple metrics can be nothing short of revolutionary for shopkeepers.
The inspiration for the product came from micro credit agents in Columbia who, 5 or 6 years ago, started using PDAs to record data from credit rating interviews with applicants who ran shops. “For many of the shopkeepers this was the first time they had seen their numbers” says Frogtek CTO Guillermo Caudevilla. “And they said ‘I want something like this for my business’”. Founder David de Ser heard about this project and saw that since Android phones had become available he could make an application accessible to these shopkeepers.
The first market was Columbia, where Frogtek has run pilots for 2 years and the startup hopes to be in 500 shops by the end of the year. Mexico is now also a focus with 120 shops already up and running. According to Caudevilla, 1 in 100 people in Mexico runs a shop and microretailers are responsible for 5 percent of GDP. Worldwide there are more than 40 million microretailers.
Microretailers are of great interest as distribution channels to large vendors like Coca Cola and Procter and Gamble as well as banks, mobile payment companies and micro-credit institutions. However, because of the owners’ informal or non-existent accounting systems, accurate data on their activities can be hard to come by. Frogtek’s business model is based on selling that data as well as getting a commission on online orders made via the application. Big companies will also often purchase or subsidise the phone and bar code reader. “We are starting a trial in Mexico with Coca Cola.” explains Caudevilla. ”We just signed an agreement with the third biggest company in Columbia to have another pilot and the second phase of that would aim to reach 120,000 shops in Columbia within 5 years”.
Subsidization is certainly necessary since the cost of the equipment, $100 for the bar code reader and $200 for an Android smartphone, is still prohibitive for most microretailers. The big challenge for Frogtek in the future is therefore to create partnerships with large companies who reach thousands of microretailers. Frogtek will use the prize money to help grow the network of retailers and partners.
Most of Frogtek’s competitors make applications on PCs for larger retailers like minimarkets. “We are the only people doing this on a phone which is 2 or 3 times cheaper. The application is completely tailored to the needs that they have in emerging markets” insists Caudevilla.
A big issue for all social enterprises is how to measure their social impact. Often they use a combination of breadth, the number of people reached, and depth, the impact on individuals. When it comes to gauging depth, Frogtek has an advantage. “We are making a measuring tool.” Caudevilla says. “At some point we can measure if they are selling more, reducing expenses, increasing margin, whether they have given up selling bad products. What we are doing is giving these people the power to make the best decisions.”
Frogtek was founded in 2009. The 18 employees are based in Spain, Columbia, Mexico and the United States and the company is current angel-funded. One of the investors is Josh Mailman, the first investor in Grameen Phone, the biggest mobile operator in Bangladesh.