No Back-Up Plan: How One Entrepreneur Ventured Out on Her Own Without Anything Lined Up
Hi, everyone! 👋🏼👋👋🏾 Today's newsletter tackles a situation some of you may find yourselves in: choosing to leave your job, without having your big idea fleshed out completely.
It happens.
It's what María Fernanda Castillo faced. In this newsletter, learn the following:
🌴 What she focused on when starting her business
🌴 The reality of raising capital
🌴 The benefit of finding partners with a different skillset than you
ENTREPRENEURS = DIY
You’ve likely heard the expression, “If you want something done, you have to do it yourself.”
That’s exactly how María Fernanda Castillo describes an entrepreneur.
She believes an entrepreneur cannot wait, or rely on others, to make things happen.
They should make or do things themselves.
The founder of the human resources platform, Nala, thinks this kind of thinking came from her parents.
When there was no school that taught English in her hometown of Pereira, Colombia, her parents started one because they wanted their kids to grow up bilingual in Spanish and English.
And that wasn't the only business they started.
But Castillo didn’t want to become an entrepreneur.
She knew the difficulties all too well.
After all, she says her father went bankrupt three times.
“It was super hard times for the whole family.”
María Fernanda's entrepreneurial parents
ARE YOU ADDING VALUE?
Still, despite having a successful career in human resources at large companies, when Castillo kept finding that HR info didn’t keep pace with managers’ decision-making needs, she decided to step away.
Castillo thought, “Why am I going to do the same, just because human resources is building processes that are not adding value to the company?”
It’s not like she had a back-up plan or anything else lined up. Castillo left the company she'd been working for on good terms.
But she thought it was important to stick to her principles.
That was in February of 2020.
She figured, “Maybe I should think of a platform that follows the same pace, the same speed that the companies are going?”
THE TIP JAR (tips provided courtesy of María Fernanda Castillo)
Castillo thinks people in all three groups, those starting out, mid-career or starting over, should attend the Y Combinator Startup School.
They have a series of videos you watch. “And they can help you do the follow-up goals [and] mentorship. Everything is free.”
Beyond that, here’s more advice she offers:
STARTING OUT: “Don’t do it because you don’t want to have a boss… You are always going to have a boss.”
PRACTICAL EXAMPLE: Castillo says, if you have investors, you’ll have to answer to them. They’ll be your bosses.
STEEPED IN SKILLS (mid-career): “You have to be very invested in this. You’re not going to rest. You’re not going to have vacations. You’re not going to have money. So you need to have a really supportive family.”
STARTING OVER: “Look for really good partners that are not exactly the same as you…. Because I see that, sometimes, the older that we get, we want to work with people that [are] more similar to us.”
Castillo says it's really important to find people whose skills are different to add value to the team.
I’LL NEVER DO THAT AGAIN: “You cannot outsource the core of your company,” particularly if you’re a tech company.
PRACTICAL EXAMPLE: Since one of her partners, the developer, was finishing up with another project, she says, “the first two months, we hired a team in Argentina.”
One month later, it was clear it wasn’t working.
“To reconstruct what they did, it took us three more months. So an MVP (minimum viable product) that should be launched in three months… took us four [or] five months.”
BEST ADVICE FROM “LA CASA”/BEST “HOUSE” ADVICE: Castillo says her dad is full of advice. She thinks one of his most profound lessons is this: “It’s better to surprise than to disappoint.”
Basically, Castillo says it’s all about managing expectations. So she’s learned not to oversell when pitching to companies. This way, businesses are pleasantly surprised when Nala exceeds their expectations.
LEARN THE GAME & EXPECTATIONS
Castillo says the company started with around $20,000, her tech partner, Fabian Prado, and one client.
Since they didn’t have a sales team, everything they did in 2021 focused on perfecting the product, especially because she knew the market was so competitive.
Pretty soon, Castillo realized something key about raising money that she didn’t expect.
“This is a man’s world.”
COMMUNICATION STYLE MATTERS
In other words, “The way you communicate the idea,” the way you share your vision was different.
“They want to see people super aggressive.”
She wasn’t comfortable promising unrealistic sales and profits.
In contrast, “a man with just the idea… pitches it, and he raises $5 million.”
FIND PEOPLE WHOSE STRENGTHS COMPLEMENT YOURS
Latina leaders of Nala: Founder María Fernanda Castillo (left) & CEO Ximena Paul (right)
So that’s when Castillo decided to invite Ximena Paul to join the company as CEO.
“She comes from more traditional companies where she was the only leader within a group of just males.”
Paul focuses on sales, Castillo brings human resources experience to the group and Prado is the CTO.
When I asked Castillo if she gave herself a deadline for sticking with her startup, she told me, “We are fully invested in this. So we never thought about the idea of, okay, in six months, if nothing works, we are going to close… It wasn’t an option.”
She’s confident in the product because she says no other human resources platform focuses on decision-making. She says the competitors focus more on automation and digitization.
GO AFTER THE BIG FISH
Castillo’s company now has more than 20 clients in several Latin American countries. Some of the companies have more than a thousand employees. And that’s something that makes her particularly proud.
“When we started, I could never imagine that we could have [clients] that were big. It started with companies that were 100 [or] 200 employees. And, now, seeing clients that have 1000 employees, it’s like, okay! Nala can deal with a lot of people.”
And, it all started with her need to create something that was missing in the human resources market, even though she didn't realize she was ready to be an entrepreneur.
INDUSTRY: Human Resources and Tech
STARTED BUSINESS: July 2020
LATINO/HISPANIC CONNECTION:
Born in Colombia
Parents were born in Colombia
EDUCATION: EADA (Escuela de Alta Dirección Administración ) - Barcelona Master’s degree in Human Resources
Pontificia Universidad Javeriana (Bogota, Colombia) - Bachelor’s degree in Psychology
DREAM JOB AS A KID: “I wanted to be the assistant of my nanny. I loved Candida and always said, ‘When I grow up, I want to be your assistant. I want to help you.’”
“And my mom was like, ‘Yeah, but… at least have a vision. At least be the boss. But the assistant of the nanny?’”
María Fernanda (far left) with her son, Nico, and her nanny, Candida (right)
BIGGEST GOAL YET: “A very short-term goal right now is to raise capital. We are raising $2 million.”
Castillo says the biggest goal, however, is the be a “retention-first” platform where managers can check Nala and get real-time data to make the best decisions about employees.
NO NEED TO GO IT ALONE
HELP ON THE OUTSIDE...because we can all use a helping hand:
Keeping Customers Happy on Social Media
Make the most of your social media channel. There are automation features you may not be aware of that can improve your customers’ experience online. Find out how in this FREE webinar:
SCORE (Service Corps of Retired Executives) Orlando
“Delivering Excellent Customer Service on Social Media”
Monday, August 22, 2022
12:00 p.m. EDT - 1:00 p.m. EDT
Virtual Webinar
FREE
https://orlando.score.org/event/delivering-excellent-customer-service-social-media-9
WORKING ON THE INSIDE...because we know our culture has a hard time asking for help:
The Art of Coaching
Do you know how to serve as a coach to your team to bring out their best? Find out how to take on that role in a way that helps them grow and helps you grow as a leader. It's all in this recorded webinar. Details are below:
U.S. Small Business Administration and SCORE (Service Corps of Retired Executives)
"Coach Your Team to Success"
Recorded Webinar
FREE
https://www.score.org/event/coach-your-team-success
INSPIRATION FOR THIS ISSUE:
There’s a reason that book from John Gray, Ph.D., “Men are from Mars, Women are from Venus,” was a best-seller.
Men and women communicate differently.
Very differently, sometimes.
While that’s not earth-shattering, the consequences of that can extend to many areas, including business funding.
When María Fernanda Castillo mentioned to me that only 2.3% of venture capital funding went to women, I’d heard that before. It’s based on a 2020 Harvard Business Review study.
What I found more important is that she understood that the expectations and communication style, when you’re in the room trying to raise money, differ.
Castillo caught on that men are more assertive and confident, even if their idea may not be as good or as profitable, as their female counterparts.
Castillo acknowledged that she wasn’t in her comfort zone when it came to boasting about her product.
Having some swagger, in certain circumstances, can help you close a deal.
But she had the good sense to find someone who could project that strength and confidence when it counts – when you’re looking to raise money for your business.
There are powerful lessons there about reading a room, recognizing your own strengths and weaknesses and having the humility to find the right complement, even if it means you’ll be making someone else the CEO of your company.
We still must do better when it comes to funding for female-led startups.
2.3% is utterly unacceptable.
The responsibility is on all of us to find ways to change that. #theskyisNOTthelimit
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🌴 Thanks for checking out Generation Si! Hope your day is incredible! 😻
María Fernanda meeting with her team virtually