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| To The Next Seven Weeks! To my right (Edgard Ortize - Co-founder) In front of me (Daniel Li - Co-founder) to Daniel's right (Creso Chavez - CEO/Commercial Director) |
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Today I spent a full day with the
Pixel Labs management team at their new office location on Rua Estevão Baião in
Vila Congonhas. Over the past 10 years the company has truly lived its motto “You dream it. We build it.” Edgard Ortiz and
Daniel Li (Co-founders of Pixel Labs) are the brains behind this innovative and
inspiring organization. Edgar is the product guy and Daniel, the sales guy. For
the past decade Pixel Labs has developed dozens of innovative technology
solutions for some of the biggest brands in Brazil and globally. Some of their
clients include Chevrolet, Heineken, Neutrogena, Novartis, Itau (Brazilian bank),
TAM (Brazilian airline), Natura (one the largest cosmetic/beauty product
companies in Brazil) and O Boticario (one of the largest cosmetic franchises in
the world).
The company primarily develops technology
solutions for point-of-sales, online channels, or events (sporting games,
concerts, exhibitions, etc.) to enhance consumer experience; increase customer
traffic; and increase sales. For example, check out this link for a campaign
conducted using the ladies’ room mirror of a local restaurant to promote Natura Una, one of Natura’s most popular product lines. Pixel Labs
developed this technology for the company. FYI…the opening line of the video
(in Portuguese) reads “Have you ever wondered if a mirror could show how you
would look if you wore make-up...without having to actually put on the
make-up?”
That is just one of many
products/solutions Pixel has developed for its clients. Although most of these
“technology solutions” can be considered products in their own right, they are
typically developed for and sold to a specific company for a specific program
(e.g. a sales campaign, or a trade-show/exhibition). As such, the company has
been unable to generate recurring revenue or significantly scale its operations
over the past ten years. Historically, revenue has been driven primarily by
these “one time” projects that are often few and far between causing cash flow
concerns.
Projects vs. Products
The company is currently considering
a transition from a project-based company to a product-based company. The idea
is to make the move from providing one product/solution for one customer or event
(i.e. non-recurring revenues) to a product-based company that can provide a
single or multiple products for a number of customers therefore creating a
recurring revenue model.
Core vs. non-core
Also, to date, Pixel’s most innovative
and commercially successful technology solutions have been centered on health
and beauty, the company’s core focus. A pertinent question has been whether the
company should focus exclusively on building products within this core space or
continue to innovate and create products/solutions for a number of customers,
industries and/or sectors.
2B or not 2C? That is the Question.
What will enable the company to scale
its operations faster – B2B (business-to-business) marketing and sales or B2C
(business-to-consumer)? Just one of many
questions entrepreneurs of all kinds have to answer as they try to move their
companies to the next level. Typically, these decisions can determine whether
or not a company is successful long-term and it’s no different for a company
like Pixel Labs. This is the crucial role Endeavor (our local collaborator/sponsor)
plays in the life of companies like Pixel. Endeavor leverages its global
network of partners, like Ernst & Young, to help these companies achieve
their potential, and from time to time, people like me get to come along for
the ride; albeit for seven weeks. This pretty much summarizes all that I
learned on my first day. So now my task is to learn as much as I can about
Pixel Labs and then leverage my Ernst & Young experience (auditing,
accounting and transaction advisory) as well as the E&Y resources at my
disposal to help Pixel at this stage of their journey. As Barney Stinson would
say, CHALLENGE ACCEPTED!!!
Fun fact
On September 6th,
2012, Ernst & Young launched its Global Center for Entrepreneurship and Innovation which is an online platform providing guidance to
entrepreneurs and innovators on their growth journey as well as enabling fast
growing companies to connect to each other, sharing their different
perspectives.
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