Bootstrapping A Latin American Social Networking Powerhouse With 50 Million Users: Sonico CEO Rodrigo Teijeiro (Part 4)

Sramana: How big is your calling card business now?

Rodrigo Teijeiro: The calling card business became an $8 billion business with very big profits. While running that calling card business, I noticed something interesting. I was always trying to optimize the buys off the website, and I noticed that one type of site that would always convert at a much higher rate, and that was e-card sites. However, dealing with e-card sites was a big problem because they were primarily mom-and-pop sites. They were very inflexible with the types of things I wanted to do. As a result, I developed two of my own e-card sites. Those two sites became the two biggest sites in Latin America with almost 500,000 e-cards sent per day. During Christmas and New Year’s we would send around 13 million e-cards in a single day.

Sramana: Did you bootstrap the e-card site by using the profits from the calling card business?

Rodrigo Teijeiro: Yes. I bootstrapped everything. The way e-cards worked, when someone sent an e-card they would send them to people they knew. Our site would say, “Hey, you just sent an e-card, why don’t you give them a call now?” and we offered them a $5 discount.

Sramana: What was the business model for the e-cards? Was it primarily to increase sales of your calling card business?

Rodrigo Teijeiro: The e-cards are just greeting cards, and they are free. However, AdSense appeared. I was able to monetize through advertising as well as create sales into the calling card business.

Sramana: How much was AdSense able to monetize?

Rodrigo Teijeiro: There was one month when we made $250,000 just off of the e-cards. That was just with AdSense.

Sramana: What was the customer base that was generating that kind of revenue?

Rodrigo Teijeiro: In December 2007 we probably had 30 million customers throughout Latin America.

Sramana: So you had two business strategies going: your calling card business and your e-card business, which fed into your calling card business, and you were able to monetize off of advertising as well as direct sales?

Rodrigo Teijeiro: Correct. In 2006, we also launched another website called CumpleAlerta, which is basically a birthday alarm system. You would go into a site and enter all your friends’ birthdays. You would received e-mails reminding you about your friends’ birthdays, and of course that e-mail would give a $5 calling card discount and provide a link to send an e-card. I ended up getting 21 million users registered with that website, and it generated 180 million birthday alerts.

At that time I had no angels or VCs. I had my programmers in Ukraine, customer support in Buenos Aires, and I lived in Los Angeles and Hawaii. I had bootstrapped the entire business and ran a virtual company. At the height of 2007, revenue hit $8 million.

This segment is part 4 in the series : Bootstrapping A Latin American Social Networking Powerhouse With 50 Million Users: Sonico CEO Rodrigo Teijeiro
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