eBay of Latin America: Mercado Libre CEO Marcos Galperin (Part 2)

SM: Did you get the sense that eBay was not focused on Latin America at all yet? What was the Latin America Internet market at the time? What kind of Internet penetration?

MG: It was very small. There was 3% penetration roughly. Today it is 20%, so it still can grow a lot. Out of that 3%, e-commerce was probably 10% or less. It was very, very small. One of the things I think we did right relative to the rest – there were 40 companies doing exactly what we were doing – some of them raised more funds than we did. Only a handful were able to do a couple of rounds of financing. That was a key to differentiate from other companies. All of them spent all of their money doing mass marketing, doing the Pets.com strategy.

We saved our cash and developed our products. From the very beginning, we focused on building a good product and our IT backbone. That is a very big difference between us and everyone else in the region. They focused more on the marketing and less on the product; we focused more on the product and less on marketing.

SM: Who were the other companies who were able to raise financing besides you?

MG: There were a couple of others. Deremate was founded by a Harvard group, so it was a huge rivalry.

SM: Harvard people do not make good entrepreneurs.

MG: I agree. At least these ones didn’t. They were very big in spending money and doing PR but not very good at building their company and building a good platform.

SM: What was the source of your technical expertise?

MG: The second person to join the team was my cousin. He was the CTO, and had a very technical background. He was with us for a few years and then he stepped out. He groomed our current CTO before he left.

SM: What were some of the early milestones that gave you the indication that you were starting to be successful?

MG: At the beginning there were not that many!

This segment is part 2 in the series : eBay of Latin America: Mercado Libre CEO Marcos Galperin
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