LATAM Awakening as a Tech Hub | Jose Bonilla, Co-Founder & CEO of Chiper

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September 15, 2022

On today’s episode I chat with Jose Bonilla, Co-Founder and CEO of Chiper. Chiper is the leading B2B distributor of consumer goods to corner stores in Latin America. They’re moving hundreds of thousands of products every month across Colombia, Mexico and Brazil.

Corner stores are prominent in some cities in the US, but in other places around the world they have a massive market share of grocery sales. In India it’s around 90% and in LATAM they account for about 50% of groceries.

Jose is more than the founder of Chiper, he’s one of the godfathers of the Colombian startup scene. He’s a cofounder of Imaginamos, a development shop that became a startup studio. His partner Simon spun Rappi out of their studio and it’s now a mega-unicorn in the region that has raised over $2B. Jose spun out Chiper. Collectively they’ve trained thousands of future entrepreneurs.

We talk all about Chiper, tips for founders and entrepreneurs, and the start up scene in Latin and South America. It’s a fascinating chat. Enjoy!

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Transcript (this is an automated transcript):

MPD: Jose. Thanks forbeing here, man.

Jose Bonilla: Hey Mark.Thank you for having me.

MPD: Cool. So let'sstart off. You wanna give us an overview

Jose Bonilla: ofcheaper? Sure. Cheaper is a, between marketplace. We have more than 3000 CPDproducts for independent corner stores. We're based in where we started inColumbia and expanded to Mexico.

Now, Brazil. Basically what we offer for independent cornerstores is a platform where they can find everything they need and we deliversame or next day. The idea behind all this is helping these independent storeowners to be more successful businesses umprobably as being our investor,there's a huge opportunity in Latin America to streamline the supply chainbetween suppliers and retailers.

In many different categories as probably people here in thispodcast have seen companies building something similar in hardware stores forbeauty and a lot of other industries. And we're doing the same thing. Westarted in 2018 as a project with the idea of building this platform forstores.

And now we're fortunate that we have more than 50,000 customersin the three countries. We've been able to grow at a very good pace in the lastthree years. And we are really making a difference for store owners arefollowing what we are offering for, and hopefully the next years we can becomefor them the main provider for Jose.

So in

MPD: the states, whenwe hear corner store, we're thinking maybe bodega there, there's just not. Itdoesn't sound like a big percentage of the market or the supply chain wherepeople buy food and consumable goods. A lot of where people do their shoppingis supermarkets. And then maybe there's a smaller part with the gas stations orthe bodegas and some of the major cities, but it's different in Latin America.

What's the, what percentage of the market is flowing throughcorner stores in Columbia, Mexico, Brazil,

Jose Bonilla: et C.Yeah, Latin America and essentially all the developing world you can go up to90%, for example, for India in terms of the percentage of market share ofgroceries that are sold through independent corner stores.

And you can go down to 50%. That is what we have in Columbiamany Brazil and along that America and the majority of the independent cornerstores are survey. Low one middle link population and stores have a veryimportant role supplying at day to day goods. And this is something thatdifferent the United States usually is hard to imagine how people or themajority of the population that buy their goods.

But basically stores are the shelf space. Of their homes andthat's why they're so important. They've been there for decades and they'vealways had the same share. They haven't, they have never decreased just becausethe role that they, that they have for their consumers is very important forthe way that they buy goods.

MPD: Now, why did youstart this company? Because there's probably a million things you could havegone out and tackled. Why did supply chain management for corner stores? Whatitch did that scratch for you?

Jose Bonilla: Yeahactually cheaper was an opportunity that knock out at our door when I was software

In 2007, where we basically build software for big companieswith tailored banks and big C. And and from there we did a lot of projects. Oneof those projects that came up for, to us was offered by someone that now is aninvestor cheaper. That was basically inviting us to do some type of softwarefor inverse logistic for them.

And he was like, at that moment, testing the idea of resellingCPG products to. To end consumers. That was the initial idea basically tryingto sell products that were short expiration date to, to their like officeemployees and and the idea behind it was okay. Why don't we sell these productsto more people, other channels?

And that's how we started, like understanding the world of CPGsupply chain and storage. Fortunately, we were able, during those years to testwho was the customer that was really having a problem that we can solve aproblem by optimizing the supply chain between suppliers and then and by theend of 2018 more CCPs came up Talking to us and went talk to us to sellproducts through the product that we were building.

More stores came to us asking for a larger selection for the,that was essentially the inception process that we, those days that allow us bythe end of 18, to understand that we were in the position where. The both sideswere pulling us to do more on one side stores were asking for more products onthe other side, S were asking us, provide our service so we can get faster toefficient corner stores.

And essentially that was inception moment where. Foundsomething that we believe that could become a company. And that was one wherecheaper started as a business. And then we launch with the cheaper that we knowtoday. And so far it's been going pretty well.

MPD: This is a littleunderstood thing that you're talking about.

It's when you know, you have product market fit. I think you haif you haven't had a lot of reps, I was trying to start companies and failingand succeed. It's not obvious when it clicks. I failed a bunch in my twenties,starting companies. And the confusing thing about failure is no isn't no islike later or let's keep the conversation going or maybe that's what you oftenhear and it's not definitive.

And it's not this feedback loop you're used to getting, or youexpect to get, if you're not used to really listening to what people are. Butyes is do more. Give me more. I want it. It's inbound. And so it's, there's aninteresting thing. It's you never, you don't always, at least I know anAmerican culture, maybe a little different, but you don't always hear thisoutright negative.

Hey, that's a dumb idea. I don't want that. You don't hearthat. You just get, yeah, fine. Let's keep talking. You get dragged along, butyes. Sounds hey, my buddy told me about what you're doing. Can we talk, I wantyour thing too. And so for, for entrepreneurs out there there's an insight herein what you're describing and you heard the wherewithal to know what no soundslike and what yes.

Sounds but if you haven't ever heard yes. Before you thinkyou're almost on the precipice of succeeding when people are telling you nopolitely. So it's confus. I don't know. It's a great story. When you get peoplecalling in and you get those inbound boy thrilling moment, because, you got

Jose Bonilla:something for sure.

Mark. And I go from those days, likes we build like more than7,000 products, all of them had to do with technology. So I, I really knowfailure for projects where. No one wants to use it. You have to push a lot theproject or what you are offering. So the customers or the users try to bringthem to use your platform or your service.

And I've seen that like hundreds of times, obviously as part ofthe company that was working with a team of entrepreneurs or a team from a bigbusiness. But our job at was essentially that launching products and see howthey got traction or not and iterating until the company want to fund the.

So that we get to the point where the take off. So whathappened to us in 2018 with this specific project is something that I don't seea lot, like both sides. Like pulling you to do more? I immediately recognizethat this was an opportunity, probably a bigger opportunity or a, anopportunity with a higher probability to be successful because it's somethingthat I never felt like on an everyday basis also, but I think that's veryimportant from our initial process.

And I always say, When you are doing something and you aredoing something repeatedly for years, you get prepared to recognize whensomething is potentially going to work. And when something is potentially notgoing to work and both are important because that's what get you prepared from,for when opportunities like cheaper came, knock to your door, you can recognizehim and understand, okay, here is something that I can.

My life too. And there's a high probability if I execute and alot of things get together that this would work,

MPD: right. So that'sa great story. I love that. You guys were going in and you started flowing themarket, pulling you that doesn't happen to a lot of entrepreneurs ever.

And it's a no brainer when it starts happening. You just leaninto. But you guys have had a lot of success since then. You've been shipping alot of products. How many products do you guys move a month through your doors?

Jose Bonilla: We sell3000 products and currently we are delivering more than 200,000 orders,

MPD: right?

200,000 orders. That's a huge number. And each order might havemore than one product. It might be a bundle or a basket. What have you learnedabout logistics? I just imagine the magnitude of moving, I don't know, half amillion goods in a month and it sounds terribly daunting, but there's a lot ofentrepreneurs who are going to start with some crazy idea and get to thispoint.

How do you scale into that? If you've never done it before anybest practices or wisdom you can share?

Jose Bonilla: Forsure. Logistics is all about operational excellence and is in our businesswhere we like CD products. They have very tight margins. You have to be verydisciplined on the processes and the systems that you.

In order to be able to deliver your products with yourfulfilling, your value prop, but also with a reasonable cost to serve so thatyou can earn money in order. So I think logistics is the type of job where youneed people that are like very disciplined, very detailed oriented, and thatare like making everything works like your playbook or your process has been.

And it's not a logistic, it's not about okay, let's be creativeabout how we're going to pick the orders today. Picking or picking should be aprocess that you have to define step by step, how it's done who should do it atwhat time? Like everything has to be measured like by minute. So that processesworks.

And the second thing that I think that is very important aboutlogistics is that everything that works today, Is there to be challenged and doit in a better way. When we started mark doing logistics, Hey, trying todeliver small orders with 3000 SKUs in the portfolio to corner stores, therewas no logistic company that could provide us this serves.

So we had, we were obligated to build. Obviously we work withlogistic companies. So they provide us like warehousing and Nel and drivers.They are not our drivers or warehouses or our personal, but we have to designall the process, how we imagine that we will have to do it so we can fulfillthe value prop even for next day delivery.

Not for same day for delivery is 34 hours later. And everythingthat works at that moment, how they worked at that moment, we had to challenge.And started design every system and connecting everything so we can fulfill .And that's the beauty on on, on side the way it's done today, that's whycompanies like a, like us has a big opportunity in this type of the market issomething that is not designed for the store it's designed either for thelogistic company or for the.

And why it's not designed for the, for power customer for thestore owner, because they try to make it efficient for their Porton. If you'rea company, you have a small you contrast and that you make this work is goingto specific zones every Tuesday or every Wednesday. So the storm have to waitfor a.

What the store has to do is to buy products for a week, withoutany like inventory management or any systems to make this decision. This isjust pen and paper. So for sure that they're make a decision where they're moreor less, it's very hard for exactly what they're for a, we are offeringsomething different.

We're selling the, our. The way that you can release workingcapital is just ordering every day, smaller quantities what you need, and wewill be able to deliver to your doorstep, eh, same or next day. And that's whatwe believe that is going to change because we are thinking about them.

Obviously you have to be able to prove that we can do it withefficient. But the data service is designed for them, not about us thinking howus could be more more efficient terms of economy. So that's something that thatlike we are, I think that is what is going to make us change the paradigm onhow stores buy products, eh, for stores.

MPD: It's interestinghow your, the diversity of your portfolio, the scale of product lines. Drivesan ability to economically deliver same day. I hadn't, it's interesting to seethose two concepts connected. The, I wanna ask one more question. Like somesomeone's showing up day one. They launched an idea.

They're getting market pull that people want this product andthey need to ship it. And they're doing this from their garage. What's theplaybook to go from. Hey, there's demand to having. A proper logisticsoperation is the first step hire go find third party logistics providers andstart partnering. Do you need to hire in someone who's an expert in logistics,or can you just use good logic and figure it out?

Are there software tools you recommend? What's the, what arethe steps to get from nowhere, but knowing you have demand to a small, medium,proper logistics supply.

Jose Bonilla: Yeahand actually to tell you about our story, how we started, we had just onesingle track that the supplier lended us so we could use it to collect productsand then deliver products.

We didn't have a warehouse. That's how we started. And we sendit to our store owners at that moment or the people that was buying to. Just aspreadsheet through bots up and say, Hey guys, this is what we have today. Whatwould you like to buy? They tell us, okay, this, whatever 10 things. Okay. Wejust did the order internally.

And then we send the track to every point to deliver thoseproducts. So I think this in the early days, you have to do it yourself, try totake your car or your bike or anything that you have. And go on just a, saythat this, I think that is something you. Jump because it's going to, it'sgoing help you understand in the early days what your customers are expecting,how is the delivery, how the delivery works, how hard its to put an order anddeliver on time.

So that's the first thing then we actually we open or launchover first, like warehouse, basically it wasn't a warehouse. We. Bought spaceon a, for a logistic company that they had a, that they were not utilizing in awarehouse. And this is space that we bought. We had to do it because a new supplierwas wanted to sell through us.

And now we couldn't use the same traffic cause the truck was arefrigerated truck and we couldn't store purchasers that obligated us to go toholistic. And to them, Hey guys, we need a space to store, but we don't, we'renot able to pay for our warehouse. We can pay for some positions at your, canyou rent me some positions at the warehouse?

Unfortunately they told us yes, us S and now some tracks likeyou have tracks, just, I know one tracking Latin America are contractors, like80% of the track fleet are contractors, independent contractors. So you justcan't hire one of them for a day or for a month and that's it. Then you canstart working.

And that's how we started to understand logistics. I think onthe, talking about the, do it yourself, both to third parties and connect them.And finally, that is something that we are looking forward to do is what ofthose things that you're doing? You are going to own it. Because it's betterfor your business, for example, are you going, if, when you have volume, areyou going to basically rent a world directly by yourself or it makes sense tostill work with third parties?

Or are you going to work with drivers? That basically today weare, for example, working with drivers that are working exclusively for us, andwe're starting to create a driver's lead that didn't exist. So that's somethingnew that we're doing also because we are. Because our growth has been so fast.

We are requested to have better and faster transportationdrivers that available for us. And we're competing in some markets against. Andfor example, for drivers, even if we are very small against them drivers alwaysgo to the place where they're paying the most. And these guys, big guys can paymore for them.

Yeah, I think the table would be with yourself third body andthen see what things make sense. If logistics is a core part of your businessin our case, its try to see which things you would do yourself. You've achieved

MPD: a ton of scalealready. We've talked about, right? And you're in three countries.

It's pretty awesome. What's success for you in this venture.

Jose Bonilla: To me.And I think too to the entire company, success to us is waking up every day andbeing able to fulfill our purpose. And back in 2018, we sat down with theinitial team, a with a, an exercise called through. And through these exercisewe define was what was our purpose person. It doesn't matter if you're incheaper or any other company.

What we're what we're pursuing that is bigger than justbuilding a huge business or a unicorn or things like that. And the, what wewrote down is that we wanted to eliminate paradigms from the base of thesociety. And IANS means. People that is thinking that opportunities or betteropportunities are not for them that they have to rely on whatever serviceexists for to solve the problems that they have on a database.

And I think to me, success, I feel successful every day becauseI wake up to build a company that is eliminated Paradi to a group of people.Fortunately, now the group of people that we are solving, these problems are agroup of thousands. And hopefully in the future will be millions. But that'swhat we pursue.

And that's what keep us here that, that this is a extraordinaryvehicle, cheap person, extraordinary vehicle to fulfill this purpose. Andthat's what made me feel successful.

MPD: I love that, Wetalk about this a lot, but entrepreneurs all wake up with different reasons forwhy they do what they do, but from a society level function, your job.

And my job is to go out and solve problems for folks. We may doit to make money. We may do it for the way of life for ourselves. We may do itbecause we're passionate about that problem. Doesn't matter. At the end of theday, we're all temporary, but the solutions you're building may not be how didyou end up as an entrepreneur?

There's. What you know, is that something that's always been inyour blood? I know you were doing a studio before this, is it? What was your

Jose Bonilla: path?Yeah when I was finalizing my studies in university, I studied by the end ofyour career, in, in Columbia, you have to do something called like theprofessional.

And you have to go to some company work for six months and theystay there or find another job and just for graduation at that moment I startlooking at some options, I remembered, I went once. To my own interview that Ihad in my life at a traditional company back in, and I sat down to do the taskthat was design.

Some kind

was like this UHS that dispense Coke. I to decide for themachine like 3d, I just sat down and I was in the middle of a lot, OFS like abig floor. I was like just doing the test and I just finished test. And I cansee myself like doing this every day. This is not for me. I felt in the wrongplace.

I just, when I finished the test that still the guide wasinterviewing me Hey man, here's the test. I really thank you. I don't wannaparticipate anymore in the process. Thank you so much for having me goodbyethen I left the, that company and I visited Simon that, that is a friend Simon.

The, of he's a friend from school and I. He showed me what hewas doing at that moment. He was already doing websites, just deciding websitesfor companies that were, that he was selling at that moment at . And I feltokay, this is great. I saw something that I wanted to do. It seems likesomething interesting website at the moment in Colombia and Latin America ingeneral.

Wasn't obviously what they are today. It was something new,very few companies on a website at that moment. So I just told them, Hey man, Ihave to do these practices. Why don't I do it here? And just start like workingwith you. I think that this is something great and probably would like todesigner so I can design and sell and build the projects and.

And that's how it started. And then since then that those, itwas like just two or three people at moment. And since then we've been likebuilding and of projects from there. So I consider myself like I was fortunateto start being an entrepreneur since the first day that I start workingformally for a company.

MPD: So if you hadn'thave bumped into Simon, Pretty lucky turn of events, someone to say, Hey, here'sthe path. Were there other community outposts in Columbia at the time, thatwere opening the door to entrepreneurship? Or was, is entrepreneurship not awell illuminated path there? What's the community like for entrepreneurs?

Jose Bonilla: It, I,it didn't exist an entrepreneurial community or like entrepreneurial businessesat that. Just for a number that moment, there were only like two companiesdoing technology, two relevant companies, building technology in for theColumbian industry. We were the third one and we were building technology forthe ones that couldn't pay for the big ones, basically the small companies.

So it didn't exist. So some projects, but. Not a community atall, not a network like it is today. And actually, I didn't know that I wasbeing an entrepreneur at the moment. I just started working as something that Ithought that was like makes sense that I would like to do it that, and that Ienjoyed.

And that's it like I wasn't thinking about, okay, now I'mentrepreneur because I'm like building my Amazon. Never thought about it. Thosewere words and concepts that came later on. And I think companies like thereare other companies also, like that were born in Columbia with all the otherservices are the ones that has build and develop hundreds of people that noware part of this ecosystem of entrepreneurs that are building.

A lot of different companies are being part of a lot ofdifferent C. And now you would see a huge ecosystem. Like I, today I see what'shappening and I remember those moments and it was like loneliness, theprehistoric times, 2007. Today we are like way better, far from what we were atthat moment.

And it's just has passed just 15 years. If this continues howit goes. I'm looking forward to see how it's going to look in the next 15years. Cause if we keep doing what we've been doing and all the otherentrepreneurs in Columbia, keep pushing the way that we're pushing. I think 15years from now could be seen as a tech hub with very important and relevantcompanies.

Really. Hopefully solving problem for people making thingscheaper or better, or providing services that people didn't have in the past.

MPD: I totallybelieve that too. I think it's on trend for that. How integrated isentrepreneurship and kind of the mainstream culture now, right? Is it somethingthat a lot of college students are talking about?

Are tech companies popping up in the media all the time downthere? What do you how much part of the collective, how central is it to thecollective consciousness of the local

Jose Bonilla:population? I will give you an example with an event that I participated acouple of years ago. I was invited to a university to check, to see all thelike graduation projects from a cohort of designers and mark.

Everyone was like their final project was a company, a newgovernment love that. And everyone, every company had to do something withtech. So it's not something that is just Fashionable or that people want to dobecause they see some, two or three examples that are being successful.Something that I think we are adopting as the new way of building businesses.

I think every business in now and in the future obviously hasto be a tech business in some way, even if you have a restaurant or a bakery oranything that you have will have to do with technology. And I think people isnow thinking or incorporating technology at the core, and then. Building theidea.

So that, that was something that just amazed me to see howeveryone was thinking about just not doing the project for traditionalcompanies or a bank or something, but proposing something new.

MPD: It sounds likethe general population is already on board. Has the government caught up? How.

How is the regulatory environment for startups? Is it a goodplace to do business in Columbia and which countries are hospitable? How doesit vary?

Jose Bonilla: Yeah, Ithink Columbia and knowing the conditions in Mexico and Brazil a, of is veryfavorable for entrepreneurship and built in a. There's not like some type ofregulation that is giving some type of advantage or something special forentrepreneurs, like for example on taxes or something like that.

But you can, in global, you have great talent. You have acountry that is in the middle of Brazil and Mexico. And like it's a place whereit is. It's not as developed as Brazil. But it's not as behind us, probablyother countries in the times like in the middle of all of them.

So it's a good place to test and experiment stuff. Columbia, Ithink it's not expensive country. So you can, the money that you can raise orthat you're going to invest in your business could be, you can have more fromit. So I think the conditions that Columbia has today are good conditions for acompany to to start.

We see a more aggressive environment, for example, in terms oftaxes in. We see a more aggressive environment, for example, in, in terms ofregulations for employees and the cost to have an employee Mexico. So I thinkColumbia is a place that is very favorable to for new companies.

To start, but nothing that I would remark that is special thatthe government has done for companies like us to start, like we have the sameobstacles that you would have in probably countries, other countries in LatinAmerica.

MPD: Are therecountries that you think are up and comers are great places for entrepreneursto be paying attention to?

Right now, it sounds like there's a little bit of a triumviratewith Columbia. Mexico Brazil. We hear those three countries, a lot on thestrategic roadmap for LA 10 startups, ums, Chile in the mix like what'sfloating around that you think is coming online and becoming increasinglyrelevant.

Jose Bonilla: Yeah.Yeah, for sure. Brazil, Mexico, Brazil being the largest markets obviously arethe place where you wanna be. But obviously also harder to win those markets.I've seen like Chile having a very interesting ecosystem, being developedArgentina, great entrepreneurs. Like you find great talent, but I thinkArgentina is a place where people think it twice because of I and like politicsthat is more I in stable than other countries in Latin America, but eh,companies and other companies that were born in in, in Argentina have left likelot of people that is great talent that we have with some Argentina for us.

So yeah, I would say that we are in the right markets, right?The other markets for our business are potentially going to be tackled in thefuture. But for now, like Brazil, Mexico are so big like 10 times Colombia, forexample, for Brazil that we have a lot of work to do. Are

MPD: you seeing apattern of where the founders come from? Are there patterns that they're comingfrom certain schools or certain geographies or certain companies where they'rethe birthplace of the current birthplace of innovators?

Jose Bonilla: Yes.Tech companies even if they're on the side of building software for othercompanies or.

Early companies like or early days in Mac and all the big guys,those are the places where I've seen more entrepreneurs like starting to starton. So that's why, like these type of companies are so input because companiesare cheaper and the others are similar to us. Eh, at the same moment, I'm surethat we are going to.

The ones that replicate what? The companies that we admiredlike the other big ones that we have in America. But in the past, we're veryfew. You have three or four companies were notable, eh, where talent, eh, thatknow how it, this works could start something. Now. Fortunately, we havehundreds of companies like like cheaper and thousands of companies probablysmaller, but also with great products and also great teams.

So I think this is going to be a multi time and the future. Howit has happened from the big ones to hundreds and then two thousands. Hopefullywe can get to hundreds of thousands of people that has gone through thesecompanies as vehicles where they have learned, why is entrepreneurship aboutwhat's the mindset that you need to be successful?

How is to build a company from scratch? How is to raise money,all the things that that you need to learn. And. Understand, and probablydominate to be able to start something and have a bigger chance to besuccessful is what is going to be for the transformative.

MPD: Yeah. And theother main ingredient outside of talent.

I agree with you. I think there's this virtuous cycle startups,Bagge more startups I'm sure. In your company you're trading the nextgeneration of entrepreneurs, whether you know it or