Business Management

Samba Tech CEO Sees a Beautiful Horizon

Gustavo Caetano is CEO and founder of Samba Tech, an online video platform based in the Belo Horizonte, or ‘Beautiful Horizon’ if you want the English translation, a name which surely makes it a fitting place for a burgeoning startup community. Samba Tech is one of the area’s success stories with offices now in São Paulo, Buenos Aires and Miami selling across Latin America.

Caetano is, unsurprisingly, a massive advocate for the region. As well as his work with Samba Tech, he is president of entrepreneurial support organisation ABStartups and mentors a number of fast growing local businesses including the Telefonica-owned startup accelerator Wayra. With the 2014 FIFA World Cup on his doorstep and the Olympics just two years away, Caetano and Samba Tech have surely reached a tipping point. Can the company use this moment to boost its global presence and put the business and Belo Horizonte firmly on the global startup map?


Q. How is the San Pedro district startup scene developing?

GC: Many different people, organisations and agencies have been working steadily to develop our local startup ecosystem. Recently, we’ve seen the Government of Minas Gerais [of which Belo Horizonte is the state capital] get involved with a program called SEED acceleration, inspired by the successful model of Startup Chile. The aim is to turn the state into Latin America’s leading tech hub by fostering its entrepreneurial culture while supporting new and innovative tech ventures. In addition, other agents such as universities are seeking rapprochement and joint work with startups.

Q. What are the most interesting innovations coming out of San Pedro at the moment?

GC: Startups such as retail discount portal Méliuz, content marketing company RockContent, education and distance learning site Beved and events engine Sympla, among others, are doing a great job.

Q. Is it easier to start up a company today? What were the challenges of starting a business in 2004 compared to now? Investment? Technology? Skills?

GC: A lot has changed, fortunately. When I started, people didn’t know about startups, funding and exits. It was difficult to convince even my Dad that I would start my own company. I’ve been waving the tech entrepreneurship flag ever since. From what I see going on around me now, it was definitely worth it.

The startup scene in Brazil is hot now mainly because Brazilians have changed their mentality. They have started thinking about entrepreneurship. We are used to a "get-a-job” culture because our parents did it and our grandparents did it too. Today it’s the opposite: we see universities backing entrepreneurship and graduates leaving the class with ideas on how to create their own businesses.


Q. Is this optimism grounded in economic confidence? There is more money around and more investment, therefore individuals are more prepared to take risks?

GC:  At this moment in time Brazil is great. We have one of the strongest economies in the world, one of the hottest tech spots and because of the World Cup and Olympics the planet is watching us. All of this creates a scenario that fosters and encourages the creation of new businesses and, of course, draws the attention of foreign investors who come here to see what’s going on.

With more investors in the country, the more startups we have and the more the media takes an interest. This helps spread the startup and entrepreneurship culture all over the country.


Q. Where did the idea for your business come from?

GC: My story begins back in 2004 when I was studying marketing and worked as an intern at a big health insurance provider in Brazil — I wasn’t enjoying the experience. I didn’t like the internal bureaucratic process and how slowly things moved. My dream was always to create a company where I could make something innovative and at the same time have fun.

I bought a top-of-the-line mobile phone, which at the time had an 18-colour-screen and while waiting for a delayed flight, I tried to download a game and… couldn’t. I recognised an opportunity. After doing some research I travelled to London, where I had a meeting with a games production company. They loved what they heard and I came back to Brazil with a deal.


Q. How did you finance the startup costs and did it take long to get going?

GC: I called my father and asked him if he could introduce me him to somebody rich and, believe it or not, Samba Tech started exactly like this! Through a US$100,000 investment, thanks to my father’s contact I could start my company as a mobile games reseller. Given it was a new market, there wasn’t any competition and I quickly began selling games in over 40 channels, sealed deals with the largest brands in the gaming market and opened offices in Argentina and Chile.


Q. When and why did you switch to online video?

GC: At the end of 2007 Samba Tech developed an online video platform, which focused on professional video hosting, management, distribution, and monetisation — that is our core business currently. We could see mobile devices becoming just another device to receive content so we decided to refocus on better ways to deliver that content and not resell mobile games, so the company shut down the mobile operation.


Q.  How has the MIT Sloan deal helped you?

GC: It started in 2007 when I was waiting for the Boston airport re-opening after a thunderstorm. I got talking to someone who turned out to be a director at MIT and he suggested that I put Samba Tech forward for the G-Lab [Global Entrepreneurship] program from Sloan, MIT’s business school. We did and we were one of the 40 startups chosen in the world to be part of the consulting program.

Every year we get MBA students to help us build the future of Samba Tech, bringing new ideas and capabilities. We are a veteran of the program now — it’s been seven years in a row — and it’s been amazing so far. We are sanctioned by one of the most important tech institutions in the world.


Q: Everything seems to have fallen into place nicely but have you made mistakes along the way and have you learned from them?

GC: Not really mistakes but we have faced some tough decisions and challenges. Killing the mobile operation and changing the company focus was one of the most difficult decisions of my entrepreneurial life, but it worked. Perseverance is needed too. Positioning a cutting-edge technology in an immature market was also a challenge. Everything was very new, even for us, but we bet on the video trend and started evangelising the market. We created the concept of digital logistics: a solution that operates end to end, taking care of video from the moment it is recorded until it is delivered to any device connected to the internet.

One of the biggest lessons is to keep innovating. We’ve built a really strong base and opened up the APIs so there is an option for developers to develop specific features for specific needs. Apps are developed and can be activated on our online video platform’s interface in order to make the process of video management customisable.


Q. So you must see streaming as the future for video and TV then?

GC: Sure, habits have changed. People increasingly want to watch content how and when they want and not to be driven by TV scheduling. Now, traditional TV is facing indirect competitors such as Netflix, Hulu and YouTube. Online video consumption is breaking records year after year and studies show that in a few years 90% of internet traffic will be online video. The main challenges for the publishers will be to produce the right content and deliver it well.


Q. What about monetisation? Does anyone make money from internet video?

GC: Monetising video can be made through a mix of subscriptions, ads and syndication deals. Take a look at this presentation made by Rodrigo Paolucci, co-founder at Samba Tech and CEO at Samba Ads, during the SXSW, that explains this concept better than me.


Q. Is the World Cup helping?

GC: Sure. We are hosting the biggest event in the world and people all around the globe are watching more and more content live and on the internet. We were approved by FIFA to broadcast the World Cup on the internet. We’ve already reached hundreds thousands of users since it started and we plan to do the same for the Olympics in two years.


Q. What’s next?

GC: Keep growing! When I created Samba Tech my mantra was “Do something revolutionary but have fun!” It’s been guiding me for all of these years. With this in mind, Samba Tech is seeking more acquisitions to give us a faster time-to-market. We also want to bet on the education market, particularly distance learning and online training as it goes through online videos. So, we will keep investing in solutions that add value to the message, content, course and training delivered on the internet.

Q. Can Belo Horizonte compete to become Brazil’s startup capital? Could it ever compete on a global basis with the likes of Israel?

GC: Yes. It’s already been competing and it will soon have more success stories to show that will put the San Pedro Valley in particular on the map as an important startup centre. Certainly, we think Belo Horizonte has become a startup reference point for Latin America. I think it is then possible to become a world reference too, just like Tel Aviv. Why not?



Marc Ambasna-Jones is a freelance writer and communications consultant that has written about technology trends and issues for over 24 years for national newspapers, consumer and business magazines. He can be found on Twitter @mambjo.


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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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