Just to make sure, Motorola commissioned a McKinsey team to dig into Brightstar's operation and see if it was really worth the cost. Motorola won't officially release the results of that study, calling it proprietary information, but Motorola's then VP of Latin American services gives a tantalizing hint at the contents. "You can draw your conclusions from this--after the study, Motorola not only renewed Brightstar's contract but also improved the terms and expanded the reach," says Rafael de Guzman, now CEO of the Latin American branch of the Foote, Cone & Belding ad agency.
"Marcelo seized the market, because the crisis forced the manufacturers to fall back on their area of excellence," De Guzman explains. Nokia, Samsung, Motorola--they were all furiously trying to figure out how to stick a digital camera inside a cell phone and how big the keypads should be. "This was a crash-and-burn situation for the entire industry, so do you think Motorola really cared about [cell phone] stock levels in Honduras? It had a million other things to worry about. If a company comes along that can handle supply, letting them take a cut is a small price to pay."
Two hours, 20 minutes...
Outside the conference room, Marcelo tells a more down-and-dirty version of the story that the VC guys are hearing inside.
"CellStar, Brightpoint, they really sucked," he begins. "When we were first getting started, they were these two huge companies, completely unreachable, untouchable. But when I started buying phones from them, I saw they were so disorganized. We made a fortune buying from CellStar Miami [which supplied Latin America] and selling to CellStar Dallas [which supplied the U.S.]. CellStar Dallas would call and say, 'Do you have any Motorola Startac 2000s?' I'd say, 'Hold on,' then call CellStar Miami, make the order, and tell Dallas I'd send them right over."
He shakes his head. "God, I wonder what they're going to think when they find out what we were doing to them?" he says. "They were really bad. The director of operations [for CellStar] had a conference room bigger than my entire office building. Why does he need that?"
"My biggest fear is that someday, someone will do to me what I did to CellStar. I don't think it will happen--I came up too hard, and it's made me as good a street fighter as you'll find."
Marcelo grew up in Bolivia, the poorest country in one of the world's poorest regions. Luckily, his grandfather earned enough as an accountant for a supermarket chain to send Marcelo's father to study in the U.S., where he became a geologist. After Marcelo and his brother and sister were born, the family moved every few years across the Americas and North Africa, following their father's United Nations Development jobs. At each port of call, Marcelo's parents scrounged to make sure they could enroll him in an elite American school. "I always complained that my friends always had a lot more money than we did," Marcelo recalls. "My dad said, 'The only thing I can give you is good education, so I spend everything on that." (It's an investment that paid off for Marcelo's dad: Today Marcelo employs both his father and his sister at Brightstar.)
As he bounced from school to school, the perpetual new kid developed into a serious goof-off. "I was a horrible high school student, always getting kicked out," Marcelo admits. Still, his mother, Marta Claure, insists she knew he'd do well; Marcelo had been a profit-wise hustler since kindergarten. "As a six-year-old, he was selling canicas [marbles] in the schoolyard by the case," says Marta Claure, "and whenever I went to the market, he'd be outside selling cans of condensed milk from a crate."
By the time he arrived at Bentley College, Marcelo had steadied enough to do well but still had nothing to pursue after graduation. He found the answer over a couple of Scotches. "I was flying home to visit my family, and I met this guy on the plane who was about to take over the Bolivian national soccer team," Marcelo recalls. "Maybe because we were having a few drinks, he offered me a job as his right-hand man."
Guido Loayza, Marcelo's new boss, was a dreamer and fierce innovator. He was determined to get tiny Bolivia, which had finished at the bottom of the Latin league standings for decades, into its first World Cup.
Within a year, Guido would get his wish, and Marcelo would get the lesson of a lifetime in leadership, strategic planning, radical institutional restructuring, and basic motivation. Everything Marcelo learned during that march to the World Cup he would later deploy with Brightstar. They relocated the team to Spain to reboot its thinking from a culture of losers to a culture of winners. The players had been promised lots of money in the past and stiffed, so the new management offered less money but always paid on time. Finally, they scheduled as many games as possible against the toughest teams in the world, so the Bolivian players could learn by seeing the best in action.
It worked. In the qualifying rounds, Bolivia ignited national hysteria when it shut out international powerhouse Brazil, 2-0, then defeated Venezuela 7-0. In its World Cup debut, Bolivia nearly pulled off the upset of the year but ended up losing to Germany, 1-0. Back home, Guido and Marcelo were heroes. Guido went on to become a senator, then chairman of the Bolivian FCC.
The first appliance a consumer buys is a phone.
Marcelo could have followed him into government but felt it was time to strike out on his own. He went back to Boston; needing cash, he answered an ad in the Boston Herald and sold his frequent-flier miles for $2,000. A week later, he had to fly back to Bolivia, so he called the number and tried to buy some back. The same miles, he was told, were now worth $8,000.
A 400% markup in seven days! That was the business for him, and it yielded two more crucial lessons.
