Guess who just sold the world's toughest, wealthiest sell?
10 minutes...
The killer question comes just as the VC trio is glancing at their watches and pulling together their notes. VC 1 fires it: "Aren't you guys setting yourselves up to fail if you extend outside your comfort zone? Why do you think you can do the same thing in Asia and Europe?"
Because in the end, what they'll be financing will be Marcelo Claure's bid to rule the world--as far as cell phone distribution is concerned, at least. They like the fact that Marcelo has never expanded so fast that he couldn't return 2% to his bottom line every single year--even during the worst crisis the telecom industry has seen--but at the same time, they know that businesses that run on as low margins as Brightstar does can be an all-or-nothing proposition.
"It only takes a few things to go wrong for it to be in serious trouble," says one Latin American specialist who is familiar with the intricacies of Brightstar's finances. "On the other hand, if a few things go right, it makes many millions of dollars without its costs going up."
With only minutes left before the VCs must leave for the airport, Marcelo doesn't hurry as he tells them how he'll gamble their $50 million. He'd set out to become the biggest in Latin America by 2013, and he came in a decade under deadline. The key to his success wasn't from any special knowledge of the region--true, he speaks Spanish, but what did he know about Patagonia? It came from hiring the best people on the ground and teaching them his method. He'll simply do the same in every new country Brightstar targets.
Already, he's in the crowded U.S. market. Brightstar has made fast strides by targeting the lower-income demographic everyone else has ignored.
"We do what they don't want to do," Marcelo says. "Motorola doesn't want to sell to gas stations, convenience stores--it wants to sell millions to Verizon. There's a gigantic market out there in prepaid cell phone chips that no one has touched."
Those same markets exist in abundance in Eastern Europe, Africa, and Southeast Asia--all those cut-off corners of the world where there are more phone customers than there are phone lines.
One minute...
Oscar has to remind the VC guys that it's time for them to go. "With construction traffic around the airport, you never know...," he's warning. But VC 1 is lingering. He's been asking the thorniest questions all day, and now it seems there's one more thing on his mind. Marcelo is saying goodbye rather absent-mindedly; he'd gotten a message about a problem in Mexico, and he's eager to get on the phone upstairs and start kicking the appropriate asses. He knows that anything he could have down here has been done; any more selling at this point, he guesses, will be a mistake.
He discovers he's right when VC 1 takes him by the arm. "Whatever we decide, I have to tell you," VC 1 says, pumping Marcelo's hand in a gesture more of congratulations then departure, "you've created one hell of a company."
Epilogue:
Several weeks later, Marcelo and his girlfriend are clinking martini glasses in Manhattan. Marcelo is just back from a trip to Seattle, and guess what? Guess who just sold the toughest, wealthiest sell in the world? That's right, Marcelo announces triumphantly to anyone within earshot--he just convinced Bill Gates to privately invest $60 million for 15% of the company, which would give Brightstar a whopping $400 million valuation. If a genius like Gates believes in Brightstar, who else would dare to doubt it?
Actually, as it turns out, Marcelo is stretching a bit. It becomes clear two weeks later that while Gates is involved in the deal, he is a partner in a $61.75 million investment by four funds, including Grandview Capital Management, which Gates personally controls, Falcon Investment Advisors, Prudential Capital Group, and the Ramius Capital Group. In its official announcement on January 14, 2004, Brightstar is mum on valuation (and doesn't even mention Gates, only his investment company), but insiders say Marcelo's $400 million appraisal is also somewhat overblown.
So, Marcelo's days of winning over doubters aren't over. His new millions will allow him to punch into Asia and Europe, but before ruling the world, he still needs to wallop Wall Street.
This coming summer, Marcelo plans to take Brightstar public, launching Brightstar's first stock offering in a market that's terrified of telecom companies. Stock traders still have "Worldcom" and "Enron" ringing in their ears, and Marcelo wants them to trust him. But that's okay; he's not worried. They haven't heard what he has to say yet.
Sidebar: Globe-trotting
Marcelo Claure began by leveraging his knowledge of select Latin American markets. But as his expertise as a value-added distributor grew, Brightstar spread to the rest of the hemisphere. Up next: an aggressive plan to enter Asia and Europe.
