In collaboration with Endeavor Global and Stanford University, the World Economic Forum recently released a new report, “Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies.” Click here to learn more.
The report, which demonstrates the importance of High-Impact Entrepreneurship in driving economies forward, includes interviews and insights from eight Endeavor Entrepreneur companies: DocSolutions, Globant, MercadoLibre, Petfor, Pharmacy 1, Refinancia, Technisys, and Yola.
In this special series on Endeavor’s blog, we are reprinting the published interviews with each Endeavor firm. Below is the section on DocSolutions.
DocSolutions specializes in the design and operation of customized solutions for document management and information processing. Founded in 2001 by brothers Guillermo and Gabriel Oropeza Ibáñez, their father, Gabriel Oropeza Griffith, and their sister, Estela, the company is family held with 100% Mexican capital. Currently, DocSolutions operates seven document centres covering over 10,000 square metres (107,000 square feet), located in two industrial parks in the northern area of Mexico City (Cuautitlán). The company employs over 300 full-time workers, and the yearly average for project-based personnel is typically between 500 and 1,000 employees. The company has evolved its strategy over time to become a more forward-looking information management company. It aims to cover the whole document life cycle, including the front end of the document production process as well as the back end storage of physical and digital documents. In 2008, DocSolutions was announced as an Endeavor company.
What was the source of the initial idea, and how did that idea evolve into a viable high-growth business venture? How did it change over time?
Guillermo Oropeza: “All we knew from the start was that we wanted to build a business, but we didn’t know what type, so we defined a set of principles and criteria around which our business would be based. We wanted a business-to-business model with the biggest market possible, with the ability to penetrate into many different companies and industries, while adding value to our clients. We wanted something that was not capital-intensive – a business that would finance itself upon gaining some momentum. And we wanted to make it big. Luckily, someone knocked on our door offering us record storage services, and we said, ‘This could work with our requirements’. So we did a study of the market and founded the company in 2001. However, the business model we had chosen came up short. While it required low investment levels allowing us to step in, these low barriers of entry quickly allowed others to do the same, so it gradually started to fill up with competitors. We realized our business then could be described and understood as a real estate business, in which companies rented storage space for their documents. Market opportunities and pressure at the same time allowed us to change our paradigm. We began to understand that those boxes we were storing at our facilities had information and that this information once had a lot of value sometime upstream. With this subtle emphasis shift, we began to realize that there was a lot of value to be delivered and captured by managing information at the earliest stages, rather than stepping in late only to store old documents. We understood the value of information at its earliest stages, and developed a complete set of services to manage it all throughout its life cycle. So we changed from a real-estate company to a technology company in which we connect directly with the information flows and the processes supported by documents, offering a far more efficient, integrated and sophisticated service than our competitors.”
What was the initial growth vision or aspiration of the founding team? Was there a sizeable change in this growth vision or aspiration over time? If a change, please describe.
Guillermo Oropeza: “We knew from the outset that we wanted to create a scalable business that we could make big and continue to grow. But we didn’t even think as a joke that nine years later we would have the goals that we have today. Our goals are now highly ambitious and would have seemed completely unattainable when we were starting up. We now see our goals as high, but reachable. We have grown 100 times from year two to year nine, and our goal is to grow 10 times more in the next five years. When we look back, we now have the satisfaction and confidence that things can be done. We’ve taken the bar very high, and we need to keep up with our self-created aspirations, but we know we should not be frustrated and that we should have the patience to get there – it’s important to think towards the future and not forget that entrepreneurs are long-distance runners more than sprinters. We are endurance athletes and, consequently, our goals are long-term.”
Describe the strategy or business model that enabled your company to achieve its high rate of growth.
Guillermo Oropeza: “Staying true to our initial vision around document management, we began complementing our services and participating in different but related industries – first in storage of hard copy of documents, then we began moving backward to document-based business process outsourcing, then one more step backward to develop the technology for Enterprise Content Management (ECM). That integration of operating and technological capacity put us in a ‘sweet spot’ that made a lot of sense to clients. The integration of these three industries, both on the physical and digital planes, really integrates a business’ entire model. But that’s only the theoretical element. The practical element is our proven capacity for execution. This capability has provided us with great references and increased our contracts exponentially through reputation. We began to gain prestige based upon our execution. Having a great idea is essential to any good business, but it means nothing without being able to efficiently put your idea into practice. Execution assures a business’ future. This is the combination that has given us our success, our high growth rate. “If the business grows, everyone that forms part of the business grows with it. To get the best results you have to get your sleeves dirty, get down in the trenches. This is fundamental because you can’t have a winning team if it doesn’t feel like it is part of something bigger. You must make your collaborators think like you, maximize risks, reduce costs, deliver on time, exceed the client’s expectations and generate long-term relationships. This type of execution allowed us to win our first big contract and take the business, in our second year of operations, from 20 to 500 employees in one month.”
What were the major growth accelerators for your company in its high-growth years?
Guillermo Oropeza: “What has given us our accelerated growth has been successfully and repeatedly implementing our business model. That is, we have hit home runs over and over again, while we have built enduring and long-lasting relationships with our clients. The experience and reputation that this has given us, directed intelligently towards each subsequent project, is a great takeoff point for our next big step. The sum of these steps is what gives you accelerated growth. The key has been not to hit a home run and then be happy with it. If we stay in our comfort zone then the motivation to grow is lost, and growth is the principal objective of the company. That allows us to create a company with ever higher standards and capacities. Each year, we have at least one big project, and a huge reason as to why we are continually able to hit home runs is due to the credentials that the previous home runs have given us. More credentials lead to more projects, which lead to more credentials. It’s a virtuous cycle.”
Briefly describe the financing of your company and how this financing impacted the growth of your company.
Guillermo Oropeza: “We began with a relatively low investment. When we identified the type of business we wanted to have, we drew up a business plan, which laid out the required initial investment and what kind of costs we would confront over X period of time. So we knew, more or less, what was needed to start up. Our father handed us a living inheritance so that we would have a boost to begin our lives, telling us, ‘Here is your inheritance, do with it what you will’. We decided to join forces and used it as the seed capital for our business and that’s what gave life to DocSolutions. In the beginning, the business was financed with this money, and since it was not a capital-intensive business, it quickly began to finance itself with the income. Today, the company is totally solvent, profitable and debt-free. We are in a fairly enviable financial position at the moment.”
What were the major challenges your company had to handle in its high-growth years, and how were they managed?
Guillermo Oropeza: “At the beginning there were some moments where it seemed like it would take forever to reach the break-even point. There was a lot of anguish initially with our family having to put in more and more money, but we knew we would come out on top. You have to be an optimist and try to believe that the business will succeed, although that can be the most difficult part. Among the most difficult challenges was to land the first big project, but more importantly was actually executing. That was a mega challenge. I think that maintaining a steady rhythm of growth has been, in itself, our greatest challenge. That has translated into many sub-challenges: to go from losses to profits, to get through that negative period. Then, to continue betting on the company with process-oriented people, new technologies and new process continues to make the company more efficient and increases its growth capacity. Investing your resources drains you, but it’s a bet for the future. It’s also quite difficult to attract good people to come on board and then inspire and incentivize them to stay on board. Since you’re betting on a project that is just being born, those people must also bet on the future of the company as much as you. Because the projects are won by people, they must be motivated to look beyond the obstacles, which are innumerable. “Now that we have a more significant size and have gone international, we have new kinds of challenges: communication, cultural issues, wanting to be there face-to-face with a client but not being able to, and having to trust and delegate to your people. We also need to be more alert about what is going on in the world and continuously improving and polishing our business model. That is, we must maintain a certain degree of constant anxiety and unconformity about the way the business is going in order to stay motivated to innovate and grow the company. This is the engine that allows us to move the organization forward and make it better at every level.”
Give examples of dark moments or negative periods that you company or you faced as part of your journey as an executive with this company.
Guillermo Oropeza: “Losing a project that you’ve worked hard for really hurts. It is tough to put forth all your efforts and resources and know you are among the finalists and then not win a project despite displaying your best practices and principles. But after accepting the loss, we must look up, and keep on going.”
What are the key lessons about entrepreneurship and successful growth strategies you’ve taken from your company experience?
Guillermo Oropeza: “These are the key takeaways for me:
• Diversify the client base; don’t service only one industry or sector of the economy. Always have many fronts.
• Don’t be afraid to take the first step and become an entrepreneur. And by this I mean the continual process of entrepreneurship, to create a new project or expand to a new region. Be cautious, of course, but you must be ever more daring than shy. Trust your feelings, and even without having performed all the analytical work, bring the right people around you and you’ll have a winning strategy.
• Bring together a team of people that share your vision, and have an attitude of winners. Especially those that are at the top, responsible for the operations and development of the business.
• Understand your business from the outside. Extracting yourself from the day-to-day and looking at it from the outside in can be extremely difficult, but ultimately a game changer.
• Look towards the whole industry to be aware of what’s going on and constantly compare your business to find new areas of opportunities.
• Develop key strategic alliances with partners that naturally complement you. Treat your partners fair.
• The last would be to look at every corner for the possibility to innovate, and never pass up a business opportunity, regardless of how challenging you might think it will be.”