In an interview with the Latin American Venture Capital Association (LAVCA), Endeavor Entrepreneur Daniel Rosas, founder of TES America, discusses effectiveness and efficiency, challenges to starting a business in Colombia, and virtuous cycles. Founded in Bógota in 1999, TES America is the leading service provider for telecommunications in Colombia. The company designs, optimizes, and monitors wireless communications networks to provide industry-specific solutions and is branching out to other industries such as healthcare. Find the full interview here.
LAVCA: Please give us some background on TES America.
Rosas: At its core, TES America is a group of electronic and computer science engineers who create customized, industry-specific solutions and systems. Our strengths have developed by designing, optimizing, and monitoring telecommunication networks.
Today we extend our expertise to other sectors most notably Oil & Gas, Mining, Health and the Public Sector. We work with clients such as Tigo, Telefonica, Alcatel and Nokia-Semens (telecom), Petrobras and Ecopetrol (energy), Carbocol (mining) and various public entities.
We have created a “Telemedicine” division, which we are establishing as a separate business from TES America. Telemedince will allow patient diagnoses content and data to be shared through Telecommunications and human/machine software interfaces – a revolutionary tool that allows hospitals in rural areas to increase their effectiveness on patient care. Telemedicine represents a clear example of how our expertise would revolutionize the efficiency and effectiveness of operations in a new sector.
LAVCA: How did you come up with the business idea?
Rosas: The idea came after the privatization of Colombia’s telecommunications’ sector. Our business is more than just providing services and products; it is about nurturing and developing the human capital of Colombia while contributing towards the efficiency and effectiveness of strategic industries which are critical to Colombia’s growth, and that of Latin America in the international arena. Our vision is social impact and high quality job creation in a constantly evolving sector.
LAVCA: Who is your competition and what do you see as TES America’s competitive advantages?
Rosas: From a corporate perspective, we are not aware of any competitors that offer the breadth and depth of products and services. Our competitive advantage derives from four key areas:
1. R&D: TES America invests in Colombia’s most talented and trained engineers by financing the research and thesis work of young engineers throughout universities in Colombia. We also invest 20% of revenues into our own R&D staff through the training and hiring of talented engineers.
2. Neutrality: Unlike the majority of competitors, we are not tied to any OEM and therefore offer impartial and objective services regarding technology.
3. Technology expertise: TES America has developed leading expertise in telecom technology, hardware integration and software development.
4. Customization: TES America is unique in that its solutions are customizable to the specific needs given a client’s industry and area of expertise.
Our most pressing strategic challenge right now is reinforcing our organizational structure to extend our expertise to foreign markets.
LAVCA: You are currently preparing the company to fundraise in the second quarter 2011. What types of investors do you plan to approach? How much capital are you seeking?
Rosas: We are seeking USD $2M for TES America and USD $500K for Telemedicine. We hope to partner with “smart capital” investors with a long-term view that can provide financing but also a network to help facilitate new market entry. We are not looking for pure equity investors seeking attractive returns in a short time frame.
We are open to both international and domestic source of capital and plan to target these investors via our own industry and personal contacts, but also with the help of Endeavor Colombia to broaden our network.
LAVCA: How do you plan to put your next round of financing to use?
Rosas: This will depend. If we find a suitable investor for the Telemedince division, we would extend to new markets. We have analyzed the drivers of adoption for rural intra-hospital consulting (rural populations, density of physicians and per-capita healthcare expenditure) and found that the best initial targets for this practice are Colombia, Argentina, Peru and Chile. Second-tier markets would include the US and additional Latin American markets.
LAVCA: Where do you see your company five years from now?
Rosas: We strive to be a leading technology and engineering services group with integrated operations in Latin America, the USA and Asia.
LAVCA: In your opinion, what remains as one of the biggest challenges for entrepreneurs in Colombia?
Rosas: I would point to four main areas: access to financial capital (especially for service and software providers), access to human capital with knowledge and experience in international markets, a taxing regulatory environment and a lack of government incentives for SMEs.
LAVCA: What advice would you give to aspiring entrepreneurs in Colombia?
Rosas: First of all, develop knowledge in technology-related disciplines. We believe technology is the seed that generates a virtuous cycle of innovation, education, development and economic growth. Leverage these technology skills to focus on sectors specifically focused on communications and networking.
Secondly, while Tes America is neutral on background, we urge entrepreneurs to develop skills through a background that stems from a quality education, international experience, language abilities and leadership potential.