Friday, April 16, 2010

Computod@s closes the books on Q1

I apologize for the leave of absence from SocialCapitalista this being my first post since the New Year. In my excuse, the business has taken off since returning from Christmas leaving me with a schedule eclipsing the standard 9-5 job, and a mind that has been fried deeper then Kentucky Fried Chicken rendering it incapable to entertain and update each of you as frequently as I would like. However, as we have just closed the books on the First Quarter of Computod@s, I felt that I would be able to summon the creative juices to provide you with a quick overview of the past three months.

Being home over Christmas was a restful, delicious, and much needed trip. It was kind of like a vacation back to childhood; Mom preparing whatever I put my finger on in the pantry, friends coming over to play video games, watch television, and even a few trips to the local casino. I chose the word carefully when I said “vacation” to my childhood. When I was a teenager a vacation meant traveling to Hawaii, playing golf in Palm Springs, or Disneyland of course! But now that I have really been able to settle into the “realistic” lifestyle that roughly 70% of people in this world live, the only vacation I need is: the choice of what food I eat at night, every electronic device at my fingertips, the safety to walk to my friends house.

From that feeling of not being able to walk safely throughout San Salvador, my business partner Sam and I knew that it was time to find an alternative means of transportation. Sam’s parents were so generous to donate a van that they had idled in their garage. Just after New Years, the Computod@s team migrated from the Pacific Northwest through Mexico, Guatemala, and finally reaching El Salvador one week later. You may be able to gain perspective on the safety here in San Salvador as I tell you that we felt it to be a good decision to drive a minivan (with 100k miles) thousands of miles crossing through cities like Juarez, and the capitals of Mexico and Guatemala just so we will not have to take the bus to work here in San Salvador. My good buddy Josh To (Founder of non-profit BRUTE Labs a key supporter of Computod@s) and his brother Justin To met us in El Paso, TX to tag along on this wild journey. We were happy to have them along for the trip, however, it was understood that this was not a trip for tourism, but rather strictly business as Sam and I needed to return for our much awaited shipment of 200 computers arriving any week. (Pic of the crew after arriving in El Salvador)

After arriving in El Salvador, Josh and Justin shadowed Sam and I for the next week providing key feedback and strong creative ideas for the presentation of our computers. We knew that we were going to be providing people with what would be their first computer and we wanted the experience and quality to match the feeling. With that, Josh has jumped on board as our creative director helping us to revamp our logo and branding giving Computod@s the marketing strength to take refurbished Dell and HP computers and turn them into Brand New Computod@s computers.

Josh has also helped with our box designs (see pic below), which we are very proud of as something to not only protect the box, but also to help market Computod@s, considering that trash in El Salvador doesn’t end up in the waste like in the U.S., it gets reused somewhere, hence…great marketing! For example, the bedside table in my room is an box. Justin was able to make us small vinyl stickers (see pic below) of our logo to go on the lower corner of the computer next to the Microsoft Windows and Pentium Intel stickers. (Pic of Justin's vinyl sticker of the Computod@s logo created by Josh)

In general, marketing in El Salvador takes a new name from what I studied in business school. Comparably, I see marketing and advertising in the United States being subtle, respectful, or even subliminal, but El Salvador is more “in-your-face,” “buy this product now” type advertising. Through the city you will find that a billboard will be waiting at every turn. Being a major form of advertisement, the rate at which new billboards are hoisted within the city makes me feel like I am in a Swing State just one month before a Presidential election. (Pic of a client holding her new computer in our stylish boxes designed by Josh)

As marketing is important, I have found that the “word-of-mouth” to be a self-fulfilling, everlasting engine that has taught us that if you are selling a quality product that people want and need, it will sell itself. In another marketing comparison that I have been able to deduce; the U.S. is what I call “first and only,” while El Salvador is “first and viral”. It is really looking into what makes you popular amongst your friends. To break it down, “first and only” comes from the idea that Americans like to be the first and only person to own a new product. Its value comes in the fact that it is rare. You want to tell your friend about your new watch, pair of shoes, or Tesla automobile, or iWhatever, but if your friend went out and bought it, you wouldn’t be as “cool.” In El Salvador I have found it to be the contrary in that buying the product first while being able to share the great deal or product with your friends is something that makes Salvadoran consumers unique and of course, “cool.” Not to say that all Salvadorans are wearing the same watches and shoes, but that the word of mouth can have an unexpected affect on your inventory and forecasts.

That lesson on Salvadoran Marketing was necessary to offer a perspective and reason as to why at Computod@s we are in a difficult situation today. Difficult, however, does not always mean bad. After arriving in our warehouse at the beginning of March, we were able to sell all 200 computers in the entire month of April, half due to word of mouth, and half due to contacts. Our network and contacts is to what we owe most of our early success. It might send the auditors for a whirl, but our contacts deserve a line on our balance sheet under Assets. They offer key qualitative support, which has directly translated into strong quantitative results. Knowing people means the difference between success and failure in El Salvador. I know that it goes a long way in the U.S., too, but it is a whole new ballgame here. Each meeting we have will lead us to 10 new organizations or figureheads. Earning a spot inside this informal network has lead to our speedy success, and to this difficult situation I mentioned. A situation of selling these 200 so fast that “word-of-mouth” is drowning our inventory! As I said, difficult is not always bad. Last week we ordered our second shipment of 200 computers from Interconnection USA, which will arrive at the beginning of next month. The only change in this order was that we told Interconnection to start preparing the third shipment because after adding a “word-of-mouth” multiplier in our forecasts, we will need a strong, consistent level of inventory. (Pic of the South end of our warehouse. We test every computer before packaging to make sure that is leaves our warehouse in great coniditon)

We are beginning to truly define our market and understand our customers. We are a few shipments away from reaching sustainability and we already see this business having a long lasting future impact. I can’t even imagine what kind of volume we will see when we decide to move beyond “word-of-mouth” marketing. A customer walked in our warehouse today asking to purchase a computer. When I told him the price he practically jumped out of his shoes. He said that he knows many of his friends that would love to purchase one, too. I was devastated to walk him into our warehouse showing him that we are currently out of stock. He asked if we would be here permanently. With the way we sold our first shipment and his reaction after learning of our never before seen price for quality computers, a reaction that I see everyday…I told him that I don’t think Computod@s will be going anywhere soon.

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