Andrés Benavides, Cometa | Digitising SMBs, Selling Aspirin vs Vitamins, and B2B Sales Secrets

The audio and video are in Spanish. These notes are a translation.

More than 70% of schools in Mexico are run on Excel, but schools are companies with specific challenges for which Excel is not the best solution.

Curiously, at the same time, it is often said that selling technology to schools is a headache.

But my guest today has found that it is not so.

Today, I spoke with Andrés Benavides, CEO and cofounder of Cometa, a platform that allows schools to centralize their administrative tasks, manage their collections, and offer parents a simple payment experience. And in just two years it has reached more than 150 schools in Mexico that, by using Cometa, save more than 100 hours a month on administrative tasks and can reduce the average delinquency of their portfolio by up to 50%.

Cometa has raised capital from investment funds like Kaszek Ventures and Reach Capital.

Today Andrés and I talk:

About the challenges of tropicalizing a business model and having to pivot
About his learnings from creating software specialized in an industry
And about his B2B sales secrets, including how to develop close relationships with your customers and turn them into your best promoters

Cometa is a great example of how you can digitize small businesses in Latin America at scale by solving their most painful problems. I hope you enjoy this conversation with Andrés Benavides of Cometa.

Youtube Timestamps*

[03:47] - Creating a Copycat

How did Andrés arrive at the fascinating world of startups?

His first company, Codeable, was billing close to 1 million dollars when Andrés goes to the MBA with the idea of starting a company in education.

With all the experience he had accumulated in the online education industry for professionals:

Why did he decide not to raise capital for Codeable or, in any case, start a company in the adult education sector where he already had experience?

He started a company in basic education, a sector where he was not an expert.

What things did he do that had the greatest impact on his understanding of the school market?
When you have nothing of the product, what can be done so the customer gives us their time?

In 2019, Andrés wrote an article criticizing those who criticize copycats.

Cometa was inspired by a company from Brazil, Isaac; but, eventually, they pivot the model.

What are the main differences between both models? What mistakes did they make in the conception of the business idea that led them to think that an Isaac for Mexico made sense?

Gonzalo, Andrés’s partner, said that that pivot was an identity crisis because they had sold investors and, more importantly, themselves, the idea of “Isaac for Mexico.”

How did they overcome this crisis, with the tension between what the market says and the idea they already had formed?

[22:59] - Vertical SaaS

Cometa thinks of school principals as business owners, who face not only educational challenges but business problems like any company.

What is Cometa’s customer profile, and why does it make sense to create a specialized solution for schools? Why don’t they use a generic payments platform like Mercado Pago or administration software for small businesses? What is unique about a school’s operation that justifies creating verticalized software?

There is a very interesting chart where they take Craigslist, this classifieds company in the US that has 300 categories, and they show how there are around 30 unicorns that have come from grabbing one Craigslist category and focusing on that.

How does Andrés evaluate the idea to make sure that it makes sense to build a startup in that vertical?

If schools are businesses with tight margins and cash flows, one can infer that it would be difficult to sell them a SaaS, since they would have to commit to the fixed expense of a subscription.

This is true for small businesses in many sectors of the economy in Latin America, not only in education.

Is Cometa a SaaS, a fintech, a combination? What has he learned about the business model for selling technology to small businesses?
Would this business work if you did only SaaS, without a payments solution?

The idea of combining payments, SaaS, and fintech sounds like it is the way to create quality software for small businesses in Latin America:

What makes it such a good idea for schools and perhaps not such a good idea in other sectors? Is it something specific about schools, or is it that other entrepreneurs have not yet realized, and should look to do it?

Although their first product was a payments and collections platform, they are already working on additional new solutions.

What was the logic of starting with payments instead of, for example, an administrative ERP software?

Schools are already asking them for new functionalities like cafeteria management, expense management, and CRMs.

What is the right moment to launch a second product, versus staying focused on the core solution? How have they prioritized the sequence of those functionalities?

[41:08] - B2B Sales

“They told us that selling technology to schools is a headache, but we have found the opposite.”

There is a Cometa customer (a school in Puebla) who has become a great promoter…

And there is no better salesperson than the testimony of a happy customer, but not all happy customers become promoters.

How did Andrés manage to involve this customer in such an active way in the sales process?

Recently they hired a sales leader, after almost 2 years, despite having raised enough capital to hire one from the start.

Why is it important that a founder start as the sales leader, and when is a good moment to hire one?

There are two other competitors in the market who have raised significant capital and surely show up often in sales processes.

What is Andrés’s style in these sales? How aggressive (pushy) or patient is he? If he trusts that he has a better product and that the customer will eventually notice it.
How does he make sure that he has the team that is learning fastest? What behaviors does a person who learns fast have, versus one who does not?

Cometa is positioning itself not as a collections company, but as a strategic partner for the schools that helps them with needs beyond the ones its product covers.

What is the logic behind that positioning of Cometa? What specific initiatives have they taken in that direction?

One of Cometa’s most effective commercial strategies has been in-person events, which in the US is a very common practice in B2B software, but in Latin America not yet.

It sounds great. Everyone should build, bring together people with aligned purposes, nurture them, and give them resources, but how to do that is really interesting.

Since when were they thinking about this? What was the intention of the events and what did they do? And why have they been effective?

In the end, customers know that you want to sell them something…

What did Andrés learn about how to make genuinely interesting events? What are some of the dynamics so that potential customers want to participate?

[01:03:48] - The Peruvian Startup Ecosystem

Andrés has been part of the origin of the Peruvian startup ecosystem with his roles at UTEC Ventures and Startup Perú.

UTEC was born in 2011 and has quickly managed to establish itself as the best university in the country in entrepreneurship and technology, and UTEC Ventures is today the best accelerator in the country.

Why? What unique things has UTEC done as a university to promote entrepreneurship that others perhaps have not so much?

A very common question in Mexico and the US is:

What is the startup ecosystem of Peru missing in order to take off?

[01:17:24] - Rapid-Fire Questions

If Andrés looks 10 years into the future and puts on the dreamer’s hat, what is the most extraordinary vision for Cometa?