The audio and video are in Spanish. These notes are a translation.
On the podcast we usually tell startup success stories. Rarely do we tell the stories of when things do not turn out the way we want, because it is MUCH harder to talk publicly about what we fear so much in Latin America: failure.
Two weeks ago, María Echeverri, founder and former CEO of Muni, published a post mortem, that is, a document analyzing the reasons her startup shut down. It is perhaps one of the most detailed post mortems I have read, and I invite you to read it. You can find the link in the episode notes.
Muni was a social commerce platform that let community leaders set up their own online corner stores and sell basic products to their neighbors. After raising 30 million dollars and growing 20% a month since its launch, Muni closed its doors.
Today we had María on the podcast to talk about her business model: was it really viable? Why did they decide to grow rapidly despite not being profitable? And the business and strategy mistakes they made. We also talked about how to support your team in recovering from the company shutting down.
Youtube Timestamps*
[2:08] - Social Commerce Model and Need for Capital
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How did Maria arrive at the fascinating world of startups?
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Maria briefly explains what Muni’s thesis was (the 4 problems it solved) and why it was such a capital-intensive business
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Is “social commerce” really a business model suitable for venture capital financing?
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What were the main lessons you took away from building a highly operational business?
[17:35] - Analysis of Growth and Product Market Fit
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Did they have Product Market Fit? What gave Maria the conviction that, beyond customer retention, they could eventually generate positive operating margins?
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One of the main criticisms of companies like Muni is that they raised a lot of money and spent it inefficiently in order to grow quickly. Was this the case? Do you think they grew too fast?
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How did Maria weigh solving problems with technology versus hiring more people?
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Maria decides to open Mexico and Brazil at the same time as part of her fundraising strategy, despite not being ready to open new countries from a business standpoint. In retrospect, how does Maria now think about the right moment to grow the business into new countries?
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Entrepreneurs tend to listen to their investors (or potential investors) when making business decisions. What mistakes did they make in Muni’s expansion (team, product, marketing, and so on) into Brazil, and what did Maria learn about how to open new markets effectively? How much did the market environment and investor appetite influence how she balanced growth versus profitability?
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Maria mentions that Simón Borrero and Sebastian Mejia are easily among the best entrepreneurs in the world at raising capital. What did she learn from Rappi’s founders about fundraising?
[39:31] - Managing Culture and People During the Shutdown
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What did you learn about balancing being a leader who demands high quality and speed, without neglecting the human side?
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What did you learn about how to let an employee go in a more human way?
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Do you have any lesson or advice about how to help people who have been let go?
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What did you get right and what mistakes did you make in managing the relationship with investors at the time of the shutdown?
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Changes Maria would like to see in Latin America’s startup ecosystem
Episode Mentions
You can find Maria on LinkedIn
Document Post Mortem of Muni
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Follow Enzo Cavalie on X: @enzocavalie.