Hi, I'm Fred Guth. Greetings from Brazil!

I’m Fred Guth and I have been a bootstrapper since 2003 (Well, at that time I didn’t know how it was called).

The first company I co-founded, Gapso, is a Software Consulting firm that grew to around a hundred people and still is quite successful in its niche (Brazilian Oil and Mining companies). We never managed to transition to a SaaS model, though, and didn’t really created a product, despite trying it a lot. Eventually, I got fed up with the yearlong sales cycles among many other things and decided it was time to a new adventure.

For the last 2 years I have been thinking about applying the SaaS model to the physical world. By that I mean selling subscription based consumer goods. There is no Amazon Subscribe and Save in Brazil. Maybe this is my stupidest idea ever and I should be building a B2B Saas product. But on January 1st this year, I decided I would give it a shot.

I will start with diapers subscriptions and I hope NetFraldas.com.br will be open in May.

I am really happy for finding this community.

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Dont let that stop you. One of the ways Amazon grows is by buying local companies that are top of their field. Like Amazon entered India by buying junglee.com. For many years, they didn’t even have an Indian website, redirecting users to junglee.com instead.

So yeah, give it a shot.

Hi @fredguth nice to meet you. Sounds like you have a ton to offer. I’m curious, you mentioned below

Would you be able to share what you tried? I’m in a similar boat, while my firm isn’t anywhere near the size that yours was, I’m curious what you tried to create on the product front and why you think they didn’t work out.


Oh, @shantnu, I won’t! :smile:

Amazon has been very slow to enter in the Brazilian market, they only sell e-books locally, all other products you have to buy in US. Eventually, they will buy a big player to grock the market. But that does not worry me either. There are already many players (big ones, like Walmart.com) selling diapers online in Brazil, so… I have already fierce competition and will only succeed if I can prove a real value to costumers.

There is a proven market for diapers. And there is also a proven online market for diapers (in Brazil from 1 to 2% of the diapers are sold online, in Korea it is around 50%). But my product is not really the diaper I will be selling, which is a commodity. My “product” is convenience: subscribe my service and never worry with diapers again, I will handle your personal diaper inventory, I will send you the right amount of diapers your baby will need each month, and, by the way, I will change the diaper size I send you when your baby grow. You won’t need to come back to my site ever. Just forget about diapers. Will people pay premium for that? Is there a market for this convenience? This is what I don’t know and what makes me worry.

Hi @gavin, nice to meet you too!

Oh man, there were so many things… I will try to recollect. First of all, a little bit of background. Gapso develops optimisation software for logistics operations of big companies. Basically, we helped companies to do more, with less resources using mathematical models. As an example, we built an flight planning software for an Oil Company that helped them transport more people to their offshore operations, with less helicopter flights, saving them tens of millions every year. It seams a very clear value propostion, it should be easy to sell it, don’t you thing? Try sell it! Haaaard!!! Yearlong sales cycles, dozens of people involved, too many gatekeepers…

Well, almost every project we made, we tried to sell to other companies (the IP was always ours). The problem is that we have never been the expert in the market we served, we were always the expert in the tool, and learned from our clients. Each logistic operation was different and as we were not the experts in the operation, we didn’t know what was generic enough to be sold as a product. So, we lacked market expertise and that was all biggest problem in trying to create a product. Sometimes we thought we new enough, but when we tried to sell it, the market kept saying us that we didn’t know enough.

In the technical side, all the software we created was (and still is) on premise. The reason is that we needed what is called an optmization engine, a piece of software that solves mathematical models. The companies that make this components just haven’t figure out how to make it work in a SaaS model and therefore, all companies that develop software in this niche can’t migrate to a Saas model.

Looking in retrospect there were many things we could have done differently.

  1. Focus in process that were not our clients core. That seems strange, let me explain. All clients core competencies were in their logistics operations. That was were they had to be inventive to be better than their competition. Therefore, their operations were never the same. One client would bet in a strategy, other client in a different strategy, and that made their problems different. But maybe their not-core processes were not that different from each other. I don’t know, maybe that could work.
  2. We never though that we could focus in the market we were indeed experts. Software developers of optimisation models. There are thousands of companies, mainly small ones, with two, three, five PhDs that are experts in the mathematical modelling, but lack all the other competencies to make a great software. We were one of the biggest companies in this niche and learned how to do that. We could have developed components and frameworks for those companies.
  3. We were not persistent in one product. We tried a little and if it didn’t work, we tried another product. Well, product success takes time and we were always short in really good people. We need a kind of professional really difficult to find. We had to invest years in those developers. And it was difficult to allocate them in projects with no current revenue.

I am sure there was much more and some things are much more clear for me now as I am not in the heat of the moment.

Hope this helps :slight_smile: And please, don’t hesitate to ask me more. I am glad to share.