Five big ideas from my conversation with Geraldo Thomaz, founder and co-CEO at NYSE-traded e-commerce platform VTEX: Key decisions that built a $1.3B+ e-commerce empire

I recently had the opportunity to sit down with Gustavo Brigatto, the editor-in-chief of Startups, for a wide-ranging conversation. It was my first time as a guest, so I handed over the driver's seat, so to speak 👀🎙

I shared my (very optimistic) perspective on the tech and venture capital scene in Brazil—spoiler alert: it's much better than what you might hear in US media! I emphasized that for global investors to succeed, they need to ditch the US playbook and embrace the unique complexities of the Brazilian market. Plus, I discussed why aiming for a billion-dollar valuation from heavyweights like a16z might not always be the best move for local VCs.

Watch / listen to this episode on Youtube channel 👇🏻

Or on Spotify:

If you are short on time, here's a quick summary of my conversation with Gustavo.

Now off to the main topic of this newsletter - VTEX and my The J Curve conversation with VTEX’s founder and co-CEO Geraldo Thomaz. From my perspective Geraldo and his co-founder and co-CEO Mariano are the ultimate flag carriers for Brazilian tech. Before we transition to the five big ideas from our conversation, here are some mind bowing facts about the company 👇🏻

⏳ Geraldo and Mariano are close friends and business partners for the last ~25 years 👀 Despite being very different they share a common passion for spear fishing 🎣
🤝 VTEX started in 2000 as a textile marketplace and had to go through a number of strategic pivots before becoming an enterprise digital commerce platform it is today
💸 VTEX’s first enterprise customer was Walmart, that entrusted them with building the second largest online presence outside the US
🌎 Today the company supports 2600++ customers across 43 countries with B2B clients including Mazda, Colgate, Carrefour and Sony. It represents a unique and inspiring example of Brazilian company that became a global leader #vamoslatam🚀

Here are the five big ideas from my conversation with Geraldo:

1️⃣ The foundation of high performing partnership is trust, complementarity, vision alignment and clear division of responsibilities

Early in their partnership, Geraldo and Mariano made a strategic decision to clearly divide their responsibilities, with each having the final say in their respective areas. This reduced conflicts and expedited decision-making. By advising each other instead of competing for dominance, they enriched their decisions with diverse perspectives without causing friction. During VTEX's early, capital-constrained stage, they built a solid partnership foundation without financial distractions. This approach enabled them to focus on long-term success rather than short-term financial gains

2️⃣ Staying true to core principles help weather economic downturns

As the company grows and faces new challenges, maintaining core business fundamentals is critical. For VTEX, this meant staying true to their SaaS model, saying no the service component at the expense of short-term revenue gains, avoiding unnecessary customization and commitment to international expansion, despite financial constraints

3️⃣ To succeed in enterprise sales, target enterprise clients early

Transitioning from low-end clients to enterprise is often challenging and less likely to succeed. Another important aspect is to establish and maintain the perception of being an enterprise brand early on, as this attracts larger clients. VTEX benefited from being perceived as an enterprise brand due to their association with Walmart

4️⃣ The key challenges of becoming a public company CEO involve a significant shift in responsibilities and mindset

As a public company CEO, clearly articulating the company's vision is paramount. Ensuring that every employee, investor, and stakeholder understands and is excited about this vision is crucial for alignment and motivation. It's also essential to recognize that stock price fluctuations can significantly impact employee morale, making it necessary to educate employees about the company's financial health and long-term strategy to maintain confidence. Additionally, public company employees may become more risk-averse, especially in turbulent market conditions. Reminding the team that taking calculated risks remains essential for growth and innovation is vital

5️⃣ Be ready to pivot your business model based on market demands and learnings

VTEX's journey to becoming a global digital commerce powerhouse involved several strategic pivots. Initially starting as a textile marketplace, they soon shifted to an outsourcing firm building simple websites to generate revenue. They explored various business models, including a SaaS solution for salespeople and a CRM system, gaining valuable insights despite limited success. The major turning point came in 2008 when they focused on e-commerce, leveraging their expertise to secure Walmart as a client

Geraldo’s book recommendation is The Innovator’s Dilemma by Clayton M. Christensen

You can watch the full interview with Geraldo on Youtube 👀👇🏻

Or listen / watch the episode on Spotify 🎧

Before you go, here’s some content that I’ve been exploring recently:

This week’s read: The HOUSE of ARNAULT. It’s a fantastic interview with Antoine Arnault, who over that past 40 years has assembled LVMH, the world’s largest luxury conglomerate and globalized a sector once constrained by the limited ambitions of family-owned European companies encrusted in tradition. So many great insights into leadership, strategy, long-term vision and maintaining relevance through radical innovations

This week’s podcast: The Tim Ferris Show with Chip Wilson. In 1998 Chip founded Lululemon athletica, creating an entirely new category of technical apparel called “athleisure” — now a $400 billion global industry. I really loved the conversation around goal setting and knowing when to get out of the industry to realize capital returns.

Thanks for reading,

Olga