HispanicBusiness

Boasting double-digit growth for six consecutive years, Brightstar Corp. owes much of its success to smart use of technology and an aggressive approach to training. Founded in 1997, the cellular phone distributor now operates 21 facilities in 16 countries, and total revenue last year topped $1 billion. The company currently ranks No. 2 on the Hispanic Business 500. The driving force behind Brightstar is Marcelo Claure, winner of the 2003 Hispanic Business Magazine Entrepreneur of the Year Award.

Mr. Claure accepted the award at a gala ceremony in Los Angeles in November (see story "Night of the Entrepreneurial Stars"). The award judges, accountants at the firm Macias Gini & Co., commented that Mr. Claure's company "exhibits the spirit of this award: empowerment of the Hispanic community in all channels of society."

To hear Mr. Claure tell it, Brightstar proves that the right idea plus the right time equals success. "We opened for business in October 1997, and our original business model was to achieve $50,000 in sales in our first three months. We did $14 million. That confirmed we had a winning formula," he says.
Mr. Claure came to the United States in 1989 from his native country Bolivia to attend school. After graduating from Bentley College in Waltham, Massachusetts, he managed a telemarketing center for Bell Atlantic. He later became president of Unplugged Communications, a California-based cellular telephone distributor.

"I saw a real opportunity in Latin America," he recalls. "Clearly the wireless boom was about to take off and there was no one well-positioned to be the leader in driving that market."

In response, Mr. Claure and Brightstar co-founder Dave Peterson moved from California to Miami and borrowed money to pursue their dream. We "literally sold everything we had and plugged it into our business," Mr. Claure says. But within the first year Miami-based Ocean Bank loaned the company $2 million, and soon BellSouth and Spain's Telefonica introduced their bankers to Brightstar executives. To date, the company has been completely debt financed.

When asked for advice to other entrepreneurs, Mr. Claure says, "build your company around your customers." He follows his own counsel, but on a practical level because his definition of "customer" extends both ways along the supply chain. Of course, Brightstar must satisfy the more than 15,000 local wholesalers, resellers, and cellular network operators in Latin America and the United States that form the retail end of the distribution system. But Mr. Claure seems equally intent on pleasing the equipment manufacturers. In fact, the manufacturer's branding, marketing, service, and product performance largely determine a distributor's success.

"They're a very flexible company, and I think that's a reflection of Marcelo's style," says Fernando Gomez, General Manager of Motorola PCS Latin America, the largest supplier of handsets to Brightstar. "I think the companies that have success in the marketplace stick to what they do well. Motorola is good at developing and manufacturing products, but when it comes to dealing with distributors and managing a network of customers, Brightstar is very effective. … It's not that [Motorola] couldn't do it, but together we do it better."

According to Herschel Shosteck, chairman of Maryland-based telecommunications consultancy The Shosteck Group, Brightstar has demonstrated leadership in a global trend of outsourcing by wireless operators. "The issue for Latin America is multiple vendors and multiple operators and multiple countries," says Mr. Shosteck. In smaller markets such as Uruguay, Paraguay, and even Chile, the wireless operators aren't set up to distribute handsets, and economics of scale work against them. In larger markets such as Argentina and Brazil, debt exposure makes them leery of investing in handset inventory. Besides phone sales, cellular companies have outsourced construction, tower management, customer service, billing, and inventory control, Mr. Shosteck explains. "All this is not mainline business for network operators. The Brightstars of the world have filled the space and provide an important function to the industry," he concludes.