Fernando Espuelas Then: CEO, StarMedia Now: CEO, VOY Group
For Fernando Espuelas, entrepreneurship involves more than just making a dollar: A new venture should identify a social need and address it. Mr. Espuelas' first company, StarMedia Networks, had the mission of bringing together Hispanics across borders and cultures to form on online community.
The company began in 1996 as a charge on Mr. Espuelas' credit card. For a year, the firm bootstrapped and begged for investment capital. Then in 1997, it secured $2 million from Chase Manhattan; in a matter of months it raised $80 million in private capital, and soon thereafter it went public. At the end of the first trading day StarMedia had a market capitalization of $1.5 billion.
"We wanted to redefine history – and I think that, in fact, is what happened," Mr. Espuelas writes in his new book Life in Action. "The StarMedia idea of Pan Latin Americanism, an idea with deep historical roots, was a profound turning point for Latinos across the world."
But in the spring of 2000, StarMedia suffered what the book calls "the near-complete collapse of the Internet economy." By his own calculation, Mr. Espuelas' StarMedia holdings at one point had a value of nearly $500 million, but he never sold a single share. "I lived a full cycle," he tells Hispanic Business. "It was the best business and personal experience I could have had at this point in my life."
Now, in the aftermath of StarMedia's demise, Mr. Espuelas has developed a new mission with a corresponding company called VOY Group. "As a Latino entrepreneur, that's how I manifest my creativity," he says, referring to the sense of purpose his companies possess. "It's really not about making money. What drives me is the creation of a business that not only makes money but also makes a difference in people's lives."
And while StarMedia's outcome was less than stellar, Mr. Espuelas says it still holds valuable lessons and validation. When StarMedia launched, for example, approximately 50,000 Hispanics were online. Today the number is 50 million. For Mr. Espuelas, that proves the accuracy of his vision. As for the company, it has morphed into CycleLogic, a purveyor of wireless software in the Spanish- and Portuguese-language markets. The flagship StarMedia Web portal was sold to eresMas Interactive, an Internet conglomerate based in Spain.
Mr. Espuelas notes that despite the nay-sayers, the digital revolution has improved economic productivity and changed people's lives. "It proves that when you connect creativity and optimism to a transformational technology, it does transform society," he says. "It was a moment of incredible fervor and creativity. Millions of people thought it was the beginning of a new period of history for the human race. I think that was correct. At the same time, business models that depend on capital markets are difficult to sustain because you never know when the capital market will turn."
Mr. Espuelas' new book Life in Action bears the subtitle The 12 VOY Principles of True Happiness and Success. VOY, meaning "I go" in Spanish, has become Mr. Espuelas' next venture, connoting both a system of success and company that puts the system into action.
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