Launching A Digital Publishing Startup in Brazil, with Greg Bateman, Founder of Hondana

Greg, please introduce yourself…

My Brazilian nickname, “e-Gringo”, captures me well. I left my home near the University of California at Berkeley for Tokyo at age 20 and haven’t back since.

There is magic when you can bring technology from one region of the world to the next, adding a little local spice. After Tokyo, I participated in eBook startups spanning Shanghai, NYC and now São Paulo.

The intersection between media and high-tech has always interested me and once I laid my eyes on the first eReader at Sony’s HQ, I knew this would be my future.

What’s the story behind creating Hondana and can you explain how it works?

Quite simply, we found a gap in the market and addressed it. Right before Christmas, 2011, the CEO of Brazil’s iconic book retailer Livraria Cultura invited me to lunch in New York and boldly pronounced that “eBooks don’t exist in Brazil.”

At the time they were already 15% of the U.S. publishing industry, but much less than 1% in Brazil. Three months later, I hopped on a plane to Brazil with some seed funding from friends and family and launched Hondana.

Early on, we made a strategic decision to build a world-class digital eBook production platform taking lessons learned from Japan (process refinement), China (cost control) and the U.S.(tech development).

Our publisher clients upload from 5 to 1000 (PDF) books to our platform, and in days we output a top-notch eBook file ready for distribution at Apple, Amazon and local bookstores.

How’s traction working out so far?

Our timing was perfect. We have around 100 steady clients to-date and too many projects to count. We’re especially proud of what we’ve done in education.

In addition to winning government contracts to “digitize” public universities, we’ve implemented an HTML5 interactive textbook solution for K-12 schools. This is the next generation to what Amazon did with PDFs for older programs.

What challenges did you face when launching, and how did you overcome them?

Compared to the “free market” in the States, Brazil certainly earns its notoriety for being a difficult place to do business.

While it took only a few hundred dollars and an online form to open our American branch, we spent more than 3 months and tens of thousands of dollars to setup shop in Brazil.

Given the crystal-clear opportunity before us, we chose to hire the best lawyers, accountants and other experts to help us get setup rather than bumble through the process ourselves.

What strategies are you using to market Hondana?

As with other international markets, Brazil’s publishing industry is really a small world. We chose to demonstrate our thought leadership by giving lectures, writing in news sites and accepting interviews.

We haven’t spent a dime on paid marketing because we think our product speaks for itself.

What are the challenges of doing business in Brazil?

We joke that Brazil’s market is protected by the “great wall of administration”. From the outside, it seems that starting and successfully running a tech business is an insurmountable challenge.

Once you’ve scaled the wall however, you find that the number of competitors inside is much less than it would be in an otherwise free market.

Day to day, the biggest challenge is recruiting and motivating an all-star team. The excitement of Brazilians is infectious. I particularly love Brazilian’s patented “jetihno brasileiro” or creative problem solving.

However, compared to my experience working with more process-oriented cultures, at times creativity can get in the way of creating a consistent, quality product.

We are proud to have trained a team on what it means to delivery well, on time every time. And then the creative juices can be focused on new product development.

How do you see the startup and investment ecosystem developing in Brazil?

Undoubtedly it is developing quickly. When we arrived in São Paulo, our co-working space was full of ad salesmen and wedding planners.

Now we have incubators and accelerators sprouting up and filling up quickly with the type of entrepreneurs you’d find coding in a San Francisco café.

In terms of funding, we still see a big gap between seed and series A investors. I’d love to see more angels participate in the Brazil Boom.

What’s next for you and Hondana?

Education. The new generation of Brazilians is not only incredibly digital, but they get the fact that education is the key to a bright future.

Municipal, State and Federal governments are beginning to get this too. Delivering digital educational content requires a series of features and business model far from the standard Apple and Amazon offering.

I wouldn’t be surprised if the Brazilian schools will soon feature connected Hondana classrooms.

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