The secret formula of creativity on capital efficiency
For decades the Brazilian marketing industry became worldly renowned as owner of first world standards of quality, accumulating piles of prizes from Cannes and other world prizes with creative ad campaigns. Digital marketing has radically changed permanently how companies get do marketing. Anyway, Brazil is proving again it’s talent in one of the highest paying creative industries in the age of marketing 4.0.
On this December 10th the Forbes Magazine announced with exclusivity that the US big data company ScribbleLive (SL) was acquired by the brazilian content marketing company Rock Content, creating one of the largest players on the field in the americas.
Together, they will now share a base of 500 employees spread across the americas, a base of 80,000 freelancers and a portfolio of clients such as Red Bull, Cisco, FedEx, Dell, Reuters, Deloitte and American Express to be added to Rock’s 2,000 customers existing clients, such as Oracle.
The RC management team was able to achieve this by performing skyrocketing growth even while facing a period where Brazilian economy retracted severely, right after the World Cup and Olympic Games, when Brazil entered a spiral of economic and political decadence that dropped the BRL value to less than half of its value before the crisis. But even an undervalued currency was no limit for the Brazilian company to define its role in the global marketing field.
So how were they able to make this growth against the odds?
The answer comes exactly from the problems the Brazilian economy has faced in the last 5 years, where the Brazilian entrepreneur had to create ways to create cashless new businesses with near zero initial capital.
This crisis, added to an economic context of two digits interest rates, created the challenging environment for building leaner models for starting a new business, that goes beyond the Silicon Valley formula of lean startup. A formula that could be called “obese startup”, if placed in the middle of the brazilian reality, such as the city of Belo Horizonte, that incubated Rock Content from the start.
The same environment produced the research that led us to the #AJogada canvas, as a tool more appropriated to create lean business in a complex environment such as Brazil.
But today’s announcement reveals something yet not tangible about how effective is this leaner Brazilian way of starting a business to be able to acquire an american big data company from a position of owner of a weaker currency.
This number can now be found in the words of Gomes, one of the owners of Rock Content:
“Without mentioning names, Gomes noted that a common feature of competitors of equal or greater size is that they are heavily reliant on venture capital, in some cases with multiples up to 15 times higher than the total amount of VC capital raised by Rock throughout its existence. According to the founder, the firm’s management and those in the stock option pool control over 51% of the capital.”
More abundant in capital, the USA economy is able to fund dozens of less capital efficient companies capable to run for years in negative, such as Uber, WeWork, Tesla, Netflix and Lyft without never leaving the market. Companies placed in dangerous positions if faced to a dot com bubble burst scenario, and only possible because the Federal Reserve prints trillions of dollars and lends it to the “too big to fail” banks that own those startups.
This macroeconomic distortion in the end makes overpriced startups in the USA and underpriced startups in Brazil, but investors already know how to read their true value looking at their capital efficiency: the tricks and technologies that make their model so lean.
Tricks that in Brazil are popularly known as “gambiarra”, that can be explained as creativity employed into solving problems without money. Rock Content has improved this method of generating results with no cash into the state of art, becoming what looks like to be “the Apple of content marketing”, validating a model that can now become worldwide. Such as #AJOGADA, this technology could only come from Brazil because in capital abundant economies, you don’t need to burn your brains if you always can burn cash.
So to explain a bit more about the model Rock Content developed, we will list it on 6 main keys:
- A web of 31,000 landing pages carefully built with SEO techniques
- A pack of info-products
- Organized registration forms
- Mail marketing automation
- Lead score/sales funnel
- Authority building and consulting
But as a writer in both Portuguese and English languages I’m able to share with you another mysterious trick:
- if English is the language of tech, Portuguese is the language of SEO.
For its flexibility, ambiguity and creative possibilities, Portuguese is a great language to think SEO strategies. And perhaps the Brazilian personality associated with the language makes Brazil one of the most active audiences in all social media platforms.
An old but still meaningful story to understand Brazilian linguistic phenomena, was the social media platform Orkut, that boomed in Brazil before getting popular in the US because of how viral content gets amplified in Brazilian networks due to this mysterious creative ingredient that is a language mostly spoken in Brazil.
This again settles Brazil in the top rankings of global marketing and a rising star on big data based business.
It also settles a new chapter on the story of Brazilian startups by being credited to be “consolidating a category” and “something atypical for a Brazilian company”, according to Gomes.
More that this, RC is settling a turning point for Brazilian tech by validating a business developing strategy that settles a new landmark over the Silicon Valley methodologies of lean startup and customer development. By running fully on wordpress, PDFs and mail marketing to traction from the start-up, it proves a new toolkit capable to be applied to 80% of the world’s markets, in other third world economies that can exponentialize the Silicon Valley management culture to the whole world and with a small share of what was possible to do before Brazilians developed this method.
The strength RC aquired on their networks makes it almost 6 times more relevant than the marketing guru Neil Patel in Brazilian internet and owner of a 1,9 million dollars monthly organic traffic.
Such score reveals RC is a company evaluated between 30 to 70 million US$.
On a next article we will brig an analysis on the value of content, with a deeper study on the valuation of the Rock Content’s case of success.