#7 Pere Vallès: leading an e-voting startup while raising $129M+ and failing, becoming CEO of a travel tech and wining despite covid
Tech entrepreneur and investor. CEO of Exoticca, travel tech startup with €20M+ funding. Former CEO of Scytl, e-voting startup with $129M+ funding.
Pere Vallès is a tech entrepreneur and investor. Since 2018 he has been leading Exoticca, Barcelona based travel tech startup offering a digital platform of complete travel packages in more than 50 destinations throughout the world. The company’s business model is based on designing its own product under the “affordable luxury” concept and has received €20M+ funding from Milano Investment Partners, K Fund, Bonsai Partners, Kibo Ventures, and Sabadell Venture Capital.
Pere is also the Chairman at Open University of Catalonia - UOC (the first online university in the world), a General Partner at Smartech Capital (Spanish early-stage VC), an active investor and Board member in multiple technology companies, and a member of the Board of Trustees of several academic and research institutions.
Before Exoticca, he spent 14 years as CEO and eventually as Chairman of the Board of Directors at Scytl, a secure electronic voting company, where he played a role in scaling up from uni spin-off with 12 employees to 600 people team, $129M+ funding and customers such as the European Union and the United States governments, leaving a few years before the company went through a process of bankruptcy, acquisition, and recovery.
Before Scytl, Pere was the CFO of GlobalNet, a NASDAQ listed telecommunications company headquartered in Chicago where he worked in becoming one of the leading providers of Voice-over-IP in the world and participated in the successful sale of the company to the Titan Corporation. Pere started his career working for KPMG’s M&A group in Los Angeles and Miami, providing financial and strategic consulting services to private equity groups and corporations in the ICT space.
👤 Brief intro: NASDAQ CFO, Startup CEOx2, investor
🥇 Win: selling GlobalNet in the US and his 14 years at Scytl
🚫 Fail and lesson: Scytl final outcome after he left; timing is critical
🚀 Ideal founder: ambitious, optimistic, storyteller, resilient
💸 Ideal investor: access, operator, reputation, help on-demand
📈 Markets: big size and low innovation in travel, otherwise agnostic
Could you give us a brief intro about you and your origins?
I am originally from Barcelona but I did start my professional career in the US, during the 90s tech boom and in the middle of the 2000 dot-com bubble. First, I worked as an M&A advisor within the tech industry, and with 29 years (in 2000) I left to join GlobalNet as a CFO. Joining a NASDAQ listed tech company in the early 2000s was raw, given the tough times the economy was experiencing. Looking backward though, we had a good run and ended up selling the company in 2003 with a pretty good outcome.
After that in 2004, due to family reasons, I came back to Barcelona and I joined Scytl as a CEO. The company was very small and had recently spun-off from the university but with hard work and an enormously talented team we ended up as industry leaders in electronic voting with 600+ employees and presence around the globe. I spent 14 years leading Scytl, enough time to experience both positive and negative things. Since 2008, I am the CEO of Exoticca, which is within the travel tech space and where we have developed an online platform intended to facilitate high-end travel booking.
Besides my executive roles, I am a very active business angel and I also invest with Smartech Capital, a small early-stage VC that even though it has only 3 years of existence it already has had three successful exits like Verse which was sold to Square. The differential trait about Smartech is that we are 6 local GPs and some LPs deeply involved with the local ecosystem of Barcelona with high-value experience. Finally, I chair the Open University of Catalonia (UOC), people don't usually know but it was the first online university in the world (created in 1995) and has had a very successful growth with over 80,000 students.
What would you say has been the biggest win in your life?
From a financial point of view, GlobalNet's sale in the US is the most important thing.
From a professional standpoint, Scytl has been the most important project. I spent 14 years of my life from 2004 to 2018 and we went from being an Autonomous University of Barcelona (UAB) spin-off with 12 employees to 600 employees, branches around the world, and becoming the leader in a new software technology category, electronic voting. The company raised $129M+ funding from great investors, it played a role in very important projects such as 3 US presidential elections and the technology developed by the company continues to be a dominating benchmark in the industry.
Related to the above, and your biggest failure?
I would say the sale of Scytl to Paragon Group in a moment where the company was in bankruptcy, at a bargain price. Although it happened 2 years after I left the company, I feel deeply responsible and I would have preferred another ending to be honest.
I believe the main issue was the relevance of timing. Scytl was early into the game and we overestimated the capacity that our target customers (governments) had in order to adopt this type of groundbreaking technology given their super risk-averse profile and complex bureaucracies.
However, I do think the company has newly increased possibilities to continue building the best e-voting company in the world from Barcelona, especially now that COVID represents a huge opportunity. Think about that, all the elections currently happening need to be remote - from public entities such as the Catalan Government to private entities like Futbol Club Barcelona, among many other examples.
What is your ideal founder profile?
I don't think there is a static standard of a predefined ideal profile, everyone has its own style but it's true that there are some common characteristics that all top entrepreneurs normally have:
High level of ambition. Willing to disrupt a market and beat incumbent players.
A very optimistic person. You have to really trust in what you are doing as the chances of succeeding are limited. You have to be a believer and not be afraid of going against the status quo (if you think rationally, probably you won't even try).
Successful storyteller. You have to convince a lot of people, early employees, clients, partners, investors, etc. You have to communicate a good story with a clear vision of what you want to do and achieve.
Resilience, the most important. When you start a company you will hear a lot of "no" from everyone and you must overcome that negativity, process it positively, and turn it into actionable fuel to execute. Not everyone can.
What is your ideal investor profile?
On the one hand, I believe we are currently seeing an excess of liquidity in the market, there are a lot of venture capital firms. Sometimes it even seems like we are experiencing probabilities of a bubble.
On the other hand, there is a limited number of really good companies. So for me the best investors are the ones that have the ability to invest in a company where every investor wants to invest but not everybody can.
To be able to do that you need a strong reputation of being entrepreneur-friendly. In order to achieve that reputation, former founders turned VC have an unfair advantage because they have lived it and understand better the key ins and outs of being a founder, such as the psychological aspects. Also, you need to have a strong power of conviction. There is too much capital looking for the same great opportunities thus competitive advantage in form of great ability to convince is important.
From a founder's perspective, it depends on what you are looking for. If you are a first-time entrepreneur, you want a hands-on investor willing to help. If you are a serial entrepreneur, you’d probably look for someone that is comfortable on the sideline, helpful but on-demand.
Anyway, the investor should adapt to the entrepreneur, allocate time and provide help if needed, but also understand that as an investor you do not have to be interfering too much. The founder is the one who decides and does, the investor is there to help if demanded.
What present and future markets are you most interested in?
Maybe obvious because of my current role at Exoticca but I’d say travel is super interesting right now because of 3 main reasons.
Huge market. We are talking about 12% of the global GDP. Really big opportunity.
Lack of innovation. In some areas travel is really outdated. There is a significant lack of innovation which means big opportunities ahead.
Big room for improvement. Even in the areas where we have seen some innovation, there are still significant gaps from UX to efficiency of processes.
For instance, at Exoticca we are transforming the high-end travel packages category, from a historically offline experience to 100% online. And just like that, there are lots of different opportunities.
As an investor, I am quite agnostic. I like big markets such as healthcare and education that are very traditional with processes still being run as it was done many years ago, which implies that opportunities to disrupt exist.
Could you share with us 3 startups you like and why?
First one is self-serving. Exoticca is a good example of a travel tech company. This is a sector hugely affected in 2020 by COVID but the companies that have stayed afloat will get out stronger and will face a terrific accumulated demand. If you have done your homework and fortified your runway, the recovery can be very strong as the supply will have shrink. I am super bullish about the industry.
Second, Avatar Cognition lead by Pere Mayol and Enric Guinovart. Pere is a very well-known business angel, an early investor in companies like Wallapop and Glovo, who has quit everything else to pursue this. This is the most disruptive and innovative project there is in Spain. They want to transform the AI/ML industry and have developed a general intelligence master algorithm that allows solving different problems using limited data sets, significantly smaller than competitive alternatives. A groundbreaking deep tech solution already being tested with interesting results.
Third, the subscription-based fintech Orain. The company was created out of the Autonomous University of Barcelona (UAB) and facilitates the interaction between humans and machines. For instance, you’d be able to chat with a vending machine or an ATM to purchase the products you want in a very easy and convenient way. The company is fairly new but has a strong tech approach and the industry is interesting.
Could you share with us 3 investors you like and why?
I have met many investors throughout my entrepreneur life and I feel you know your investors not when everything is going well (where all behave similarly) but when things get rough, when challenges and difficulties appear.
With my recent experience at Exoticca, given the global pandemic and what we have gone through in the travel space, I’d like to highlight our current investors. They have been super supportive, not only with words but actions, since we have extended our 2019 Series B with the same conditions. Shout out to Milano Investment Partners, K Fund, Bonsai Partners, Kibo Ventures, and Sabadell Venture Capital.
What are the 3 books you feel everyone should read and why?
I am an avid reader, usually reading ~50 books per year. Around 1 book per week. I read anything from fiction to history but I normally don't like management books, as I believe that usually they repetitively explain in hundreds and hundreds of pages what could be done in 50 or so.
"Hard Things about Hard Things: Building a Business When There are No Easy Answers" by Ben Horowitz. It has 2 parts, one where he explains his experience being an entrepreneur and one where he describes his life as a venture capitalist. I like the first better. I feel you should read this book before creating a startup as you will clearly see what are the difficulties, the professional and personal costs, and detailed insights on the ups and downs a founder goes through in the journey.
"Emotional Intelligence: Why It Can Matter More Than IQ" by Daniel Goleman. Our IQs can be determined by genetics. But our emotional IQ has a very important contribution to our personal and professional success and is something we can significantly modulate and change to improve ourselves and our relationships. A must-read to anyone willing to have a leadership position.
Any book from Michael Lewis. It doesn't matter how complex the topic is that he writes comprehensively and super easy to follow. Within the financial reads, he is one of the best. My favourite? "The Big Short: Inside the Doomsday Machine".
What lessons from your experiences navigating tough times during 2000s dot-com bubble, and then as a CEO at Scytl going from small university spin-off with 12 employees to 600 employees and 80% market share to leaving 2 years pre-bankruptcy, are you leveraging to succeed with Exoticca in the currently agitated COVID times?
There is a super interesting study that analyzes the most successful tech companies from Silicon Valley and checks what was the average founder's age when they were incorporated. Surprisingly, the average is 45-50 years old and that strikes as we all believe startups are run by young people. At the end of the day, you realize there is no substitute for experience.
When I was your age, I didn't know what I didn't know, which is dangerous. But you see that you have to go through it, there is no business school course that can teach what experience teaches. This has helped me significantly understand and know myself better, my strengths and weaknesses. Which in turn helped me improve.
I've been excessively optimistic and aggressive with decisions. Thankfully, through crisis periods I've learned to be more prudent and surround myself with people with more conservative views than mines, to balance me out. Experience has taught me a lot, I've learned from everything. Most likely, I would have taken decisions differently after all these lessons learned.
My recommendation is to go through your personal and professional journey as a pure learning process and to try things out. When you reach 40 years old you will have enough experience and vision to realize about all. It's more difficult before because your experiences' life-span is super short. For instance, if you have never ever experienced a big crisis you feel everything will continue as it is - both as a founder and investor.
Big thanks Pere for sharing your views with us !
Big thanks to you, reader, for your time and interest !
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