Client Stories

Sujay Tyle is the co-founder and CEO of Merama, an online group of brands in Latin America. He also is the founder and former CEO of Frontier Car Group. Here is the conversation between Sujay and Orrick Partner Samir Bakhru.

Excerpts from the conversation:

Tell us a little bit about what you do.

At Merama, we are trying to create the next generation of online e-commerce brands in Latin America. Our business is focused primarily on creating digital brands that sell throughout Latin America, which is a region going through an e-commerce renaissance.

What drove you to start your next company in Latin America? What is Merama’s mission and what led you to where the company is at today?

I’ve always been obsessed with emerging markets. The last business I started, we had operations in Southeast Asia, Sub-Saharan Africa and Latin America. I fell in love with Latin America. It is the fastest-growing e-commerce market in the world. It’s the fastest-growing region in the world for internet penetration and credit-card penetration. When you put a lot of that together, and you can bring the right capital and talent to the region, you can create extraordinary value and make a big difference.

In one word: What do startup founders focused on emerging markets need to succeed?

Trust is the biggest thing – with stakeholders, board members and advisors as well as with employees and customers.

It you talk to investors, one of their biggest fears when they invest in emerging markets is around opaque labor laws and corporate structures. They want to protect their capital and avoid corruption. If you can create trust, that helps bring those stakeholders into the business.

With employees, how do you create a culture of work that almost resembles Silicon Valley or New York, where they can be working on innovative stuff, ensure that they’ll get paid and ensure that they have real stock in the company?

The third leg is customers. How can you create a company where customers know they will have a great journey using the product? And how can you ensure suppliers know that they will be compensated?

There’s a much higher barrier of trust internally, externally and with customers that emerging-market companies have to think about, but if you can do it right, it’s a big competitive advantage as well.

What’s some of the best advice you received from a legal team that has helped the company succeed?

It’s actually advice you gave me. I don’t know if it’s universally true, but it’s worked extraordinarily well for us: Being a Delaware company. People find it weird that we have very minimal U.S. presence but we’ve always maintained being a Delaware C corporation.

That has allowed us to create trust on the investor side -- investors unlock the ability to create value for employees and customers, so you have to build a company a little bit around them in the beginning.

Being a Delaware company has created so much trust and transparency and ease for investors and eventually for employees because they have a very transparent stock plan. Investors have a very strong corporate structure to invest within, and there are very strong anti-corruption laws.

What do you love about what you do and what motivates you to keep going?

In emerging markets, the beauty is that you can disrupt fundamental industries or massive categories because they’re so nascent in these places.

If you look at the coolest companies coming out of the United States today, there are fundamental ones that are changing consumer behavior, but sometimes they’re operating within niches and they can still be big businesses.

What I like is thinking about where the U.S. disrupted five, 10, 15 or 20 years ago – and doing that for massive countries. When you do that, you can fundamentally shift an industry rather that something niche.

The used car trade has fundamentally shifted in many countries because of my last company. The way people buy certain products online has fundamentally shifted in Latin America because of  Merama. That’s really exciting.

As you built each of these companies from idea stage to executing in the real world, what surprised you the most on that journey?

The first naïve thinking is that anything created in the U.S. can just be exported and automatically work. The second naïve thinking is that anything that works in Latin America works everywhere in Latin America or Africa or Asia. Fundamentally, what you see is that all of these places are so different culturally, legally, language-wise, currency-wise – consumer behavior, consumer ability to pay.

In our first company, we tried to create common tech platforms and common ways of doing business, and what we quickly realized is that we had to adapt all of these businesses very locally. Initially we brought in a lot of talent from the United States and Europe to run these companies, but eventually what we’ve seen is that the only way to make companies succeed is to have the best talent locally paired with the best capital internationally.

Why is it an exciting time to be in your industry and in your space?

For one thing, Latin America has become the hottest region of the world in focus for companies, employees and investors.

Number two: E-commerce is the confluence of a lot of trends. When people get credit cards, when logistics become more efficient and safer, when people trust transactions online … There are so many companies that can operate in each of these categories, but e-commerce is like a whirlpool in between. It relies on FinTech, logistics, credit-card penetration and supply chain optimization. So e-commerce wins when all of these trends win. So over the past five or seven years, companies have been being built on FinTech, supply chain, logistics, and now is this renaissance for e-commerce as a result.

The third trend is – there’s not a single billion dollar brand in Latin America that sells primarily online. There’s going to be $170 billion of sales this year. In every other region of the world where this has happened, there has been a billion-dollar brand created within the first three years.

For those three reasons, I think we got very lucky and we’re in the right place at the right time.

What’s your advice to other tech founders on taking the right risks?

The idea that entrepreneurship is such a big risk is an overblown proposition. It’s a risk – don’t get me wrong – and it takes a lot of effort and a lot of time, but you can tranche your data points in the amount of risk you take... You see a problem, validate it with one or two data points, raise a bit of money, validate it with 10 to 15 more data points, raise more money, etc. So you’re not taking as much capital risk in the beginning as people think.Number two is that with the power of entrepreneurship these days… and people realizing the time and effort it takes, there are opportunities to always have an amazing opportunity outside of entrepreneurship. So my advice is, take the risk because it’s not as big of a risk as people think it is.