Lockdown Economy Spain in a Student Networking Community with Arturo Gil
The interview was transcribed and adapted into an article by Grace Holloway
Lockdown Economy: Interviews by think tank AlterContacts.org with real entrepreneurs sharing insights, challenges and successes during the COVID19 global pandemic to inspire, motivate and encourage other entrepreneurs around the world.
In this interview hosted by Maisaa Sarkis, we meet Arturo Gil, the CEO and co-founder of Studentfy, international student association in Spain. The business started as a marketplace in October 2015 focused on services and resources for business school students. The objective was to create value and integrate what was relevant for international students. Being an entrepreneur, the co-founders got to experiment a lot and at the same time learn from their experiences. The Lockdown shut down 90% of their revenue streams so they were forced to make tough business choices, revisit their strategy, and develop new plans based on what they can now offer. Making sense of today is not easy and right now, Studentfy’s wants to introduce new plans that will generate a new revenue stream, find investors and establish new partnerships. Like working on creating value for business schools, as it is the main adopting channel for students. We’re in unparalleled times and Arturo’s priority is to have a steady monthly recurring revenue that will gain stability, improve the planning & budgeting, and get funding to take the business forward.
How did you start Studentfy?
Arturo: The idea came shortly after starting my master’s. I realized there could be an opportunity with student networking, and started doing a bit of market research. I went to the Program Director of management back then, Nigel Hayes, and I told him my idea and he was very supportive. Next, I started working for my co-founders and developing the idea.
Can you tell us about your co-founders and their background?
Arturo: My first co-founder is Bruno, alumni from EIE. He was working on a master’s in international business when I met him. He worked before that in Deloitte for a year. We started developing two projects at the same time, Barcelonian and Studentfy. The other co-founder is my brother, Jesus. He’s our CTO and develops all the APA, the app, and the panel. He’s the person behind everything you see when you open the Studentfy app and background IT.
Can you tell me more about Studentfy and what it’s about (before the COVID-19 pandemic)?
Arturo: We’re mostly focused on marketplace-concentrated resources and services for students. Anything we thought was relevant for students we tried to integrate, trying to create value for the customer/student. We concentrated on discounts; everyone likes to save money, including students. We also incorporated a section of services, as we found facilitating the arrival of students to be very important, and add to value. Last but not least, we have the module of events. We organized some events and provided a place to find entertainment opportunities and networking outside of school, through events and trips.
To summarize, your goal was for students to save money and time, and provide a guide for students moving to Spain or Barcelona on little or no income. I am aware you have experienced this, teaching you what works and what doesn’t work as a student. What caused you to change your business model? Were you thinking from a business perspective for growth, or were other elements at play?
Arturo: Since the beginning, we have constantly changed what we’re doing, including the name of the company. It started as Barcelonian, then changed to the student network. Next, we split the company completely in two when we realized there were two completely separate goals. Two years ago we changed the name to Studentfy. It’s been constantly changing, mainly due to experimentation and lack of experience. Many of the changes have been forced by the interest of the customers, and the big impact of the COVID-19 crisis, which accelerated these changes.
To clarify, COVID-19 made you accelerate your business model, and make decisions faster. Can you tell me how you were affected when the pandemic began, causing most of what you provide in terms of service to become inaccessible?
Arturo: I’ve always been a fan of Clayton Christensen, the author of the Innovator’s Dilemma and The Innovator’s Solution. He recommends for starters to be patient for growth and impatient for profit. This means focusing on profitability, rather than growing and obtaining insane growth numbers. That has been my approach so far and has allowed us to grow without requiring an external fund. This crisis shut down 90% of all of our revenue streams, forcing us to look for funding. To get funding, you need growth KPIs. This caused us to shuffle our approach. However, like other smaller crises that came before now, only positive things have come out of it. They force us to work harder, be more focused, and leave what’s not working. In the end, I think we’re going to come out stronger.
How did the COVID-19 pandemic dictate your day-to-day operations?
Arturo: We have made many changes. For example, we have four fewer employees; we couldn’t keep everyone on board due to decreased business. This decreased our team by 40%. Additionally, we shifted our focus away from events or local content. For example, we started focusing on online discounts. We have close partnerships with companies such as HP, Microsoft, Lenovo, and Azer, which provide online discounts that can be used in many locations. We tried to create value for schools, as that’s the main adoption channel we have for students. We began thinking about how we could monetize schools and increase our monthly recurring revenue, which would be less impacted by a crisis. We’re trying to gain stability.
To clarify, in order to gain this stability you are focusing on creating value to the student or the school, in order to improve their performance during the crisis?
Arturo: Yes, we are trying to create revenue streams that are not as severely disrupted as an event. We had many events planned that were all suddenly cancelled. We are trying to create value in ways that are more scalable and can be utilized even during a lockdown. We want to create passive income like monthly recurring revenue, rather than selling on our platform, which is GMB across merchandise value. We are focusing now on MRR, and growing the value of the platform itself, especially the social aspects. We have three KPIs; we have GMB, or gross merchandise value, which we have already, but has been stalled due to COVID-19. We also have MRR, or monthly recurring revenue, which is created by growing the discount platform. This is done through students purchasing the discount card, and the managing which schools purchase. We are focusing on MRR, including our daily active users; we want to add some social capabilities that people can use even during a lockdown.
To clarify, you’re focusing on closer interactions with your users, who are both international business students and those in Barcelona.
Arturo: Yes. We have three types of users: brands, educational institutions, and students.
Do these different types of users intersect in the ways they use your service?
Arturo: We are trying to facilitate contact between brands, universities, and students. By solving student problems, we have more students, which is good for brands and universities, and vice versa. The more of one type we have, the more benefit to the other two. It’s not specifically that one service will benefit both brands and students, but having one type of customer benefits the other one. By adding value to one, we add value to the others as well.
I know that your mission is to have a positive impact and help all types of customers. What are your next steps, moving into 2021? What worked from 2020, and what didn’t?
Arturo: We are trying to add value in different ways. As our revenue stream is very affected by COVID-19, we are directed towards obtaining the metrics we need in order to get funding. We are applying a couple of accelerators. Our next step is entering one of the accelerators while starting to raise a funding ground. This will hopefully allow us to hire IT, as we believe we are very close to the market field. We know what we have to build, but it must go slow due to the size of our team. If we get a bit of economic muscle, we can hire more IT people and develop our platform faster, potentially having it ready for the next academic year.
So you are preparing for the next academic year by seeing where you can collaborate with other partners?
Arturo: I’m always thinking about new partnerships we can do. I can’t really talk much about partnerships that haven’t closed, but there are several cool things that could be happening soon that will help us provide a better service. For example, we could provide easier payments on the app, no processing fees, and increasing value in different ways.
I have used the Studentfy app and went to activity before the lockdown. It seems many students use some aspect of your service. Do you have competitors who are doing things differently in ways you would like to explore?
Arturo: We have a lot of competitors because we have many services. For example, we have discounts; any business aimed at providing discounts to students could be competitors. Additionally, any business that can set up an event can be a competitor or any company that provides landing services. In the schools we work with, our usage is very high. We are now trying to reach more schools outside of Barcelona. The scale cycle of schools is very slow; they are very bureaucratic. It took me two or three years to work with the school I graduated from due to their process. We want to improve what we’re offering to schools to decrease this sales cycle. We also want to directly aim at the student, decreasing dependency on the universities.
You are already trying to be proactive during change. Are there any projects in the pipeline you plan to work on soon?
Arturo: Yes. We have a huge pipeline; if I had 10 engineers, I would have them all working full time. Developing an app requires a lot of preparation; there is always development. We are working on adding value to the schools. We have detected that the schools want to personalize their solution by adding their colours and logos; this is something we are working on right now. Additionally, we have continuous work on improving discounts, by making them more accessible, and improving awareness on where students can use their discount card. There are a hundred things we are working on, but in the next few months focus on these things.
Is there anything else you would like to share with our viewers?
Arturo: If you want to start your own business but are struggling with COVID-19, always see the positive side. The glass is half full. We had a lot of setbacks because of the pandemic, but everyone experiences setbacks. Try to power through and see the positive side, and work hard in order to come out even stronger.
About the Guest
Arturo Gil started building the infrastructure of what is today Student Network. His business is offering a SaaS enabled market plate with discounts and an intranet for universities.