AQ Top 5 Young Entrepreneurs: Andrés Moreno
This article is adapted from our AQ Top 5 feature on young Latin American entrepreneurs. To see the rest of our list, click here.
It’s almost misleading to call Open English a Latin American startup. The initial funding that turned it into one of the most widely used online language-learning services in the world didn’t come from South America. Most of the company’s more than 500 employees live in the U.S. The programmers who built the platform may have fueled their work with arroz con caraotas instead of Top Ramen, but founder Andrés Moreno’s plans for growth have as much to do with Asia as the Andes or the Amazon. It’s almost misleading to call Moreno, from Venezuela, a quintessentially Latin American entrepreneur. Almost.
The truth is that despite a Silicon Valley-esque origin story, forays into international markets and headquarters a few steps from Miami beach, the Caracas-born Open English is precisely what Latin American entrepreneurship looks like today. The company is connected to global markets, relies on both regional and international talent, and is the product of a deep understanding of local realities, consumers and cultures. Thanks to Moreno’s blend of media savvy and old-fashioned persistence, it’s also highly successful. But that doesn’t mean making it happen was easy.
“We weren’t able to raise a single cent in Caracas,” Moreno told AQ. As a struggling student, banks refused to lend to Moreno and his fellow universitarios without collateral. Local investors weren’t interested in Internet companies at the time. And so Moreno headed to San Francisco. “I went over there Latin American-style, with $700 in my pocket, a big smile, my PowerPoint presentation … I slept on a friend’s couch for about nine months.”
Even in Silicon Valley, however, investors were skeptical. Moreno’s idea was to pair personalized cloud-based learning with 24/7 access to English-speaking instructors through chat services like Skype. But U.S. investors’ idea of a Latino customer, Moreno recalled, was a “newly arrived Mexican immigrant with no computer, no Internet, and no money. If you were going to teach them anything, you’d have to use cassette tapes.”
But Moreno knew the region — and his customers. Internet penetration in Latin America was substantial and growing fast. For many in Latin America, learning English was not a pastime or a hobby, as learning Spanish might be for a customer in the U.S., but a professional imperative for a growing and ambitious middle class.
So Moreno kept at it, and his efforts eventually paid off. In $10,000 and $20,000 increments, he was able to raise the first $200,000 he needed to get Open English off the ground. He also found a unique way to connect with his audience. With little cash for expensive marketing schemes, he and his partners launched an unconventional TV campaign in which Moreno himself was a star. The funny, low-budget productions were a hit, and in the age of viral video Moreno became a celebrity of sorts in much of Latin America. “Once we had regional success, that made it more interesting for American investment firms, because it wasn’t just a Venezuelan company anymore, but a Latin American company,” Moreno said. “And that was a growing market.”
Open English has since expanded throughout Latin America, and will soon take its distance-learning approach to would-be English speakers in places like Turkey and Russia. A round of funding in 2013 put the company’s value at about $350 million; the company declined to provide more recent data. But with the acquisition of Next University in 2015, Open English is moving past language education, offering professional training in tech fields from mobile app development to digital marketing.
Today, a Latin American entrepreneur doesn’t have to head to Silicon Valley to realize his or her dream — thanks in part to the success of people like Moreno. Starting a technology company is still difficult, of course, but there are now resources and networks to provide a helping hand. One of them, perhaps not surprisingly, is an online entrepreneurship course taught by Moreno; with a wink to one of the most memorable Open English commercials, the course is called, simply, “Éxito!” — Success!
Jaramillo Bernal is the executive producer for Efecto Naím, which airs on NTN24.