Juan Carlos Salame - Scaling a Third Generation Ecuadorian Retailer & Credit Provider

Juan Carlos Salame’s family business began in Guayaquil in 1944. Domingo Salame, his grandfather, began selling at the local market prepaid vouchers so his customers could buy products at different local stores and, then, pay Mr. Salame in installments. A revolutionary idea that many decades later evolved to what we know today as credit cards. He later put in place a retail shop to sell the products himself. This business was transitioned to his son in the late 70s. A couple of stores have grown into a corporation with over 70 stores in Ecuador and a strong ecommerce presence. The business model focuses on financing products to a population, many of whom, do not have a credit history yet. Juan Carlos and his brother have taken over the business in the last few years putting in place top technological systems and curating an innovative culture. Standout Quotes: "Be respectful of everyone regardless of their position, their role, or what they do with their lives" - [Juan] "Be very low profile...with your life, with your business, Humility in that sense" - [Juan] "I would seriously encourage anyone to look for a mentor in the early stage who will help guide them through the different opportunities that they would face in their lives" - [Juan] "I would encourage anyone in their twenties or early thirties to form their own business, especially if they want to be like a CEO... they have to quickly learn and fail on a smaller scale" - [Juan] "Founding your own business is like 3 MBAs in one" - [Juan] Key Takeaways: Juan describes the original business model which is still in play today. His grandfather had started selling coupons which allowed customers to buy products from other stores now and pay back in installments to him. He later opened his store to sell those products, in effect, he was a credit provider. The business model is targeted at customers who don't get credit from their banks or lack a credit history to support them getting it. The biggest aspect of the business is now e-commerce, especially following the lockdown in the pandemic Describing that he was not forced into the family business, there was always some level of expectation that he would join the business, and he had already started getting involved at an early age. However he had left to get an MBA in the US, and decided to start his business rather than return to the family business, but after a few years, his father called him back. He stayed for a while and quitted since his working relationship with his father was poor. Juan shares that he finally went back to the family business with conditions given; the first was to have a board member to sort out rifts when they come up, the second was not reporting directly to his father. The most challenging aspect of the business they had to change, upon joining the family again, was the culture of the company in order to attract new talent. Some managers also had to leave, as there was a need to work with people who were more aligned with the goals of the company. Discussing his process of implementing change, Juan shares that his first step is to work with the people already in the company, if this fails, he then persuades the workers to make the necessary changes, and if that also fails, he would find someone else who can work with him. History did repeat itself as Juan's father also had issues with his father regarding joining in and transitioning into the family business. A key source of his knowledge was starting his own business, and also putting in the effort to be exposed to different industries by participating on their boards. Investing in time with the kids has become a top priority on the list of worthwhile investments? The family decided to assemble a book 2 years ago, which would tell the story of the family business and the family as well as the future of the business. Key lessons from Juan's journey: Be very strategic in how you go about implementing change. Being intentional about communication in the workplace and within the family is also very necessary as part of a family business. From Juan to his kids: Look for something that you want to do in life, something you enjoy, and something that adds value to the world. Juan would also encourage his kid to put the best effort into anything worth doing, find a mentor, and within the early twenties start a business because the knowledge gained is like 3 MBAs in one. Episode Timeline: [00:49] About today's guest "Juan Carlos Salame" [02:00] Juan narrates the origin of the family business. [08:30] How did you come to join the Family business? [18:36] What changes have you been able to implement since you and your brother joined in? [21:40] Juan shares his approach to making drastic changes in a company. [27:56] Is there a multi-generational family plan in place for your children? [30:15] Have there been any transition issues since the business started? [31:45] How have you learned and grown on your journey? [35:12] What is the most worthwhile investment you have ever made? [36:13] Highlighting Values instilled in Juan which he passes on to his children. [37:09] Does your family invest in anything intentionally to try and document its history? [38:28] Juan shares lessons from his growth process [41:45] What would you say is your legacy? [43:05] Juan's letter to his kids For more episodes go to BusinessOfFamily.net Sign up for The Business of Family Newsletter Follow Mike on Twitter @MikeBoyd If you feel it's appropriate, I'd so appreciate you taking 30 seconds to Leave a Review on iTunes, I receive a notification of each review. Thank you!Special Guest: Juan Carlos Salame.Sponsored By:The Business of Family Newsletter: The newsletter compliments the podcast with subscriber-only articles, bonus content and a great list of book recommendations. Links:Créditos Económicos