By Davis Smith, Wharton MBA’11, Arts & Sciences MA’11, co-founder of Baby.com.br and Dinda.com.br
In June 2013, I met with a group of Lauder students on a rooftop in Rio de Janeiro with a stunning view of Botafogo Bay and Sugar Loaf Mountain. After encouraging the students to look beyond traditional job opportunities and take risks that would allow them to “change the world,” one of the students asked me if I felt I had changed the world with my businesses that sold pool tables and baby products. The question was sincere, but it stung. Unbeknownst to him, I had been asking myself the same question in the previous months and had already decided I was going to make a change, but this student’s question increased my sense of urgency to take my own advice.
While I was at business school at Wharton, my cousin and I closed a $4.3 million round with a PowerPoint and a killer domain, nothing more. Brazil was hot, and we knew it. It wasn’t by coincidence that we chose Brazil or the baby market. We spent our first year in school coming up with 60 business ideas, which was facilitated by my involvement in the Venture Initiation Program. During the summer, I was fortunate enough to receive a Wharton Venture Award, which allowed us to rigorously research, vet and test our plans. By the end of the summer, we had narrowed the 60 to 1 and knew that we had a game-changing idea.
Just two years earlier, my friends, family and neighbors thought I was crazy. My cousin and I had started PoolTables.com out of undergrad, and had grown it into the largest retailer of pool tables in the US. When we told people we were going back to school, nobody understood. Life was good, but we believed MBAs would give us the knowledge and networks needed to build something truly meaningful. We sold our business, essentially burning the ships. It had seemed reckless, but now appeared brilliant.
Within eighteen months of the Baby.com.br launch, we had raised $40 million and built a business that had become a household name in Brazil, especially among young families. Our team consisted of one of Brazil’s biggest celebrities and many of the most seasoned e-commerce professionals in the country.
For all the company’s successes, it wasn’t always smooth sailing. We were battling fierce competitors, Brazil was incredibly difficult to navigate, margins were slim and our business was extremely capital intensive. Despite these challenges, we found ways to push the business forward. We launched Dinda.com.br and continued to see our businesses grow beyond what we’d ever hoped. It was every entrepreneur’s dream-come-true. However, after three years of working on the business, I unexpectedly began feeling it might be time for a change.
Once again, the comments of old began: You’re crazy to leave your company now! Just as before, people didn’t (don’t) understand the timing. I admit that stepping away was probably the hardest decision I’ve ever made. My decision to leave was based on two major factors that I couldn’t work around:
First, I was unhappy with our founding dynamics. My cousin and I had worked together for years, building some amazing businesses. There are partnerships that work well; in fact, ours had worked for a decade, but running a business as Co-CEOs was taxing. Ultimately, as many founding relationships do, our friendship began to sour. Trying to salvage our relationship became more important to me than power, control or money. I felt strongly that it was time for us to part ways as business partners.
Second, I wanted to make a bigger difference with my work. My reason for becoming an entrepreneur in the first place was to have a positive impact on the less fortunate. My co-founder, family and friends knew this. It has always been my life’s passion, largely driven by the fifteen years I’ve lived in the developing world (nearly half my life). Around this time, that desire to do good began to burn deeper than ever before.
Just four months after meeting with those Wharton students in Rio de Janeiro, I left my day-to-day role at Baby.com.br/Dinda.com.br and moved back to the US to begin my next adventure. Cotopaxi will be launching in Spring 2014.
Bio: Davis Smith is a serial entrepreneur, a graduate of the Wharton School and Lauder Institute’s Class of 2011. He is the founder and CEO of Cotopaxi.