Small and medium-sized businesses (SMEs) have been some of the hardest hit by the economic downturn caused by the COVID-19 pandemic, and only those with a strategic, forward-thinking mindset who have been agile and ready to adapt have been able to succeed.
The UN’s Micro-, Small and Medium- Enterprise’s Day aims to raise public awareness of SME’s contribution to sustainable development, the global economy and the challenges they have faced during the COVID-19 pandemic.
We recently caught up with Victor Rokkedal Dyrnes, Founder and CMO of Guinea Mobile and MSc Entrepreneurship Alumnus, to learn more about how he has overcome the challenges of the pandemic to lead Guinea Mobile to become one of the key players of Mobile Virtual Network Operators in the Peruvian market.
What does Guinea Mobile do?
We are a Mobile Virtual Network Operator (MVNO) which provides mobile services such as SIM cards with mobile plans that include data, minutes and SMS. One key part of our business model is that we rent the infrastructure from one of the established Mobile Network Operators (MNO).
There is a huge financial benefit to being an MVNO instead of an MNO because as an MNO you are required to build a huge corporation and mobile infrastructure that costs hundreds of millions, which would not have been feasible for us when starting out.
We originally began by launching our own brand, Cuy Móvil, and later became the white label provider for another brand, Wings Mobile. Since then we have evolved and developed the business plan to focus solely on B2B clients, where our mission is to enable any business to have a mobile phone plan.
What were the main challenges you faced when setting up Guinea Mobile?
Guinea Mobile is a Peruvian based company and, as a Norwegian myself with no knowledge of the Spanish language or experience conducting business in Latin America, there were many challenges before we even got started.
Launching an MVNO in a developing country such as Peru, where the culture favours a lot of bureaucracy and a much more relaxed approach to business than I am used to with no real sense of urgency, was a complex and challenging task. During the first three-and-a-half years, we had to dedicate a lot of time to the administrative side of the company such as; obtaining an MVNO concession from the Ministry of Communications, negotiating an agreement with our host MNO, Claro Perú, and passing the required technical integration tests, which meant we generated no income during the first three-and-a-half years.
Conducting business in a new language and trying not to get too frustrated with cultural norms, such as people constantly being 30 minutes late for meetings, meant my patience was definitely put to the test as it’s just not what I was used to. It was sheer determination and grit that got me through all the delays and constant challenges.
Another key factor to overcoming the challenges was that from the outset I recruited an excellent Peruvian partner who I appointed as CEO.
What inspired you to start your business in Peru?
When I was backpacking around Latin America, I was keen to avoid sky-high roaming charges, so I bought a new SIM card in every country I visited. This experience made me realise how outdated the process, services and even the apps involved in acquiring a SIM card were. This led me to think that it might be a good idea to launch an MVNO.
This might seem strange coming from someone who has no telecommunications experience, however, the market for MVNO’s in Scandinavia has grown exponentially in recent years with at least 100 emerging onto the market, and several of these having had amazing exits. Some have been so successful they have been featured in the global media. After doing some research while backpacking and before coming to UCL to do my Master’s, I found that they had just opened the market for MVNO’s in Peru which made me think that being a ‘first-mover’ there could be a great idea. I also had a Peruvian friend who I convinced to join me in this exciting venture.
How has Guinea Mobile grown in the past five years?
When we first launched with our own brand, Cuy Móvil, we quickly faced the brutal reality of the telecoms industry being fiercely competitive which resulted in the company almost going bankrupt due to the huge cash demands.
This was a period of change for the company and we continually adjusted and developed the business model to combat these challenges, which led us to decide on taking a new direction and become the host for companies that could benefit from having a mobile plan.
We then started providing a white label offer, which means any established brand with distribution and financial resources can, through us, launch a mobile plan in just eight weeks. We manage all the tech, legal requirements and customer support, and they get help from our data team to analyse the enormous amounts of data that comes from the telecom plan with the goal of improving their core business model and increasing loyalty.
Since we became Guinea Mobile and officially started operating in October 2019, our user growth has been on the up, and by March 2020 we had acquired 1.7k users. By October 2020 we had grown a little more to 2.5k users, but then our growth started to escalate and by March 2021 we had 21k users which meant a year-on-year growth of 1,130%.
As of June 2021, we have reached 25k users and we’re still seeing positive growth.
How has the pandemic impacted your business?
As Peru went into full lockdown with a strict curfew from 16 March 2020, the government banned the sales of new SIM cards. The activation of new SIM cards requires biometric fingerprint verification, which is why the government argued it was impossible to do it without physical interaction.
However, we took this opportunity to implement our innovative market strategy, which planned to reduce costs by developing tech that required less human capital. We developed the first mobile application on the market that allowed the users to complete the verification by themselves.
We filed a letter to the regulator outlining that we already had a distribution model that didn’t involve physical contact, hence we should be allowed to continue operating during the pandemic. In May 2020 the regulator publicly announced the approval of this method and that it was currently only being provided by us. This gave us a few weeks as the only option on the market and it also helped to establish us as the innovative mobile operator in Peru.
In terms of the pandemic presenting new opportunities, I would say that it has helped us to change the mentality of the regulator to accept a different technological approach to the way the telecom industry is regulated in Peru, and they have since made a number of small changes that makes it possible for us to provide a great service with few employees.
What changes have you made in response to Covid-19?
Our main focus was on marketing us as a 100% virtual operator offering contact-free onboarding. However, as this has always been our mindset, we didn’t actually have to change much. The transition to remote working for all employees, including the contact centre, happened overnight and we are still working from home. As the team has grown from 12 people to 22 in the last 23 months, we would have outgrown our office, but we see that working remotely has increased productivity and made employees more satisfied, hence we will continue with this and only use the office for creative workshops.
One positive change has been that before we only employed people locally, however now we can recruit throughout Latin America to find the best talent and take advantage of countries with lower labour costs.
What do you think is the key to the survival of SMEs?
Grit and adaptiveness. I see many companies fail because they do not have these two key qualities.
- Adaptiveness: they are too stubborn and protective over their original idea and refuse to make changes or, if needed, pivot their business plan.
- Grit: they struggle to stay positive in the darker times, hence they find giving up the easiest way forward even though they often could have made changes to help the company survive.
What excites you most about the tech industry at the moment?
It’s not quite related to my industry but, I’m extremely excited about cultivated and plant-based meats. I’m not vegan or vegetarian, however, I see it as having a potentially big impact on the environment and the countries who are the first to develop ecosystems and scale it, can create high impact startups that will lead and dominate the market. I believe countries can do this by implementing subsidiaries, provide financial support or increase taxes on normal meat.
What are your main responsibilities as CGO and what do you enjoy most about your role?
As we pivoted to become more B2B focused and less B2C, I transitioned into the role as Chief Growth Officer (CGO). I lead on our new goal which is to generate 1-2 new B2B customers per year, to focus on our growth. These customers are new white label mobile brands and are typically the biggest brands in the country such as large retailers, banks etc., with thousands of employees.
My day-to-day responsibilities involve analysing and gathering data, developing the user experience and constantly thinking about our vision and how we can improve to get there in the future. The best and cheapest way to grow for us, and our white label customers, is to reduce churn by making more people satisfied, hence also improving word of mouth to get more users is a key responsibility. One of my main roles, therefore, is to monitor and analyse key performance indicators (KPIs) like churn, active users, average revenue per user (ARPU), net promoter score (NPS) and other satisfaction scores daily.
What were your key takeaways from the MSc Entrepreneurship programme
Learn more about Victor’s story and Guinea Mobile and on their website.