Startup Monity embodies Walton Scholarship ethos

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L-R: Zuniga, Navarrete, Cruz, Rojas, and Escobar and faculty member Jon Wood

Fintech startup Monity is the embodiment of the Walton Scholarship vision: Combining the foundation’s investment in educational opportunity with hard work and persistence, Walton Scholars are charged to return home with a vision to make meaningful contributions to the region. The founding members of Monity are computer engineering major Michael Cruz of Belize, international business major Roxana Escobar of El Salvador, management information systems major Andres Rojas of Costa Rica, and software development major Jhoel Zuñiga of Costa Rica. Recently, computer science major Pedro Navarrete from Nicaragua came aboard to assist with web development.     

We remember the first meeting of last year’s Arkansas Governor’s Cup business plan competition teams, at which students explained their ideas to faculty and answered questions about the viability of their business model.

At a corner table sat four Latin American students, intently explaining their vision for a blockchain-based money transfer system for the developing world, where millions of foreign workers pay high fees to send money to unbanked families across national borders.

We were impressed with their quiet commitment. CEO Michael Cruz established the need by describing a ledger his father had shared with him. It contained a record of his wages and of all the money he had transferred from his remote employment location back to his family. The total in transfer fees he had paid over the years seemed staggering, and that revelation planted the seed for Monity.

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Monity CEO Michal Cruz

Monity’s collaboration began the week they first arrived in Arkansas. Zuñiga and Cruz met on a campus bus on a Walton Scholars trip to Walmart. They discussed their dreams of creating a business and returning to help their countries. Their first attempt didn’t end as they’d hoped; they spent six months developing a video game, but soon realized they needed team members with solid business skills. “We launched the game, but people would play for a while, but when players didn’t see a critical mass of users, they would drop off.” They sidelined the game and looked for partners.

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Rush Deacon of Arkansas Capitol, Zuniga, Escobar, Dhu Thompson, Cruz, Rojas, Lt. Gov. Tim  Griffin, Ken Olree.  Photo: Arkansas Capital

They soon added Rojas, who was, as Cruz said, “all about big data.” Then they began trying to identify an important problem to solve. The team considered a digital wallet, but eventually settled on money transfers. “And we asked who else could align themselves with our dreams?” Cruz said. They needed marketing expertise, and Cruz knew Escobar had big dreams for things she wanted to do. With their team in place, they used the Governor’s Cup competition as a concentrated effort to move their vision forward. The strategy was successful: Monity was well-received at the Governor’s Cup Competition, taking third place and a $10,000 cash prize.

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Roxana Escobar presents Monity’s 90-second pitch at the Governor’s Cup luncheon. Photo: Arkansas Capital

In the fall, Monity was accepted into the Delta I-Fund, an early stage, proof-of-concept business accelerator formed to train entrepreneurs administered by Winrock International. Each startup is matched with a mentor, completes 12 weeks of rigorous training, and receives $5,000 in technical assistance or access to seed-stage capital. The experience helped them refine their business model.

Although Monity originally targeted money transfers from laborers in Costa Rica to unbanked families in Nicaragua, political instability delayed a planned market research trip last summer and led to the devaluation of the Nicaraguan currency. The team now views that complication as a blessing. Confronting the political risks led them to modify their strategy. “During the course of the Delta I-Fund, we decided our initial target market needed to change,” explained Escobar.

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Senior management information systems major Andres Rojas consults with an expert on regulatory issues.

“The exchange rate was always the big unknown in the equation.” said Rojas. “The U.S. dollar is the official currency of El Salvador. With El Salvador as our beachhead market, Monity will start out lighter on our feet. Also, our original target market was unbanked individuals but the individuals who are sending money out of the U.S. are mostly younger people, more accustomed to working with banks.”

“Our entry point now is the United States-to-El Salvador corridor.” said Cruz. “Salvadorans are the largest population, after Mexico, transferring money from the U.S. to Latin America. That market is not saturated. Every other player in this industry targets Mexico.”

The team realized that, given the demographics and attrition, an ever-increasing percentage of their customers will have a relationship with a bank. They predict they eventually will be able to serve unbanked customers as well, however.

“We mainly talk about people sending money back to families in Latin America, but there would also be utility for individuals such as foreign students in universities, for NGOs and missionaries, and for populations all over the developing world,” Zuñiga noted.

Cruz notes that the traditional U.S. companies in the money transfer sector have not created a relationship of trust with the market. “People go to those companies because there is nothing else.” Monity believes a close affinity with the people of the market will offer a loyalty and intuition advantage in marketing the service. “Monity wants to step into that market and develop a relationship of trust we can use to educate users and eventually provide jobs that will help move the entire economy forward.”

In the meanwhile, the team admits Monity is an all-consuming preoccupation, invisible to most faculty and students. “When I finish with my classes and see people on Netflix,” Cruz says, “I am thinking how I wish I had all that time to devote to Monity.” Rojas nods, “I often wish I could split myself in two!” They are remarkably intentional, and their dedication comes from having their collective eye on a goal. The entire group affirms that they’ve had to learn to self-regulate; making sure they get enough sleep while getting coursework done and meeting their obligations to the Delta I-Fund and other Monity-related tasks.

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Software development major Jhoel Zuniga and Dr. Kenneth Olree discuss presentations at the 2018 Arkansas Governor’s Cup luncheon in Little Rock. Photo: Arkansas Capital

So what’s the next hurdle? Cruz takes a deep breath. Transfer licenses are the elephant in the room right now. Monity requires money transfer licenses from all fifty states, and license costs vary widely from state to state. California, where the Salvadoran concentration is greatest, is the most expensive: licensees must have $250,000 in collateral. So having an affiliate bank who already has the license structure in place might be an ideal strategy.

So what happens after graduation? Cruz is developing a tourism side hustle—a website to organize tours of Mayan ruins near his home in Belize. He and his sister will launch that while he continues his efforts to raise Monity from the ground. The others will continue to collaborate remotely while they are employed elsewhere, traveling as needed.

The vision for Monity has a long arc. “We are not only trying to help people economically—we intend to help educate them financially, to incorporate them into the formal financial system,” said Escobar. And the team believes that connecting unbanked citizens to the financial infrastructure can have ripple effects and could lead to more political and economic stability in the region over time.

A rising tide lifts all boats—bringing us back to the original vision of the Walton Scholarship, which for a quarter century has been “creating life-changing opportunities, championing faith and empowering young minds to initiate meaningful impact across Central America and Mexico.”

As they approach graduation, the Waldron Center would like to assist these award-winning students in identifying a network to help move their vision forward. If you have contacts in banking, or if you are interested in learning more or helping to fund next steps, contact michael@monity.co.

The Arkansas Governor’s Cup prize money is underwritten by Delta Plastics. Monity would like to thank Owner and Chairman Dhu Thompson for investing in innovation and entrepreneurship in Arkansas.

CART3R: Running Back Dwayne Carter’s E-commerce Side Hustle is Growing

 

 

At 2017 graduation time last year, we posted the following Q & A with Dwayne Carter. We decided to check in with Dwayne and update the progress of C3.

Company: CART3R LLC. (Also known as C3)

Owners: Dwayne Carter II and brothers Michael Carter and Joshua Carter

Where located: Navarre, Florida

Business type: Sports brand/athletic apparel

The Waldron Center frequently observes that inspired business ideas frequently derive from what an entrepreneur knows and loves. Senior management major and Bison running back Dwayne Carter of Navarre, Florida, obviously knows sports ­­— so it was logical for his business inspiration to incorporate that passion he shares with his brothers.

What is a little surprising is that his interest expanded even before he graduated into a full-fledged e-commerce business.

Where did you get the idea for your business?

I decided I wanted to do something special with my brothers, and with all of us being athletes, I wanted to do something that dealt with sports. So we decided we wanted to start a sports brand like Nike or Adidas. We are an e-commerce store.  We do advanced orders when we make uniforms for teams and organizations, and for our individual line, we have inventory.

What was one challenge you had to overcome to get the business off the ground?

At first, it was difficult to arrange the manufacturing part of the company. I tried contacting multiple manufacturers around the world, and working with them, the big issues were a language barrier and the minimum size clothing orders I could place, which was 100. Then one day when I was searching, I was contacted by a manufacturer from Peru, and he spoke great English. He allowed me to place minimum orders of 50. He made my job a lot easier and made the process of making clothing and getting them here smoother. We’ve stuck together ever since.

How do you market your brand?

Our saying is “Expect Greatness.” We strive to be known as a brand for athletes who love to work and who expect to be great because they work so hard to reach it — even if they are counted out at the moment. We try to depict athletes working that theme in the photos we use.

Carter says he relies on social media and the web for advertising. You can connect with him and C3 on Instagram at CART3R, follow @CART3R LLC on Twitter, or visit C3 online at shopc3sports.com.

We wish him luck after graduation!

January 2018 Update:

Are you working full-time with C3?  If you work elsewhere, what are you doing, and can you discuss managing C3 and other opportunities at the same time?

Yes, I work with C3 full time. I just work on C3 and train while my agent talks to teams in the NFL/CFL to get me signed. I manage doing both by changing my sleep schedule. Since my manufacturer is 12 hours ahead so I work to get our clothing and our customers clothing designed and made from 9 pm-3 am. Then I wake up around 10 am and train about four hours a day. In between the four hours I’m in meetings either over the phone, via skype, or in person with our customers.

How do the personalities of the three brothers affect the process of doing business together? Would you have any wisdom about working with your own family?

The personalities of the three of us work well together, because we all have have the same ultimate goal; we all are driven to get there. We also are all creative in different ways.

I would say working with your family is fun, but make sure you can see things from their points of views and  be open to their ideas. It’s easy to be closed-minded, especially when it’s with your brothers/sisters.

What do you consider your biggest market and what is your biggest selling tool?
 
Our biggest market is people interested in football, whether it’s football coaches ordering for teams or individual football players. Although we sell to all athletes and all sports. Our biggest selling tools have been Instagram and Facebook and the videos we make for them.
 
Any specific advice for college entrepreneurs?  Anything from your own experience that you might have done differently if you’d known then what you know now?
 
One thing I learned that I wish I knew earlier was to design and order clothing a season ahead.

To college students, I would say keep going and don’t get discouraged. Also, I would say don’t be afraid to ask for help. I think because we are so young we have an advantage. There are so many older entrepreneurs that are excited to work with us because they want to see the culture of entrepreneurship grow.

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Entrepreneur spotlight: Ice Cube Putters Matt McJunkins and Josh Turner, owners

FullSizeRender (7)Matt McJunkins and Josh Turner are golfers and entrepreneurs. Their lunch info-session sponsored by the COBA Center for Professional Excellence was an ideal case study for entrepreneurship students. The bearded pair were entertaining and engaging as they explained their journey as new owners of what began as a garage-workshop product, and the challenges before them in scaling the company up. By the end of the hour, students were pulling for their success.

The Ice Cube Putter is a 400-gram, clear acrylic putter head with a stepped shaft and Karma Jumbo grips. It was first manufactured in singles out of inventor Wes Mickle’s workshop in Texas. The elderly hobbyist had managed to get five different patents — four for design and one for utility — on the putter head, and had persevered seven long years to obtain USGA approval for it. But he was in his seventies now, and needed a buyer who could take his project to the next level.

Turner, who was already using the putter himself, got a call from someone who thought he might be interested in buying the rights to it. He and McJunkins were interested, and Mickle was willing to provide the structured buyout on which the purchase depended. They did the deal. Mickle and his wife drove from Texas, set up the shop in Searcy, and trained McJunkins and Turner in their production process. Now it was up to them to make it successful.

Now that they owned the product, the critical issue became how to mass-produce it. Turner had an acquaintance traveling to China for personal business, so he sent a putter with him. Two weeks later they had a manufacturer that would reduce their per-item manufacturing costs considerably. The components are still assembled locally. Sales are increasing, but the next big step is how to expand into overseas markets. “Shipping is a big hurdle,” Turner said. “I sold one putter to a buyer in South Korea. I explained that the shipping would make the $149 item cost $400, and it was fine with him.” But they know they still need to find the right channel to facilitate overseas sales in larger numbers. Canada and the UK are the priorities right now.

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Turner owns an oil field company, Environmental Resources, which remediates saltwater and hydrocarbon spills on site. He is also on the Physical Resources staff at Harding University. He is more oriented to the production arm of the company. Turner passed a prototype around the room for students to examine as he spoke. He displayed the original lackluster packaging and poor quality head cover that had been sold with early iterations of the putter, and explained their process for revising the branding. The new logo design includes a stylized polar bear. Turner demonstrated how it was interpreted on shipping boxes, a slick black head cover, and golf bag. “Ice the competition” is the new tagline on the website.

Serial entrepreneur McJunkins in the sales side of the pair. He owns a trucking company and does oil and gas consulting through his company Legacy 7 Surfsol. His relationships in different markets allow him to identify future partnerships that might benefit Ice Cube Putters. The company has been approached by those who want to affiliate, but he and Turner enter those relationships with caution. “We want partners, of course. But from experience I can say that you need to be careful who you choose for those business relationships.”

 They are working to affiliate with businesses interested in promotional items, since the putter head can be customized with laser-engraved logos or other art. Their website features clubs engraved with the autographs of pro golfer John Daly and entertainer Toby Keith. “Licensing is a big deal,” Turner said. They are pursuing sports licensing relationships that ultimately will benefit sales.

One new component of their marketing strategy is the decision to sell through Amazon. The process of being accepted at Amazon took two months. “You have to send all kinds of information to prove you are a legitimate company. We had to provide patent information and so forth,” Turner recalled. Eventually, they partnered with Domazon, a marketing firm providing consulting for sellers who want search optimization for their products on the Amazon platform.

Other challenges? McJunkins said they recently became aware of someone overseas who was knocking off their product. “Patent infringement lawsuits are expensive,” and “you have to decide how important pursuing a particular case is to you.” Ice Cube now manufactures a second USGA-approved putter, the Face-On putter, and sells logo golf hats and head covers as well. In the meanwhile, they are pursuing their expansion strategy while balancing other jobs and projects.

McJunkins had some advice for aspiring entrepreneurs in his audience, “If you have a dream to start a business, don’t be afraid to do it. Get some experience in the corporate world if you need to, but go ahead and do it. You’ll probably make mistakes, but if you have a family later on, it gets much harder. I’m most proud of taking the risks I’ve taken and not just taking that corporate salary.”