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Joe Falcão is the CFO of Boston-based unicorn Thrasio. Learn the secrets of this uniquely successful startup. Retrace my friend’s exciting journey which started in Kenya and led to Boston via Brazil and other interesting places.
Highlights:
Sal Daher Introduces Joe Falcão, CFO & #5 Employee at Boston-based Unicorn Thrasio
“Always be open to meet people.”
“…we are playing within the Amazon ecosystem by acquiring Amazon third-party sellers.”
“…what we are buying is basically a proven customer experience and a proven supply chain that they can use in our platform and build in scale.”
“…from that point, onward it becomes very time-consuming or capital onerous for them to grow and scale. And that's a sweet spot where Thrasio can acquire these companies.”
“And we want to make sure that they feel pride in what we are growing and helping them out.”
“…we've got a unicorn status in the summer.”
“…what we want to do is provide awesome products for the customers.”
“One other element I will suggest for the founders of companies is to understand their numbers, the flow very well. How the company makes money, the business model.”
“…create a strong relationship with investors, because investors can help you.”
“Your mom may be more interested in your success, but your investors are second, a very close second.”
“…doing the right thing and build up strong trust and relationships. That's the cornerstone of everything I do.”
“Vasco da Gama went to India, and that was the startup of 500 years ago.”
“…every company I joined, I tried to pick up a corner of the company, which had problems that needed to be fixed.”
How Joe Met His Wife Cheryl on a Trip to India
Transcript of, “CFO of Thrasio”
Guest: Joe Falcão
Sal Daher Introduces Joe Falcão, CFO & #5 Employee at Boston-based Unicorn Thrasio
Sal Daher: Welcome to Angel Invest Boston conversations with Boston's most interesting angels and founders. Today, we have a very, very special guest. My friend, Joe Falcão. He is the CFO of a very interesting company that was founded back in 2018. The CFO of Thrasio. Employee number five at Thrasio. They buy up businesses on Amazon and Joe is the guy who oversees all the funding that they need for this business. Welcome to the podcast, Joe.
Joe Falcão: Thanks so much. It's a pleasure to be here with you. And thanks for pronouncing my name properly, it is very rare. The last twenty years in the US, there's no one that pronounced my name properly.
Sal Daher: Big Brazilian, you know.
Joe Falcão: Exactly.
Sal Daher: Falcão. Yes. You studied in Colegio Mackenzie in Brazil...
Joe Falcão: Yep.
Sal Daher: Computing. And then you studied economics at Fundação Getúlio Vargas.
Joe Falcão: You know, USP.
Sal Daher: USP.
Joe Falcão: Yeah.
Sal Daher: Okay. And then you also ended up to do some work at Sloan and also an MBA at Babson.
Joe Falcão: Yeah, that's correct.
Sal Daher: And you were working on the accounting side of things, the CFO. So, 2018 you connected with Thrasio, tell us the story. How did that come about?
“Always be open to meet people.”
Joe Falcão: Yeah. I think the genesis of the encounter I had with the founders was what I learned in life. Always be open to meet people. Always be open to meet smart people and that has opened my mind to new ideas. So, I met the founders basically at back office of a Dunkin' Donuts in Dover, Mass, out of a casual networking. I had met someone else the day prior. And it was the irony of this is, years prior, I'd worked at the corporate office of Dunkin' Brands. He helped take the company West and global. And when I went there, I was not sure if I was meeting the person for coffee at a Dunkin' casually, but it was an office in a small sort of like my home office here.
Sal Daher: Uh-huh (affirmative).
Joe Falcão: And I was meeting with them because they were looking for a CFO to help build and scale the company. And this was roughly two and a half years ago. So, technically one of the founding's actors of the company.
Sal Daher: Quite a ride, quite a ride. So, tell us a little bit public stuff that we can know about...
Joe Falcão: Yeah.
Sal Daher: What Thrasio was doing. First tell us you know, what's the rationale behind what Thrasio does.
“…we are playing within the Amazon ecosystem by acquiring Amazon third-party sellers.”
Joe Falcão: So, what Thrasio wants to do is to have a dominant place in the consumer products. And what we are doing, we are playing within the Amazon ecosystem by acquiring Amazon third-party sellers. Nearly everyone who sells products using Amazon FBA.
Sal Daher: Amazon FBA, what is it?
Joe Falcão: Fulfilled by Amazon.
Sal Daher: Oh! Fulfilled...
Joe Falcão: But let's take a step back. All of the companies that worked for the most complex pain-point of selling our products was the entire order to cash cycle. Meaning, managing inventory, invoicing the customer and getting the cash. Yeah.
Sal Daher: All the non-fun part. The fun part is getting the business in the door.
Joe Falcão: Exactly. In getting it to the customer and giving a fantastic customer experience.
Sal Daher: That's the fun part. Yeah.
Joe Falcão: And what Amazon does, is like you and everyone else listening, you place an order. You have just in time payment. So, risk of non-collection is pretty low. And once it's paid, then the order gets fulfilled. So, as part of this ecosystem, Jeff Bezos said, we can do some by ourselves, Amazon buying and selling, but we can rely on the entrepreneurship of a third party seller that can start his business on the side.
Sal Daher: They can discover opportunities and demand in a micro scale that Amazon could never reach.
Joe Falcão: Absolutely. And this is the power of the network. At the end of the day is the power of the network. Like example, I can give, if I want to buy a pen, this is a pen. And based on the reviews and the customer feedback and acceptance, it goes up in the search process. And what the seller may do on the side, they can have a supply chain biller from China. They bought the stock, store that, and then sell at Amazon. It's a very complex element, but they are doing with one or two products, huh?
Sal Daher: Right.
“…what we are buying is basically a proven customer experience and a proven supply chain that they can use in our platform and build in scale.”
Joe Falcão: So, what we are buying is basically a proven customer experience and a proven supply chain that they can use in our platform and build in scale.
Sal Daher: Excellent. Excellent. So, the third party reseller, they are bringing to Amazon the supply as well. And then Amazon does the fulfillment.
Joe Falcão: Correct. They bring to Amazon, the supply, the product, the packaging, and the marketing to that. And also they can bring the traffic of customers when they go in search...
Sal Daher: Right. Yes.
Joe Falcão: To the Amazon space.
Sal Daher: Mm-hmm (affirmative).
“…from that point, onward it becomes very time-consuming or capital onerous for them to grow and scale. And that's a sweet spot where Thrasio can acquire these companies.”
Joe Falcão: There's lot of science behind what is being done. There's a lot of analytical information that one can benefit from. So, when someone starts a 3PL (third-party logistics) business, there's an inflection point where they can ride. Then from that point, onward it becomes very time-consuming or capital onerous for them to grow and scale. And that's a sweet spot where Thrasio can acquire these companies.
Sal Daher: Excellent. Excellent. At what point are the companies eligible for acquisition, is there a revenue cutoff?
Joe Falcão: Yeah. So, the numbers it plays anywhere from five to $50 million, those are revenues.
Sal Daher: Okay.
Joe Falcão: Then you can derive the EBITDA [earnings before interest, taxes, depreciation and amortization] from there. The price point is based on a normalized EBITDA pro-forma. The...
Sal Daher: Mm-hmm (affirmative).
Joe Falcão: The price as much from the EBITDA. But the most...
Sal Daher: Okay.
Joe Falcão: From a finance angle, the pain points the sellers may have is a complexity of funding the working capital, the inventory.
Sal Daher: Oh yeah.
Joe Falcão: Because you buy products in China. Although, let me take a step back. My kids go on Amazon, buy, the truck comes and delivers. But behind the scenes, the products have to be placed in order in China, you have to pay them, or any other place in the country. And then it's to go on the sea. You have to find a container, go on the sea, come to the US. And this you're talking about three to six months of time. So, someone...
Sal Daher: Right.
Joe Falcão: Has to fund that before they put the bats that had to be sold at Amazon.
Sal Daher: Right. Right. Right.
Joe Falcão: So, that says getting very risky. When you're talking about inventory down payments in the hundreds of thousands of dollars.
Sal Daher: Okay.
Joe Falcão: If someone like me has a business, there were hundreds of thousands of dollars, it's a risk. Or you may be financed.
Sal Daher: Sure.
Joe Falcão: You can be mortgaging your house. So, at that point, they say, well, can I cash out? And what Thrasio does this provide liquidity for the company, number one.
Sal Daher: Yes.
Joe Falcão: Number two, is if the business grows and scales, they can get a piece of the earn-out process as well. So, it's a very fair deal with the seller community of this brands.
Sal Daher: We could get a piece of the what profit?
Joe Falcão: Of the earn-out. So the business grows.
Sal Daher: Of the earn-out.
Joe Falcão: Yeah.
Sal Daher: Yes.
Joe Falcão: It grows and scales...
Sal Daher: Okay, so they have an incentive to keep being creative...
Joe Falcão: Correct.
Sal Daher: And coming up with ideas. So the business grows because they'll get a percentage of that as well.
Joe Falcão: Yeah. And, they're not involved in the business, we take it over. But at times...
Sal Daher: Right.
Joe Falcão: They can have some ideas; they can share with us. But as someone starts a business that is like very close to them.
Sal Daher: Right.
“And we want to make sure that they feel pride in what we are growing and helping them out.”
Joe Falcão: And we want to make sure that they feel pride in what we are growing and helping them out.
Sal Daher: That is so cool. You know, it makes a lot of sense for Thrasio to be buying these businesses. Because funding, providing working capital, providing all of this accounting; the services that Thrasio does, that's the kind of stuff that there's economies of scale there. You know, if you're doing it a large scale, it's a lot easier, a lot cheaper than to have each little third party reseller with their own accountant, their own bank and their own banking relationship. I mean, all of that is extremely inefficient. I was flabbergasted when I heard that a company existed, that's grown to... What's public that we can give an idea so people can get a sense of [crosstalk]
Joe Falcão: I think the public nature. So, when I joined the company, we had two acquisitions, three acquisitions under our belt.
Sal Daher: Right.
Joe Falcão: Now they are quite shy of 90 plus companies globally.
Sal Daher: Wow.
Joe Falcão: US and UK
Sal Daher: 90 Plus. 90 Plus
Joe Falcão: And...
Sal Daher: Is it public? How much you guys have raised to acquire these companies,
Joe Falcão: Yeah, it will be public these days. So, the funds that we raised so far is close to a billion dollars.
Sal Daher: Wow. Wow.
“…we've got a unicorn status in the summer.”
Joe Falcão: And we've got a unicorn status in the summer. And I think we'll be crossing that very soon. So…
Sal Daher: This is fascinating.
Joe Falcão: Yeah, it is.
Sal Daher: This is so cool. I listened to the interview with one of the founders. I'm trying to remember.
Joe Falcão: Carlos Cashman.
Sal Daher: I think it was Carlos.
Joe Falcão: Josh. Yeah.
Sal Daher: Josh. One of the guys. They're both in Boston, right?
Joe Falcão: No. One is in Boston. Carlos is in Boston. And he lives like 20 minutes from my house. And the Josh lives in New Jersey.
Sal Daher: Okay. New Jersey. Joe, you know from what you've seen at Thrasio, what kind of thoughts do you have for start-ups? Because we're going to get into your angel investing because Joe...
Joe Falcão: Yeah.
Sal Daher: Is also a member of Walnut Ventures.
Joe Falcão: Yep. Very proud member, starting the journey.
Sal Daher: Yeah. But anyway, so, from what you've observed and the journey, and this amazing journey that you're having at Thrasio, what would you like to get across to founders that I think would be useful for them from your perspective?
Joe Falcão: In express which I learned in the last two and a half years in the journey so far is; want to be very focused on the market opportunity. What's out there in the small sleeve or segments one, we go after. It's a buzzword, but execution is what comes to play here.
Sal Daher: Right. Right.
“…what we want to do is provide awesome products for the customers.”
Joe Falcão: So, the billion of the reality of what's happening beyond the PowerPoint slides. Understanding them, met and unmet customer needs. At times the customer knows what they want, but at times they may not imagine what they can get. So, we can help them in new products and help them imagine. So, if you're using this platform as a delivery mechanism, but what we want to do is provide awesome products for the customers.
Sal Daher: Excellent.
Joe Falcão: Like in the segment of bats. So in segment of sports or other products that we will be selling. So, as many of our customers at home now, so getting this breadth of products that they can acquire from us is critical. One other element I will suggest for the founders of companies..
“One other element I will suggest for the founders of companies is to understand their numbers, the flow very well. How the company makes money, the business model.”
Sal Daher: Yes.
Joe Falcão: Is to understand their numbers, the flow very well. How the company makes money, the business model. And also create a strong relationship with investors, because investors can help you.
“…create a strong relationship with investors, because investors can help you.”
Sal Daher: Yes. Yes!
Joe Falcão: Investors can help open up the doors and help you think things through. They're not, they have a vested interest in the company growing. It's not competing. They have a vested interest in the company growing and scaling.
Sal Daher: Let me put it this way. After your mother, they're as interested in your success as they come. Okay.
Joe Falcão: Exactly.
“Your mom may be more interested in your success, but your investors are second, a very close second.”
Sal Daher: Your mom may be more interested in your success, but your investors are second, a very close second.
Joe Falcão: If your mother invests in you, she's on top of the cap table.
Sal Daher: Exactly. You have to put mom at top of the cap table; honorifically. Even if she invests late or invests little.
Joe Falcão: Correct. Correct.
Sal Daher: No, that's really important. Focus on execution. Being single-minded about understanding the needs of the customer and addressing that. I mean, that is a well-established formula and that is a secret for start-ups. The tough thing for start-ups is what do you focus on? Because they are in unchartered territory. They don't know where to go. There are no charts, there are no roads. And so, there's infinite choices and figuring out which way to go. That is the toughest thing that I see for a startup.
Joe Falcão: I just watched again, Jeff Bezos video, which was like 26 years ago. It came out as he stepped down as a CEO of Amazon. And it was very interesting to see how he was imagining what Amazon will be. I think the art in science is for the founders to imagine...
Sal Daher: Yes.
Joe Falcão: But not to get lost in imagination. And this is one of the traits I learned. Having lived in Brazil. The Brazilian by nature, they like to imagine. They're very, they're not pessimistic.
Sal Daher: No, no. It's a very optimistic country.
Joe Falcão: It's a very optimistic country. So, even how you can rekindle. If you hit your head against the wall, how it can pivot very fast. So, finance you talk about systems and processes. If you don't have the best system, maybe you can use Excel. It does certain tricks for you or QuickBooks until you're actually reached to the point of maybe I need to grow and scale. And finding the right talent to be able to scale the company. That's critical because people need to have the same vision and risk-takers as well. Because when you join a start-up company or taking certain level of risk, but the journey is extremely rewarding. So.
Sal Daher: Mm-hmm (affirmative). Absolutely it is. It is. And you have a chance as an early employee in a start-up to really affect the...
Joe Falcão: Correct.
Sal Daher: Culture of the company, the direction of the company.
Joe Falcão: Correct.
Sal Daher: Let's talk about a little bit about... By the way I connected with Joe via my brother Mau, shout out to my brother Mau.
Joe Falcão: Yeah.
Sal Daher: He and Joe had daughters who went to the same school. Montrose school put a plug for Montrose school.
Joe Falcão: Certainly, certainly.
Sal Daher: My daughters were also at Montrose. They really love that school. We have that in common. Joe recently joined Walnut. So, now I must say you've been in Walnut since we haven't had physical meetings. So, it's an entirely different thing. When you actually have physical meetings, it's been all online.
Joe Falcão: Yep.
Sal Daher: Which is a little bit too abstract for my taste. But, tell me what your thoughts are. You're just beginning to do angel investing on your own. What attracts you to angel investing?
Joe Falcão: The thing that attracts with a couple of things. One is to be able to understand how founders are solving business problems. Especially in the industries I've dealt with much more closer, like call it technology, e-commerce and medical devices. I have understanding of these industries based on where I worked previously. The second one is, be able to help and mentor. So, always my question when I'm in the diligence calls, is how can I help them? What insight can I give.
Sal Daher: Oh yes.
Joe Falcão: And the third one is to obviously is to get financial reward for the kids. I still need to pay some college tuitions.
Sal Daher: I paid college tuition with investments. Money that I made in investing.
Joe Falcão: Once the money is cleared. I mean, the college don't care from where it's coming, right?
Sal Daher: Where it's coming from. That's true. That's true. So, Joe, let's talk a little bit about your biography. So, you were born in Brazil.
Joe Falcão: So, the toughest question I get, which is a simple question. So, is from where I am. Is that one of the toughest questions I get. So, at times I'm not sure how the questions is framed and what's the intent.
Sal Daher: Right. Okay.
Joe Falcão: So, one of the answers can be what's my nationality, I'm an American citizen. But previous, prior to that, I was a Portuguese national.
Sal Daher: Portuguese national.
Joe Falcão: Yeah. So, it gets more complex, but then I was not sure if it's based on my ethnicity. So, then...
Sal Daher: Right.
Joe Falcão: So, I'm Indian.
Sal Daher: Okay.
Joe Falcão: From where I was raised, from where my heart beats, which is Brazil.
Sal Daher: But you had a Portuguese passport.
“…doing the right thing and build up strong trust and relationships. That's the cornerstone of everything I do.”
Joe Falcão: Yeah. So, I'll connect the dots here. So, when I was young, I had a dream. I had three things that drive my life in everything I do. One is a sense of integrity, sort of when you work in a corporate setting, I mean, doing the right thing and build up strong trust and relationships. That's the cornerstone of everything I do. The second one is dare to dream, imagine. The third one is being a global person. So, this is where the three cornerstones I had in my journey.
Sal Daher: Certainly are. I've been thinking about the East...
Joe Falcão: Exactly.
Sal Daher: Brazil, America. Yeah.
Joe Falcão: Yeah. So, my life story is the following. I was born in East Africa, Kenya. My father was working for the Safari Park in Kenya. He was running that. So, the sense of freedom and daring comes from there, that aspect.
Sal Daher: Wow. Yeah.
“Vasco da Gama went to India, and that was the startup of 500 years ago.”
Joe Falcão: Then I spent four years there and roughly shy of three years in Goa. Which was a former Portuguese colony in India. So, then when Columbus came to the US or Americas, the Portuguese were entrepreneurs as well. Some went Brazil and some went India. So, Vasco da Gama went to India, and that was the startup of 500 years ago.
Sal Daher: Talk about globalization.
Joe Falcão: Absolutely.
Sal Daher: Globalization. 15th and 16th century style.
Joe Falcão: Correct. All right.
Sal Daher: Portuguese were, they spent the 1400 or 1300, or 1400 taking ships around the coast of Africa. Going all the way around Africa to get to the Indies. They used to call it.
Joe Falcão: They were very, very persistent. I mean, I studied the history. The Portuguese history obviously, but...
Sal Daher: Yes.
Joe Falcão: They were very persistent. I mean, there's some flaws in later, but I mean that small, tiny country was conquering Africa, part of Asia. I mean, if you go, I went to Malacca in Malaysia, in Japan as well. You find Portuguese there. I mean the...
Sal Daher: Oh yeah.
Joe Falcão: The Japanese word 'arigato' comes from 'obrigado' in Portuguese.
Sal Daher: Oh yeah. And the Japanese word for bread “pan”.
Joe Falcão: Yeah. Yeah. Yeah. Absolutely. It's a ...
Sal Daher: Bread. I think the first dictionary from Japanese language to a Western language was into Portuguese. There were Portuguese missionaries.
Joe Falcão: Correct. Correct. When I was reading about the biography of these missionaries. They were young, they were in their late twenties, early thirties.
Sal Daher: Yeah.
Joe Falcão: And if you see where, how they moved and how they lived, it was, I mean, not much comfort and they didn't have the cell phone to help them out, or no Sal's podcast to give them guidance.
Sal Daher: That there was something else. You know, I remember going to mass at the cathedral in Singapore.
Joe Falcão: Yep. Yep. I was there.
Sal Daher: And seeing on the walls, the name of martyrs, who had...
Joe Falcão: Yeah.
Sal Daher: …been martyred, missionaries who had gone to the Malaysia and to Korea. There were a lot of martyrs in Korea. The Koreans were not receptive to Christianity initially.
Joe Falcão: No, it was not.
Sal Daher: And Japan as well.
Joe Falcão: No Japan as well. My dream of being a global citizen, I was able to work and live in other countries. And I travel a lot to China and Malaysia, Singapore, obviously, because that was my connection in Japan. And I could see, I mean, how people were resilient in this journey. So, it was a life lesson for me.
Sal Daher: Yeah. I mean, think about the galleons that took silver from the mines of Potosí in South America. They were built in the Philippines.
Joe Falcão: Oh wow. I didn't realize that.
Sal Daher: They were built in the Philippines. And then they, this is the Spanish. Not the Portuguese.
Joe Falcão: Yeah. Yeah.
Sal Daher: The Spanish were much bigger. They had a lot more people than the Portuguese did. And so, they had these galleons [the silver] that would come down the River Plate from the mines up in the Andes. And then, at the ports, I don’t know if it was Montevideo or Buenos Aires, where they would pick up the silver from the Potosí mines. You know, Mexico as well. And then they would carry the silver to the ports in the South of Spain and the Mediterranean ports. The Spanish got so much silver that the price of silver fell. They had inflation with silver.
Joe Falcão: You know, It's this entire network. If you just imagine now with the tools we have, this entire network...
Sal Daher: Yeah.
Joe Falcão: Of our products are moved in people, is amazing.
Sal Daher: Yeah. And this is in the 1500s they were doing this in the 1500s
Joe Falcão: If you take that and if you overlay the current technology and let's call it as, I mean the Amazon space, the Jeff Bezos mindset...
Sal Daher: Yes.
Joe Falcão: Jeff Bezos was born in the 1500s, most likely, he could have done something similar.
Sal Daher: You know, you've had some kind of trading arrangement...
Joe Falcão: Agreement.
Sal Daher: Somewhere. Yeah. Agreements. And it's amazing. It really is fascinating. So, basically you were born in Kenya, Goanese parents.
Joe Falcão: Yeah.
Sal Daher: Eventually spent some time in Goa. And then your family went to Brazil.
Joe Falcão: Yes. So, the way my father ended up in Brazil is a very interesting story, is unusual.
Sal Daher: Uh-huh (affirmative). Yeah.
Joe Falcão: So, one day I can give you the details, how and why, but let's keep that for a second. So, he decided to leave Goa with a one way ticket to go to Europe.
Sal Daher: Uh-huh (affirmative).
Joe Falcão: So, we went to Italy.
Sal Daher: This is more or less when?
Joe Falcão: 1970's, '75.
Sal Daher: '75. Okay.
Joe Falcão: Yeah. So in '75 we went to Italy and then we spent a week or so there. Then we went to Spain. We were roughly four months in Spain. And the intent of my father was to stay in Spain or go to UK. That was his intent. That economy was very tough at that point in time. I don't if you recall. Yeah.
Sal Daher: Yeah.
Joe Falcão: So, it was very tough to find a job. And what my father was leaning on, was possibility that he had a Portuguese passport. In sort of casual networking conversations, like the same way how we met at a college...
Sal Daher: With Thrasio. Yeah.
Joe Falcão: Yeah. No like you and I, we met as well.
Sal Daher: Yeah. Exactly. Yeah. Yeah. Yeah.
Joe Falcão: So, someone told him, well, why don't try going to Brazil, out of the blue. My father knew what Brazil was. The same way you and I may know, I don't know what you. But we may imagine Estonia type thing.
Sal Daher: You've heard about, you know where it is, but you've never really focused on it.
Joe Falcão: Correct. Yeah.
Sal Daher: Yeah.
Joe Falcão: So, it was something bit distant.
Sal Daher: Yeah.
Joe Falcão: So, the headline or the narrative was the following. Brazil is a nice country. Peaceful, nice weather, the people are very friendly. And it's getting out of the dictatorship.
Sal Daher: Yeah.
Joe Falcão: It was '75 ish. It was getting out.
Sal Daher: Yes. Yes.
Joe Falcão: So, he took that to heart and he went and bought a ticket to go to Brazil, one way ticket. He was not sure. I mean, he made a mistake. It was, he had to go to Salvador, but he made a mistake, he got it from El Salvador.
Sal Daher: Oh my gosh. So you went from Spain to El Salvador?
Joe Falcão: No, he did not because I caught the mistake.
Sal Daher: Oh! You caught the mistake. Okay.
Joe Falcão: Yeah, because I said, " Dad, you're saying it's Salvador, right? Not El Salvador." Then he went and changed that.
Sal Daher: Uh-huh (affirmative).
Joe Falcão: So, he landed, you may recall in Salvador, Bahía. But, yeah.
Sal Daher: Yes.
Joe Falcão: His mind was a following and I learned from him a bit. So, he said, " Where can I get people who have some affinity with me? And there can be something that the founders of companies can try to network." So, I said, " Let me go to the Portuguese consulate and just ask them for names of people."
Sal Daher: Yeah. Yeah.
Joe Falcão: Simple. So, he did that. He went and met with them and got some names of people. Then it was very tough to find that sort of employment and et cetera. And to get green card of Brazil at the time, the Modelo 19, I think that was the name
Sal Daher: What, they didn't have, because if you were a Brazilian…doesn't being Portuguese get you anything in Brazil.
Joe Falcão: No. That time we had to, no, it doesn't. I mean, I know the law inside out. Whether it does or it doesn't.
Sal Daher: I imagined that somehow it would. Yeah.
Joe Falcão: It doesn't. So, then he went to Rio and even São Paulo. And the same thing, go to the consulate, get names. And people were much more friendlier that way. In terms of openness.
Sal Daher: Yeah. It's true.
Joe Falcão: I think human nature, people are willing to help independent of where you are in the world.
Sal Daher: Mm-hmm (affirmative).
Joe Falcão: So, this I think the consulates have found is this leveraged that as much as possible. So he to Bahía, Rio, São Paulo with a small briefcase or bag or et cetera.
Sal Daher: Yes.
Joe Falcão: And then someone told him to go to Brasilia, which you may recall the capital.
Sal Daher: Yes.
Joe Falcão: And then he got a job offer. Working for a commission, high commission of the American government in Brasilia.
Sal Daher: Mm-hmm (affirmative).
Joe Falcão: He had to deal with very sensitive information, et cetera. And I spotted the job. He had, he got full clearance from the FBI and CIA.
Sal Daher: Okay.
Joe Falcão: They checked everything and background. I mean, I'll look everything. So, at that point in time, we moved to Brazil. We were there for four years.
Sal Daher: This would have been from '70. What is it? [crosstalk]
Joe Falcão: '75 to '78, nine. Yeah.
Sal Daher: '78. '79. Yeah. I left Brasilia '66.
Joe Falcão: Oh, well.
Sal Daher: I still lived in Brasilia. I lived there for about a year before that in Goiânia. So, '75 to '79. So, he was working basically for the US government in...
Joe Falcão: In Brazil. Yeah. Then the commission who was working got dissolved by the change of presidency. I think Carter step down the new president came and then he left and he worked, he moved to São Paulo and he worked for American company based on the connections he had from the...
Sal Daher: Yes.
Joe Falcão: From the military. He worked for Levi Strauss, the jeans company.
Sal Daher: Oh wow.
Joe Falcão: Yeah. He worked for, he worked with them. So, my life was basically in São Paulo. In terms of dreaming. I come back to dreaming and imagining. So, I was on the juncture of having to apply to colleges. And it's a very stressful situation. The same thing I have to go through, I went through with two of my, three of my kids. So how you imagine that? Cause it's very easy to imagine, to be average, I'll go to the average school because...
Sal Daher: Yeah.
Joe Falcão: I'm sure I'll get into not to the top schools.
Sal Daher: Yeah. Yeah. Exactly.
Joe Falcão: You have to follow.
Sal Daher: Yeah. Yeah.
Joe Falcão: At that point in time, everyone in any state where you are is how you aim. So, I said, let me aim as high as I can. So, I said, let me aim to go to USP. Which was, I mean, [crosstalk] it's a very tough to get into.
Sal Daher: Yeah. It's very competitive. In Brazil the university, there's actually an exam that you take for the university. And depending on your rank on that exam, you get in, or you don't get in.
Joe Falcão: Yeah.
Sal Daher: Dog eat dog. One of the few meritocratic things that exist in Brazilian society.
Joe Falcão: Yes, you're right. So I got into that to study economics, and I'd got a full ride as well for, to study technology. So, I did a computer science at the same time, like mornings and nights. I mean, in the morning I was studying some of the economic finance ministers of Brazil, Pastore, that you may recall. The big picture thinking. Very complex models and in the afternoon and night I was learning how the flow of information works in a company.
Sal Daher: The nitty gritty of stuff.
Joe Falcão: Yeah. So, that it complimented. I mean, there was no incremental spend for the, my family or my parents. It was, I got full ride in both obviously. USP full ride. Mackenzie full ride.
Sal Daher: Congratulations.
Joe Falcão: Then I graduated, I worked for a company called Solvay. Solvay is a global Belgian company. Plastics. Yeah. What attracted me to that company was the CIO at the time wanted to hire a bench of young professionals to be able to change the mindset of the company by information. Not just to design reports, but to change the mindset.
Sal Daher: Yes.
Joe Falcão: And I worked for them for eight and a half years, six years in technology and two and a half in treasury.
Sal Daher: Oh Wow. Okay. So you have already the mindset of transforming companies and so forth from your experience at Solvay.
“…every company I joined, I tried to pick up a corner of the company, which had problems that needed to be fixed.”
Joe Falcão: Yeah. And always when I, every company I joined, I tried to pick up a corner of the company, which had problems that needed to be fixed.
Sal Daher: Mm-hmm (affirmative).
Joe Falcão: And when the problems are roughly fixed, then it was time to do something else. So, I had the bug that any founder may have of trying to find order in a chaotic environment. So, from Solvay after eight and a half years, I had a dream and my dream was, I need to be a global citizen. I needed to be overseas. In overseas at Solvay is basically go to Europe...
Sal Daher: Right.
Joe Falcão: England or Spain.
Sal Daher: Uh-huh (affirmative).
Joe Falcão: And one of the hurdles to dream is you need to have some elements of execution. So, I needed a passport.
Sal Daher: You need a passport. Yes, exactly.
Joe Falcão: I had that.
Sal Daher: Yeah.
Joe Falcão: The second one was going to Canada, which is easier because it goes on your own merit, right? You score, you get landed...
Sal Daher: Yeah.
Joe Falcão: Immigrants. The US is tougher though. But I said, there should be a company that wants someone with my merits. And it happened there was someone from Cabot Corporation, a Boston-based company.
Sal Daher: Oh yes. Yes. Yes. Yes.
Joe Falcão: The CFO of Cabot was looking for someone in South America who could come and help rethink the cost economics of the company.
Sal Daher: Yeah. T.D. Cabot, his estate was next to my house, in Weston.
Joe Falcão: In Cambridge.
Sal Daher: In Weston. This is Weston.
Joe Falcão: West. Okay. Okay. Okay. Okay.
Sal Daher: Yeah. Yeah, yeah. Yeah. Yeah. Yeah. It was very nice. I was just two acre house and they had like a 13 acre estate, a beautiful house.
Joe Falcão: I know. I can imagine, I can imagine. He's...
Sal Daher: So, anyway Cabot Corporation,
Joe Falcão: So, I joined them. So they made me an offer to join in July of 1996.
Sal Daher: Chemicals, paint.
Joe Falcão: Oh! Chemicals. Chemicals. Find chemicals.
Sal Daher: Alumina, that kind of thing.
Joe Falcão: Correct. Correct. So, it's a global company. So, I joined in July. I used to come to Boston every month for a week or two weeks. One of the trips I was here, I was landed on a week prior to Thanksgiving, I stayed here and it was very unusual. There's on Thanksgiving day. I was a by myself, but I didn't appreciate what it was, but it's...
Sal Daher: Yeah. It's a uniquely American thing.
Joe Falcão: Correct. Correct. Absolutely. Yeah. Yeah.
Sal Daher: So, Cabot Corporation brought you to US, gave you a job here. So, that's how you landed in the US.
Joe Falcão: Yeah. I came here, basically I landed on January 5th, 1997.
Sal Daher: It's an amazing excursion. So, born in Kenya, lived in Goa. Your father moves the company to Europe, but then eventually ends up in Brazil. You grew in Brazil, get educated in Brazil and then, work in Europe for a while for Solvay the Belgian company.
Joe Falcão: No, I did not work for Solvay. I worked for them in Brazil, in Brazil.
Sal Daher: But, you, so, you jumped from Solvay to Cabot.
Joe Falcão: Cabot. Yeah. The twist gets more interesting. I mean, once you look back. Say, well something is unusual here by Cabot. In the month of April, 1997.
Sal Daher: Yes.
Joe Falcão: The CFO hired me, asked me to go on an audit to India. And I said, "Ed, it doesn't make sense for me to go, I’m just learning how things work. The people, the process, all the good elements." Then he came back the next day said, "Joe, you need to go." I said, "Ed, I cannot, I need to learn." Then he came back. He said, "Joe, I'm your boss, you have to go."
Sal Daher: So, you were thrown like a cat, thrown into a swimming pool.
Joe Falcão: And the reason of that was he said, I want to train his direct reports to become executives within Cabot or anywhere in the market place. So, he said, "You'll be well-prepared, well trained, anywhere you go."
Sal Daher: Right.
Joe Falcão: So, he said, "You need few elements to strengthen you. And so, this is a great chance to go with them for two weeks," et cetera, et cetera.
“…I knew how much the company was paying for the hotel. And I knew looking in the streets, the people who are just living there in poverty were very humbling.”
So, for two weeks I was staying at a nice hotel in Bombay, Mumbai. And I was to go to the factories, which were an hour and half, each way to audit. It was the most humbling experience of my life because I knew how much the company was paying for the hotel. And I knew looking in the streets, the people who are just living there in poverty were very humbling.
Sal Daher: Yes. It's shocking. Yeah.
How Joe Met His Wife Cheryl on a Trip to India
Joe Falcão: Yeah. So, I did this for two weeks and I told Ed, I said, " Ed, my family is from Goa. I'm coming to the US." And I said, "I don't like to look back emotional." I said, "Let's look forward, but let me go back and meet my relatives." So, on that week that I was there casually, I met Cheryl, which whom we got married.
Sal Daher: Congratulations.
Joe Falcão: So, this was in 1997. So, in December we got married while this was happening.
Sal Daher: Cheryl's from?
Joe Falcão: She's from Goa. Yeah.
Sal Daher: Okay. Okay.
Joe Falcão: Then in August of that, 1997, I got an offer to go to Asia Pacific.
Sal Daher: Uh-huh (affirmative).
Joe Falcão: If you recall, in '97, '98, the Asian crisis.
Sal Daher: Yes, yes, yes.
Joe Falcão: So, the folks in the US were not understanding the numbers properly.
Sal Daher: Yeah.
Joe Falcão: The investments being made, the inflation, et cetera. So I said, "Wow! The hyperinflation from Brazil, it's easier to understand."
Sal Daher: Yeah. You had [crosstalk] a lot of experience with inflation accounting and Brazil, yeah.
Joe Falcão: Exactly. And also how to show the numbers that concentrates everything. It comes in handy.
Sal Daher: Right. Right.
Joe Falcão: So, they moved me as an expat [expatriate employee] to Malaysia. So, I was there, I worked for a while there. Then they made me an offer to go to Belgium where we were for three years.
Sal Daher: And this is which company? Is this with?
Joe Falcão: With Cabot. With Cabot.
Sal Daher: With Cabot. With Cabot.
Joe Falcão: Yes. Yes. So, I was an expat in two places. My older daughters, the ones that you refer to were born in Belgium.
Sal Daher: Ah, okay.
Joe Falcão: The twist of the story here. When I worked for Solvay, I had made them a proposal that I would like to be an expat in Belgium. And they will say, well, I can go with a low expat rates because I have a Portuguese passport. And they said, no, it's too expensive. So what I did, I just click a pictures in front of the head office and I sent to the CEO of the company. I said, "I'm here." So, the point again for the founders is just keep on dreaming, keep on being respectfully persistent and stubborn.
Sal Daher: Yeah. That is far out. Well, Joe, we're the point of wrapping up our interview. We're doing kind of a short interview because we're going to do this interview in Portuguese as well. So, are there any parting thoughts that you want to leave our audience of founders, angel investors and people who want to start companies?
Joe Falcão: One thing I will suggest to the founders is to write a letter to themselves day one of their journey. Then write a letter to them three years down the road, what they will expect to have achieved and always keep on thinking there's someone else there on the corner that can help them. The question is how they find them very fast.
Sal Daher: Yes. Reach out. Don't keep your light under a bushel.
Joe Falcão: Yeah.
Sal Daher: Go out there and get help. I want to thank Joe Falcão for coming on Angel Invest Boston and giving us this really excellent interview. Thanks a lot, Joe.
Joe Falcão: Sal, most welcome. And thanks everyone for listening.
Sal Daher: This is wonderful. This is Angel Invest Boston. I'm Sal Daher.
I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.