LAVCA recently spoke with Rafael Atijas, Founder and CEO of The Loog Guitar about how a lot of passion and a little crowdfunding helped him launch a global business.
Atijas: In concrete terms, the Loog Guitar is a guitar that comes unassembled for kids and parents to build together. It is entirely made out of sustainable wood, tunes and plays just like a real guitar, and has three strings instead of six. We believe that 6-string guitars can be overwhelming for little kids and beginners. With its three strings the Loog Guitar makes it easier for kids to tune, play and listen to the notes they are playing. It is a more stimulating experience that allows children to play music right from the start.The goal is to make it fun, easy and stimulating to play music.
LAVCA: What is your background and how did you come up with your business idea?
Atijas: My background is in music and marketing. I have a master’s in integrated marketing from New York University and have worked developing digital marketing strategies for clients such as Microsoft, Master Card, Sony, MTV, Spring and JCPenney.
The idea for the Loog Guitar came while I was finishing my Master’s at New York University and had to develop a business concept for my thesis. I remembered seeing how difficult and overwhelming it was for my six year old niece to play with a standard kid’s guitar. That made me realize that there was an opportunity to re-think the instrument and the redesign became my project. As soon as I started working on the thesis business plan, I also started working on the “real-life” business plan. I teamed up with an Uruguayan industrial design shop and brought in a luthier. We immediately started working on the design. It was a nine month process and we went through countless design-iterations, but finally in July 2010 we had our first prototype. After that, we focused on finding the right manufacturing partner (we found it, where else, in China) and then we were ready to launch.
LAVCA: You received the initial capital you needed for the company from Kickstarter, a crowdfunding site. Can you tell us a bit more about this trend and the advantages you saw in using the site early on?
Atijas: Crowdfunding really changes the paradigm of how a business can be launched. Having a successful crowdfunding campaign not only helps you raise funds, but when you do it through a trendy platform such as Kickstarter, it gives you a level of exposure that would simply be impossible in another way. For instance, four days after we launched our Kickstarter campaign we were being featured in WIRED, Fast Company, TechCrunch and BoingBoing.
Also, with crowdfunding and the possibility of pre-selling your product to real end-customers, you develop a very profound relationship with them. You are building a business but you are also building a brand
LAVCA: You are now looking for additional financing. From whom are you looking to raise the capital?
Atijas: We are looking to partner with people who understand our product and what we are trying to achieve with it. We want partners who can add value to our business, not just provide capital. In that sense, we are very open but we are also very selective when it comes to pitching; we don’t want to rush into it. At this point, we are talking to three small venture capital firms; one in Uruguay and two in the U.S. We plan to continue operating with a small structure and are looking for a rather modest investment (less than US$1M), so we want to be very selective about whom we bring to the project.
LAVCA: How do you plan to put your next round of financing to use?
Atijas: We will use it in basically three areas: marketing, production and completion of our management team. We pre-launched Loog Guitars a year ago and in these 12 months we corroborated that there is a market for our product. Now we want to take it to the next level and grow at a pace that we cannot achieve with our current resources.
LAVCA: What keeps you up at night?
Atijas: I guess my biggest fear is to lose momentum. So far we’ve been incredibly lucky with the attention we’ve received, but we know we won’t be the new “flavor of the month” forever. That’s why we are constantly thinking of ways to achieve solid and sustainable growth.
LAVCA: Loog Guitar is truly a global company. You started it while living in the US, found a manufacturer in China, but now run the company from Uruguay with a local team. Was that your strategy in the beginning?
Atijas: When you are from a small country like Uruguay, you are taught to think globally if you want your business to make a real impact. In the same way, I think that if you are too U.S.-centric, you miss a lot of opportunities that are out there. I actually think that operating our company from a global perspective is one of our clearer competitive advantages.
LAVCA: What is your perspective on entrepreneurship in Latin America? What are its unique advantages and where do improvements need to be made?
Atijas: Entrepreneurship in Latin America is fortunately gaining traction, although I do feel that sometimes Latin entrepreneurs are too focused on building “the Kickstarter of Latin America”, “the Groupon of Latin America” or “the eBay of Latin America.” I can’t help but find that approach boring and limited, so that’s where I think there’s room for improvement.
LAVCA: Where do you hope to see Loog Guitar five years from now?
Atijas: We want to position ourselves as the clear #1 option when thinking of the ideal kids’/beginners’ guitar. We have big plans and see very clear opportunities in the education market, for instance. In any case, we do everything with our mission in mind: to make it fun, easy and stimulating for kids to play music.