Table Colombia Challenge

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According to DANE (National Administrative Department of Statistics), 40% of colombians live with $4.24 dollars a day and 5 out of 10 work in the informal market. The main reason is because they have no education and skills to perform the tasks needed. Moreover, most people lack the proper education to understand the mechanisms to reduce informality. All of the above places Colombia as the second most unequal country in the hemisphere. In the hospitality industry specifically, people who need a job encounter a big challenge: their scope of job posting is limited and lack the proper networks in order to know where to look for possible temporary offerings. Additionally, in Colombia part-time jobs are non regulated, meaning that workers can't have any time of benefits that regular workers can. Moreover, the sub segment of undergraduate students are looking for gigs that provide flexibility of schedule, variety in the work done and a fair payment for the job done. In contrast, hospitality services owners and managers suffer a lot from high staff turnover and permanent peaks on demand. On top of that, the process of finding temporary personnel is inefficient. Since workers are low-skilled people, the communication channel goes through Whatsapp contacts, Facebook groups and other inefficient searching methods.

Travail pretends to solve both of the customers’ problems. First, become a bridge between supply and demand by providing a digital platform where potential workers and employers can meet and match according to the skills and the urgency level of the workforce needed. Second, offer a payment method enabling managers and owners to keep track of their payments. Third, ensuring a background check on the workers. Fourth, providing new generations with a job that can fit with their needs in terms of flexibility, payment and variety. Finally, enabling skill development and lifestyle improvements for workers through a gamification point system earned while using the platform. Our app has being launched and we are already working on next steps for upcoming versions that will improve the experience between both users.

Hospitality industry is a fast growing and labor intensive industry. It is said to be the one that will offer the most jobs for unskilled workers in the future as it is hardly automated and according to the World Travel and Tourism Council, today 20% of new jobs created in the world come from Hospitality. Colombia holds over 230,000 businesses related to hospitality but Latin America's hospitality part-time job market is over 27 billion dollars and as tourism grows, the market will keep on growing. 

We have mapped competition and have identified certain related platforms in Colombia, the US and the UK. Those in Colombia (Toucanian, HoyTrabajas, among others) are not specific to any industry, are in a very early stage and are not focused on on-demand gigs. Although those in the UK (Syft) and the US (Pared, ShiftPixy) are specific to the hospitality, highlighting the relevance of the platform in the industry, they are not present in Latin America and show no focus on growth and development of their part timers.

We are the only one in Colombia who focus on hospitality and can provide personnel on an on-demand basis and we are doing even more. We provide a safety net of consistent dignified jobs and benefits such as medical and work insurance, retail discounts and quality trainings using gamification. This is very important because traditionally people don't receive these types of benefits, especially those in the bottom of the pyramid. Finally, we have filed our software for copyrights as well as our brand.

Since October 2018 we have fulfilled over 9,500 hours of employment where 52 hospitality businesses have worked with over 150 Travailers (as we like to call those working on our platform). We have sustained a 20% weekly average growth during 2019 and have had a repurchase rate of businesses of over 70%. We launched the app at the end of august and we are already working on the next version of it. We won the MIT Startup Competition in late May and we participated in the Hult Prize Accelerator for 5 weeks in London, the largest impact centered Accelerator in the World. We have transferred over 16,000 dollars from businesses from Travailers and obtained an average of 12% above those USD$16,000.
References - Clients: Abel Calderón, owner of Varietales Coffee Shops. Email: abelcahe@gmail.com or phone +57 3103375501.
References - Clients: Juan Herrera, owner of Amalia and Flugel restaurants. Email: juan_herrera_n@yahoo.es or phone +57 3175002812

References - Hult Prize Accelerator: Andrea Garcia, Head of Corporate Relations. Phone: +52 3311185071

As our main source of revenue, we take a handling fee on each transaction paid by the business based on how urgent they need a worker. The higher the urgency for a worker, the higher the fee we charge. We have mapped other streams of revenue for the upcoming future such as premium services and advertising within the "notifications tab" in the App.
Our go-to market strategy is first expand within Colombia to the five main cities (Bogotá, Medellin, Cali, Caribe -Cartagena and Barranquilla and Bucaramanga). By year 2 expand to Mexico where we already done a due diligence followed by Perú.
We have already partnered with a fast growing Fintech in Colombia called Tpaga (YC 2017) to provide the instant payment through an e-wallet and they have already expanded to Mexico so it makes it easy for us for the expansion to Mexico. We also partnered with insurance company called Paralife to protect Travailers if they are injured while working. To ensure demand from businesses, we signed an agreement with one of Colombia's largest event planning associations (ASOCOLWEP) and to secure Travailers we have an LOI with an NGO called Tiempo de Juego that works with vulnerable youth. We have LOIs with two universities, a temporary agency company and the Pension Fund Protección. We want to partner with SENA (Servicio Nacional de Aprendizaje) so we can provide better trainings and certificates for all our Travailers.

- Ivan Castañeda, Founder (40% equity): MBA. Hospitality Management professional with experience in Switzerland, Panama, China and Colombia working in hotels and developing projects within the industry. Founded 3 businesses related to hospitality (https://www.linkedin.com/in/ivancastanedacolombia/)

- Vanessa Castro, Co-founder (30% equity): MBA. Co-founded and NGO that incubated and accelerated more than 100 social SMEs in Nicaragua, Central America. She's a Georgetown's GCL alumni and Global Shaper. (https://www.linkedin.com/in/vanessa-castro-304a211b/)

- Fernando Cortes, Co-founder Technology (15% equity): Software Developer and project Management expert. Co-founded 8 technology companies in the region. (https://www.linkedin.com/in/danielfernandocortesg/)

- Jhon Susa, Co-founder Technology (15% equity): Business Analytics and accounting expert. Part of the Board of Directors of the Colombian Software Federation and Co-founder of 8 technology companies in the region. (https://www.linkedin.com/in/jhon-everaldo-susa-hernandez-038a8134/)

Travail follows a two-sided business model based on volume of transactions. Unit economics are healthy as transaction costs are reasonable and percentage base (2.99% of commission from the e-wallet), with no fixed cost. However, on this kind of business models a large volume of transactions is needed to reach a breakeven point. On our financials we are initially only considering expansion in Colombia and a unique revenue stream, giving a breakeven on year 4. However, we have a clear intention to internationalize in the first 2 years and start considering other sources of income once volume is reached. Expansion to other cities and countries should be reached keeping a lean structure, focusing on the creation of alliances, therefore keeping our costs stable while the volume of transactions grows at a consistent rate.

The KPI’s used at Travail are divided in three groups: Performance KPI’s indicating mostly growth. Impact KPI’s focused on our mission to disrupt traditional gig economy by making it meaningful. Financial KPI’s measuring transfers and income.

Our Performance KPI’s Milestones are:

Our Impact KPI’s Milestones are:

*Every month Travailers must specify the number of hours they are willing to work. This number is used as a parameter to ensure Travail’s impact in their need of stability.

**Quarterly every Travailer is asked to fill a survey focused on understanding the improvements in their life standards as compared to the previous quarter.

Our Financial KPI’s Milestones are:

Regarding the investment needed to support operations in Colombia, a total of 1.3 million US dollars are required. As internationalization occurs the volume of transactions will increase, bringing forward the breakeven point. However, this process will require investment. Subsidiaries in new countries will receive local investment in smaller proportions to reach basic operational needs. Further discussion on this strategy can be discussed personally. We expect this investment to be divided into 2 rounds. First, we are looking for a SAFE round of 500,000 USD. This amount will allow Travail to strengthen its operations, develop technology internally and open operations in the two main cities of Colombia. The expected runway of this first round is of 1.2 years. The remaining 800,000 USD are expected to be reached through a second SAFE or a convertible note that should then lead Travail to its first priced round. The valuation cap for this first round is of 4 million USD and conditions are open to be negotiated. It is important to recall that this type of business model requires time in order to reach the needed volume, therefore various rounds are needed. It is of everyone’s interest that the company is solid and has a desirable cap table to reach subsequent Series A, B and C. Travail has an unlimited potential in Latin America and can become the number one HR platform in the gig economy, disrupting traditional search mechanisms, offering opportunities for thousands of people and creating impact to a region that well deserves it and needs it.

The investment of the total 1.3 million is divided as following (if analyzed year by year the percentages might change):

Marketing & Sales – 34% (Acquisition tactics and commercial team)

Retention & Support – 20% (Trainings & Activities)

Admin & Generals -26% (Talented leadership team)

Technology – 20% (In-house technology development and growth)

Our business is impact focused from the very core. There are 4 main segments of workers (Travailers) that we are focusing on while creating and looking for partnerships. (1) tertiary education students: 42% of students in Colombia drop out of tertiary education because of lack of resources. Since there are not many opportunities for part-time jobs, they can't work and study in order to keep themselves in school. At Travail, we want to provide flexible schedules to earn extra cash to solve their problem. (2) There are 1.4 million Venezuelan refugees that have no means to sustain themselves even if they have a work permit. There is a high percentage of xenophobia in our country, but we have already changed perceptions from hospitality businesses that we have sent Venezuelans to work for part-time jobs and now ask from them again. (3) Single mothers that have worked with us and have found in Travail a great opportunity to take care of their child while having a flexible job. Finally, we are starting to look for partnerships so we can provide opportunities for demobilized guerrillas that are finding it impossible to obtain a job. To assure impact metric surveillance, we are starting the process to become B-Corp certified. We want to become a safety net for all these people who need to manage uncertainty for their daily survival and are in desperate need of any type of opportunity. We are also working hard to provide benefits that otherwise they wouldn't have access to. Thats why we partnered with the insurance company that will provide up to a month of daily salary if the Travailer gets injured at work and it will costs to businesses less that USD$ 0.50 per day. We are also negotiating with Protección's pension fund so they can be able to save for their elderly retirement based on their possibilities of savings. Both of these benefits are currently non existent for part-timer personnel in Colombia.