esar Paz is an innovator, entrepreneur and educator. He founded one of Brazil’s first digital agencies at the end of the nineties, AG2, which navigated the market change to become one of the most important digital agencies in the country. After selling (and leaving) the agency, he started teaching innovation classes at Unisinos while founding Ecosys, a group of agile and specialized companies that collaborate together but work independently, in a living example of organizational innovation.
You’re an engineer that started working with the Internet in the mid-nineties. What led you to digital marketing?
So, I usually say I’m not an engineer by vocation but by training. I worked in the aeronautical industry for twelve years. But when I started working at Embraer, a cutting-edge player in the aeronautical industry with the best engineers in Brazil and the world… I started thinking I wasn’t an engineer. These people were way more into engineering than me. At Embraer, I worked in market intelligence, then business. I became an airplane salesman, which is perhaps much closer to my nature, my truth.
I was very impacted by all the transformations in technology. Like many people – those who lived, like me, actively and professionally in the nineties, especially the second half of the nineties – I understood that what was happening
was transformative. The possibilities opened up,
not only in business opportunities but also in
I did what many people at the time did: we dropped our careers to somehow enter this world of technology, thinking that we would solve all of humanity’s problems. There was such a huge inversion of the paradigm, this completely democratic, inclusive environment with many opportunities, with the possibility of increasing productivity on all fronts. Of course, things don’t happen exactly as we dream and imagine, right? But the opportunities were undoubtedly real, opportunities did happen, and I was able to somehow surf a little bit of that wave. I started one of the country’s first digital native agencies in Rio Grande do Sul, in Porto Alegre.
Tell me more about AG2.
AG2, as I said, was one of Brazil’s first digital native agencies and one of the most important ones. In the beginning, we worked with web services. But, quickly, instead of developing technology-based platforms, we turned to communication. Communication and marketing budgets are usually larger than IT ones. And then AG2 grew – we’re talking about the 2000s now – working in the advertising counterculture because everything was new. By the end of 2010, international groups were interested in acquiring this type of business, and I decided to sell it to the Publicis group, one of the largest communication holdings in the world. I stayed as a counselor for five more years, then left.
It was a complete cycle: from the beginning, having an idea, going through some angel investment, then venture capital, to reach a sale, and then an exit.
And after that, how was the process of founding Ecosys?
My first idea was to do a sabbatical, then a master’s degree in strategic design here in Porto Alegre, at Unisinos, but I ended up starting a second cycle, with angel investment in some early-stage companies, and creating other businesses.
But I wanted to bring some organizational innovation to the scene. I did not believe that this model of large agencies, even digital native ones, could be successful. I had seen it in practice: a large offer of services, often fragmented under a big umbrella, no longer responded to the market’s need. I needed specialist companies that could connect with each other according to the opportunity and need. And then I came up with Ecosys, a group of specialist companies. I actively participate in the strategy, but I don’t control any of them. This vision of power and control deviates a little from this model. I want to participate, but I need the mental model of my partners, who are maybe two generations younger than me.
What do these companies specialize in?
We have several specialties of what I call the disciplines of new communication models: data science, information architecture, UX, SEO, brand strategy, media technologies and development technologies, mainly with an open-source bias. They all have a high quality of delivery, and they end up participating individually or jointly in projects developed within this ecosystem, this group of companies. I joke that it is an anti-holding company, because it is not a model of imposing standards and best practices but about valuing the creative flow of knowledge exchange, maintaining the freedom and individuality of each company. To continue growing in an accelerated, fast and light way, it’s important for Ecosys not to impose compliance and a series of requirements.
And what are the challenges with Ecosys? How was the reception of this model?
From my side, it’s a daily exercise of avoiding being a protagonist and not participating effectively in the executive function of these businesses. But it’s tempting. The most significant exercise is to continue with the systemic view and not be an executive.
From the point of view of the business itself, this proposal’s biggest challenge is to orchestrate the opportunity for several of our companies to work together. How do you orchestrate these services in favor of a single client, single ownership of the entire ecosystem? Independence is crucial here – they shouldn’t become dependent on a larger structure.
What keeps you, as an entrepreneur, going? Both AG2 and Ecosys are very innovative concepts – some may say they were slightly ahead of their time.
From a psychological point of view, I think it involves behavioral and cognitive issues. My experience as an entrepreneur is linked to some turning points that I’d noticed, and for me, that was it. This entrepreneurial attitude, I think, comes from a need to renew oneself, identify scenarios and opportunities, and not give up. From a wish to take risks and deal with uncertainty. Maybe emotional maturity too…
Being an entrepreneur has a bit of this revolutionary, liberating attitude, but it also involves risk. Sometimes, risks get in the way of many entrepreneurs and it doesn’t work out. Either way, we make a lot of mistakes. Many people transfer this blame to society, the State and the lack of support for entrepreneurship, but it’s not like that.
Deep down, people end up taking too many risks, sometimes irresponsibly. This is common in entrepreneurial activities. So is being too visionary, ahead of their time, and thinking that’s okay, the vision is correct… But it could take fifteen years, and how will you live until then?
I want to see Porto Alegre as a world-class city, sought after by the world and visited by the world, as Berlin is today.
What would you like to have done differently on your entrepreneurial journey?
What I would like to have done differently is what I am doing today: to delve into a methodological view of acquisitions, for example. I didn’t know any of that. I sold my first company without understanding it.
Another thing I would also do differently is to become aware of economic changes. In the nineties, the dollar was one-to-one, so I took out a loan in dollars. But overnight, the dollar doubled; my debt doubled. Other expenses in dollars also doubled. I had bet on stability that didn’t exist, maybe. They were risky bets that I would not take today and might have delayed my entrepreneurial journey back then.
I would avoid depending exclusively on stability, because uncertainties are present all the time, although we have, from an economic point of view, much greater stability today than at the end of the nineties. Yes, be a visionary, and think outside the box, but look at the box, too.
How has Porto Alegre changed concerning knowledge production and becoming a startup hub?
The ecosystem in Porto Alegre has really blossomed in recent years. The connections really happened, and today it is a robust, strong, well-organized ecosystem.
In 2016, when I returned to the city, I was shocked, because I found a gray place with no business prospects, although it had this impressive knowledge production. The city of Porto Alegre has always had plenty of raw materials for innovation. Here, a lot of knowledge and talents have always been produced in all areas. Already in the nineties, we had the first technology parks, the initial movements of “venture capital” and the first wave of internet entrepreneurs, but 2018 is undoubtedly the moment of our “tipping point.”
I really think that the creative economy is an excellent amalgam that can unite the different collectives and interests of Porto Alegre in favor of a leap forward in building a better city, both from an economic and social perspective.
Looking to the future, what are your goals and concerns regarding entrepreneurship in Porto Alegre?
One perspective is consolidating this ecosystem view of organizational innovation, which for me is an excellent laboratory. I study it; this is my field of interest. And then I have this ambition to consolidate and show that these systemic models, which are the transformation process of organizations, are a trend. We are moving towards ecosystem models.
And there’s the objective of transforming the city of Porto Alegre. With the city’s knowledge production, the innovation ecosystem is building itself. I see Porto Alegre as an international city, connected to the world, welcoming people from all over the world, with excellent training, education, and business production centers, and with sustainable, inclusive, diverse creative businesses.
This vision of “development at any cost” is not part of my business. We’ve been building profitable businesses, responsible from a social and environmental point of view, and I really want this to be the way of the city. I want the city to be aligned with that.
What are your work essentials?
At what age did you found your company?
I was thirty-four when I started my first company.
What are your most-used apps?
Everything by Google.
What’s the most valuable piece of advice you’ve been given?
Success is in the details.
What’s your greatest skill?
Talent training and development.
What book has most influenced your career?
The Network Society by Manuel Castells.