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Ask the Expert: Martha De La Torre of El Clasificado
Martha De La Torre, President and CEO, El Clasificado. Photo courtesy of hispanicprwire.com
For a while now, everyone has talked about the booming marketplace amongst Hispanic consumers. With significant population expansion coinciding with growth in purchasing power, Latinos have become incredibly powerful within the United States culturally, politically and economically. Such power has led to the growth in the number of Hispanic-owned enterprises to outpace that of non-Hispanic-owned businesses by incredible margins, according to the Minority Business Development Agency. Many of these firms are also finding success in appealing to the local community, much of which is often comprised of many Latinos of all nationalities.
One such company, El Clasificado from Los Angeles, has found success in appealing to this market. They have made the Inner City 100 on six separate occasions and most recently finished #79 on the 2012 Inner City 100 list. El Clasificado is a Spanish-language weekly newspaper that acts as a “Classifieds” section targeting a Hispanic audience. We had the opportunity to speak with CEO and Co-Founder Martha De La Torre recently to discuss how her firm has been successful in penetrating the Hispanic marketplace and adapting for growth.
Tell us about the founding of El Clasificado.
I was first inspired to create a Spanish publication while working at Arthur Young and then as the CFO of La Opiniόn. It was the 80’s and the Hispanic population was growing dramatically. At that time, I realized that the Latino population in Southern California was underserved and felt that a free classified publication like the Pennysaver, but in Spanish, was desperately needed. However, the product vision was not to make it just a shopper, but a source of concise “how-to” articles to help the Hispanic community adapt to U.S. culture. I wanted to provide the type of content that would have made my parents’ lives easier when they first arrived from Ecuador in the 1950’s.
We discovered a niche. My husband, Joe Badame, and I estimated an initial capital need of $600,000, but we only raised $350,000. We plunged ahead anyway and launched an undercapitalized company in 1988. We made many sacrifices. Joe had to work two jobs to keep us afloat for many years before we finally started generating positive cash flow, and neither of us took a salary for the first 10 years.
At what point did you realize that El Clasificado would become a high-growth firm?
After facing the recession of the 1990’s with a severely undercapitalized business, we dramatically shifted the company’s distribution model. We moved from a home delivery model to a bulk-drop. We computerized the company’s distribution system and began an aggressive street-rack market saturation initiative throughout Los Angeles. Our award-winning distribution system is the key to El Clasificado’s success in print. Even today, bucking industry trends, El Clasificado continues to expand in print as well as digital. Nurturing our management team to be nimble leaders ready for change and building infrastructure based on best practices has resulted in our winning formula for growth. The results have created a momentum in sales and growth that has not stopped even through recessions, slow economies and changing demographics. El Clasificado has averaged a growth of 20% a year and is now the largest classified media company in the nation with $20 million in annual revenue.
How has the expanding market you serve changed El Clasificado operationally?
Due to the growing Hispanic community, we launched an aggressive geographic expansion initiative throughout California. El Clasificado now has a weekly distribution of 500,000 magazines and can be found in 22,000 locations and 290 cities in Central and Southern California. The company has magnified its presence from its origins in East Los Angeles to reach as far South as Tijuana, Mexico and as far North as Fresno. This is just in print.
Digitally, with Elclasificado.com for grassroots Latinos, Quinceanera.com for young Latinas coming of age, and Susociodenegocios.com for small Latino-owned businesses, we have expanded our channels to reach a variety of buyer personas in the Hispanic market. We understand the growing Hispanic population and are always looking for better solutions to connect buyers and sellers in the Hispanic marketplace. That’s why we’ve created innovative digital and mobile products, grassroots events, special publications, and niche websites, like Elclasificado.com, which has become the leading portal for Latinos in the U.S. with 10 million page views per month.
What skill-sets have you had to find when hiring people that you did not have to find before?
We are now hiring more people with MBAs who bring an elevated skill-set and are highly educated. We need our employees to be digital citizens and multi-taskers. Just as important, we have expanded our internship program to hire high school, college students, and recent graduates on short-term paying projects. Most interns have turned into full time positions. We work hard to create an interactive environment between our long-term employees and new hires where they exchange experience and industry knowledge. Such an environment elevates leadership and collaboration and we are very proud of it.
How has the culture at El Clasificado evolved since the company took off?
We have a culture of growth in revenues and job opportunities and love the idea that we are empowering emerging Latino communities with opportunities. We actively participate in the community and donate time and treasure to many organizations, but I think the most gratifying contribution we make is in creating local jobs. We are training our managers to delegate more, work smarter, and create processes that can be followed by less skilled and less experienced employees, who with the right opportunity and training, can also grow with the company. Our culture embraces and empowers our workforce via education and professional development opportunities. We have a history of guiding inner city students to earn college degrees and then pursue management careers at El Clasificado. Today, many of the interns from 19 years ago, were mentored through college and are now managers and directors steering El Clasificado into the future.
What in your background best prepared you to address the needs of a fast-growing market?
Without my Latino heritage and the strong core values of work and ethics instilled in me by my parents, in combination with the accounting degree I received at LMU (Loyola Marymount University), I could not have developed the foundation of technical, creative and leadership skills needed to become a successful entrepreneur.
My professional experience as a Manager at Ernst and Young (formerly Arthur Young) and CFO at La Opinion also prepared me significantly for the challenges of launching a new business, managing cash flow, hiring talent and establishing an operational structure from scratch. As a CPA, I worked with many small businesses and entrepreneurs, which I found to be an invaluable experience.
Tell us how you need to grow as a leader of a high-growth firm so that El Clasificado can continue to grow?
Although I persistently get training and education to enhance my technology and leadership skills, the most effective way to lead a high-growth company is to hire the right talent that will build the right systems and processes and sell the right products and services. The other most essential skill in growing effectively as a leader is becoming a better listener to all of El Clasificado constituencies: its employees, customers and vendors. I get some of the best ideas for low cost technology solutions and new profitable revenue opportunities by listening at the ground level. Most importantly you need to know when you must step down or step aside so the right leaders can step in and grow the company to a level beyond your own imagination or capacity.
Do you know of any young entrepreneurs that have started a small business and deserve recognition for their success? Nominate them for the Inner City 100 where they will recognized in Fortune and receive free management education at Harvard Business School as well as other content that will help them give them the tools to become a growing enterprise. If such a description fits your firm, apply for the program today!
BY Alex Rodriguez on September 17th, 2012
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