Open Enterprise Interview: Brian Reale, Colosa CEO

February 16, 2009

Posted by: Glyn Moody

Bolivia is not a county you might associate with free software, but one of the advantages of open source is that it can be created anywhere, drawing on the support of users around the world. Aside from Linus, one person who has proved that to be the case is Brian Reale.

He's the founder of Colosa, an open source company based in Bolivia's capital, La Paz.

Here he talks about his background, how the company came to be set up, what business problems its ProcessMaker is trying to solve, how it compares with Intalio's business process management (BPM) product, and why cloud computing using the Affero GPL is the future.

GM: What's your background? How did Colosa come about: how did it start, when, and why? Where does the name come from?

BR: I studied Literature and Philosophy at Duke University, but I spent most of my summers in high school and college working for high-tech companies, so shortly after graduation it was natural that I became very attracted to the emerging Internet.

In 2000 I was approached by a childhood friend who wanted some help creating some software for the reinsurance Industry. I didn't know too much about reinsurance or even running a software company at the time, but I had just sold my first high tech startup, so he saw me as his best possible entry into the seductive but confusing world of high tech. I couldn't resist a new challenge.

My first company (Unete) was an Internet Service Provider in Bolivia (founded in 1996), which later became a leading phone company and satellite services company. Since I already felt comfortable managing technical teams and doing it in Bolivia, I didn't think it would be too much of a stretch to begin doing the same in software and continue doing it in Bolivia. I understood the culture, the price for talent was very attractive, and frankly, that's where I was so that's where my next business got started.

We struggled initially. We were focused on raising capital in the U.S., but I was in Bolivia and my friend was in Argentina at the time working as an insurance executive. We raised a little bit of capital and then came the tech bust of 2000-2001. In retrospect, it was a very good thing for us. My friend decided technology wasn't for him so he went back to insurance and took standard gig – good pay and low risk.

I started looking more closely at the work our programmers were doing, and I started thinking of ways to re-orient the company. We changed the name from Spinsit.com to something that sounded better and was easier to say in both Spanish and English - Colosa.

Then I started to focus on the platform that our programmers had created so far. I decided to forget about far off markets and try to find some applications that we could build and sell locally first. I realised that the code we were creating could solve two of Bolivia's chronic problems - corruption and long lines related to paperwork.

I then decided to look for a client in the industry I personally knew well - telecom. After a bit of calling some contacts, we landed our first client in Bolivia - the Superintendent of Telecommunications. They needed a way to add transparency and efficiency to their licensing processes. We took our software, made some adaptations, and installed it for them.

After that first client, I went to a friend who worked for IFC (International Finance Corporation), and I pitched an idea to create a National Digital Identity Number for the country. She liked the idea and decided to help finance the National Tax Authority so that they could buy a version of our workflow software related to the Country's Tax System.

We ended up having to get a Supreme Decree (which I ended up helping to write) passed by the Congress making this digital certificate legal in Bolivia, but miraculously it actually got passed. From there we continued to sell and improve and grow, slowly but surely.

GM: How did your ProcessMaker product evolve from the earlier Bolivian work?

BR: After we had a few client references, we managed to get a few more. And then a few more and so on. Soon, we managed to land some important contracts like the Central Bank of Bolivia, and the Bolivian Social Security System.

These more important clients were key to helping us start to land some clients outside Bolivia. The company directors (my original partner and a new one) also became clients in the US reinsurance industry which greatly helped us to continue to build a client portfolio. In software and technology, you either build your reputation slowly via an accumulation of success stories, or you raise some VC money and then just overwhelm people with hype and publicity.

Both tend to convince potential customers although the former tends to be healthier in the long run in my opinion. We didn’t have much of a choice because we hadn’t raised any outside money.

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