WHAT'S NEXT: Pedro Espinoza's SmileyGo Blends 'Smarter' Business With Charity
Peruvian-born wunderkind Pedro Espinoza was raised an entrepreneur from the start. But he also had a life-changing experience working with a charity in his youth and wanted more of that feeling. With SmileyGo, a data-driven startup founded by Espinoza last year, he plans to bring both worlds together, streamlining the connections between big businesses and nonprofits.
The modern business world is competitive, even when it comes to charity. Beyond the bottom line, big corporations are also measured for the effectiveness of their CSR, or corporate social responsibility. So there's a demand for smarter ways to spend charitable funds and improve the efficiency of those investments.
SmileyGo is launching a full online platform for businesses and nonprofit early next year. Speaking with Latin Post, Espinoza said he believes his platform will help Fortune 500 companies give smarter, through big data and smart data, and he's is confident it will match companies and nonprofits more efficiently, than competing social good platforms, such as Bright Funds.
"We evaluate nonprofits using decision trees, which is a machine learning technique, holistically," he explained. "So not only the financials of the nonprofit. But also the CEO or President's compensation of each nonprofit; and also the number of volunteers over the number of employees; And also fundraising expenses divided by revenue."
You get the idea. SmileyGo considers a lot of data.
"So we scale everything and put it into perspective," said Espinoza.
Born Into Entrepreneurship
Speaking of perspective, Espinoza has a great deal of it, especially considering his young age. When asked about his enormous drive and his rapid success, he's quick to credit everyone in his life before himself.
"I've had the privilege that my parents came to the U.S. when I was one years old," Espinoza said.
Espinoza grew up in Miami, Florida, but also spent a good amount of time in Peru. Seeing the difference in cultures, Espinoza said he appreciates the U.S.'s bent towards the entrepreneurial spirit.
"Here in the U.S., I feel like we value leadership, innovation way more," said Espinoza. "And back in Peru, when I visited my grandparents and went to school there, the teachers viewed my hyperactivity and my constant questioning as a negative trait. But back in the U.S., they viewed it as a positive trait."
And Espinoza was quite active from an early age. Technically, he began his first entrepreneurial endeavor at the age of 10, selling French toast around his Miami neighborhood. "It was good," laughed Espinoza. "I used to bike around and put my marketing postcards on the light posts in my neighborhood."
Espinoza credits his preternatural entrepreneurial disposition to his parents, who are both engineers, entrepreneurs and investors.
"Ever since I have memory, I've always been shadowing, following and working with my mom and my dad," said Espinoza.
"So for example when I was seven years old and we went to Peru for the summer, my dad and mom said, 'Hey Pedro, here's a great opportunity to start a Toyota dealership in this new district.'" Espinoza explained the site his parents were pointing out was just a pit -- just dirt.
Two years later, there was a full, brand new Toyota dealership on the site. "I was like, 'Wow, my parents really have that vision,'" he concluded. That dealership is where Espinoza would begin his work career, at 14 years old. On the advice of his mom, Espinoza trained in every position he could, learning every aspect of the business.
Social Good Feels Great
Espinoza spent his high school years in Peru, attending the American School of Lima. During his teenage years in Peru, Espinoza came to appreciate lifting up others through nonprofits, and that's where the first spark of SmileyGo lit up his mind.
It started when his mom created a nonprofit to help underserved kids in the Peruvian highlands. When he was freshman in high school, Espinoza admitted he didn't really understand why she turned from business to charity.
"I remember I questioned her. 'Why are you investing so much time and money in helping these kids?'" recalled Espinoza. Her answer? "'Go check it out yourself,'" said Espinoza.
That summer, he traveled to Pampa Grande, a rural district in the Andes, to help build a library with his mom's nonprofit.
"There I met a young energetic girl named Juana," said Espinoza, telling about the lightning bolt moment that would set him on a path to founding a startup dedicated to intelligently helping businesses find charities to invest in.
"I asked her, 'What do you want to do when you grow up?'" Espinoza explained how her reply was dispiriting. Running the family farm was the only thing generations of her family knew, so she replied, "That's it. That's my future."
"This girl had so much potential but due to the fact that she has no Internet, no library, or no anything -- she can't do it," said Espinoza. "And she was super smart."
Espinoza felt he had to do something, so he joined a charitable club at school, and then partnered the group with his mom's nonprofit. Over the course of a couple years -- and thanks to funding through partnerships his mom created with several businesses -- they built a fully connected library where Juana lived.
"By this time, I was going into senior year ... and three years had passed and Juana was 17 as well," said Espinoza about his second encounter with the smart, energetic Juana. "And she was like, 'Hey, Pedro, now I know what I want to study ... I want to be an engineer, and I want to build a bridge to connect my little town with the capital of the state."
With access to the Internet, Juana had full access to all of the tools she needed to become whatever she wanted.
The Spark Behind SmileyGo
"I was like, 'wow,'" said Espinoza, simultaneously feeling great and being floored by the possibilities. From that moment, Espinoza was hooked and wanted to do more things like that. "If I could create software, a platform, or a startup that closes the gap between the private sector with the nonprofit sector, that would be amazing."
That idea became his application essay for U.C. Berkeley, and it earned him a scholarship.
Stanford was the place where SmileyGo was born, though. Working on a certificate of management at Stanford for a few months, Espinoza found the perfect setting to create his startup: Engineering 145.
The dull name belies what the class actually taught.
"The class was literally 'start your own tech venture,'" enthused Espinoza. He applied and was rejected. But Espinoza wasn't going anywhere. "I emailed the professor and then I called him twice -- and then he responded," he said.
Espinoza asked the professor to lunch and, over sandwiches, he recounted his story about Juana. He was in.
"That class literally provides you with all of the resources to start the foundation of your startup," including advisors, mentors, co-founders and early employees. After three months of the class, Espinoza had the name, online domain and a self-coded landing page for SmileyGo.
After that, Espinoza took SmileyGo through Manos Accelerator -- a tech startup accelerator with Google backing focused on Latino founders -- where he honed the technological core behind SmileyGo: Using big data science to streamline the matchmaking process between corporations and charities.
Bringing It All Together
"That's what SmileyGo does," said Espinoza. "We empower big companies to give smarter using big data."
Now Espinoza is on the cusp of launching two software products designed to do just that. Over the last summer, he, a team of interns and a data scientist -- his first hire at SmileyGo -- created the intelligent algorithms that powers SmileyGo's platform.
"It's literally a search engine for nonprofits. We've evaluated and entered over 5,500 nonprofits," he explained, "and then using machine learning, we improve the accuracy of our results and predictions."
Although SmileyGo works with nonprofits and Espinoza wants to help change the world through his startup, SmileyGo is a for-profit company. The second aspect of SmileyGo, a messaging platform between companies and nonprofits available for a premium membership, is where Espinoza sees SmileyGo's revenue potential.
SmileyGo -- now with 13 part-time and two full-time employees, an advisory board with members including Joe Wheeler (the founder of Dropbox's charitable arm), partnerships with Dropbox, Godiva Chocolates, Motorola and over 300 nonprofit early users already -- is launching the new search engine and messaging platforms by late January 2016.
"We're aiming for 50,000 users by the end of next year," said Espinoza.
Meanwhile, SmileyGo's CEO and founder is still working on his Bachelor's degree and recently reached the legal drinking age.