Utilizing teleworkers can be a great way to reduce costs and give employees flexibility at your small business or startup, but managing them requires an entrepreneur put in a little extra effort to ensure that everything runs smoothly. Here are some tips to help make your teleworking program a success.
It’s almost time to leave Mexico (okay, by the time I post this I will have already been in Costa Rica for 2 weeks – but it’s almost time for the blog to leave Mexico) but before heading to the airport I was lucky enough to be able to sit down for a coffee chat with Jackie Hyland. She’s a Project Analyst at Angel Ventures Mexico and interacts regularly with both startups and investors, so she has a pretty insightful take on the entrepreneurial ecosystem in Mexico City.
Since Jackie works at an angel fund, our conversation naturally started with a discussion of the investment environment and, according to Jackie, there’s a big gap at that initial seed-stage capital between what entrepreneurs need and what investors are willing to offer. She says:
“There are people who want to invest but very few that want to join in on a company that is at the prototype or even seed stage. [Investors] want to see sales.”
On the positive side, however, Jackie says that the investment environment in Mexico is very open, meaning that investors share deals with other investors rather then trying to keep the next hot thing to themselves.
“Between the funding organizations, we want to share what we know,” Jackie says.
“The movement has started now. There are people saying ‘I don’t need to just take over my Dad’s company or get a job. I can start something,'” she says. “But it will take another 3 or 4 years before people start seeing it’s not just about starting a company, it’s about coming up with something really unique.”
These changes are a part of the evolution of the ecosystem. According to Jackie, just a few years ago in Mexico entrepreneurship was just starting to come out of people’s mouths and now it’s exploding. Now that there are numerous incubators and accelerators that have started, people know about them, and people are in them; people are beginning to try to figure out how to make them better.
“Everyone says this is the prototype phase and now let’s go to phase two: let’s make it better,” Jackie says.
“What I think and what I always ask Mexicans,” Jackie says, is “why do you feel like you need to mimic when you’re bringing something from another culture? Why not try to do more than transplant and see how this model fits with Mexico and make it bigger and better?”
However the ecosystem continues to evolve – as an attempted direct copy of places like Silicon Valley or as something intentionally uniquely Mexican – Jackie says, “the flow will pick up when entrepreneurs say: ‘Okay we’ve been doing this, we’ve been making companies, let’s figure out how to do this better, how to make a big difference.'” Thus, the question of the growth of the entrepreneurial ecosystem in Mexico seems to be one of how and how quickly, not if.
Do you have experience in the Mexico City startup scene? If so, please let me know your thoughts on what Jackie had to say in the comments sections below. Next up we head off to San Jose, Costa Rica to explore the entrepreneurial ecosystem in Ticolandia.
This week’s New Venture Mentor video is a bit different from what I usually do and I hope you all like it! Instead of listening to me blabber on and on this week, you get to hear from an expert I brought in to talk a bit about what bankers look for in a candidate for a small business loan.
I get lots of questions on this topic so I thought it would be best to hear some advice straight from the horse’s mouth. That’s where Joaquin comes in. Joaquin Gallardo is a business relationship manager with Wells Fargo Bank in the DC metro market. He manages business accounts ranging from startups to companies over $50 million in annual revenue, which includes managing their lending requirements. He’s been serving the business banking segment for the past 6 years with the most recent 2 at Wells Fargo. He currently serves on the George Mason University School of Management Alumni Board of Directors and is a founding member of the George Mason Business Roundtable.
See what advice he has to offer entrepreneurs in the video below:
Want to find out more about Joaquin or get in touch? You can find him here.
After visiting Endeavor Mexico, Josh Ford put me in touch with Scott Wofford, a consultant and project leader at Ashoka who is developing a map of the entrepreneurial ecosystem in Mexico City including development organizations, funding organizations, universities, etc. JACK POT – this is just the kind of information that I am interested in.
Unfortunately, Scott’s report isn’t yet released publicly so I can’t share any lovely links, but Scott was kind enough to grab lunch with me and give me another take on what’s happening in the world of entrepreneurship in Mexico City and where the city’s ecosystem is headed in the near future.
One of the key differences he identifies between the ecosystem in Mexico and that in the United States are that there is more classism for aspiring entrepreneurs to contend with in Mexico and that
“classism impacts many things about being an entrepreneur including raising capital and being part of the right networks.”
Additionally, because of the social stratification, there is more need-based entrepreneurship in Mexico than in the United States. Many people become business owners because it is the only option they have to support themselves or their families, however, these are not the entrepreneurs that have the resources or desire to grow those enterprises into fully functioning, scalable companies.
At the same time, there’s a lack of investment capital – specifically venture capital, in Mexico. Scott believes this lack of venture capital has a few causes: venture capitalists have trouble finding a pipeline; lots of monopolies prevent industries from taking off through a startup because those monopolies have a choke hold and since the startups cannot make it “really big” they are less attractive to investors; and Mexico is missing the qualified talent to manage a successful fund.
Scott also identifies more entrenched corruption in Mexico as something that differentiates the ecosystem there from that in the United States. Because of this corruption, Mexico doesn’t fare well on the ease-of-doing-business index and it can be difficult for entrepreneurs without the right connections to get the proper permits and licenses to begin doing business or to expand an existing business.
On the positive side, however, because the social divisions are so defined,
“Once you’re in, you’re in,” Scott says. “Some of the success stories go through all of the programs – Ashoka, Endeavor, etc. even though they don’t necessarily need the help.”
This is a theme that came up in other interviews in Mexico City as well – because the ecosystem is still at its early stages, it’s a small community in which everyone knows everyone.
Mexico also maintains a strong family structure as a deeply entrenched part of its culture so friends and family “rounds” of investment are more common. Additionally, Mexico has a growing middle class and good macro-economic growth that, combined with its proximity to the U.S., position it well to bring established U.S. models and apply them in Mexico – usually for less risk.
So where does Scott see the Mexican entrepreneurial ecosystem in 5 – 10 years?
“Right now, 80%-90% of entrepreneurs who’ve been invested in or accelerated by one of the big programs will increase 25%-30% per year but only a few will be big success cases in terms of ROI.” In 5 – 10 years, “I think that there will be a couple of big success cases where entrepreneurs become pretty famous.”
Do you have experience in the Mexico City startup scene? If so, please let me know your thoughts on what Scott had to say in the comments sections below. Our next interview will be with Jackie Hyland of Angel Ventures Mexico.
Many an entrepreneur dreams of raising money from a prominent venture capital firm or angel investor, but this type of funding is hard to come by. If your company is suitable for an equity investment and you’ve been lucky enough to land an audience with some investors, it’s important that you don’t blow your pitch if you want to make a good impression and get the funding you need.
Today’s video gives you some quick tips to make sure that your pitch impresses your potential investors so that you can get money you need to build your dream startup.
After speaking with Jorge Madrigal of Aventura in my last Startup Nomad post I was really excited about Mexico City’s potential as a startup hub. I wanted to speak to someone connected to an international organization to get a comparison between the entrepreneurial ecosystem in Mexico City and ecosystems in other cities, so I headed over to Endeavor Mexico to talk to Joshua Ford.
Josh is an Analyst of Entrepreneur Services & Selection, so he’s on the front lines interfacing with entrepreneurs who would like to become a part of Endeavor’s program and he gets to help decide who’s ready to get going with the program, who needs a little bit more work before entering the program, and who just isn’t a good fit for what Endeavor offers. He was kind enough to show me around the Endeavor offices in Mexico City (very Google-esque) and to let me grill him about what he sees happening in Mexico City’s world of entrepreneurship.
According to Josh,
“Mexico is just starting to get to the point where people are starting to think about entrepreneurship,”
and he sees some key differences between entrepreneurship in Mexico and entrepreneurship in the U.S. Firstly, he sees a lack of capital in Mexico. According to him, venture funds are smaller and more hesitant to invest because of “cultural stuff,” while, at the same time, entrepreneurs are hesitant to give equity stakes because they’re more guarded as the practice is not as familiar, there isn’t much understanding of how to value a company, and many entrepreneurs don’t realize that they could/should be looking outside of their network of friends and family for money to start or grow their businesses.
This mentality brings us to another difference that Josh identified between the U.S. and Mexican entrepreneurial ecosystems: Mexico’s lack of an entrepreneurship culture. There aren’t nearly as many pitch competitions, mentorship programs, or academic programs highlighting entrepreneurship as a viable career path and educating Mexicans about how to pursue it. There is also greater social stratification with most entrepreneurs coming from wealthy families because the “life tracks” start at a very early age. Public education in Mexico, according to Josh, is not as good as that in the U.S. so the wealthy in Mexico have an even bigger leg up than those in the States. Plus, since there are so few “rags to riches” stories there are not role models available to encourage entrepreneurship among less-well-off young people. Thus, the potential pool of entrepreneurs is the top 5-10% of the population (economically) instead of the entire population.
Finally, Mexico lacks some of the basic infrastructure to really be a tech, startup, and innovation powerhouse because the availability of things such as high-speed internet varies greatly from place to place within the country.
However, just like Jorge, Josh sees these barriers starting to crumble. In 5-10 years he believes that entrepreneurship will be more of a “known thing” and that young people will be talking about it, which will lead to more mature innovation. He says,
“One of the coolest things is that in emerging markets [like Mexico] there is still tons of opportunity. So far a lot has been taking ideas from the U.S. and Europe and doing them here, but in the future we’ll see more people innovating from zero and creating completely new ideas [in Mexico].”
The growth of entrepreneurship is a cycle, so that next level of innovation will lead to more conversation, awareness, and availability of mentors and role models so that more people will be inspired to pursue entrepreneurship and the growth will continue. In Josh’s opinion the biggest success was having an entrepreneur come through the Endeavor program, succeed, and create a contest to encourage young entrepreneurs.
Josh also expects to see more expansion into the rest of Latin America because Mexico is simply better positioned to enter those markets than the U.S. is. He also predicts that more money will start to flow into Mexico as the violence decreases and more people educated abroad return to Mexico to fill holes in the market.
So what’s his advice for current and aspiring entrepreneurs? Well, he has a lot of it: Firstly,
“There is no substitute for hard work,” he says. “It’s easy to work hard for 2 or 3 months but the typical success takes many, many years.”
He also advises entrepreneurs to be very strategic about who their market is and how they’ll target that market.
“You need to know your market inside and out,” he says. ” There’s no way you’ll be able to capture a market if you don’t know what the market is.”
He suggests you find the niches – whether geographic, class, etc. – and try to figure out how to get ahead of the curve and weather the storm while you educate your customers because you’re ahead of the trend.
“Entrepreneurs really need to look at not only what’s been Mexican forever – what’s already a part of the fiber – but also what could be a part of the fiber and figure how to tell the consumers what they want,” he says.
He also suggests that entrepreneurs move strategically, not necessarily rapidly. “Don’t expand just for the sake of expanding,” he recommends. He also stresses that you need to know your numbers because, “no matter how good your idea is or how excited you are, [investors] want to see your financials.” Therefore, you need to know your finances or, at least, bring on someone who does.
Finally, he says:
“Know your weaknesses AND know your strengths. A lot of times people are so focused on their weaknesses that they let their strengths fall. You want to bring everything up, not let your strengths and weaknesses meet in the middle.”
Do you have experience in the Mexico City startup scene? If so, please let me know your thoughts on what Josh had to say in the comments sections below. Our next interview will be with Scott Wofford of Ashoka.
I’m a huge advocate of startups and small businesses utilizing interns and I think that entrepreneurs can get a huge bang for their buck by doing so, while at the same time helping young people learn, grow, and add a great internship to their resumes. However, if you don’t properly manage interns, they can turn into nothing more than a huge time suck and actually become a hindrance instead of a help.
To make sure that you don’t waste your time (or that of your interns) here are some tips for managing interns at your small business or startup:
What tips do you have for recruiting and managing interns? Do you have any horror stories or success stories that you’d like to share? Please let us know what you think the benefits and struggles are of working with interns in the comments section below.
When I started to research the entrepreneurship scene in Mexico I immediately discovered Jorge Madrigal. He’s the Founder and CEO of Aventura, runs numerous startup events in Mexico City including Apptualizate and Tech Startup Nights, and has been interviewed for and contributed to The Next Web. Lucky for me, he’s also a friend of a friend of mine. When I asked for an intro from that friend I was informed that,
“Jorge is entrepreneurship in Mexico,”
so I was extremely excited that he agreed to let me pick his brain about the Mexican startup scene.
Naturally, the first thing I wanted to know was how Jorge got into the startup scene in Mexico in the first place. Born and raised in Mexico, Jorge went to the U.S. for college where he joined his school’s entrepreneurship club. The faculty adviser often spoke about how international students come to the U.S. and then never return to their home countries to “fix things.” Jorge didn’t want to be one of those people and believed that Mexico had a lot of potential, so he returned to Mexico looking for a job in private equity but ended up at an angel fund instead. Here he says he learned how far behind entrepreneurs in Mexico really were as compared to their counterparts in the U.S.
As Jorge sees it, Mexico has plenty of people with a lot of money, but they don’t necessarily want to invest it in helping someone else build a company. At the same time, U.S.-based investors are open to investment in Mexican companies, but there just isn’t enough deal flow to make them sit up and notice. Despite all of the hype about access to capital as a key issue, Jorge sees it differently. He says,
“If you have 20,50, 100 companies doing interesting things, money will come.”
When Jorge asks investors to come to Mexico City to work with his startups they’re happy to, but they ask him to deliver a certain number of interesting companies/potential deals for them within their investment niche and he simply can’t do it.
And the #1 reason there isn’t enough deal flow? According to Jorge, the most important thing lacking is a community of entrepreneurs and support for their endeavors. He doesn’t see people sharing and developing a sense of community despite major investment from the government including the creation of clusters, incubators, accelerators, etc. As Jorge sees it, these efforts are falling short because the government is attempting to copy other countries’ models but,
“Mexico has Mexican problems [to overcome] – not Chinese problems or U.S. problems – problems that are innate to Mexico. The biggest mistake,” according to Jorge,” is trying to do things exactly as they’re done in other countries.”
One of those “Mexican issues” that Jorge identifies is that entrepreneurship is not accepted as a legitimate career choice. In fact, it’s often seen as a euphemism for not having a job. This is partly because there are not enough Mexican entrepreneurs serving as role models to show how you can actually make a great living through entrepreneurship and partly because the Mexican family is more economically dependent on all of its members across multiple generations than in, say, the United States, so the decision to try a startup will likely affect an entire family, not just the individual entrepreneur. Plus, when a young person is still living with his/her parents (which, different from the U.S., is often true until s/he gets married) it can be much tougher to break from this disapproval and give a startup a chance.
Another issue that Jorge points out is the greater socio-economic stratification present in Mexican society. The networking opportunities, education, or money to be able to take the first steps into entrepreneurship aren’t readily available to everyone. This is one reason that all of the events Jorge hosts for current and aspiring entrepreneurs are free. A typical event like his, but hosted by another organization, would cost 700 – 1,000 pesos, he says. That’s less than $100 USD (at the high end), but for a young person making maybe $500-$700 USD per month, it’s a big expense if they’re not yet sure if entrepreneurship is right for them. In fact, Jorge says,
“For me, this whole entrepreneurship thing is really about creating more social mobility in Mexico.”
His efforts are certainly working. When Jorge began hosting events less than 2 years ago he was able to pull in just 45 attendees in a metropolitan area of well over 20 million people. Now, he’s able to attract more than 200 attendees per month. He’s also successfully helped students at 3 universities start entrepreneurship clubs to start getting young people thinking and talking about entrepreneurship and building the next generation of the entrepreneurship community.
So, with all of the efforts that Jorge and others are making to develop Mexico’s entrepreneurship community and all of the potential that the country has, where does he see the Mexico City startup scene in 5 – 10 years? “I don’t know,” he says.
“The thing I fear the most is …that our tech entrepreneurship community doesn’t get to the point that if the current promoters quit or leave the whole thing won’t die.”
But for now anyway, Jorge will hold down the fort in Mexico City trying to build a more robust tech startup ecosystem and to develop the next generation of Mexican entrepreneurs.
Do you have experience in the Mexico City startup scene? If so, please let me know your thoughts on what Jorge had to say in the comments sections below. Our next interview will be with Joshua Ford of Endeavor Mexico.
Mexico City – Mexico’s capital – is a major metropolitan hub and the driving force of the country’s economy, generating nearly a quarter of the country’s GDP. It’s also just a short plane ride from Silicon Valley and has been growing its entrepreneurial ecosystem in recent years. With easy connections to both the U.S. and the rest of Latin America, increasing adoption of technology, and government efforts to support entrepreneurship, the city is primed to be able to make a name for itself as a major startup hub.
However, economic and cultural issues hold the city (and the rest of the country) back and there is work to be done before Mexico City can claim its seat at the table of truly vibrant world startup hubs.
Taking a look at these visualizations from the Global Entrepreneurship Monitor you can see that while Mexico has lagged the United States in terms of established business ownership, it’s making a real push to catch up – and maybe even pass the U.S. – in terms of new business starts.
My next few posts will be interviews with movers and shakers in the startup world of Mexico City who will share their takes on where the startup ecosystem in Mexico’s capital city stands, what obstacles Mexico City faces in creating a more vibrant startup community, how the city can help to develop its entrepreneurial ecosystem, and where the startup community in the city will be in 5 to 10 years.
One of the biggest stresses for entrepreneurs can be figuring out where to get the necessary to capital to start your dream business or to grow your existing business to its full potential. If you don’t have a finance background and/or this is your first time as an entrepreneur, you may not be familiar with all of the funding options available to you and choosing the best option for your business is critical to your company’s continued growth and success.
This video will give you a quick overview of the funding options available to help you get started with exploring the best financing for your small business. If you’re still confused and need some help deciding what type of financing is best for your company, talk to a mentor or head to the “Work with Cate” page and make an appointment to speak with me about how best to move your dream business forward.