VC in the MC
aka Welcome To Tequila Valley
The Rise of Mexico’s Startup Scene and Booming Business Market
In America, Silicon Valley is a haven for innovation, home to many of the world’s most distinguished high-tech companies and brands. It is an entrepreneurial, cultural and venture capital mecca.
High tech companies have a reputation for being quirky. We love that! I’ve heard the Google headquarters life-sized T-Rex is particularly impressive. His name happens to be Stan and he’s an internet icon.
But Silicon Valley is not the only attractive area code in North America for those bursting with entrepreneurial spirit. In fact, over the course of the last decade, Mexico has made some fascinating evolutions to its infrastructure, and jumped head first into a startup renaissance that has created one of the most innovative and attractive entrepreneurial hubs in the western hemisphere.
Welcome to Tequila Valley.
Or so aptly named was the movement, back in 2006, that spurred the startup buzz in Mexico.
It’s not like Mexico’s startup scene appeared overnight – it’s been a long time coming. It can be traced back to TechBA, which was formed as an international business development program that was born out of the North American Free Trade Agreement (NAFTA) back in the mid-2000s. The goal was to bring people to Silicon Valley and teach them the ins and outs of entrepreneurship.
Fast-forward to 2009. The Mexican Association of Venture Capital and Private Equity hosted its first conference in Mexico City, the nations vibrant capital. Naturally, the city has become the headquarters for Mexico’s startup scene, with a host of venture capital firms and operations that seek to invest in Mexican startups setting up shop.
With momentum like that, it’s not difficult to see why the startup scene has stuck in Mexico. Even the Mexican government is immersed in Mexican entrepreneurship – it is expected to allocate roughly $600 million dollars in funding for entrepreneurial endeavors through the year 2018.
Mexico is, quite simply, one of those places to be.
From a basic financial standpoint, Mexico is an economical and cost-efficient option. The cost of living is low, and the peso is relatively strong compared to the dollar.
Mexico is the largest Spanish-speaking country in the world and certainly the most attractive and rapidly growing startup market in Latin America. Goldman Sachs even predicted that, by the year 2050, Mexico would represent the world’s fifth largest economy. Our neighbor to the south already represents Latin America’s second-largest economy, next only to Brazil, and it boasts excellent port operations that span two coastlines.
It also doesn’t hurt that it’s always been highly accessible for U.S. businesses. The highly accessible aspect is a huge selling point for Mexican and American entrepreneurs alike. Earlier this year Forbes Magazine discussed how more entrepreneurs are keeping one foot in the U.S. and one in Mexico. This is especially true in San Antonio, which has been a haven for Mexican startups in the past, since cultivating a respectable startup scene of its own – and all just a stone’s throw away from Mexico’s border.
On the other side of the border, as Mexico City continues to flourish as an entrepreneurial hub, the city of Monterrey has grown into a notable locale for Mexico’s startup ecosystem. Guadalajara has also become a point of interest for entrepreneurial endeavors, specifically with respect to engineering. Back in the day, Hewlett-Packard set up operations in Guadalajara prompted a host of other U.S.-based tech companies to flock to the area, setting up one of the world’s finest tech manufacturing and service destinations.
Since much of Mexico’s population is fixed around these cities, giving students and educational programs access to these innovative businesses. It’s also important to factor in the fact that, according to 2014 demographic statistics, roughly half of Mexico’s vast population is younger than 20 years old. With improvements being made to Mexico’s higher education system, the Mexican state expects to churn out graduates in technology and engineering that can rival the best in the world and foster the growth of the country’s business market.
It appears that Mexico’s startup scene is here to stay, as the country’s entrepreneurs continue to propel the economy forward into the future. As Mexico continues to build a stronger infrastructure, it will be interesting to see how the innovation born from the Tequila Valley movement evolves. Will we see increased collaboration between startups in Mexico and the U.S.? Will Mexico become a target for you and your brand’s strategy?
So I offer you this parting thought – your question shouldn’t be, “should I be doing business in Mexico?” – the question is why aren’t you? If your answer is that you don’t speak Spanish, the good news is I know an excellent translator.
With more than 18 years experience in translation and interpretation, Flor Dimassi, CEO of Global Speak Translations stays on the pulse of what is happening in the international oil and gas arena. She turns language and cultural diversity into business opportunities for her clients. Learn more at www.globalspeaktranslations.com.