Lifeselfmastery's podcast I Startups I Venture Capital
00:02:46 · Marcus Dantus
[00:02:46] S2: No, no, no. I mean, there was definitely pattern. A Let let me explain this to you very, very quickly. I I I was running Startup Mexico. The bubble burst. I separated myself from the company. My my partner and the investors took it, I sold what I could. And then, you know, I started a couple other companies, we sold them. And then I was called by a friend of mine who owned medical device incubator, if you will, a medical device development company. And that was my first, you know, contact with incubating companies. It was in the medical device space of which I have absolutely no knowledge. But at the end of the day, I did understand eventually was that a company is a company no matter what they do. If it's medical devices or if it's services or if it's products. And I got a great experience, you know, incubating these mechatronic engineers and biomedical engineers and creating their products and launching them. And then that company was actually eventually sold to a fund in Mexico. And when that happened, I joined a university as a professor. I thought I was gonna retire in the academic world. And that university was, you know, a creative university. It taught television and movies, cinema, and it taught design and industrial design. And when I started with the university, I started thinking, well, why don't we make an incubator for the university for creative companies? And so that was my second experience incubating. And then a couple of years afterwards or about a little less than two years, I got a call from Telefonica and they wanted to build an accelerator for, you know, technology companies and telecom companies. And I, you know, I founded Wayra Mexico. So that was my third incubation experience. And by then, you know, I had incubated medical devices and creative companies and telecommunications and technology companies. And then I started my own incubator and that's how Startup Mexico started, you know, as a much bigger program. To give you an idea, you know, Wayra incubated 10 companies a year or accelerated 10 companies a year. The university, about, you know, maybe five or six, you know, America, five companies. Of course, it's much more complicated since it's medical devices. So I thought, well, why don't we build something much bigger?
00:05:53 · Marcus Dantus, Rohit Malhotra
And that's how we started Startup Mexico, we started incubating about a 100 or a 150 companies a year. And so it does follow a certain pattern, a pattern that surprised even me. But at the end of the day, you know, I followed my intuition, if you will, and stayed with it. [00:06:18] S1: Got it. Super interesting. And you once turned around an underperforming organization by changing its business model. So you know what was some of the first signs that you found that it was broken and what were the hardest call that you had to make to fix that broken business model? [00:06:39] S2: Well I think, Rohit, that it's always the same. You know, at the end of the day, companies need to pivot and adapt. And and, you know, the world changes now faster than ever. Tendencies change, the... Your customer needs and wants change, and if you don't adapt, you die. It's always hard to do this type of adaptation because... And you know Michael Porter says it very well. He says innovation is not difficult. What's difficult is to stop doing what worked before. And that's, you know, something that's really hard for companies. But eventually, I'm always suggesting, I give a lot of conferences on innovation, I'm always suggesting that companies now need a new position, a new COO, which is not the chief operating officer, but the chief obsolescence officer. That's always looking to see when a company will become obsolete. Because I think, you know, with technology appearing so quickly and especially now with AI, you know, lot of business models and companies will need to change.
00:06:39 · Marcus Dantus, Rohit Malhotra
[00:06:39] S2: Well I think, Rohit, that it's always the same. You know, at the end of the day, companies need to pivot and adapt. And and, you know, the world changes now faster than ever. Tendencies change, the... Your customer needs and wants change, and if you don't adapt, you die. It's always hard to do this type of adaptation because... And you know Michael Porter says it very well. He says innovation is not difficult. What's difficult is to stop doing what worked before. And that's, you know, something that's really hard for companies. But eventually, I'm always suggesting, I give a lot of conferences on innovation, I'm always suggesting that companies now need a new position, a new COO, which is not the chief operating officer, but the chief obsolescence officer. That's always looking to see when a company will become obsolete. Because I think, you know, with technology appearing so quickly and especially now with AI, you know, lot of business models and companies will need to change. [00:07:59] S1: Yeah. Yeah, you're absolutely right about AI. There's just so many tools which are coming up and you need to figure out which is going to work and which is not. But you know when you launched Wayra Mexico for Telefonica what did you learn about getting a large corporation to actually work with startups?
00:07:59 · Rohit Malhotra, Marcus Dantus
[00:07:59] S1: Yeah. Yeah, you're absolutely right about AI. There's just so many tools which are coming up and you need to figure out which is going to work and which is not. But you know when you launched Wayra Mexico for Telefonica what did you learn about getting a large corporation to actually work with startups? [00:08:21] S2: Well, look, in beginning when I started with them, I thought it was an amazing idea, you know, corporate venture capital, a big company that, you know, created little companies that it could eventually either absorb or work with, give... Provide them a huge marketing and commercial arm, etcetera. But it does have its negative side. And the negative side is that, you know, corporations move a lot slower than startups. So, you know, the process, for example, to buy a laptop in Telefonica could take four to six months. And in four to six months, a startup could die. So, you know, trying to match those two different timeframes and schedules wasn't easy. And that was probably the biggest problem that I had with Wayra. [00:09:21] S1: Got it. And you've been running Startup Mexico since 2013. So how has the Mexican founder changed in last, you know, thirteen or fourteen years and what still hasn't changed that might frustrate you?
00:09:37 · Marcus Dantus
[00:09:37] S2: So look, in 2012 Mexico created the Mexican Institute of Entrepreneurship nationally. Yeah. And that's provided a lot of support and, you know, money and, you know, it really created the entrepreneurial ecosystem. So between 2012 and 2018, the Mexican ecosystem grew. You know, we started getting a lot of incubators. You know, we went from zero to about 500 incubators in the country, some accelerators. We went, just to give you an idea, from three funds in 2008 to over 150 funds by the end of the decade, the end of the next decade. So I believe that the ecosystem was truly born in that era. We were missing a very important component in the ecosystem, which is success stories, in part because it was such a young ecosystem. Today, it has changed completely. You know, the entrepreneurial institute disappeared in 2018 with a change of government. There is absolutely no support for entrepreneurs whatsoever nationwide. So a lot of incubators have actually died. Many funds have not continued. I think entrepreneurship is still growing. I think that the culture, the entrepreneurial culture is something that's spread out and that's very important. And we also have a positive side because now we have a lot of unicorns that were created in Mexico. So now we have the success stories. So if you ask me where I find it now, I think that as an entrepreneur, as an investor, as an incubator, we are a little bit in a state of confusion. Why, if we were so successful in creating this ecosystem, why aren't we feeding it currently? So I think we still have an opportunity to, you know, take advantage of what was created, but I think we need to move and we need to move fast.
00:12:26 · Rohit Malhotra
[00:12:26] S1: Got it, interesting. And, you know, before the call you talked about Ruta Excel where, you know, you've moved on to this new initiative where you're focusing on traditional SMBs rather than venture backed startups you know so what led you into you know this sort of change where you've moved from Mexico to Ruta Excel?