By Claudio Barahona, Managing Partner of Alaya Capital.
After two years, we met in person and talked about the challenges we have gone through. We had lunch with 16 startups of our portfolio, we called it Alaya Portfolio Meeting and we talked about 3 challenging topics for the startups. We show you our draft and we share some highlights of what we talked:
🚀 #ChallengeOne Opening a new market in Mexico
Mexico is one of the market every startup of Latin America wants to conquer, as it could be the previous step to scale the United States However, it is one of the larger markets, after Brazil, and it presents some particular challenges. 3 key conclusions:
- It is necessary to build a local team and find a Country Manager committed to the startup’s goal. Moreover, the founding team must get involved in the opening and live in the Mexican market, by traveling or residing there. “Mexico has its own idiosyncrasy and you understand it when you are there. During the pandemic, many of us were not able to travel, so the Country Manager became a key element”.
- Keep a constant monitoring and change on time, “the Mexican market needs to be owned in the first try, it is necessary to iterate quickly”.
- Mexico is not just DF, there is a whole country to be known and it is necessary to evaluate which is the best city to make the entry.
🚀 #ChallengeTwo Acquire a company to grow
123Seguro and Welii shared their experience of acquiring companies in their target markets: Brazil and Colombia, respectively.
- It is a useful option in order to grow in an inorganic way, to skip one step to your expansion. Thus, you have something concrete and quick instead of starting to start from scratch”.
- “You can take advantage of the market already opened by this company, with their learnings and the talent developed”. “In times when there is a lack of talent, being able to retain a talent and to make them feel part is one of the greatest victories of the process”
- For the acquisition, it is necessary to understand the founders of the company you are buying, their current situation and what they need to make a quick transaction. Otherwise, the process to enter a market could be delayed and create more bureaucracy.
🚀 #ChallengeThree Build and keep a technological team
We also talked about the “weak point” of the startups at present: build a technological team in a context of low supply and great demand.
- Double challenge: to attract and retain not only a junior team, but also senior talents. “For the juniors, the only option is to acquire experience and spend time and budget to their training, taking into account that you can lose them in a year. The senior talent is more difficult to attract, but we are facing a time when many good professionals are seeking new challenges, far from corporations, and in startups, there are plenty of challenges. It is more difficult to attract seniors than to retain them”.
- Demands: in this context, talents demand much more from the founders of startups, who should keep up with these requests. A recurrent phrase is “I want to be part of a project that goes well”. This is why, the culture is as important as the operation, grant a professional workplace environment with tools and methodologies.
- Startup culture: facing a great demand for technological talents, the best tool startups have is, precisely, being a startup. The culture around a startup is special, and the talents feel more involved in creating something new, with impact. “Build sense of belonging and community should be part of the key tasks of the C-levels and should be considered in the budget. Taking into account that it is more expensive to hire than to retain, we should make sure that every resource understand what we do and why we do it”.
- CPO: One of the possibilities that came up is to incorporate a Chief Product Officer and split tasks commonly assigned to a CTO. The CPO is not a resource that should develop technology, but should have the market vision to develop the “idea” of the product.
¿What do you think about these conclusions? ¿Would you add some other item? Leave the answers in the comments and let’s learn in community.