Legatum Fellow Spotlight: Pablo Marín Robledo
Mar 19, 2012
Categories: Latin America
As a Legatum Fellow and MIT Sloan MBA candidate, Pablo is creating a photography software business focused on the needs of tourists in Mexico and Latin America. In this contribution, Pablo outlines the challenges (and opportunities) he faces in launching a tourism business in Mexico, and how he has thus far overcome these obstacles.
By Pablo Marín Robledo, 2011-2012 Legatum Fellow
Starting a business in a developing country can be a radically different experience than launching a start up in a high-income country. My country, Mexico, presents both advantages and challenges for entrepreneurs. I am developing and commercializing software for souvenir-photography in tourism sites. The tourism industry, one of the largest in the country, is a unique sector with a lot of space for creativity and innovation. However, tourism is also subject to cyclicality and it is severely affected by frequent external shocks such as hurricanes, security, and economic downturns, among others. Furthermore, creating a business in a developing country can have significant trade-offs from that same experience in industrialized economies.
In developing countries, I often perceive that there is everything to be done. As the term “underdeveloped” suggests, there are enormous opportunities for entrepreneurs to satisfy needs. There are huge requirements for infrastructure, technological solutions, innovation, and also for more traditional products and services. Thus, starting a company in my own country, emphasizing the innovative aspects that MIT praises, has been very attractive to me.
However, there are also many challenges to be faced. As a small start-up, finding and recruiting talented people has been difficult. The number of programmers coming out of college every year is low, while the overall economy has a large demand for them, creating a scarcity of tech-savvy employees. Establishing good relations with local universities and colleges has proven a good solution to have access to better human resources.
A second constraint I have found is the resistance from some medium-sized companies to experiment and try innovative solutions. The pace of change is slower and the market takes a longer time to incorporate technological developments. There seems to be an aversion to technological risk. To overcome this we have come up with pricing schemes that require little upfront investment and that pay for performance. This approach provides confidence and aligns everyone’s incentives to make our software deliver real value.
Finally, I believe that there is a personal choice trade-off in the type of company that one wants to build. Countries like the U.S. have the entrepreneurial ecosystem set in place to transform great ideas into very large companies, yet competition is very intense. On the other hand, developing countries have more needs and less competition, creating more opportunities for new companies to provide products or services. However, these countries lack both the necessary ecosystems and the huge markets required to transform such companies into very large ones. In particular, multiple rounds of funding are less frequent and alternatives to exit (such as being acquired or doing an IPO) are less or even nonexistent. Hence, it is important to be aware of the options available in order to make a conscious decision on the type of company one wants to build. Entrepreneurs can have great ideas that solve huge needs and create very profitable businesses, going beyond traditional venture funding and employing creative exit strategies. Personally, I believe that building a company, and then running it in the medium- and long-term, can also be a lot of fun.
This article appeared in the Legatum Center's March 2012 newsletter.