Opinions

The Secret About Why Top Investors Are Betting on Latin America

One of my favorite pieces of advice comes from Jack Ma, lead founder of Alibaba — one of the largest global IPOs to go public at $231 billion in 2014. He famously said: “Global vision, local win.” This isn’t a complex idea, but it stands out in my mind when I think about my own team’s success here in South Florida. The concept feels almost intuitive in the tech world. Offshore vendors and contractors from BRIC countries have fueled the rise of a $6 trillion global, extended workforce, with the number of Fortune 100 companies outsourcing jobs more than doubling since 2000 – our team included.

The secret top investors now realize is that Latin America is primed to become the hotspot for budding tech talent. Big name brands such as OpenEnglish and Mural.ly are just a few of the recent tech darlings to emerge from Latin America’s entrepreneurial scene, with at least six other companies valued at over $1 billion in Brazil and Argentina alone. Early investors have three real ways to get in on the trend.

INVESTING IN THE FUTURE:

Now is the time to invest in Latin American startups. And there is no shortage of options. Accelerator programs such as Start-Up Chile link investors to viable projects across the region. According to VentureBeat, Start-Up Chile has helped fund nearly 5,000 startups and entrepreneurs, bringing in over $7 million in capital investments.

The key to choosing where to invest is one part art and one part science. I feel confident in Latin America’s technology renaissance, because the emergence of startups signals stabilization in the economy as the region works through political and infrastructure hurdles. I’m also confident in my LatAm investments because I know that most incubators, like Startup-Chile, are committed to keeping politics out of their business practices, safeguarding investor contributions and protecting the spirit of startup culture and success.

When I evaluate the viability of a startup, I ask myself whether the concept is solving a latent customer need and whether there are any competitors currently in the market. In my experience, bleeding edge technology represents the biggest risk and biggest reward scenario. Everyone wants to get in on the newest, sexiest, shiniest future… but the truly reliable investments are ones that have been de-risked. The riskiest factor for a startup is “proving the concept,” so my recommendation is to be a second-wave early adopter, taking a proven idea and improving on the concept or executing a facet of the business more efficiently.

INSOURCING IS THE NEW OUTSOURCING:

If you aren’t looking to invest directly in a global startup, you might consider linking top Latin American talent to your brand by insourcing your employee pool. Insourcing is a specific type of global outsourcing that tackles one of the biggest onshore pain: time differences. When outsourcing from the United States to India, for example, a double-digit time difference breaks down the collaboration and communication process. Insourcing connects talent within a three-hour time zone (no different than calling my West Coast business associates from Miami) to expand your human resourcing options without compromising your business model.

We have offices in Costa Rica and Uruguay with over 100 employees who elevate our front and back end development, graphic design and call center support. Investing in insourced talent helps me reduce our fixed costs while adding a layer of quality control to my offshore work. Still not convinced? Insourcing is also a great way to give back to the global community. Our office in Costa Rica has contributed to so much growth in its surrounding neighborhood that the Mayor of San Jose plans to attend an official ribbon-cutting ceremony at our office and has encouraged us to scale our workforce to over 200 employees. That’s what we call a global win-win situation.

BRINGING TOP TALENT HOME:

And, of course, once you’re hooked on insourcing and the amazing talent coming out of the LatAm market, you might just decide it’s time to bring some talent home. Global census reports suggest that Latin American countries are highly motivated to cultivate skilled tech talent. According to Telefónica’s Index on Digital Life, Latin America ranks in the top 10 percent when evaluating digital access and development to GDP per capita, even when compared to established regions such as Europe. In other words, technology represents the “new (Latin) American Dream.”

Because top Latin American talent is competing against established talent hubs such as India and Pakistan for most global contracts, the next generation of coders and developers know they need to be smarter and savvier than ever to stay competitive. High motivation to enter the industry and a steady stream of healthy competition are a recipe for success when choosing LatAm talent.

As a business owner, I encourage my Human Resources lead to look for the best talent anywhere and everywhere in the world. Global talent often brings new solutions, fresh ideas and a fierce desire to succeed to the table: all characteristics I value in employees and partners. I’ve been betting on Latin America for over 5 years and winning every time. I encourage any entrepreneur to do the same.

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