It was 2010, and the economy had started to recover and investors had opened their checkbooks to ramp up investing. During the economic downturn, it had been difficult for us to to hire and retain talent at Ooyala because Facebook, Google, Apple, and Twitter, and others were still growing. With the start of the bull market for the ages, we knew we had to execute on a strategy to expand engineering efforts outside of Silicon Valley.
Conversation with our board:
Me: We’ve found the place to set up an engineering team outside of the Silicon Valley – Guadalajara.
Board Member: Guadalajara, Spain. Let me see, oh, I see, it’s near Madrid. That could be a really good strategy.
Me: Uh, no, Guadalajara, Mexico.
Board Member: There are engineers in Mexico?
Me: Yes, and electricity, and Internet and the donkeys only come out on Thursdays.
To be fair, I had the same response the summer of 2009 when a management consultant, Mark Ellis (Now the CEO of a successful startup, Liftoff) recommended that we/Ooyala look at Mexico as a place to set up engineering teams for professional services work. My parents had emigrated from Mexico because they felt that it was a dangerous, corrupt place with zero upward mobility and wanted a better life for their children. But when Mark mentioned that it was an interesting place for talent, we looked at the data and decided that it made sense to take a recruiting trip. We visited Guadalajara, Mexico, and of the 15 engineers we interviewed, Sean Knapp (Co-founder of Ooyala and now CEO of Ascend) wanted to hire and bring 8 of the engineers to Silicon Valley. We knew we were onto something! By the time we sold Ooyala, we had over 100 people working in Mexico.
Last week, The Information covered how Uber was moving engineering positions to India. In the same article, it was mentioned that Lyft was opening engineering operations in Mexico.
More and more, we’re seeing investors and companies take notice of the opportunities to build technology teams in Mexico. But for the uninitiated:
- Mexico has a population of 130M
- Median age is 28
- GDP is $1.2T (Spain, South Korea, and Australia are only slightly bigger and Mexico is the 2nd largest economy in LATAM)
- GDP per capita of $10,000
- Mexico is a member of the free trade agreement between the US, Canada, and Mexico with clear rules on IP protection and immigration
- As of 2013, Mexico was graduating over 130,000 engineers every year
- Mexico City (20M+) and Guadalajara (6M+) are huge cities with dozens of universities
- Over 80 million smartphones and 89% Internet penetration with home and mobile devices
- Guadalajara and Mexico City have dozens of flights to and from the Silicon Valley, New York Los Angeles and many other major cities in the US. It’s actually faster to get to Guadalajara from San Francisco than to New York City
- English is widely understood and there is a strong cultural affinity with the US
- While the US has strict immigration policies, Mexico is very open to immigrants
- Mexico’s Time Zones are Pacific, Mountain, and Central
- Startups like Jüsto, Bitso, Kueski, RunaHR, Reservamos, Siclo, Clip, Conekta, Yalochat, Minu are thriving… and investors like Softbank, August Capital, Sequoia, Sierra… are all investing heavily in the region
- And did you know that Larry and Sergey’s advisor at Stanford was Hector Garcia-Molina? Garcia-Molina was a Mexican computer scientist who studied and graduated from Tec de Monterrey, one of the top CS schools in the world
When we started Wizeline in 2014, we started from day one with a team in Mexico. And when we opened our operations in Europe and Asia, our team from Mexico flew to the four corners of the world to expand Wizeline and keep a consistent culture.
Wizeline will be over 1,000 employees by the end of the year, with over half working from Mexico. Our teams of engineers, designers, and project managers build technology for some of the biggest companies in the world – platforms and applications that reach hundreds of millions of users every month.
I would be remiss if I didn’t speak to the problems facing Mexico (and most countries in regions)… There is corruption, the wealth disparity is disheartening and drug violence hangs in the air. Through tech employment, I think we can do effect change by growing the middle class. Tech companies pay well, provide equity and bring an entrepreneurial culture that will accelerate the growth of business. This is one of the things that excites me the most about what we’re doing in Mexico. We are not only building a successful company, but we’re also helping to Terraform the region.
If you’re considering nearshoring operations, I would give Mexico a look. And if you do, drop me a line.
Check out the original post on LinkedIn.
Bismarck Lepe is CEO and founder of Wizeline, a global product development company that helps its clients solve their biggest challenges with design and technology. Previously, he was the founding CEO of Ooyala, and before that, was a Senior Product Manager at Google.