Published here in Spanish on September 19, 2018
Almost three years after I started this Venture Capital career, I had some interesting realizations. This new career brought great lessons; some of them came as a ice water bucket, some other lessons came as an “I told you so” and the most important ones I believe settled down slowly during these three first years.
Grow Pad temporary office 2016
As Ortega y Gasset said well: “ I am I and my circumstance.” Political, social, and economic changes have been essential factors in my learning process. Knowing and accepting myself as a bi-cultural investor, Mexican and American (gringo as I say) has been an exciting process. The working style, traditions, and culture, despite being neighboring countries and, despite the popular belief that Mexicans want to be more like Gringos the difference between the two cultures is huge and even sometimes have contradictory values.
Thirty months of learning, traveling, and adventures brought — in addition to AI8 Ventures — new partners and associates with whom to share the journey. Also, my son was born, my circumstance changed, I am forty now, and the middle age crisis created an inner self revolution that expanded the scope of what I wanted to achieve before I die.
Reverse culture shock
Although I would like to feel special, this feeling of not belonging here or there is something familiar to many immigrants, mainly to those who have had to adapt to the working system and style of two or three cultures.
This may be a surprise to many, but no, not everyone works like the Gringos do, and even though when I am in Mexico, I feel at home, I have found myself trying to push the work culture of the United States. For everybody else, no, in the United States, people are not late, meetings do not start, 5, 10, or 15 minutes late, my partners refer to this as Latin time. In the US there is no discussion of sports or politics, and very rarely anything personal is shared. Your collaborators are not your friends, and in Silicon Valley it is more important what you have to say than how do you look, the brand of your clothes is entirely irrelevant, and your watch only attracts attention if it is the newest version of the Apple watch. If you wear the brightest and most expensive attire you have, you are most likely a tourist.
Again in Silicon Valley It is much more important in what you work than your position and title; the meetings start and end on time. Email is more important than a call, and nobody uses Whatsapp, this apply to the whole US. Silicon Valley is very meritocratic, but other country areas have different rules, such as which church you belong to or if your accent reveals your origin. There are a series of prejudices — not only racial — but also depending on your place of birth or the place where you live; if you live on the East coast, you might think that those on the west coast do not work as much as you do or if you are from the West coast you think New Yorkers are only motivated by money. Being from the Midwest implies that you are a good person, honest and hard-working, and if you are not from one of the ten best-known universities, it doesn’t really matter which one is your alma mater.
With this diverse society, they need to be able to label and pigeonhole you; the society has a series of value attributions that determine how trustworthy you are. In my case, generally, they cannot decide whether I am reliable or not; for some, it is an opportunity to chat with someone with a different background, for others, when they don’t find coincidences with their experience and they turn around and leave, literally, they excuse themselves and leave.
The conversations are generally like:
-Where are you from? — Mexico City
-But where did you grow up? — In Mexico City — (Ahh, he didn’t come as a child)
-Well, how long have you been in the United States? — Almost five years — Ahh, you just arrived
-Did you come to study? At what university? — No, I studied in Mexico at ITAM — (Confused grin)
-Oh! So you came with a company, which one? -No, I didn’t come with any company, my wife had been living here for a long time, and when we got married, I stayed — (They sure think — He got married to be able to live here)
Usually, at this point, they either turn around or become interested.
-What do you do for a living? — I am a Venture Capitalist; I invest in technology companies.
If I am in Silicon Valley or NY, there is not much more to explain; you have to give more details anywhere else.
-Have you been doing this for a long time? — Three years officially, many more as an entrepreneur.
-Ah, so, you were the “founder” of a startup. What was your company called? If you are here, I imagine it was successful — Sm4rt was a cyber security company. We also had a video game company and a credit card- fraud prevention company. I stayed in San Francisco when the security company got acquired.
-Who bought it? — KIO Networks — Mmm, I’ve never heard of them. — You know Corona beer, they share investors with KIO — of course I know Corona, it is the cheap Budweiser.
It sounds like a joke, but conversations always change the subject. They say something like: “Oh, I know this Slim guy, he’s a billionaire, right?. “He is a friend of my friend with whom I have a yacht; I go racing with…, I went to school with his friend, his cousin, etc. I met him once on a trip to Cabo. Without a doubt, the best known Mexican is Slim, of course if you ask them if they know America Móvil, Carso, Telmex, or Claro, the answer is “what is that?”.
Few have been to Mexico City, Monterrey, or Guadalajara, almost all of them to “Cabo”, “Puerto Vallarta” and “Playa”. San Miguel is a trend.
Back to Basics
With this happening, plus my middle age crisis, plus the constant search for enlightenment, it was time to redefine objectives and ask the most important question, Why?
Why do I do this? To have more money? To become famous? To have something to do? To have a conversation starter? And the answer is always: “To change the world,” to help my beloved Mexico, to generate wealth and create a positive impact in our society.
The answer is to go back to why I started the fund, which will unquestionably be a source of wealth for those involved. Still, I also created it to bridge ideas, entrepreneurs, capital, and investors, to promote the development of technology and businesses between countries; between Latinos on different sides of the border, Gringos, and Mexas, Asians and Mexicans; having technology and social impact as a common language, seeking to improve our life conditions throughout the continent.
It turns out there is a term for this: impact investing. When people ask me if the fund is impact investing, the answer is yes.
The new industrial revolution (AI) will make automation mainstream, leaving out all kinds of jobs; Yes, from Uber to traditional cab drivers, professional investors, brokerage houses, cooks, doctors, etc. Yes, it will also generate other types of jobs, and although the cake is bigger, there will be few who sit at the table.
The most outstanding value will remain (as always) with the owners of the production means and now with the technology creators.
Our fund is an answer to close the socio-economic gap with underserved communities, it responds to the necessity to empower diverse communities to have a leading role in the new generation of wealth.
We have to teach our engineers how to create and execute Silicon Valley-style. We have to teach them how to create temporary monopolies. And, teach to new and old investors how to invest in the future that they want to live in, this will not only make them wealthier but will generate a social, economic and environmental impact. If you think this is unnecessary, here’s a piece of information: “Our high-impact portfolio companies grow on average two times every 12 months”, How much does your company grow?
In the 2018 GIIN annual survey, 76% of investors responded that their impact investments generated the social benefit they expected, and 82% answered that they had the expected economic performance. 15% responded that they exceeded their expectations in the two dimensions.
Historically, latinos, and overall minorities have been late to the disruption waves. The waves of economic growth, the industrial revolution, the internet, and the information and knowledge era have passed us by. The future of our communities depends on us, on the investments we make, and, the ability to create the technology that we will use or that will be the basis of the industry for the next 50 years. Will minorities play a leading role in sustainably? That is still to be seen.
The investment industry in the United States has turned to participate in technology impact investing. It aims to be at the point of collision of technology versus how fast human beings can adapt; this collision generates such movement that entire communities tend to disappear. Remember Sears or Kmart? Where are the people who used to look for clothes or arrange boxes? Indeed some are working for Amazon, some for Instacart, probably a few more for Postmates, and many more changed careers; this is an example of the change of control of the financial surplus, and it’s precisely where our investments are.
I am I and my circumstances, but even with 30 months predicting the future, I returned to my origins, to what my heart is telling me, which is why you are reading this blog.
A hug
Carlos (wolf) Ochoa