Good Times for a Startup in MexicoBy José Escobedo | Fri, 06/19/2020 - 10:41
Launching a start up in Mexico today, as opposed to five years ago, brings many opportunities to founders, but most of all, to users. In 2016, the Mexican Entrepreneurship Institute reported that 75 percent of startups born in Mexico closed during the second year of operations. Back then, innovative ventures had better luck in succeeding in countries such as Colombia, Brazil and the US. The reasons for startups failures in Mexico were too many: lack of financial and business planning, lack of a market strategy and lack of income to jump start the business.
Today the startup business in Mexico, especially in Mexico City, has begun to consolidate and it is opening opportunities that would normally not exist in Silicon Valley. One example that has had much success is Runa, a payroll startup whose Founder, Courtney McColgan, previously worked at Cabify as Marketing Lead.
"We found that companies had many problems with their payroll systems. This is why Runa became part of the solution, especially because they were using 20 to 30-year-old software. I found out that none of the US payroll programs work in Latin America. So, we decided we had to organize payroll systems in Latin America, especially in Mexico,” McColgan told Sputnik.
One of the reasons why McColgan decided to launch its payroll app was that she found a very competitive market talent in Mexico that was capable of developing the app and her project. "What I really liked about Mexico is that it has a very vibrant community of entrepreneurs and a very good startup scene, the best I have seen. There are many people who have previously worked in startups or technology companies, which was a little different from other countries in Latin America, where we could not find such talent," said Courtney McColgan.
Japan-based Softbank established in 2019 a US$5 billion innovation fund to invest in technology companies in Latin America. For McColgan, this investment was crucial to help convince investors that there was a prominent startup future in Latin America. As a result, startup companies in Mexico such as Konfío, Kueski and Clip took off with much success, so much so that in 2019 LinkedIn included them in its Top Startups list, where it ranks the 10 most popular startups in Mexico.
The health and economic crisis will not deter the entrepreneurship sprit of startup developers, either. McColgan highlights that moments like this one can help startups to better channel their costs and goals for the following months. "Statistics show that some of the best companies were founded and launched in times of crisis. There has never been a better time to hire someone in Mexico, now that all companies are letting people go. There is a lot of value in the market and at a much better price, which means that with the same amount of money that you had three months ago, you can do much more and achieve better results in terms of what you can add in value to your product,” said McColgan.