I recently had the pleasure to present the Camino Financial story to the Ambassadors and Consuls of Mexico at their XXVII Annual Reunion in Mexico City. The takeaway was simple: the U.S. hosts the LARGEST untapped Hispanic market in the world and it’s up for grabs right now. The buying power of Hispanic consumers is approximately $1.3 trillion, making its economy larger than all but 15 countries (source: Selig Center for Economic Growth). Meanwhile, Hispanic-owned businesses significantly contribute to the U.S. economy with over $661 billion in gross sales (source: Geoscape). And with all the innovation occurring in the U.S., very few startups are focused on delivering value to the rapidly growing Hispanic community. A recent survey from AngelList counted 89,405 U.S.-based startups: of these, only 15 focused on delivering services to the Hispanic market. Here lies a GIGANTIC opportunity…
While I fundamentally believe 80%+ of what is required to capture any American market resides here in the U.S., we shouldn’t let this blindside us from exploring resources and influences across the border. This is especially true when looking for a marketing or operational edge to capture the U.S. Hispanic market. Below are 3 ways startups can leverage Mexico to build a Hispanic edge:
Design Complementary Products for Both the U.S. and Mexico
Designing a product or service that works in the U.S. and Mexico presents both an immense growth opportunity and a big challenge. While this is clearly a challenge, we have seen many products become widely accepted across borders, such as tacos, tequila, and Vicente Fernandez (not joking). But delivering transnational products goes way beyond tacos and entertainment, it can be as sophisticated as creating microfinance products and Ed Tech solutions (e.g. Camino Financial in 5 Years).
Mexico is a Center of Influence for Paisanos
After my discussion with Mexican officials, I was quickly approached with requests to visit several local consulates in the U.S. (Mexico has 50 consulates in the U.S.) to speak to Paisanos (first generation immigrants) looking for capital. These invitations further exemplify the power of influence that resides in Mexico, as well as an opportunity to penetrate the U.S. Hispanic market. It sounds far-fetched, but it’s true. This can be a huge capture opportunity for savvy startups focused on the U.S. Hispanic market.
Resources & Talent
Now, many Hispanics in the U.S. may not find relevance in, or may be detracted from, “Hispanic oriented” products. However, Mexico has much more to offer than just serving as a center of influence for a certain number of Hispanics in the U.S.: it offers resources in the form of raw materials and talent. While in Mexico, I met with two call center providers to help service my Spanish speaking customers in the U.S. First, I was blown away by the level of management sophistication, technology, and access to motivated talent. Second, I was intrigued by the opportunity of saving 50 cents on the dollar. While I do not believe the ultimate cost solution for startups or BIG corporations is to outsource work to countries with a lower cost of labor, I do believe businesses should allocate finite resources in certain areas to maximize the customer experience. In the case of catering to Spanish speaking customers, Mexico offers a huge opportunity to deliver a seamless telesales and customer service experience.
Now more than ever, it is imperative that entrepreneurs and business owners open their eyes and look across the border, as this may be the key to unlocking untapped value among Hispanics in the U.S. and beyond.