podcast, proyecto 1951, episode 12. concept: american dream
By: imaubert
Read in 30 minutes

Proyecto 1954 Podcast: “The American-Mexican Dream” with Sean Salas

“Nothing stops the Latinos. We are a Vibrant and Powerful Community and Will Emerge Bigger and Better”
Sean Salas

The following is a transcript, in English, of episode 12 of the podcast “Proyecto 1954”.

Proyecto 1954 Podcast, Episode 12: “The American-Mexican Dream” with Sean Salas

Presenter

One thousand nine hundred fifty-four miles divide but also unite our two countries. Welcome to Proyecto 1954, a podcast to talk about the Mexico-United States relationship. Conducted by: Enrique Perret.

Enrique Perret

Welcome to one more podcast of this Proyecto 1954, the US-Mexico Foundation podcast. We are here with a great great friend, Sean Salas. Sean is CEO of a financial company in California called Camino Financial.

Sean Salas

That’s right.

Enrique Perret

Sean is a graduate of the University of Berkeley and Harvard University.

Sean Salas

That’s right.

Enrique Perret

Both you and your twin brother, Kenny Salas, have been fighting in the entrepreneurial world, let’s say, both in California and other parts of the United States and Mexico, and you have a success story today Sean. Although you may not be the big corporation yet, you are a great entrepreneur, and you already have a success story, and I would like to share it through this podcast. Welcome, Sean!

Sean Salas

Well, thank you very much, Enrique, for having me here. I’m delighted to be able to share a little bit of the history of Camino Financial, as well as part of mine and Kenny’s, and I always have to combine my history with that of my twin brother because we have done everything together. But we did marry different women (laughs).

Enrique Perret

But tell me, tell me, Sean, a little bit of your family history. How does your family get to Mexico? What did your parents do? Where did you and Kenny grow up? How did they get into Berkeley, and how did they get into Harvard?

Sean Salas

No, with pleasure. I was born into an entrepreneurial family, and like many Mexicans looking from Mexico here to the United States, my mother came to the United States with the great American dream.

Enrique Perret

The American Dream.

Sean Salas

That’s right. So, for her, the only way to do this was as an entrepreneur, and she opened more than 30 Mexican restaurants called El Mexicano.

Enrique Perret

Wow! Of her property?

Sean Salas

Yes, of course, she opened them. My mom is a supermom, but that’s the way all women are, right? All mothers. And well, my mom was like that for 25 years, but unfortunately, she lost all the business.

Enrique Perret

This is in California, right?

Sean Salas

Yes, this is in California, we were living in California. We actually grew up in Calabasas, and we were born with the silver spoon sort of speak, but from one day to another, we lost everything.

Enrique Perret

Wow!

Sean Salas

It was a blessing in disguise. Then, Kenny and I were 12 years old. My mom, who fed on the American dream, thought that the American dream was gone, so in fact, we moved back to Mexico, so I grew up…

Enrique Perret

Mexico City?

Sean Salas

No, actually Mazatlán, Sinaloa, infamous for its banda and other things (laughs). 

Enrique Perret

And amazing food.

Sean Salas

Amazing food! It is such a beautiful place. I have to tell you that it is a great safe place to visit; I encourage all the people who are listening on this podcast to go and visit Mazatlán at their earliest convenience, it’s a great place.

And so, I grew up in Mazatlán from 12 to 20 years old, a good chunk of my formative years, but always…

Enrique Perret

Dual citizen?

Sean Salas

Right now, we are only US citizens; we’ve got to work through that. In fact, Kenny is in the process of becoming a dual citizen, and I am too… I’m not in the process yet, but I have every intention to do it.

What ended up happening is that we wanted to re-pursue that American dream, something that, in a way, felt was taken from us. So we applied to Berkeley and got in. We were the only kids from our high school, Tec de Monterrey, at that time had a high school in Mazatlán, and we were the only kids to get into a four-year college from our high school class, and we re-started that journey.

Fast forward to the present. We graduated, we caught our teeth in finance and investment banking. We chose a fantastic year to enter the industry, it was 2008, Kenny was working for Lehman Brothers, and I was working for UBS (laughs).

Enrique Perret 

No!

Sean Salas

For those that don’t know, Lehman Brothers ended up crashing, in fact, within the first month of Kenny being employed there, but lucky enough, he was able to survive and stay at Barclays, which acquired Lehman Brothers; and I also stayed at UBS. 

And then we transition into private equity. We would both worked for two of the largest private equity funds; we had an orientation towards investing in minority-owned businesses. Kenny worked for Palladium Equity Partners, and I worked for ICV Partners. We had a great experience but also, had a full appreciation of the limitations of private equity as an investment vehicle into a market that I hold very near and dear, mainly because of my history was seeing my mom struggle with managing, growing, and capitalizing her business, the Latino business segment.

And, you know? The truth is that the average size of a Latino owned business generates roughly $160,000 in revenue per year. We would invest in companies that were making less than $7 million in profit per year, so from that perspective, there is clearly a disconnect in terms of what is the investment vehicle to address this opportunity at scale.

And that’s why, eventually, we started this little company called Camino Financial. And we were lucky enough to be able to incubate what today is Camino Financial while we were getting our MBAs at Harvard Business School.

Enrique Perret

Sean, I love doing these podcasts because although you and I have been friends for five years, perhaps, by other friends in common… Felipe Vallejo also now in financial matters. But I learn a lot from the lives of people here, and I like to ask them a little about their family history because it speaks a lot about who they are now. And, obviously, you decide to focus on the Latinos, the Hispanic segment…

I recently interviewed Román Leal, who’s also… 

Sean Salas

A friend!

Enrique Perret

A friend of yours who is also focused on, well his investment thesis, he as Venture Capital Fund, is focused on this. How much should we bet on Hispanics and Latinos in the United States? I know they are, that more companies are growing here than in any other community in the United States and that their purchasing power is growing a lot.

But your generation is very different, your generation of, let’s say, the second generation of Hispanics in the United States, is very different from the one of your parents or your grandparents. How would you summarize that new wave of Hispanic, Latino, Mexican-American in the United States?

Sean Salas

Well, I am a person of numbers. So let me share some numbers. Perhaps Román shared the same ones, but if I repeat them, they should be repeated because these numbers are huge.

So: if we had to measure the GDP of the Latin market in the United States, it is $2.3 trillion. It is a market larger than Brazil, which has $2.1 trillion in GDP, and almost twice of Mexico’s, which has between $1.1 and $1.2 trillion in GDP. So it is a vast market.

Enrique Perret

This with 60 million Hispanics, right?

Sean Salas

Exactly. And I think that more than half of that proportion are of Mexican descent.

Enrique Perret

Right, right.

Sean Salas

And another thing that people say is: “Well yes, but it is a generational matter. Many of them no longer speak Spanish.” But mind you, Nielsen has just released figures showing that young people are learning Spanish. They are more likely to be bilingual because now… There was a generation, an older generation, where they were pushed to assimilate. Assimilate, that meant, also, not speaking Spanish but pure English. And now… 

Enrique Perret

There was even a fear, wasn’t there?

Sean Salas

There was fear, yes, of course, it was. I think that nowadays we have learned, whether for music, for food, for the significant fact that being Latino is cool…

Enrique Perret

Yes!

Sean Salas

We want to get much closer to those roots. And that opportunity, within that, there is an opportunity for many companies to generate unique value for this community.

Enrique Perret

Yes.

Sean Salas

So I think it is a tremendous opportunity that is growing. And I focus on the business segment. So let me share some figures specifically for business.

There are 4.3 million businesses that are owned by Latinos in the United States. They generate, in aggregate, $700 billion in sales, ok? We are talking about a market that, in quantity, in terms of numbers of entrepreneurs, is the same as in Mexico, right?

Enrique Perret

Yes.

Sean Salas

But the purchasing power is enormous, that is, more than half of Mexico’s GDP. So I think there is a great opportunity, right, for this market to create value, to be able to, in the case of Camino Financial, capitalize them. Because, although they are many of them, the average-size of their business that I already shared, which is more or less $160,000 in annual sales, is almost a third of the size of a non-Latino company in the United States. So there is an excellent opportunity to train and capitalize on these businesses, these types of companies.

And in fact, there is a Stanford study that says that if we could create bridges for these companies to have the same size as other non-Latino companies, that would add, and listen to this, $1.4 trillion to the economy of United States.

So, of course, when I say: “if Camino Financial can have a little of $1.4 trillion because we are helping to train and capitalize, well… it’s a great business, right?”

Enrique Perret

A great business.

Presenter

Proyecto 1954, the Podcast. With Enrique Perret.

Enrique Perret

We are with Sean Salas, CEO of Camino Financial. And let me also tell you that he is the new Board Member of the US-Mexico Foundation. It is helping us a lot. We want to have more active people in California, in Texas, in Mexico, obviously. And Sean is their brand new member of the Board of the US-Mexico Foundation.

Sean, the Mexican ambassador of the United States, Martha Bárcena, says, she has a phrase that is: Being bilingual is cool, right? And we have to encourage that.

Sean Salas

Exactly!

Enrique Perret

Tell me, and you just mentioned it, but tell me if you have found… You speak Spanish from a very young age, and you speak English from a very young age too, your parents encouraged it, I suppose.

Sean Salas

Yes.

Enrique Perret

Have you found this leverage in front of other American friends of yours who do not speak another language?

Sean Salas

Yes. First of all, I learned to speak Spanish when I moved to Mexico. So at 12, which is still too young for me today. But the exciting thing about learning it at 12 was how I transformed myself through learning a new language, sticking more closely to my roots, and being able to do that in Mexico was a blessing, as I tell you. Although yes, my mom lost her business, and at times we felt that we lost everything, it was a blessing in disguise. And I think I was able to “acculturate” much more by learning the language and also by living in Mexico.

When I returned to the United States, I thought, and now I have validated that I can contribute more, I can contribute more. And you know what? Many kids are Mexican-American, like me, who are a bit in an area that they don’t know how to identify themselves or they are afraid, they think they have to choose one from the other. The good thing is that I believe that nowadays we accept that you can do both. It’s cool to do both, and part of doing that is language. 

And let me give you another example that goes further, that is not related to me, but rather to a Latino that many of you know, that is Julián Castro. In fact, right now, in his presidential candidacy, some people said, “You don’t know how to speak Spanish”…

He grew up in those days when speaking Spanish was bad. Now we live in days when there are people who criticize Julián for not speaking Spanish. And one way or another, he accepted that. And nowadays if you ask him, he says: “First, I’m learning Spanish. And second, my daughters are learning Spanish from a very young age, and they speak better Spanish than me.” So, there is already that transformation and adoption of that language. A very influential Latino person who wants to be President of the United States. So that shows a lot.

Enrique Perret

Right, Sean. You have been traveling to Mexico in the last two years for business, right? You have gone as much to set up an office in Mexico with your brother Kenny to get partners to explore the fundraising capital in Mexico. What have you found there, both in the world, let’s say, of the fundraising capital, in the business world, in the financial world? What have you found there?

Sean Salas

Well, first of all, I have found open arms. And I tell you, Enrique, not only because you are interviewing me, but you were one of the first people who opened many doors for me. In fact, just so everyone knows, before Enrique was the CEO of the US-Mexico Foundation, he led ProMéxico North America, right? And through ProMéxico, we became friends, and many doors were opened there.

Second, there is a lot of interest in investing in transnational companies, especially between the United States and Mexico. So many people ask me how did you do it? It’s very simple. First, I can help you with doing meetings. Nowadays, the US-Mexico Foundation can help you to do meetings, and you will see that many people are interested in listening to your pitch, hearing your story, hearing how to create that mutual, and transactional value between the US and Mexico.

So I went, I learned and, with time, I obtained two of my most prominent institutional investors of Camino Financial from Mexico, one is Crédito Real, and the other is DILA Capital. And we just put together an $8 million A Series, that was led by Crédito Real, and before that, we had put together $3 million on a convertible note that was led by DILA. So, for you to see that there is not only interest, there is money. 

Enrique Perret

Well, there is a lot of money for good ideas for good projects. There is money; you just have to connect.

Sean, I talked a lot with Román Leal about different success stories. You are a success. You and Kenny are a success, but there are many more success stories of Hispanic Latino entrepreneurs living in the United States, in the financial industry, in the technology industry… We could talk about Bismarck Lepe. We could talk about James Gutierrez. We could talk about…

Tell us a little more, because you are in that world, you talk to them regularly. You see in California a lot of new successes… Could you give the audience a little bit of this vision of who they are, what they are doing, what industries they are involved in? 

Sean Salas

Well look, I see Latinos from all over, right? Right now, you just named a few, and honestly, I could spend an hour identifying technology leaders in every vertical you could imagine. So what I would tell you is that, first of all, there is a large market in the United States, which is the Latin market. But there is talent, too. And they can focus on the Latino market or not.

Enrique Perret

Sure

Sean Salas

Many people ask me: “To captivate this market, do I have to do something that is specifically Latino?” And what I would say is no, not necessarily, right? I believe that there are many opportunities that, given how we have grown, we could have a point of view that gives us a competitive advantage in creating technology in voice bots.

For example, Ricardo Garcia-Amaya is a friend of mine who has created a spectacular group, the Top Latinos in Tech, and he has a company called VOIQ. Right now, he is innovating as voice bots to help scale the sales vertical of very very large companies. Back again, he is a technologist who is Latino, from Colombia, in fact, but he isn’t doing something that focuses 100% on the Latino market.

So I think that is an example of many, but then we see talents in different ways but believe me, we do contribute a lot to the ecosystem. We have to share these stories more because we also have to influence the generation that follows us. It is crucial. 

On the other hand, where I see that Román is doing an outstanding job, is to have more Latino investors. And that’s where I see a little more of… it’s an area of ​​improvement in the venture capital market in particular because I do believe that, and some investors say to me: “Look: give us the benefit of the doubt that we are greedy. If there is a big market there, we will invest in it.”

But my response to them is: I understand the benefit of the doubt argument. But any benefit of the doubt requires a leap of faith, in a pain that you believe is true, and sometimes when you are not a Latino. You haven’t been exposed to that pain point; then, it’s hard for you to give the benefit of the doubt because you are not necessarily convinced that that’s a real pain point, and that translates into a massive market opportunity—number one.

Number two. I think that investors are limited to their networks and how they source deals. And it’s just common sense to believe that Latinos are going to know more Latinos. So I would say that we are doing a great job at starting companies, at building a presence in the technology sector, although obviously there’s room for improvement there. But where I see the biggest gap is getting more Latinos in investment decision making roles. I think that we’ll move the needle more slowly, making progress, but not as fast as I would like.

Presenter

Proyecto 1954, the Podcast. With Enrique Perret.

Enrique Perret

We are here with Sean Salas, CEO of Camino Financial. Sean, let me go to this last part of the podcast. Let me ask you about the future of the relationship. You live in California, you travel to Mexico, and there are many gaps still between Mexico and the United States. How do you see this future? Maybe with the politics that we have now, or perhaps without the politics, let’s go straight to business, talent, and education. How do you see this relationship?

Sean Salas

Look, I think we need to start a little bit in politics without naming anything specifically because here is one thing that I want our audience to be very aware of.

We are a vibrant community. We don’t get kicked down easily. And independent of what the headlines are, we’re going to emerge bigger and better than we were before. And everyone in a while we need a reminder that we need that emergence. So I am actually very optimistic about the prospects, the Latino market, the vibrancy of the market, the voice of the market. Voter turnout is increasing substantially within the Latino segment, better than ever before. I think the political situation was a catalyst for that. 

I think people now realize using case studies, whether it’s James Gutierrez, or Bismarck Lepe on Wizeline, or Samuel Ulloa of @Listo, realizing that building companies around the Latino market generate returns. And I also think that today there are case studies that weren’t there before. And all those companies that I just mentioned have some level of presence in Mexico.

Enrique Perret

Yes.

Sean Salas

And it was very cool. The other day I was sitting at a panel where there were several tech startups. There were four of us, and three of the four had operations in Mexico.

I’m starting to see that, at least, the newer generation of Latinos, the younger generation of Latinos, the millennial generation of Latinos, they are beginning to see the value of having a transnational company and being able to take advantage of also the talent you find in Mexico as well. And when there is money to be made, I think politics will follow in a way (laughs). The cynical part of me feels that I don’t know if that’s a politically correct thing to say, but I do fundamentally believe in that.

And Camino Financial is one simple case study: We have one employee at the beginning of January 2019, and now we have somewhere around 45 employees. And the natural follow-up question is: is it just back-office and operators? No! Yes, sure we have operators, but we also have underwriters, we are hiring for engineers, we want to build a data science team over there, technical marketers… there is such a vast ecosystem of startup mentality talent in Mexico.

And two hubs, in particular, are very vibrant right now: one is Mexico City, and the other is Guadalajara. I don’t think it’s limited to that. But I think that at the end of the day, as much as there’s a lot of talk about walls, there are also a lot of bridges that are being built right now and the tech community is leading that change.

Enrique Perret

Sean, I think we need a lot of success stories in the US-Mexico relationship and the Latino market. There are many, many stories; we need to talk about these stories. How can we talk more about them? How to make the Latino mainstream? How can we see more TV shows, and podcasts, and radio shows with this community?

Sean Salas

Yeah, well. First of all, I think we are starting to take control more than we had before. Beatriz Acevedo, the founder of Mitú, created a media platform that enables millennials and Gen X Latinos predominantly, to develop and disseminate content. And her platform has flourished because there is such a thirst for that need.

Enrique Perret

Yeah.

Sean Salas

And I’m starting to see that. If you look at just general consumption of social media, whether it’s Facebook, Instagram, Snapchat, you see that that consumption is in large part driven… and not only the consumption, the growth in that consumption, is driven in large part by Latinos. I think there is already a captive audience in these distribution channels. 

I think there needs to be more awareness around what those numbers are. Nielsen just released a report at the end of 2019 on consumption around media and how Latinos are consuming media, and when you look at the numbers, you just say wow! So it’s worth knowing that they are there, they are listening, they are watching. Granted, we always need to be creating more content and more stories. I think we are not representing ourselves in the content. I think the distribution is there, and the audience is there. That is already there, but I think we are not representing ourselves.

Many Latinos have showcased themselves in stereotypical roles, whether you are the gangster, or the janitor, or secondary roles next to the big star, and we need to change that. But we are making some progress. The last Terminator was predominantly a Latino cast, the movie at least in the box-office did very well. And it’s a showcase of: if you represent us, we will repay trough more consumption. 

So I am excited about the prospects. I think the industry is finally paying more attention than they used to. There are a few platforms that I encourage you to follow. One of them, from the media perspective, is Mitú. Another is L’ Attitude; it is an annual conference that talks a lot about these issues that we’ve just been discussing.

And then some reports are being created, Nielsen, Stanford, has an excellent report on business in collaboration with The Latino Business Action Network… There are initiatives, and I think we just need to be raising awareness of the resources that also exist.

And of course, there is the US-Mexico Foundation and this podcast itself. And we all need to all do an excellent job of not just capturing these stories, but distributing them tool. And I think if we do that, we will find an open and willing audience that wants to listen and see.

Enrique Perret

Sean, hopefully in the second part of this podcast, we can talk about the participation of Latinos in Boards, about educational issues, obviously from the regional part in the United States, from California to New York.

But hey, now we are running out of time. Thank you very much for sharing these ideas with us. Congratulations on what you and Kenny are doing. A great story, and we hope we learn a lot from you. ¡

Sean Salas

Thanks!

Presenter

In perhaps the most complicated relationship between the two countries, we will find themes of talent, trade, security, finance, energy, border, migration. This is Proyecto 1954, the Podcast.

Check if you
qualify for a loan

LEARN MORE