After many years doing business in the US, in 2008 I co-founded a fintech venture in Mexico. Even though I was born and raised there, many of my friends and mentors warned me that I would be shocked at the amount of corruption prevalent in the country. Their businesses faced frequent bribe demands to stave off largely invented misdeeds. Of course, everything could be fixed with a ‘mordida’, Mexico slang for bribe that literally means bite.
My partners and I were absolutely adamant that we would not engage in this practice. It has not been easy, but I am optimistic about the fact that it has been possible, if sometimes more expensive and time consuming than taking the offered corrupt path.
In 8 years and with a peak of 400 employees (pre-online business) we have seen it all: fraud, theft, embezzlement, sexual harassment. You name it. In all of these cases, there was an expedient mordida way offered to solve the problem. There was also, as they say in Mexico, ‘the hard way’, i.e. following the rule of law. We always took the latter.
One time a law firm, in cahoots with the authorities, sued the company and myself personally for the non-existent misuse of a third-party brand. Of course accompanying the lawsuit was an offer that for a few thousand dollars it could all disappear. Turns out the law firm was in business just for this and infamous among legal circles. In the end our defense cost not much less than what was being demanded and much more time. After a year, when the legal blackmailers saw that we simply were not backing down and that they would have to show up in depositions before a judge, they dropped the whole case and slinked away under the hole they had crawled out of.
Just as dishearteningly, on more than one occasion we had thefts caught on camera and the cops asked for bribes in order to go after the already-identified criminals. We simply kept calling their bosses until someone got tired and possibly scared that we would go to the media or start a Facebook campaign.
I could go on, but you get the picture.
I will admit that more than once while in the middle of a legal deposition or while paying yet another attorney invoice, I wished we had gone the easy way. But we never did and by doing so I believe we have accomplished something more important than just being true to our own principles. My partners and I, as Endeavor entrepreneurs, mentors to a number of start-ups and frequent speakers at business-related events, are in a position to influence the future of how Mexican businesses approach the hard or easy way to solve problems.
Unlike what we heard when opening the company in 2008, most of the entrepreneurs I speak with these days in Mexico’s up and coming vibrant start-up ecosystem rarely have complaints about corruption. They are, thankfully, much more preoccupied with hiring, product definition and the next round of funding. We are seeing VCs and incubators led by Mexicans with impeccable credentials and international reputations, such as Ignia, with Fabrice Serfati and Alvaro Rodriguez as well as Marcus Dantus and Pablo Salazar, helping usher the next wave of Mexico’s employers.
Entrepreneurs in Mexico, along with those that fund, mentor and incubate their companies, have the opportunity to actually change the system from within. Decades-old oligopolies that have unsavory ties to the political system have no will to change the way things are done, but in a country where Elon Musk chose to unveil his vision for colonizing Mars, you can feel an optimistic new world order. One where start-ups are not just widespread disruptors for existing business models, but also will set the example of doing things the right way so that soon it will be the norm and no longer the harder path.