By: Salvador H. Avila Cobo

CEO

CONSERVELOPMENT INTERNATIONAL CORPORATION/ INTERNOVA INNOVACIÓN Y DESARROLLO, S.A. DE C.V.

Entrepreneurship today

Being an entrepreneur is cool. Taking risks when venturing through uncharted waters on a business vessel is a statement of bravery, independence, and vision. However, not all entrepreneurs are created equal. Some are driven by external factors, such as the pandemic, the need to stay at home, the ever-changing marketplace, or a fluctuating job market, while others do so just because they feel like it or motivated by an obvious business opportunity. Some others become entrepreneurs because they feel compelled to respond to an inner call. In this last category are the truly altruistic, energized by transcendental values and ideals. The first category, however, includes many others who march to the rhythm of a more cynical motive: ambition. The aspiration for wealth is its powerful engine of creation, adaptation, and evolution.

Over time, technological change has provided huge entrepreneurial venues for creative spirits. The IT revolution opened the doors of entrepreneurship for many future entrepreneurs 50 years ago. More recently, Artificial Intelligence is empowering Information Technology to a degree never seen before, making it possible to use digital platforms to respond to markets in a better-informed way with incredible speed and accuracy, while allowing us to create previously non-existent niches.

However, regardless of how noble the individual motive may be, how complex the market or how sophisticated the business environment and tools at our disposal, it is still possible to identify in all the basic ingredients of entrepreneurship: an unmet need (a market niche), a way of satisfying it (with a product or service), and an individual (the entrepreneur), willing to take risks to make those two, need and solution, connect.

Becoming an entrepreneur also involves taking risks. Making that decision, rather than simply entering the market through more traditional work in an established organization, involves at least the risk of assuming the opportunity cost of the chosen path, among other more significant and obvious costs. The risk increases significantly when the decision to become an entrepreneur is made in a society that is not ours. Such is the plight of migrant entrepreneurs.

How did I get here?

A cultural heritage… with 3 different flavors

My family has roots in Mexico, Spain and now the United States. Since I was born in the city of Chihuahua, in the largest state in Mexico, very close to the border with the United States, I grew up quite bicultural. Frequent trips across the border, most often on vacation or to buy clothes, appliances or electronics and other specialized equipment for my father’s electromechanical company, made sure my behavior resembled that of many young Americans. At the same time, my Spanish heritage, as the grandson of a Spanish merchant who followed the route of Mexico’s mining towns in the first third of the 20th century, also provided me with a valuable contrast on how to do business in a foreign land, as my Spanish grandfather and his brother did in Mexico for more than 40 years.

Multiculturalism as a business opportunity

The Cambridge Dictionary defines multiculturalism as “including people who have different customs and beliefs relating to a society, organisation or city”. Therefore, being an entrepreneur in a multicultural society means serving markets that are unfamiliar to us, often in societies that are not only foreign to us but are far from culturally homogeneous.

Consumption patterns are value-based, and since different cultures embrace and prioritize values in a different way, it is of utmost importance to become familiar with the culture and core values of the individuals in our target market, in order to maximize opportunities for success in serving them, particularly ethnic niches. A recent finding illustrates this point: Hispanics spend nearly 27% more time staring at a screen per day (cell phone, computer, tablet…) than the average U.S. population. Such behavior is attributed to the strong social and family ties they have. That provides valuable opportunities for advertisers. Additionally, it has been shown that Hispanics in LATAM have a much stronger loyalty towards brands that advertise in Spanish. At the same time, using a U.S.-based company that fully understands the cultures of the target countries often provides a competitive advantage over competitors, native or foreign.

The challenges for an entrepreneurial migrant

Migration

Contrary to popular belief, net migration from Mexico to the United States was close to zero during the past few decades. Only in recent years have more Mexicans stayed in the United States than returned home. According to data from the Pew Research Center (2022), the net total even declined in years as recently as 2019, when more Mexicans returned home than stayed in the United States. However, that has not been the case with the rest of the Latin American countries, particularly Central American, whose large influx of migrants to the United States is distorting life at the borders, while straining relations between the countries.

With notable exceptions, the United States has often reacted negatively to mass migrations to its territory. Over time, however, such migrations have contributed to enriching American society and culture. Hispanic migration to the United States is no different. A notable example of this cultural marriage of convenience is the predominant presence of Mexican cuisine throughout the United States (including the mixture of iconic rituals such as watching the Superbowl, accompanying it with a quintessential Mexican dish, guacamole, as the appetizer of choice).

Market entry barriers for immigrants

Language

The first barrier to market entry, even as a dayworker, and to society for new migrants is language. The deep-seated habit of migrants of taking refuge in ethnic pockets in their own neighborhoods does not help. That slows their ability to climb the social scaffolding toward more knowledge-intensive (and higher-paying) jobs. Very slowly, as they become more culturally familiarized, insecurity begins to subside and they integrate into society. The passage of time and the growth of the Hispanic market are helping. Today, 50% of American college students take Spanish as their second language in school, while 70% of middle and high school students do the same.

But the language barrier isn’t limited to simply speaking the language of the adoptive country colloquially. Each sector and economic branch also has its own terminology and mastering it becomes a requirement to successfully participate in the business world. To further complicate matters, during my early years as a consultant outside my home country, I was often faced with the challenge of having to learn the lexicon of other disciplines, in order to succeed in advising companies and governments in different countries. For example, when working on Sustainable Development projects in the Circular Economy, to my surprise, the term Conservation often meant different things to Biologists and Economists, which forced me to learn the idioms and meanings of both disciplines, so that all my audiences got the same ideas.

Babel is ubiquitous in the business world and migrant entrepreneurs are permanently exposed to it in their adopted country and abroad, so it is better to meet the challenge head-on, becoming multicultural, multidisciplinary, and bi or multilingual, as quickly as possible.

Education

The difference in educational attainment between first-generation migrants and the U.S. population at large is abysmal. According to a report released by the Federal Reserve Bank of St. Louis in 2020, while only 8.3% of the U.S. population lacked a high school diploma, 25.9% of foreign-born people in the United States did. This contributes to complicating access to the U.S. market and economic assimilation (even in regular jobs) of first-generation migrants.

On the other hand, understanding market dynamics takes practice. In that, education and experience play a critical role. For a newcomer to the United States, understanding the behavior of consumers and suppliers in such a complex market can take a lifetime. That’s why most first-generation migrants are mostly limited to serving their own when they start their first venture, while their children, educated and raised in the United States, often go much further. Then, there’s also the issue of skills. Many migrants end up deploying the skillset they learned in their home countries: manual labor, painting, gardening, pool maintenance, weaving and sewing, doing laundry, childcare, and other low-skilled (and low-paid) jobs.

Cultural subtleties

Coming from a wealthy multiethnic background, my impression growing up in Mexico was that being bilingual would be enough to be able to thrive doing business in foreign markets. Spanish and English would do the trick for me, given that those two languages are spoken by about a quarter of the world’s population, with many more people speaking English as a second language for business. However, when I moved to Stanford University, I realized that clearly wasn’t the case. While speaking English helped me communicate with people from many different countries, language was not enough. There were many cultural factors that interfered with the successful communication of people from different cultural backgrounds. That became more evident when I started doing consulting work for the likes of Deloitte or The World Bank around the world. To succeed in conducting business with different nations, in addition to speaking the language, I had to master the cultural subtleties of each society. Cultural immersion was required. To my surprise, that was the case even with cultures that according to my then limited experience as a young professional were almost identical to my Mexican heritage: Guatemalans, Hondurans, Salvadorans, Costa Ricans, Argentinians, Chileans, and Mexicans speak Spanish, but we all have evolved our own ways of doing things, in life and in business. The same is true even in my native Chihuahua, where Indian nations survive, with their own rituals and way of transacting and doing business, based on their own cosmogony. Dealing with them in my youth would prove to be an invaluable asset later in life, allowing me to understand that people need to be approached in ways that are culturally appropriate for them.

Markets

Demystifying the market

Markets have layers. In the case of an economy as complex and sophisticated as the United States’, there are markets within markets: the migrant market, the Hispanic market, the minorities market, the general American market. And then there are overseas markets. Each with its own level of complexity.

For some analysts, the U.S. market has been taken by surprise. The growing Latin American diaspora to the country has created many opportunities for established businesses as well as for newcomers. At first, the purchasing power of the Hispanic population was only marginal, but as the number of migrants increased, they became a market force, creating a Hispanic market and offering the market a significant amount of purchasing power (with a population of nearly 70 million people today). Hispanics in the United States have an estimated $2.5 trillion in purchasing power a year according to the Pew Research Center.)

This market evolved with the degree of sophistication and skills of the people in it, particularly consumers, in this case migrants and their descendants. At first, through stay-at-home activities, their commercial endeavors primarily served the nostalgic needs of first-generation migrants (food, clothing, souvenirs). They eventually began adding other services, more common in their adopted country, as households became more solvent and had more disposable income to invest. Over time, they created businesses that compete with those of other minorities (laundries, photocopiers, convenience stores). Finally, as their children have gone to school at institutions of higher learning and have been exposed to more knowledge-intensive jobs, Hispanics themselves ventured into more high-tech businesses, including some very successful venture-capital firms. An additional wave of more affluent Hispanic immigrant entrepreneurs over the past 10 years added yet another layer to the market, attracting foreign direct investment to the United States to create businesses capable of competing in the U.S. market and using the U.S. as a platform to serve markets abroad, particularly in their countries of origin.

Some tools for each market

Fortunately, as in any market, in the battle to succeed as an entrepreneur in a foreign market there are some tools at our disposal, regardless of the nature of the market we serve.

• User-based design
  In the previous paragraphs I dissected the environment surrounding a migrant entrepreneur entering the U.S. market. As in all markets, knowing the customer in depth is essential. What are their needs? And their preferences? In what context will they use what we offer them? What are the most valuable features for them? How does our value proposition best serve its purpose in this market and for these customers? Is it culturally appropriate? Does it support and respect their values? Being thorough in answering these questions would allow us to design better products, services, and experiences.
• Innovation
  Being culturally sensitive can also provide opportunities to differentiate our business proposition. Ethnic niches are particularly valuable for that, given that customers in them are sensitive to very specific values. Once the questions mentioned above have been answered, the search for innovation can begin. What elements of differentiation can give us additional competitive advantages?
• Cross-Cultural Pollination as a source of creativity
  Observation and introspection are two valuable tools for immigrant entrepreneurs. They allow us to not only identify the cultural elements that are relevant to our future clients, but also the cultural subtleties that can and will make a difference for them. It is important to introspect and reflect on how these characteristics affect consumer behavior, to take them into account when designing products and services. We can also enrich our products and services to make them responsive and appropriate to the different cultures present in our current market.

Establishing borders… in a distinct way

Being an entrepreneur in a foreign country is, paradoxically, also about building walls and establishing solid borders, albeit in a different way. Ours will define the reach of our products and services, helping us identify the scope of the market we serve.

Developing a CLEAR sense of purpose

Returning to the beginning of this chapter, as we undertake entrepreneuring, we must be able to answer some fundamental questions: Why am I doing this? What do I want to achieve? Is it a question of financial benefitting? Is it too good a window of opportunity to let go? Is it to advance the state of the art in my field of interest? Am I trying to respond to an inner call? Is it clear to me what that call may be, what internal vocation moves me?

Our purpose and true motives will determine how we will conduct ourselves and our business, so we must be able to clearly identify them, and keep them in mind. The rewards will depend on it and on how we answer the fundamental questions listed above. If we resonate with our answers, we will extract joy from our journey as entrepreneurs, and magic will start to happen.

Once we’ve identified our transcendental motives to become entrepreneurs, it’s important to go further and touch our potential customers: are we really creating value for them? Are we truly trying to serve them by providing easier and better solutions, closer to home, and more responsive to their culture and values? Do we want to serve them or just please them?

Everybody can attempt to be an entrepreneur. But becoming a successful one is a different matter, particularly for migrants. Such is the nature of our quest.

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