Patrick Morselli, former Uber LATAM expansion head, shares tips on how to grow your tech business in Latin America2019-10-01 | Maria Paula Polchlopek
Patrick Morselli is a renowned entrepreneur with extensive experience in Europe, the US and Latin America. He led Uber’s successful international expansion into Latin America, which still is one of the fastest-growing and most profitable regions for the company. He then directed WeWork’s expansion into the United States, Europe, the Middle East, and set up the expansion for the other global markets. Patrick is now in New York and London doing venture building and investments.
We talked with Patrick about his experience on the ground leading and implementing the important expansion effort of these companies, as well as his recommendation on how to navigate the Latin American market.
Q: How was your experience leading Uber’s LatAm expansion? Why did the company decide to enter LatAm?
A: For many companies that are considering going global, Latin America is often an overlooked region because it is less easy to enter than Europe, and a smaller opportunity compared to Asian markets. Usually, you divide Asia into China, India, and SEA. Latin America, compared to those, is still smaller and quite challenging. At the time when it was about Uber entering Latin America, we didn’t really know what we would find. For me, it was about looking at the numbers and the metrics on mobility, commuting, and transit. It was a data-backed intuition. When you are in a new market, you don’t make decisions based on a consulting approach, you try to take fast trial and error decisions and that’s what Mexico City was like for us at the beginning. The results were great beyond expectations, so we decided to continue.
Q: What data did you look at that showed you Latin America was an interesting opportunity?
A: Some of it was internal data and metrics that the company uses. However, starting from the fact that one of Uber’s main goals is to bring better experience in mobility around the world, it was natural to look at the cities where the experience was not so good. It was about finding cities where public transportation is not as good as in other cities, where the number of people moving around every day is significant and the inefficiencies of mobility are high.
Q: What were your achievements during your time at Uber?
A: We were able to successfully launch Mexico, then Colombia, Chile, Peru, Brazil, and Panama. It really taught me something that I applied afterward which is the value of developing a strong expansion playbook.
Q: Could you elaborate on that?
A: The playbook is a set of guidelines and principles that don’t break, applicable to any type of geographies, any type of expansion. Then there are a set of elements that you do need to customize city by city, but as you grow, those elements that you customize are fewer and fewer. The playbook is at the core of every successful expansion. Many people interpret the playbook as a to-do list, but in reality, it is not. It is context, it is a certain structure for communicating among the different teams. It is also a specific commitment and responsibility for specific people. It’s leadership for launchers. It’s of course also a set of actions that need to be taken, but the actions by themselves are less important than the context that enables them.
Q: Could you give us some examples of this expansion playbook?
A: Yeah. Probably the most important thing that so many companies do wrong is that they think there is one person who is responsible (for the expansion). That’s wrong because nothing can be achieved at that speed, at that size by just a single person. Therefore, one of the most important things about the playbook — and this can only be done at the highest levels of the organization — is to realize that every department and everyone is responsible (for the objective) as a team. Everybody is responsible for their own part. And they’re also responsible for letting others know if they are doing something wrong.
Q: In your case when you started in Mexico, how big of a team was there on the ground?
A: We had a very small and lean team, however, we were getting a lot of support from HQ and that was important. You’ll want to keep the organization lean, but you want to get a lot of support on all the things that are needed for expansion, such as the internationalization of the language, legal support, analytical support, etc.
Q: And the team grew very quickly once you started showing performance?
A: Yes, definitely. However, hiring the right people was one of the biggest bottlenecks.
Q: How come?
A: If you hire the right people, everything else is going to be solved somehow. I think you definitely need talent with local knowledge, but you also need the type of professionals that are unbiased and used to making decisions based on data and not based on what they think is their knowledge of the market.
Q: How did you overcome the talent challenge?
A: I network a lot whenever I’m entering a new country. Eventually, by understanding the local ecosystem, you also understand what kind of people you need to lead your company.
Q: Was that talent more international or more locally available at that time?
A: It was both. We definitely preferred to hire people, whether international or local, that actually came with some experience in the local city or country.
Q: What other challenges did you face that was perhaps harder to overcome?
A: For me personally, hiring is the biggest and most important. Of course, because you have a supply-side and the demand side, you’re always going to get into situations where what you’ve been doing to grow demand or grow supply is not necessarily the best strategy anymore. So you need to adjust in order to get back on track to double-digit growth that you’re looking for in that market.
Q: Another question people often ask is how similar countries are across Latin America. Would you say knowledge transfer across countries was easy?
A: Ultimately, it’s a region that has many things in common across countries. However, the cultural way of doing business that is slightly different. But it’s not hard once you enter the first country in the region, for example, Mexico, to get an understanding of how to adapt to the other countries. Just be really open-minded. You have to be humble to ask and learn from people around you in the ecosystem. Most of these countries have ecosystems that are really open and willing to share information, so you have to show that you are there with good intentions. With that in mind, you will usually find many people that are really willing to help. In Latin America, you need a little bit adaptation (across countries) but it’s not as different as going into a different region. And of course, typically Brazil is separate. It’s its own thing.
Q: Could you give an example of the difference in business culture, for instance, Brazil vs. Mexico or some other country?
A: I think you can see places where doing business is more personable than analytical. Chile and Argentina are more analytical. In Brazil and Mexico, it’s much more about relationships. To create a strong partnership, you have to get to know each other as people first. There is also the rhythm of doing business. Brazil is typically a more bureaucratic country, things are done at a different pace. You have certain countries that are much more open about their feelings – for example, Brazil. Then you have certain other countries where it’s almost culturally prohibited to say no. So, you have to be careful because sometimes when people say, “Oh yes, I agree”. In reality, often, it means no. Reading between the lines is very important. There is also the case of countries that have a really strict top-down type of leadership approach (the case of Brazil again), while other countries have a flatter organization.
Q: Were there mistakes you made? Could you share some experience that may help newcomers to be better informed?
A: Yeah, a lot of mistakes were made. I think you just have to be ready to embrace the mistakes and act as fast as possible on them.
I think if someone comes into Latin America and is new to the market, one of the biggest mistakes they might make is just to hire local talent and expect them to immediately understand their business model or the culture and the pace of the company. You always need to have some sort of knowledge transfer system in place, where you actively share the goals of the company and your way of doing business. What’s your way of growing? Why are you successful as a company in the first place? These are elements that need to be clear for the expansion to work.
Q: For the next part, we would like to discuss market dynamics. What were some peculiarities of Latin America’s market consumers that make this type of expansion possible?
A: What I like about Latin America generally is that it’s a very young region. There are lots of young people that are very, very open to new products and services. They’re tech-savvy. They’re very digital and they create a relationship with brands that it’s usually better and more loyal than what happens in mature markets like the United States or Europe. In Latin America, consumers are still giving meaning to a brand and connecting that brand with a specific set of attributes. From my experience, if the marketing is done right, the reaction from customers is much stronger, and the adoption is faster and more loyal than the United States, for example.
A: Do you think loyalty has something to do with the limited amount of options available compared to other more mature markets?
A: Yes. I think that’s definitely another aspect.
Q: When you say marketing done right, what goes into “right”? Is it the type of channel? Getting to the right demographic?
A: Depends on the project you are launching. There is not a specific formula of channels or spend that is ideal. You do marketing right when you know who you are talking to and you speak in their same language with content that is meaningful for them. It attracts attention and generates trust.
Q: What type of content did you notice that appealed more to the demographic that you were tackling?
A: When we launched, it was the beginning of the influencer movement on Instagram. Now, this has exacerbated because there are now so many influencers promoting so many products that consumers are not trusting them anymore. You also see that for certain topics people tend to inform themselves much better. For example, there is a lot more awareness about health and wellness. People read a lot about it. So, I think in that context, that field, people now tend to not look for what the influencers say, but look for what science says, what is the latest research. Depending on the field and depending on the type of product that is being sold, we can identify content channels that are more or less effective.
Q: What is your take on Latin America’s venture capital growth in the past 3 years?
A: It’s a growing region that is becoming more and more mature. Mexico and Brazil are really large markets and are getting a lot of attention. Brazil has more barriers to entry compared to Mexico. As economies become more stable politically, they become more investable. It makes sense that there is an increasing interest in these countries. Just like there is an increasing interest in Southeast Asia.
Q: To what extent do you believe political changes and fluctuations can be a risk to the region?
A: It’s definitely a risk. It’s a barrier to entry, a risk for growth. But now the whole region is slowly becoming more stable. Brazil and Mexico are becoming relatively more stable than they were just 15 or 25 years ago. However, there’s a very long way to go and we don’t know if they will ever get even close to that level of stability of China, for example.
Q: To conclude, what advice would you give to Chinese tech companies or entrepreneurs who want to come to Latin America?
A: I would say first enter a country like Mexico where the barriers to entry are lower than, say, Brazil. I would say be super open and be ready to learn in-depth about the local ecosystem. Spend time with local entrepreneurs because they’re going to share with you their learnings. Keep your principles in terms of the culture, the way of doing business, the vision and the mission of your company. But learn the cultural nuances of each new country. Try to hire people that are very disciplined with data that are able to take decisions based on data, but also people that have the leadership and management skills to change their management style to something that works with the local dynamic. People that are very flexible and versatile in the way they talk and manage people (are very critical).