It’s easy to get burnt out on the constant hustle of Silicon Valley. For Andy Kieffer, reaching for the pressure release valve after selling his Kleiner Perkins-backed startup in 2008 meant getting out of dodge. Despite having a young family, he didn’t move to Portland, San Diego, or Denver. Instead he packed up his life and moved 1,900 miles south to Guadalajara, Mexico. There he formed an incubator and contract dev shop called Agave Lab, hired some of the abundant and surprisingly skilled local talent, and began mixing innovation with margaritas to see what would come out the other end.
When we first reported Kieffer’s story, the closest he’d come to convincing another Valley veteran to join him was having his friends say on the way to the airport after a weekend visit, “You’re crazy man. How did you do this?” But things began to change as his story got out there more, first in PandoDaily, and then in the New York Times. Just a few weeks ago he got his first inbound inquiry.
The email came from out of the blue. A total stranger, Amazon engineer Eric Springer, wanted to know if there was room at Agave for another gringo with real technical chops but a growing distaste for the rat race. Kieffer invited him down to check out his operation with the promise that if he liked what he saw, there would a spot for him to join the team.
“I said to him, ‘It’s obvious why I’m interested in you, but why are you interested in me?’” Kieffer tells me in a phone interview.
The first step on any tour of the Agave Lab operation is tequila and tacos. Then, he introduces guests to the rest of his team and maybe takes them to a local meet up to give a sense of the community. Time permitting, he’ll squeeze in a trip to the company-owned beach apartment a few hours drive away. It’s a hard to turn down a combination that makes working in Mexico great, Kieffer says.
Springer’s tour was six weeks ago. He has been in living Mexico full time now for a little more than a month. Just a over a week ago he put an offer in to buy a house there. All signs point to him staying for the long term. Short-term, long-term or anything in between, Kieffer is just happy, if not a little shocked, to have someone this capable join his merry band of hackers. It also got him thinking about whether there might be more pent up frustration north of the border that he could tap into.
“Eric came down and has been awesomely productive and is having the time of his life,” Kieffer says. “I thought, why not see if there are more of him out there. I just posted this craigslist ad and, already, I’m getting tons of people who are interested.”
A little over a week ago, Kieffer posted a flippant job listing in the San Francisco section of Craigslist. The headline read, “Working vacation in Mexico’s Silicon Valley – Make almost NO money (guadalajara).” The listing went on to describe the Agave Lab operation and then dropped this offer in the laps of anyone crazy enough to join them:
We’re giving a few Bay Area developers the opportunity to rethink their life priorities and get out of Dodge for a while. You’re startup is flagging? Sick of the fog? Commute got you down? Just broke up with your partner? Why not pull the rip cord and come work with us for a while?
What do we have to offer?
-A vibrant, biggish (pop. 4M), student-oriented city, that’s full of hip bars, restaurants, and (really) beautiful, friendly people.
-A work environment that is, hands down, the hippest place to work in Mexico. Imagine programming in the hammock – poolside (yes, we have a pool).
-Use of the beach house. We have a 3 story beach house with all mod cons, 20 feet from a graceful, immaculate sandy bay in a small fishing village. Also, one of the premier left point surf breaks is 5 minutes away by boat (which we also have).
-A chance to learn (or practice your Spanish).
-An opportunity to be at ground zero for one of the most vibrant and rapidly expanding startup scenes in the world.
-Beef up your resume with experience in navigating the business climate in Mexico and Latin America.
-and, finally, ALMOST NO MONEY. Okay, not entirely true – you’ll be paid a very tidy wage (by mexican standards) which will allow you to live well here – most things are cheap here. However, if you compare what you’ll make here versus what you’re making now? It will be a disappointing exercise. Said differently, if money is what you’re after – then this is not for you. If you’re looking for adventure, fun, and to challenge yourself with something new – welcome to your new home!!!
It’s been just eight days and Kieffer has gotten a few dozen inquiries. Some were from recent college graduates with no experience and he’s likely to pass – this is a job offer, after all, and he’ll have to pay these people to work for (or with) him. But amid the riff raff have been six more senior engineers looking to leave town. None have made their exploratory visit yet, though two have booked plane tickets.
“Whatever the reason is, I seem to have hit a nerve. It’s great for me,” Kieffer says.
No one has asked about narco-terrorism or been too concerned with compensation or lifestyle, he adds. “Guadalajar isn’t even on the list of the world’s 100 most dangerous cities. It’s about the equivalent of living Denver, risk wise.”
He expects to hire two to four expats over the next 30 days and says he has a total capacity of six over the next six months. But as with Springer’s unexpected enthusiasm, the response to this latest posting has Kieffer once again thinking bigger.
The real opportunity in Mexico is to build an elite technical team and begin tackling the basic problems that are holding the nation back. For example, Mexico doesn’t have an Amazon or Gilt equivalent – or the opportunity to create one in the short term – because Mexico doesn’t have a reliable local postal service. Agave is addressing this, in its own small way, with an “Uber for bike messengers” courier service startup. But it’s barely fair to call this the tip of the iceberg.
Having lived in Mexico for nearly six years now, Kieffer has a laundry list of opportunities identified but is limited in his ability to address them all. He’s bootstrapped all of Agave Lab operations to date with his own money, adding in supplemental contract development work for cash-strapped US startups to help keep the lights on. But with a seemingly extensive supply of talent now beating a path toward his door, the thought of raising a few million dollar incubation fund is growing more and more interesting.
“$20 million?” Kieffer asks incredulously at my suggestion that he raise what would be considered a small pile of cash for a Silicon Valley incubator. “I wouldn’t know what to do with that much here. With just $3 million you could literally own Mexico.”
But all of this is just a shiny idea in Kieffer’s head today. At the moment he’s up to his eyeballs in job applicants and tequila tasting tours to schedule. Once he eventually fills out his six person expat A team, things should settle down, he says, and then he’ll be able to give some more serious thought to how to make the most of this opportunity.
Kieffer is brimming with excitement. After we got off the phone, he sent a follow up email that read:
Imagine raising a small fund ($2-$5M) and importing startup talent from the Bay Area, partnering them with local dev teams, and targeting the emerging LATAM market place. I think that combo of a bay area founder with a track record, the huge untapped market here, and the low go-to-market cost, would be attractive to investors that are seeing too many of their startups fighting over too little market opportunity.
I can’t imagine how difficult it must be for a partner at, let’s say, True Ventures to find things to invest in. Is there ANY unplowed field left in the US? In Mexico – it’s all green field.
There are challenges, of course. Mexico has limited institutional knowledge around startups and venture capital. For example, Kieffer recalls explaining to a local lawyer hired to draft an ESOP (employee stock option plan) agreement why on earth he would give a piece of his company to a newly hired employee. But people are learning quickly. Mexico also lacks a reliable exit market. It’s one thing to generate revenue, and lifestyle business opportunities grow on trees. But there’s no Google or Yahoo out there to scoop up middling successes, and at the same time no local hero company for newby founders to look up to in aspiration.
“One of the biggest challenges with these guys coming down from the US is recalibrating expectations,” Kieffer says.
I raised the possibility that Kieffer is letting the cat out of the bag, so to speak and alerting his potential competition to the combination of massive opportunity and hard to pass up lifestyle south of the border.
He shrugs this off saying, “It would be hard for a US founder to come here and build LATAM-focused products. There’s just too much local and cultural knowledge required. Besides the market’s almost too big to comprehend, there’s plenty of opportunity to go around.”
And so it is. Kieffer is looking to spread this opportunity around and to make a few new friends in the process. The only question is, who else will be crazy enough to join him.
[Image via FoodFashionista]
- Agave Lab VenturesCompany building seed fund investing in Mexican startups that target LATAM.
We are more of a company builder than a traditional venture firm. This is what we do:
1 Target traditional sectors in Mexico and LATAM that are under-utilizing technology and are ripe for disruption and rapid adoption,
2 Work with business leaders in these sectors to identify real-world problem areas,
3 Coordinate with startup entrepreneurs to innovate within the bounds of these problem areas,
4 Invest only after business leaders agree to be customers, board members, future investors, and/or potential acquirers,
5 Build initial product using in-house Agave Lab team,
6 Provide aggressive, daily, hands-on mentorship and training, to founders,
7 Hire and stage new talent into the new company,
8 Maintain a tight focus on execution and achieve profitability before the end of the six-month incubation period,
9 Seek follow-on funding lead (if needed to scale) from industry sponsors.