How a Valley veteran found happiness and opportunity building tech in Mexico

By Michael Carney , written on May 21, 2013

From The News Desk

When veteran entrepreneur Andy Kieffer tired of the Silicon Valley rat race, he didn’t move to Portland, Austin, San Diego, or any other family-friendly, up-and-coming startup ecosystem. He and his wife packed their home and their two small kids and moved to the last place anyone ever expected, Guadalajara, Mexico, with designs on building one from scratch. This was five years ago.

With no language skills or local connections, Kieffer started a small development shop called Agave Lab, hiring local talent – which he found in abundance at a fraction of California’s going rate – and began building apps on spec for old friends in the US. The cost: $30k plus a little equity. His team has built early versions of TastemakerX, TEDx Guadalajara, ClientVoice, and Puppy & Kitty Time, among other products.

In the years since, Kieffer has had a front row seat for the rise of the Aztec Tiger and has played an active role in the emergence of a national angel and venture capital ecosystem and the birth of a culture of internet entrepreneurship.

“If you want to predict the future in the Mexican tech sector, take the previous 15 years of what happened in the Bay Area, and compress it into a single year, and then watch it happen in fast forward,” Kieffer says.

Having sold Kleiner Perkins-backed Visible Path to Hoovers (now Dun and Bradstreet) and held senior positions in multiple other venture-backed startups over his 10-plus years in the Valley, Kieffer is one of the more experienced and credible entrepreneurs in Guadalajara. When he’s not angel investing and developing his own pet projects (more on his latest product below) Kieffer spends time mentoring founders and advising less sophisticated angel investors on the Silicon Valley model.

For the founders, he’s focused on encouraging action and developing a plan to de-risk a potential seed investment. For the investors, he’s often educating them on common deal structures and terms, as well as breaking down the logic of handing tens to hundreds of thousands of dollars to a team of twenty-somethings with little more than an idea and an impressive resume.

“Everyone here wants to be a ‘startup guy’ but they don’t know exactly what it is and how to do it,” Kieffer says. “I’ve been trying to advance the model, ‘we don’t invest in ideas, we invest in success.’ I ask founders what they could accomplish in three months to validate their idea. Sometimes it’s getting 200 active users, or getting their first 10 paying customers. Then I say, ‘Build it on nights and weekends. If you prove that it works, and you’re willing to do the work, I’ll fund you.’ That way I’m investing in traction and in execution. The model is catching on with others.”

Once he funds a company, they typically move into his 7,000 square foot office for an initial incubation phase. There they get access to the Agave Lab team and to a community of fellow portfolio entrepreneurs who are cranking away to solving both global and Mexico-specific problems. The office also has a pool, and is the scene of regular parties bringing together the greater Guadalajara tech community.

Kieffer is far from the only outsider focused on Mexico’s burgeoning community of internet entrepreneurs. Dave McClure’s 500 Startups partnered with Mexican.VC last summer to launch an offshoot of its accelerator program in Mexico City. And other local and international investors are banking that Mexico will steam roll the rest of Latin America and possibly give the rest of the emerging markets a run for their money over the next decade.

As much as Kieffer is an investor, advisor, and advocate for Mexican entrepreneurship, he says he’s a builder first and foremost. Unsatisfied with building apps on spec for others, he has recently been hacking away on several of his own ideas as well.

“It’s something that was made easier by being in Mexico,” Kieffer says. ”It’s hard to develop two to four products at seed stage in the Bay Area and filter your winners, because step one is raise $1.5 million and build a team. Here I can build a [minimum viable product] for a few grand and test to see what works.”

Kieffer is launching ShotStrip today, an iOS and HTML5-mobile Web app that allows users to combine up to six photos of an event or experience and share them as a single interactive “Strip,” or mini-photo album.

“I’m kind of embarrassed to say that it’s a photo sharing app, because I know the whole category has become the butt of everyone’s jokes,” Kieffer says. “But I really think there’s a hole in the market between Instagram and Vine for telling stories using photos. I built this for myself and when I couldn’t stop using it I knew I was onto something.”

The concept makes sense, on the surface. It can be genuinely difficult to capture the essence of an event with a single photo, but sending or sharing separate photos across social media leaves them disconnected. But the competitive landscape in the photo-sharing space is brutal on the best of days. Users are genuinely fatigued with the number of new products in this space, most of which are either offer little differentiation from the competition, or lack the network of users required to make joining a new platform interesting. And even if Keiffer can save a few hundred grand in product development costs by building in Mexico, the hurdle for monetizing social and photo platforms is stratospheric.

Kieffer and his team hope to combat this by adding a number of interesting features to the ShotStrip platform that make it highly interactive. In addition to offering standard commenting and social sharing features, Strip creators can invite others to contribute to an existing strip, making the end result a collaborative visual story. Users can scroll vertically a feed of Strips, similar to Instagram or Vine, but can then scroll horizontally to preview the six photos in a single Strips, or mini-album. Clicking on a Strip expands it into a full-screen view and gives access to commenting and sharing tools.

ShotStrip allows asynchronous following, so that users users can follow their friends or strangers who set their feeds to public. The platform also offers a Featured stream of the best Strips of the moment, curated by members of the ShotStrip team, and a Popular stream for those Strips getting the most likes and shares.

In its first three weeks after the soft launch with no marketing or press, ShotStrip is already in the Top 100 free apps on the iOS App Store. The gross numbers – 2,000 users and 4,000 photos uploaded, each of which have been doubling weekly – are nominal, but the organic growth suggests that the idea may have legs.

Kieffer and his team are still experimenting with the product – it needs some polish around the edges – and looking to build a community of active users before thinking about monetization or fundraising. As far as where he’ll look for capital when the time comes, it’s telling that Kieffer incorporated ShotStrip as a US C-corporation. While it’s only wise to keep all his options open, it also speaks to his desire to keep one foot safely north of the border.

The Mexico startup ecosystem is still in a very nascent stage, but the opportunity in the country is massive. With readily available and affordable local talent, and no shortage of (increasingly sophisticated) money eager to be deployed in the technology sector, the country has a number of structural advantages over other ambitious, but less-well situated global markets.

“Mark my words, everything that has happened in the US startup ecosystem will happen in Mexico, just five years later and at 100 times the speed,” Kieffer says. “The big elephant in the room is we don’t have a Google that everyone can look at as a success story. Once that happens, I think this place is going to go crazy. There’s just so much conservative money sitting on the sidelines looking for proof of concept.”

But Mexico doesn’t need photo sharing apps. Its needs are more foundational, like payment and fulfillment solutions, given that most people in the country don’t have credit cards and there is no reliable postal service. But with these shortcomings come massive opportunities for those ambitious enough to build something from scratch.

Kieffer says, “When my friends from the US visit, they alway ask, ‘how the hell did you do this?’ My answer is, ‘I just went to the airport and got on a plane.’ People are averse to risk, afraid of change – and narco-terrorism.”