MGSN article on Digital Nomads drew significant interest from our viewers.
As documented in the MGSN article, the Digital Nomad Visa is a product of the pandemic and the growth and permanency of remote workers. Significant contractions in the hospitality sector caused a negative impact on tourism-related income.
Several countries developed the Digital Nomad Visa as means to recapture the derivative income that tourism contributed to the local economy. The fact that the remote workers are earning money from employment/business opportunities located out of the host country makes the Visa a perfect solution.
The Digital Nomad is spending money in the local economy without taking local jobs. Although this visa is being implemented in countries across the globe, it is still not available in many countries. That fact won’t stop a digital nomad who is gigging with remote contracts. The digital nomad who is interested in pursuing the life/life balance is more interested in using remote digital work, to immerse into all the globe has to offer. Tourist visa are perfect fits for this approach to being a digital nomad. There are several sites to find the remote contract work to fund this lifestyle. One of the more expansive sites is Flex: www.flexjobs.com
There is yet another Digital Nomad who wants to channel passion and creativity to build businesses, while having an impact on the host communities.
There are powerful examples of an entrepreneur utilizing the Digital Nomad means to build an impactful company. Entrepreneur Loreanne Garcia was born and raised in Venezuela. She developed a solid Business acumen working in various capacities in multinational companies in the States. She went to Stanford University for her MBA. It was at this point, she and a classmate, whom she married, decided to move to Mexico. Although her newly minted MBA and blue-chip corporate experience could have opened many doors in the multinational world, she had entrepreneurial goals.
Although Ms. Garcia was settled into Silicon Valley, she opted to take the move to Mexico City. The youthful energy, low cost of living, vibrant nightlife and dynamic Startup ecosystem attracts digital nomads.
Mexico City is fast becoming a well-placed North American tech startup city. It is strategically close to Silicon Valley and Mexico is trading partner with Canada and the USA in the T-MEC trade agreement Mexico’s membership in the Latin American Integration Association (ALADI) positions itself as the potential conduit for Startups throughout Latin America that are seeking growth on the global stage. ALADI offers a unique networking and trade platform for young entrepreneurs.
The ability to leverage the strategic position Mexico City has with North Central and South America is key for both tech and non-tech offerings. Irrespective of the offering and the strategic location of a Startup, the issue that a Startup must address a market stress point. A market stress point can be based on a consumer need, legal dictate or a more volatile consumer impulse event.
A brief discussion of each of these aspects of market stress points is important in order to fully apprehend the successful formula that Ms. Garcia and her family created in Mexico City.
1. CONSUMER NEED
There are several means to identify consumer needs that current products and service lines in the marketplace are not serving. Trade Journals and Financial Journals and Media sites document a need to abate certain gaps in the marketplace. An example of this point is the market need of replacing fossil fuels. One of the most common elements on the planet is hydrogen. It can be refined into transportation fuels, electricity and biogas. However much of the refining process utilizes fossil fuel. The hydrogen produced from fossil fuels is often referred to as grey hydrogen. The refinement of hydrogen from renewable resources is called green hydrogen. However, the high cost of the refinement is too expensive. There is a tremendous market demand for the endless supply of green hydrogen, any entrepreneurial team that can develop a tech solution that can meet this market need will address a Market Stress Point that is well documented in varied business media products: https://www.forbes.com/sites/ankitmishra/2021/11/29/hydrogenious-is-using-conventional-fuel-infrastructure-to-scale-green-hydrogen-adoption/?sh=1efbd3b91d68
The Market Stress Points, based in consumer needs, which are well documented, as well as the entrepreneurs that are working in the solution space are obvious targets for Startups. There are consumer needs that are not well documented and are in markets that are not in glamorous postal codes. Entrepreneurs that seek to provide solutions in this sector tend to be the most durable in the Startup ecosystem.
2. LEGAL NEED
Market Stress Points can be created as a result of changes in the legal landscape. A prime example is the evolution of corporate Environmental Social and Governance (ESG) programs. ESG was smaller part of marketing. There was very little need for significant market growth as ESG was part of the content marketing departments and it was voluntary. Consumer activist, regulators and law enforcement are moving to demand mandatory reporting of ESG for larger and or publicly traded companies. EU nations are now operating under legal requirements to report ESG corporate activity: https://ec.europa.eu/info/business-economy-euro/company- reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en#overview
The legal dictates create a Market Stress Point. Compliance Consulting firms have developed new practice groups for the market. New employment opportunities in Corporate Compliance now exists. Tech solutions are already in the market place and are being developed for the anticipation of the mandatory reporting in the US market: https://www.sec.gov/sec-response-climate-and-esg-risks-and-opportunities
3. CONSUMER IMPULSE EVENT
In 1980 no one knew what a cabbage patch doll was and there was no identifiable Market Stress Point that neither market analysis, economist nor government planners could identify.
Yet a mere three years later the demand for this unassuming toy was so great that consumers rioted to obtain the doll. Pricing for the ostensibly frivolous product were hitting thousands of dollars: https://news.yahoo.com/flashback-cabbage-patch-kids-riots-192929734.html.
There was a clever business model that drove the Market Stress Point. Entrepreneurs created content marketing products around the dolls. The production and manufacturing plan was to produce limited amount and create the content marketing on a mass marketing plan. The Marketing & Sales plan was not rooted in Business Development research, it was devised on the marketing of the artistic creativity of the content marketing. The Marketing Stress Point is driven by the high octane of impulse buying, often associated with fads.
Ms. Garcia’s brother Carlos was living in Columbia and planning a move to Mexico. The experience of trying to sell his car was beyond difficult. The traumatic experience that he experienced is the type of “bad” experiences that everyone experiences at some point in life’s journey. Some choose to forget and move on; many choose to blame and complain and then there’s the entrepreneur’s response.
Carlos Garcia’s response encapsulates the vision and passion to see the opportunity amid the steep challenges and find a solution. There aren’t many documentaries on the market need for a used car transactions throughout Latin America. Mr. Garcia living experience provided anecdotal evidence that his traumatic experience was widespread throughout Latin America. The methodology he employed provides entrepreneurs with a structural training tool on how to build a successful business in a difficult market. The fact that Mr. Garcia had just moved to Mexico City and was starting a new job did not stop him from spending his nights and weekend working on the Concept Generation for a business model that could address this unruly market stress point. As he distilled a business model from the Concept Generation stage, he reached out to his sister with the conceptual model and, according to the Stanford University Graduate School of Business Insight, she utilized her research skills to conduct market research into the used car market in Mexico. The market research led to confirmation of the conceptual model and justified the move into the Proof of Concept (POC) Stage. This stage requires funding and model building from Alpha to Prototype. They developed a disciplined funding model, restricting the POC to bootstrapping and close network of family and friends. The model for early investors impeccably aligned investors with knowledge of the Mexican automobile sector and investors with alignments to Silicon Valley.
The POC stage move into the Startup Stage, the Garcia’s and friend Roger Laughlin brought Kavak into the marketplace.
True entrepreneurs, the Founders grew new product and service lines from the original offering of a safe and efficient digital marketplace for selling and buying used cars. Servicing model, consumer information on the cars and finance models were developed on the basis of a market need and opportunity.
Kavak’s remarkable journey from market entry to Unicorn is a testament to the entrepreneurial spirit of the Founders.
In the next installment of this series, MGSN will provide a cornucopia of free content with a model that we developed out of Concept Generation. We will offer this model to the Digital Nomad Entrepreneurs looking to be an impactful disrupter. As for becoming a unicorn, well imagine if Carlos Garcia was able to sell his car in Columbia without a problem.