Startups Can Escape Their Cash Crunch in Mexico Bill Richardson - Wired
go to original February 6, 2016

Prior to NAFTA, the high-tech industry in Mexico was limited to low-wage, labor-intensive assembly operations. But reforms initiated by the agreement opened a new era of investment in Mexico’s tech sector. Hardware companies are now able to bring their money through multinational banks to invest in equipment design and capital-intensive manufacturing lines. Software companies and app developers, meanwhile, enjoy full protection by courts under very stringent copyright and patent laws.

At the same time, however, I learned that Jalisco’s emerging software industry is still in its early stages and in great need of greater technical expertise. I immediately saw this as an opportunity for US startups to meet the needs of a new business-to-business market while at the same time increasing their cash flow by saving substantially in operating costs. For these startups, a move to Mexico could mean surviving that dreadful gap between initial investment and revenue generation known as the Valley of Death. Jalisco, my associate said proudly, wasn’t only welcoming these international entrepreneurs, but actively recruiting and incubating them, including small companies from Silicon Valley like Ooyala, Wizeline, and 3DMX.

To help draw more high-tech companies to Jalisco, Governor Jorge Aristoteles Sandoval created a cabinet-level Innovation Department upon taking office. He’s also leading a revitalization of Guadalajara’s historic downtown by building a 940-acre media-oriented business hub for TV, film, advertising, video games, animation, interactive multimedia and e-learning. Firms such as Kaxan, Inzomnia, Ocelot, and Metacube have already opened doors even though construction is still underway.

Read the whole story at Wired

Governor Bill Richardson is a former New Mexico governor and UN ambassador. As deputy minority whip in Congress, he was instrumental in the final passing of NAFTA.

Photo: Truong Thanh Thuy

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