The accelerator that sees opportunities in Mexico's problems

Hackers & Founders Guadalajara accelerator is gearing up to have 10 Mexican startups attractive enough for Silicon Valley investors. H/F aims to improve the entrepreneurial ecosystem in Latin America.

Originating from Silicon Valley, Hackers & Founders (H/F) is the world's largest network of entrepreneurs, with over 200,000 members, presence in 40 countries, and across 104 cities. Its founder, Jonathan Nelson, has a unique background: born to missionary parents, he grew up in humble Central American communities, where he grasped the challenges of Latin America. A programmer since age 7, he initially followed his parents' advice to pursue a career in healthcare, working as a nurse in hospitals for 20 years while nurturing his programming hobby. H/F started in a Silicon Valley bar with gatherings of hackers (programmers) and startup founders from around the globe. Recognizing that 9 out of 10 new companies failed, a stark contrast to hospital statistics, Jonathan focused on helping companies and founders with their "pains" and "symptoms." This quickly led to the creation of an entrepreneur community and subsequently an accelerator called Hackers & Founders Co-Ops, which offers companies a range of services, connections with investors, and mentors in exchange for a percentage of the company.

The H/F portfolio of 36 companies is valued at over $400 million. What's intriguing is that this accelerator operates on a cooperative model, asking companies for a 5% equity stake to enter, and returning 70% of the collected shares to the companies. H/F retains 30%, so all companies own a portion of each other, fostering mutual support for success, resulting in an 80% success rate for its companies. "We focus first on creating ecosystems, and then selecting the best entrepreneurs to invite to the accelerator. Most US funds and accelerators do not see Latin America as a major opportunity in the entrepreneurial world; however, for us, there is a huge opportunity due to the significant problems in the region. Also, because Latin America's GDP is larger than China's, and the population doubles that of the United States, with many young people. Although the lack of venture capital in the region is evident, there are very good programmers available at much lower prices than in Silicon Valley. We are confident that within the next 10 years, we will see companies like Alibaba or Baidu (major success stories of technology companies outside the United States) emerging in Latin America," Jonathan comments.

In December 2011, Mak Gutierrez launched the Mexico chapter in Guadalajara, the second-largest H/F network in the world, after Silicon Valley. "It all started by creating events to understand what a startup was and how to create one, focusing on collaboration, which helped us grow the ecosystem. Currently, we have events for developers, designers, and women entrepreneurs. Several Mexican leaders already exist in Silicon Valley, such as Héctor García Molina, a professor and mentor to the founders of Google and Cisco. Therefore, it's very likely that Mexican leaders, especially Chief Technology Officers (CTOs), will emerge in Silicon Valley in the near future, as the quality of software in Mexico is rapidly improving. Guadalajara has been gaining momentum in technology since companies like Motorola arrived in the seventies, followed by HP, Intel, IBM, and Oracle. Furthermore, we had around 40 to 50 companies on our radar in the community that seemed interesting, so we decided to open the accelerator in Guadalajara," says Mak.

In its first year, the H/F Co-Ops accelerator in Guadalajara aims to have 10 companies attractive enough for Silicon Valley investors, focusing on selecting founding teams that seek to solve significant problems, target attractive niches, and are appealing for investment. It's evident that if we want Mexico and Latin America to grow at higher rates, their companies must have a broader vision, be technology-driven, and be more profitable. Therefore, the role that H/F plays in Mexico to expand and improve the entrepreneurial ecosystem is crucial.