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If 70 small and medium size companies become big companies, México GDP will increase 1%. Imagine the impact if we transform 700 companies; this is Endeavor’s challenge to make a true impact.
Mexico boasts one of the largest economies in the world. At almost a trillion dollars, Mexican GDP is about equal to India’s while its population is roughly a 12th of India’s size, and its GDP is only slightly smaller than Brazil’s with half the population. In fact, of the emerging markets, Mexico is the most developed economy compared to the BRIC countries (Brazil, Russia, India, and China), as a recent report by Goldman Sachs states: “…only Mexico, and perhaps Korea, have the potential to rival BRICs – economies that we excluded initially [from the BRIC term] because we view them as already more developed.”
Despite those impressive facts, Mexico’s GDP growth rate has been lagging the BRICs, and the recent crisis has reduced GDP by almost 6%. Its status as a higher developed nation among emerging economies could fall fast. One reason why Mexico has not been able to grow its GDP at the same rates as China, India, and even Brazil, is that on a given year, a very small number of large firms are created, while a large number of micro businesses are opened. Nearly 75% of Mexico’s GDP is accounted for by private formal establishments (firms); while 34% of GDP comes from the 2,665 large firms in the country, only 6% of GDP comes from the 2.69 million micro firms. This means that only a small number of medium sized firms make it to the next level, and while it’s something to be worried about, it’s also a great opportunity for Endeavor.
If only 50 large firms were created every year in Mexico, GDP would increase annually by 1%. Endeavor Mexico is therefore actively seeking to meet this goal.
One optimistic sign is that Venture Capital is growing by leaps and bounds in Mexico. In 2008, there were only two funds with $40 million in capital commitments. Today, 25 funds in Mexico control over $1 billion in capital commitments, representing a huge opportunity for high-impact businesses.
Endeavor Mexico was founded in 2002 with a single office in Mexico City. To date, business leaders have provided more than 20,000 hours of mentoring to Entrepreneurs, who in turn have created more than 8,600 high-value jobs. Roughly nine in ten Entrepreneurs state that Endeavor has had a significant effect on their businesses. Currently, 50% of Entrepreneurs have patents or are in the process of applying.
Endeavor Mexico has rolled out an innovative franchising strategy in an attempt to better reach promising entrepreneurs in all parts of Mexico, partnering with top universities and local businessmen in seven states to launch regional offices. Each office reports to Endeavor Mexico, feeding candidates it recognized with a regional seal of approval to Endeavor’s main pipeline. These entrepreneurs are closely watched for the potential to become Endeavor Entrepreneurs. To date, Endeavor Mexico has opened nine regional offices: Puebla, Baja California, Monterrey, Chiapas, Guanajuato, Aguascalientes, Guadalajara, Yucatán, and Sinaloa.
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