JEFFREY VAN CAMP


Entrepreneurs are often narrowly judged by simple indicators like growth, profit, and valuation. Stats like these ignore a much larger economic picture.

In 1999, Marcos Galperin and Hernan Kazah were enchanted by the growing abundance of ecommerce companies sprouting up all over Silicon Valley. Together, they founded Mercado Libre and were selected to join our Endeavor community.

By 2007, Mercado Libre became the first Latin American to have an initial public offering and list on the Nasdaq in the United States. Today, it’s worth more than $60 billion and recognized as a global commerce leader. They scaled up, grew into one of the largest tech companies in Latin America, revolutionized ecommerce in the region, and are now industry giants. But that’s only half their story.

As they ascended the ladder of success, Marcos and Hernan decided to help new generations of entrepreneurs climb it with them, compounding their success and creating innumerable entrepreneurial opportunities across Latin America. Marcos has mentored more than 20 budding founders, directly invested in 25 others, and become a leader at Endeavor. Hernan has founded his own venture capital firm, Kaszek Ventures, where he has funded no fewer than nine other unicorns and around 100 companies. And the leadership and culture they created at Mercado Libre has inspired 90 former employees to become entrepreneurs themselves.

At Endeavor, we’ve seen this story repeat itself across the globe over 25 years as we’ve developed and nurtured entrepreneurship in emerging markets. We’ve learned that when entrepreneurs help other entrepreneurs, their efforts compound exponentially. We call this the Multiplier Effect.

But What Is the Multiplier Effect?

The Multiplier Effect is the compound, exponential impact a founder has on the entire entrepreneurial economy of a region when they mentor, invest in, and inspire the next generation of entrepreneurs. It’s their bubble of influence.

Building and scaling a company to make millions (or billions) of dollars is crucial to the Multiplier Effect. It’s just not the whole story. The best entrepreneurs scale up and think on a grander scale.

Entrepreneurs can transform entire economies for the better when they foster more entrepreneurship. They can do this by recognizing the help they’ve gotten along the way and paying it forward, giving back to the startup community so the next generation of entrepreneurs can more easily overcome obstacles that could derail their dreams.

In the United States, you can see the power of the Multiplier Effect by looking at PayPal’s influence on Silicon Valley. PayPal alumni have gone on to found companies including Tesla, LinkedIn, Palantir, SpaceX, Affirm, and Yelp.

By harnessing the Multiplier Effect, Endeavor spreads this kind of success globally. It’s how we’ve helped 60+ companies become unicorns in cities and countries where that opportunity had never existed before.

We’ve seen evidence of the Multiplier Effect all over the world. Entrepreneurial communities are building the next Silicon Valleys—thriving entrepreneurial ecosystems that drive broad, sustained economic growth. In Latin America, Globant (see Multiplier Effect map) grew to employ more than 6,000 people, inspiring so many employees that its alumni have gone on to start more than 430 businesses. In the Middle East, ride-hailing giant Careem (see map) now serves 48 million customers. Its founders have paid it forward by investing in 91 startups. And in Africa, Go1 (see map) became the first unicorn from South Africa just a couple years ago. Its founders have already mentored 35 entrepreneurs.

In Endeavor’s research, the most successful companies were 2x as likely to have received mentorship, investment, or work experience from a successful founder.

The Components of the Multiplier Effect

How to grow your bubble of influence.

There are a few key components that differentiate an ordinary entrepreneur from one who creates a huge bubble of influence: scaling up, mentoring other founders, directly investing in entrepreneurs, and inspiring your own employees because they’re the Multipliers of tomorrow.

Scale Up, Clear a Path

You can’t have a Multiplier Effect if there’s little to multiply. Growing and scaling companies so they can transform industries and make a difference in local economies (and regions) always remains a touchstone of our mission.

It’s a huge achievement in itself, especially when an entrepreneurial ecosystem is nascent. For example, food delivery startup Rappi (see map) became the first unicorn in Colombia, but to get there it had to leap over a myriad of hurdles most businesses can breeze by or don’t even know exist. By knocking a few over as it scales, it helps clear the path for the entrepreneurs who follow.

As they achieve scale, larger companies tend to produce a majority of new jobs and raise salaries in an area. Bigger companies also tend to keep growing and provide a backbone to an entrepreneurial community, holding fragile ecosystems together during economic downturns. We saw evidence of this during the Great Recession in 2008. Larger businesses (defined as having 250 or more employees in this example) proved more resilient than smaller companies, shedding fewer jobs during the crisis, according to Brookings.

Mentor and Invest in the Next Generation

Entrepreneurs with a big Multiplier Effect act as role models, investors, and mentors to the entrepreneurial community, directly taking a stake in the success of entrepreneurs outside of their own companies.

For example, Indonesian entrepreneurs Achmad Zaky and Fajrin Rasyid, co-founders of Bukalapak (see map), have directly invested in around two dozen founders in the last 10 years and offered advice and mentorship to 16 more.

In 2022 research studies of the tech sectors in Sofia, Riyadh, and Spain, Endeavor’s research department found that mentorship and investment—especially from successful entrepreneurs—demonstrably improved a company’s chance to scale up (measured by number of employees).

For instance, in Spain, founders with 50 or more employees were 2x as likely to have received experience from another scaled-up founder. In return, founders of scaled companies were 2-3x more likely to pay it forward and mentor or invest in local tech entrepreneurs, compared to founders of smaller businesses. We’ve spotted similar patterns in Sofia, Manilla, Lagos, and other markets we’ve studied around the world.

Mentoring is a potent accelerant for growth—whether it be through work experience, involved investment, one-on-one advice, acting as a responsible public role model, or community networking. It also tends to set off a virtuous cycle.

When entrepreneurs see other entrepreneurs paying it forward, it becomes an accepted and expected standard of behavior. And the more companies there are that scale-up in a city or country, the more opportunities there are to share through mentorship and experience.

For instance, in Madrid, Spain, founders with 50 or more employees were 2x as likely to have received mentorship, investment, or experience from another scaled-up founder. In return, these founders were up to 3x more likely to pay it forward and mentor or invest in local tech founders, compared to small business owners. We’ve spotted similar patterns in Sofia, Manilla, Lagos, and other markets we’ve studied around the world.

Inspire Future Alumni at Your Company

Founders with a Multiplier mindset inspire their employees to develop problem-solving skills and dream big—and in the years that follow, their alumni slowly form the next generation of entrepreneurs. Employees who work at a growing company, especially one with an entrepreneurial culture, get an invaluable first-hand education in scaling up and solving problems. This makes them better equipped to become entrepreneurs for the rest of their careers. Cabify’s founder Juan de Antonio is a powerful example of this.

Cabify (see map), the ridesharing app in Spain, was founded in 2011 and was valued as a unicorn in 2018. As of 2023, 80+ of its alumni have already founded nearly 90 companies in 15 countries. This puts it in the top 1 percent of tech companies in Spain with entrepreneurial alumni, according to Endeavor research.

“The culture we established at Cabify empowers employees, is transparent, and intends to foster entrepreneurship,” Cabify founder Juan de Antonio explains. “By establishing the right culture at Cabify, people get a taste of what they can expect as founders. On top of it, I try to give advice and support employees in their entrepreneurial journey.”

See the Multiplier Effect in Our Interactive Map

To shed light on the Multiplier Effect, Endeavor has launched an exclusive worldwide Multiplier Effect map that visualizes the compound influence that 24 Endeavor Entrepreneurs from 13 countries have had in their underserved communities. Endeavor’s community helped many of these founders scale into $1+ billion unicorns, and gave them a platform to pay it forward.

Our new interactive map uses data provided by Endeavor Entrepreneurs and their companies, along with supplemental information from Pitchbook and LinkedIn. It shows every entrepreneur they have mentored, directly invested in, or previously employed. And it proves that a single founder can impact more than 500 other companies.

We’ve linked to the Multiplier maps for every company we’ve mentioned in this article, and there are many more to explore.

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