Alejandro López started his company Ulfix in Mexico City to be a software factory. But, he realized that opening an office in Houston, Texas would be more impactful. He walks us through his business advice, touching on both the challenges and rewards of moving a nearshore company to an onshore company.
Alejandro also hopes to inspire more people to start careers in tech and to reimagine perceptions around Latinx business owners.
Is Technology a Good Career Path?
- Consider nearshore outsourcing vs onshore work
- Focus on a niche brand
- Know that specialization is beneficial
- Use market fragmentation to your advantage
- Grow your Industry knowledge
Consider Nearshore Outsourcing vs Onshore Support
For nearshore companies, opening a US-based office can be a great way to expand your market while elevating your ability to support your clients. But, it’s important to pick the right location. Alejandro talks about why he decided to open his new DevOps office in Houston over other cities.
Alejandro López: In the US market, it’s very common to hire nearshore developers. These are people who can do the same job as someone in the US, but at a cheaper cost. It makes sense for a Mexico-based company like Ulfix to open a US branch.
So, I started my company in Houston, Texas last year. I chose Texas because of a very particular scenario. As you may know, most companies in California are moving to Texas due to taxes and other policies. I also chose Texas because the taxes are higher in Mexico than in the US, and we already had contacts living in Houston.
It’s also easier to create companies here. For context, when I started my company in Mexico, it took me about 2 months to incorporate the company. Then it took about another month to open our bank account. That was crazy because we were already operating! We already had customers, but we weren't able to get paid because we didn't have an account associated with the company.
In the case of Texas, the company was incorporated within a week. We actually opened a bank account remotely — we didn't even have to go to Texas to open the company and to open a bank account. We only sent the documents.
Opening an office in Texas allowed Alejandro to explore better financial opportunities at a faster rate. When considering the right location for you, think about the local policies, where your contacts are, and the barrier of entry.
Focus on a Niche Brand
One of the first lessons Alejandro learned was the importance of focusing on a niche, especially in the US. He explains why he decided to home in on DevOps within the automotive and retail industries.
AL: The first thing we needed to change was to focus on a niche. We had to have a clear offer for our specific city. We learned that as part of the boot camp that we took when entering the market. It was called Base Miami — they helped us land our strategy and actually think about how we were going to get into the US market.
The great difference is that people in the US generally prefer to go for specialists in their field, so you have to be very specific and have a real differentiator from the competition. And, at the time, we were very generalistic.
So, we thought about the kind of plans we already had in Mexico. We’d worked with other American companies via our Mexican branch, so we already had the confidence to work with them.
Then, we realized that we were working for the retail and automotive industries in Mexico, so we needed to find out if that was an issue in the US. If so, what could we offer to them? We decided as a team to focus on DevOps since we had those tools to offer to our customers.
In Mexico, DevOps is not really a thing you can sell right now because companies aren’t used to those practices. But in the US, people know what agility is and how they should be growing their software. We decided to get into consulting so that we could have an opportunity to open a business in the US.
When you identify your niche, you’re also defining what makes you stand out from your competitors. Your niche should address a current need in the market while anticipating what the landscape might look like in the future.
Know That Specialization Is Beneficial
Finding your specialization gives you a competitive edge. At least, that’s what Alejandro realized when formulating his business strategy around DevOps.
Michael Le: It sounds like in the Mexican market, you're able to be a bit broader with your skill set, whereas as if you're entering the American market, you need to focus down in order to be competitive.
AL: For sure. The niche is really important because you deal with fewer competitors obviously. In our case, we’ve found that we need to go this way because we have a lot of competitors already.
Most companies now offer software as a service (SaaS), and most of them are doing a lot of things at the same time. They're not focusing on something. But we’ve realized that this is going to change in a few years. By then, we’ll only be competing on price margins, and that's not something we want to do.
I’ve learned that, more than getting competitors, you should get partners. If we're doing similar things within the same industry, then maybe we can collaborate and create a bigger company with different verticals where we can “compete” as a group.
That way, if a client needs something that I'm not doing, then I can just talk to a “competitor” (partner). That's something that’s happening here in Mexico, and I also see that as a competitive advantage for the US market.
For Alejandro, specializing in DevOps allowed him to reframe his relationship with others within his industry. He turned his competitors into partners because each company focused on a different vertical. This allowed everyone to grow together.
Use Market Fragmentation to Your Advantage
Market fragmentation can be a great starting point for establishing your niche. Alejandro reveals how he discovered what his company could offer in the software space.
ML: What I'm hearing you say is, even in a saturated market, if you understand how fragmented it is and can home in on the niche that suits you, there's always going to be a market for you. Even if it's a small one, you can still build it.
AL: We're looking to be positioned as an expert in the American market so that we can actually practice this through DevOps.
For the software industry, we're getting into what happened to the automotive industry. For instance, 100 years ago, creating a car was a trade — you needed to learn the craft in workshops before you could create a car. That wasn’t automated, right? But, now, you can create a car in just 20–30 hours through automation and assembly lines.
The same thing is happening in the software industry. Obviously, you’ll still depend on the talent of the software developers, but now, you have to automate most of the process to get to the market faster. With that, you can release hundreds of thousands of changes in the software and continuously improve.
Soon, you, as a normal person, will be able to create software just by integrating components. You won't even have to know how to program or be at the level that most of the developers are at. That's how we see it. Artificial intelligence (AI) is the technology behind all of these trends, and that's the direction that I see the industry is going in, both generally and globally.
That's why you have to pick one task to specialize in because you can’t do everything. Go for it, and be the best!
As technology progresses and becomes more accessible, it will be crucial to stay on the forefront. Focus on how emerging technology can enhance the everyday user’s experience so that people can achieve their goals faster.
Grow Your Industry Knowledge
You might not get very far if you don’t learn to expand what you know. Alejandro advises Latinx entrepreneurs to seek out other talented Latinx people who can help them grow. Check out his experiences networking with Base Miami.
ML: What message do you have to other Latinos looking to start businesses in the US? Do you have any comments or advice?
AL: My main message is to go ahead and don't think about it too much. That’s the culture we have in Latin America. We are entrepreneurs by nature, but our situation, in general, is not really good.
However, the US is really friendly to people who want to start businesses. If you take a look at the numbers, it's crazy how many C-level people or founders who’ve started companies in the US aren’t originally from the US or are second-generation citizens.
In my case, I opened a business in a country where I've only visited as a consultant or as a tourist. It was really hard because English is my second language. I get nervous when I speak, but it's part of the process, and it only gives you more confidence in what you're capable of doing.
You’ll also get to know really talented people who’ve also come from where you’re from. And, they're happy to help you because they went through the same process, which means you can connect with them at a level that isn't possible if this were someone from the US because it's not the same context.
Instead, you’re meeting entrepreneurs who’ve come to the US from Latin America, and it’s important to them that they help you because they understand that you’re trying to change things in your country, too. We're opening businesses in the US so we can create jobs in our countries, and maybe that’s motivating for all the people who’re helping us.
I’ve met many friends who’ve helped me open our business in the US. They’re really into bringing more people into the market so that we can change the history told about Latinos migrating to the US.
We’re bringing the best talent into the American market and, as a part of that, are looking to gain a better lifestyle. To be honest, if I wasn’t in tech, I wouldn’t have the life I have now. Tech literally changed my life.
Alejandro found his network of people, and now he’s become a support resource himself to build up other Latinx business owners. His experiences only reaffirm that careers in technology can serve as equalizers to bridge socioeconomic gaps.
How to Find Alejandro
Get in touch with Alejandro at Ulfix to hear more of his inspiring story, expand your own network, or even find insights into the DevOps world.
Looking for more business tips from a range of industry leaders? Follow our podcast From the Ground Up to check out our other episodes.