I’ve just returned from Argentina where I had a chance to meet with the management team of Mercado Libre, Argentina’s largest company by market cap, and one of four Argentinian unicorns (insurgent companies valued at greater than $1 billion). As often happens in these meetings, I was able to see Founder’s Mentality in action: In this case, Marcos Galperin, the CEO and founder, explained that what really defines his team is its profound belief in technology and its ability to continually disrupt industries. The Mercado Libre story also provides a simple lesson: Talk about the obvious. More on that in a moment.
First, a bit of background on the company. A group of Stanford Business School students founded Mercado Libre in 1999 in a garage in Buenos Aires while finalizing their studies. The founder, Marcos Galperin, is still the current CEO. The company has emerged as the largest online retailer in Latin America and Galperin is recognized as one of the world’s top entrepreneurs. In addition to being named Argentina’s Entrepreneur of the Year (2012), Fortune named him one of the top entrepreneurs under age 40 in 2010, an honor he shared with Mark Zuckerberg (Facebook founder) and Marc Andreessen (Netscape co-founder).
Millions of users turn to Mercado Libre to make purchases online. Its management team sees the company’s mission as democratizing commerce and payments and taking the hassle out of buying and selling online. The website is among the 50 most visited in the world. Based on page views and unique visitors, the company is the market leader in e-commerce in 10 Latin American countries and operates online commerce platforms in five others, as well as in Portugal. Its Marketplace online commerce site accounts for 60% of revenue and its payment platforms contribute another 20%. The company has a simple repeatable model—which it calls ”enhanced marketplace”—that provides a platform for buyers and sellers to meet, improved payment systems, credit access and logistics and fulfillment partnerships to deliver products.
I met with the team at Mercado Libre’s offices, which overlook the Rio de la Plata, the huge muddy river that dominates Buenos Aires. We discussed how great companies work to maintain their Founder’s Mentality. Like any great insurgent, Mercado Libre believes it is at war with its industry on behalf of under-served customers. The team also believes it has been successful at keeping its insurgent mission alive and well. Here’s how Marcos describes that insurgency: “The world of commerce isn’t serving the needs of buyers or sellers. It is too hard to unite buyers and sellers, too hard to handle transactions and payments and too hard to deal with logistics and fulfillment. Our mission is simple: Take the hassle completely out of commerce. We don’t buy or sell product, but rather enable the entire world of buying and selling products.”
For me, the most fascinating part of the discussion was how the team achieves this insurgent mission, in particular, what the spiky capabilities are that allow Mercado Libre to lead in each market it enters. That question sparked a lot of discussion about its product design capabilities, its ability to partner with major players in each market and its ability to act with speed and agility. We also talked about how important it is to keep investing in those capabilities and not to lose focus as it grows and adds new recruits.
At that point, Marcos interrupted the conversation to say, “I do a lot of interviewing for new candidates. And the one thing that strikes me is that even after our rigorous screening process, somehow candidates still get through to me who don’t actually love technology. They don’t actually believe technology will disrupt the world. How can this happen? Why isn’t this the first thing we test for, rather than the last?”
Consider this: At that point, we had been discussing the Mercado Libre insurgency and the critical capabilities that help them achieve it for two hours. And we listed lots and lots of important capabilities. But throughout that discussion, no one on the team had said that what really differentiates Mercado Libre is that all employees in the company are united in their love of technology and passionately believe that technology will transform all aspects of commerce and make it better.
We reflected on this. Why was this the last thing mentioned and not the first? And the answer was obvious: Because the founding team has shared this understanding since 1999. There was no need to state it because everyone understood it. It would be like arguing that the firm should use electricity—so obvious, it doesn’t require discussion.
But this is exactly the problem that founding teams face. They forget to state the obvious. They assume that everyone knows the core beliefs of the company and don’t require repeating. It is why the founders of Yonghui didn’t even mention supply chain integrity as a core capability in one of our meetings. It was too obvious. They had revolutionized the grocery industry in China by offering safe food for the Chinese mother. This was entirely about supply chain integrity. But the founders felt everyone knew that, so it would be better to talk about the new capabilities needed to compete. It is also why the founder of Jaipur Rugs warned about losing touch with the weavers—there was so much to do to globalize his business that he had stopped talking about the weavers. And yet, forming a community of weavers was exactly what differentiated Jaipur Rugs.
Great insurgent companies grow fast. And with growth they add huge numbers of new people every year. The founders might be tired of talking about the obvious, but if they don’t, these armies of new recruits never hear the most important stories. They never hear the founders talk about the obvious—and the obvious isn’t obvious if it is never discussed. Electricity doesn’t play a very big role unless you turn on the lights.
Mercado Libre is transforming commerce across Latin America. This is because its leaders have created a company of insurgents—all united by a maniacal belief that technology can transform the world. And that’s worth talking about. Endlessly.