25 years of Nearshoring from Y2K to today

Welcome to the Nearshore Cafe podcast, home to the most interesting stories and people doing business in Latin America.

Welcome everyone to the Nearshore Cafe podcast. I'm Brian Sampson, your host. Today I want to welcome our sponsor, Plug Technologies, Plugg Tech, a great way to find software engineers in Latin America for US Companies. I am really excited to welcome our guest, Julio Siragusa. Tulio was somebody I had in mind when I concepted this show. As someone who's worked in Nearshore for just about as long as anybody has. Just really excited to have you. Welcome Tulio.

Great to be here, Brian. Looking forward to the conversation.

Well, Tulio, I'd love just to get right into the near Shoring part of it. This is something that you were really early on, maybe set the scene a little bit. Like, when did you start doing this? What did the world look like when you were, when you were venturing into this?

You know, when I got into it, I didn't realize I was pioneering this near shore initiative 25 years ago. It was around September of 1998. I had just spent nine years with a very large telecom company at MCI, predominantly working with global accounts and had very strong relationship with some of the top Fortune 100 companies in the New York area and was approached by a company by the name of Softech. At the time it was fairly small, maybe 2, 300 people. Their business for the previous 17 years was predominantly in Latin America and South America. And they wanted to enter the US market and take advantage of the Y2K initiatives. Right. That was generating tremendous demand for talent, which created opportunities for both offshore companies and nearshore companies. This, mind you, was during a time where the economy was doing very well. So the costs, the labor arbitrage wasn't as attractive back then that I remember speaking with the CTO of Bear Stearns and I'll never forget this conversation. And he says, look, we have, we have all the money in the world. I throw money at a problem. I don't need to work near shore offshore. Hire the right people and pay them. Right? And that was a good lesson in terms of what is it that the actual value of this is. So at the time, I remember working with Blanca Trevino, who's now the chairman at softech. His, her sister Fernanda, which is one of the most creative people I've ever worked with in my life. And we're sitting around in Monterrey, Mexico, thinking about how do we differentiate ourselves from the offshore players? This was a time when the big offshore players were also small. They were all, yeah, maybe $100 million in revenue. They were definitely not multi billion dollar companies. This is the heydays, the early days, the pioneering days of both.

So we're thinking of like the Tatas and.

Yeah, that' sourcing period. Yeah, the top little companies back then. So anyway, the way I landed there is that they were interested in bringing someone who had strong business acumen and connection with large accounts. And at the time, MCI was known as like the second best sales and marketing organization in the world, next to Xerox. Yeah, so we, we knew a thing up to about bringing new ideas to the market. I had just finished working with Vint Cerf in the early 90s, introducing the Internet to the world. Talk about the biggest disruption that ever happened and doing it. We weren't thinking this is a big disruption. We were just putting some new solutions out to market. And, you know, looking back, I actually interviewed Vint a few years ago on my other podcast and it was just an amazing experience, not knowing that you were changing an industry, in some cases, you were changing the trajectory of the world, of the business world. So similarly, we were just sitting around in a conference room in Monterrey trying to figure out a way to coin a differentiation. Right. Well, they got offshore. Who are we? Well, how do we define who we do, who we are, what we do? And landed on this term nearshore services. And it stuck. It's because it has become the, the way you describe doing business in Latin America, or at least tapping into talent out of Latin America for the past 25, 26 years. And so very early days of pioneering this concept, of course, over the few decades, I've seen it evolve and mature quite rapidly and expand. You know, first it was Mexico that has become the most mature market near shore. And then of course, now we have every country in South America, with heavy emphasis in Colombia. Colombia is a new emerging market where you have good talent, cost of living is fair. So it's a whole new world now. And in fact, Gardner has even predicted over the next few years that a significant amount of outsourcing will shift to near shore in Latin America. Because the pandemic normalized it. Right. You know, so, yeah, the pandemic made it normal to have remote workers everywhere. And when you, when it, when it comes to near shore, it's just another remote worker. It doesn't matter that they're in Santiago or Guadalajara or, you know, Cali. It really doesn't matter. It's a similar time zone, very westernized world culture. And as a result, it's no different than working with someone who's in Tucson, New York or Boston for that matter.

That's right. Yeah, I totally agree. So, so back to the, the early days, just for a second. What were some of the, the initial sales calls like? Did they need a lot of education around how this worked or did they instantly get it? Because Offshore had already matured a little bit. You know, you think of the late 90s and the Internet, the world is flat and Thomas Friedman and, you know, it's, it's, it's a little, you know, Offshore, I think was more accepted pioneering concepts.

I think Offshore had a jump start on it. But there were a lot of challenges. Many companies failed their first initial outsourcing efforts because they weren't set up to be successful. In fact, I remember spending a lot of time while I was at CSC helping organization adopt shared service models like first learn how to share talent pools and resources internally where you can have a centralized IT organization where each department can basically leverage the capabilities and do in sourcing, right. Get good at that first. And then that's a lot easier to outsource once you've gotten good at that. And so there were a lot of changes that needed to take place within organizations to be successful in outsourcing, period. So these were very early days for everybody. And the very first sales calls were very enlightening because quite often there was a desire to either cut cost or improve the services that they were providing or expand the capability of what they were providing to various business lines. But everybody owned their own little kingdom, right? So go back to like the way even big banks, Citi, Citicorp or JP Morgan Chase, at the time it wasn't JP Morgan Chase, it was just Chase and the emerge later, right? But if you go back to those days 25 years ago, each department or each division had its own it. There was no centralized it. So you had all these business unit that had their own IT departments. And so whenever they needed to get something done, they budgeted for it and, and managed IT within its own division. So selling to those companies often required connecting with a lot of division heads. So the idea of coming in to outsource, you know, was limited to perhaps a division. Now you started pushing more and more technology, advancing. You had the ability to do a lot more centralized deployments. And really, if you think about it, the middleware, it changed the tech industry, right? The middleware. Middleware allowed for disparate systems to come together. And that created opportunity for centralizing IT and even services around it. So as Technology advanced. That was really the first thing that made the shift for everybody to be able to outsource, you know, the introduction of middleware software. Right. Or middleware solutions. So the initial calls were very enlightening because they were everywhere. You know, somebody was interested in the cost savings, somebody was just, just couldn't find enough staff. So there were a number of things and what I realized very early on was we needed to specialize. This was before open source software. So the majority of the nearest role projects and offshore projects were very IT centric and your specialization evolved around helping implement things like SAP or Oracle or PeopleSoft or you know, BI solutions that were becoming more prevalent. And what was happening at the, at the same time is a lot of these big companies were pushing software and many of those implementations were failing because they hadn't figured out yet that you have to customize this stuff in order for actually to work. So there were lot of disruptions happening at the same time. It was like a perfect storm. And in some cases if you had developed a good enough specialty in one area or another, you could differentiate yourself. And of course if you were in a position to do it at a lower cost, you can also differentiate yourself. The other challenge was you didn't have enough staff. Like, you know, this was the early days of IT in for example, Mexico. So the country itself wasn't pushing it as a, as a way to, for, for export. Just like India was a little bit more ahead of its time in terms of pushing it was more challenging in the early days. The sales cycles were longer and the conversations were very, mostly the salespeople were learning what would work and stick, but eventually figured out, you know, you have to get good at specializing in certain competencies. And I remember we started to get very focused around some SAP competencies and we landed on some strong ABAP 4 development type of competencies. That was the rave back then. And so we started focusing on, on that. And then we also started focusing on some CRM initiatives. Again CRM at Salesforce, back then they were a small company. They were not the behemoth Drum and giant they are today. So I remember being able to contact some of the CEOs of these companies back then and working with them and figuring out how do we solve this problem for this particular client. So very early days of learning how to position these services to a certain degree it was like being in a startup, you know?

Yeah, yeah. You know, as you were talking, I was just thinking about things we take for granted today, like agile development, aws Slack, JIRA and, and I'm sure some of that didn't even exist. You had to find solutions around that as well.

Yeah, very different world and we certainly weren't talking about developing software. Companies were not trying to figure out do we license and customize versus build and own open source really has democratized building out software. Many companies, the lines are blurring today between what is an enterprise company or a technology company. Many enterprise companies have adopted build your own software stacks. Those were not the dates where this was happening. It was very clear cut. I had a third party platform at middleware software I need to work with. I'm trying to get some BI in place. You know, you're working with MicroStrategy, the SFPs of the world, Oracles, the Siebel systems of the world. I mean some of these companies don't even, the names don't even exist anymore. Right. But it was a different world. It was very fragmented and everything was done on premise. Yeah. So yeah, remote work was also foreign. So we had a lot of challenges of introducing something that hadn't been done, introducing something that was different. While at the same time there were many other technology disruption. Middleware was being introduced, you know, other things were coming on board, new startups, new technologies, new computing power. All these things were happening at the same time. So in the early days you're just trying to, it's like a race. You're keeping up with everything that's going around you. It's still happening today, but not at the pace this was back then. This was such a transformational moment in, in our technology history that, that, you know, anything that can help you differentiate yourself was key. So landing on terms like nearshore, developing certain expertise, niche focused and owning a segment, building partnerships with companies that were moving the envelope forward. These are all key things to being successful back then.

One other thing I was going to ask you about with the early days, which is still a factor today, is customs and hardware and getting the right equipment to the right people and you know, as countries either ease or create more constraints around moving equipment around. What was that like? And you mentioned Monterrey. So I imagine most of the operation was there. What was that like in the early days?

Difficult, but you know, you had to be a lot more creative. Let's just, let me just paint the picture of a typical solution that is actually embedded in our phones today. I remember working with Viacom, which owns MTV and VH1 and the MTV and VH1 executives were complaining about how much travel the creative teams needed to do between New York and Los Angeles. And so there was number one, very costly. Number two, it's just very time consuming. So it had an impact on productivity which ultimately impacts creativity. So like is there a way we can create collaborative rooms, you know, conference rooms between these two cities? And so I remember working on creating a video conferencing room. And back then it literally like you had a conference room that was wired with like equipment. And I remember talking to picture tell about needing the hardware for the equipment in Cisco for the collaborative platform and the various software that needed to play into this. And then you have to deal with the telecom connectivity and did you have enough bandwidth between these two locations? This is live video on a conference, so T1 wasn't going to cut it. And DS3s were very expensive back then. There's so many factors. This was a multimillion dollar initiative. Today we have FaceTime on our phone Zoom, right? I mean it's like it's, we take it for granted. I could just connect with a hundred people instantly. You don't think about do I have enough connectivity, do I have enough bandwidth between you just don't even think about it. Back then that that was the kind of stuff we had to work on and put together and, and it was complex challenges, million dollar challenge that today just becomes a commodity, right? So those were, you know, very much the heydays of putting us on a path towards automation, towards more connectivity. The technology just wasn't up to snuff. So it was more costly, it was more complicated. You had to put together a lot of different partners. You didn't have a one stop solution. But the guys who played in it learned a lot. We learned how to solve problems, we learned how to leverage technology to solve business problems. This wasn't about implementing a, you know, a video conferencing solution. This is about connecting creative teams together on a regular basis so that they can improve their productivity. So we learned how to tie in the technology to solve the right business problem. And those things have informed many of the things that have come over the years that still, you know, have evolved into agile methodologies, lean canvas, all these things. Design thinking contributed tremendously to a lot of these things that we now take for granted or are readily available at our fingertips. But I felt like I was working with the people that were paving the way for the early days of technology and the evolution that it's taken over the past 25 years. Now I didn't know at the time I was participating in that. That's the that's the funny thing you're just doing. And then you realize, you look back like, oh, we kind of did a lot to change the world. Had no idea we were doing that.

Yeah, we, we rarely ever know we're in the moment until the moment passes. But yeah, that's a, that's a great point on maybe a, a little bit of a change to geography. So my understanding is the majority of your nearshore experience was leveraging Mexico. Talk about some of your travels there. Experiences, cities, meals. We'd love to hear some of the fun stuff too.

I fell in love with Mexico back then. I was traveling in and out of Monterey. I lived in New York City at the time pretty regularly. Was not easy to get a direct flight. I'd fly usually through Houston and I would say, I wish we had more zoom and things like that that we do today because back then a things happening, conference room and whiteboards, a lot of traveling. And I was a new father at the same time. So I did miss out a lot in terms of my, my, my son's growth with all that travel. I remember one time I traveled, I was I think in four cities in one day. So you know, I had breakfast in one city, lunch in another, dinner in another. I think three cities, excuse me, not four. But you know, that's the way it was back then. So it was, I was younger, I had probably a little more energy than I do now. But I did fall in love with Monterrey. It was great culture, very service oriented culture. I've had the pleasure since then of traveling into other cities and operating in other cities like Guadalajara and Hermosillo and Chihuahua and Mexico City, even Merida on the east coast of Mexico. And see, I've seen in Colima just south of Guadalajara, they have all the react talent in the world over there. So you know, I've seen the whole nearshore space has really evolved since then. Now it's not just Mexico. You have Costa Rica, you have Peru, Chile, Colombia, Argentina, Brazil. And every country has its own specific nuances and specialties. Some of them are more mature in one area than others. It really becomes important to understand the landscape if you're a service company especially that you can make recommendation based on where you think the best talent is. There are certain skill sets that are strong in some markets and others. So it's, it's really just understanding your product. And you know, the product is the people and the talent. But I've been amazed at the quality of work that happens out of Latin America. I've worked with engineers that have been toe to toe as good as any Google engineer. And, and so it's, it's very impressive. And also because it's a western world culture, it's not a very yes oriented culture, which happens a lot in Asia. So when working in agile environments that require daily stand ups, number one, you could do it in concurrent working hours. Number two, it's not a yes, we'll get that done and figure it out later. It's more like, no, that doesn't work, here's why. So there's more of a collaborative situation that takes place. So I've learned that if you want to create the, the closest experience to having to hire a good employee, a remote employee, your best bet of North America will be, you know, really in Latin America. That's where you're going to get to that, that experience. And that's not me selling it because I've been involved with it for 25 years. It's just a fact of having hands on. And, and it works the same way for other regions of the world that are near shore to those markets. And so ultimately what I think has happened is the outsourcing space has evolved and matured to the point where everybody understands the value of nearshore. Everybody wants near shore within their continent. People in Europe want near shored, which is why Eastern Europe has grown so much. You have development shops in the Ukraine and Poland and Croatia. They're serving the needs of the UK and emea. They also serve the needs to the, of the US on an offshore basis. But I think the pandemic really opened people's eyes to realize, you know, what we really need is just remote workers that are within the same concurrent working hours. So you're going to see a continuous shift, I think over the next five to ten years where the, the concept of offshore will become mute. It's more like where can I find the talent that's close to where I work? So if it's in Europe, it might be Eastern Europe. If it's Asia, it might be in India and Vietnam or in Malaysia. If it's in the North America, it could be Latin America, it could be Canada. Right. But the point is, is people want to work within the same concurring working hours. And also there's a cultural alignment and there's a stronger propensity to understand the accents within the region that you're in.

Right.

And then that's a reality you have to face. You know, we're all very different. You have to accept those cultural differences too. And Harmonize them. And sometimes working in a nearshore fashion everywhere allows that to happen. So I'm, I'm excited to have seen how we started something in one region that has been really replicated throughout the world. World.

You know, one thing that I, I noticed you didn't lead with, with some of the reasons was price. And of course it's cheaper than, than onshore. But I feel like the world is, you know, nearshore is not really leading with price. It's workday overlap, it's, it's quality of work, it's cultural alignment. I don't know if you have any, any thoughts on that. Yeah. How price is part of your, part of your conversations with buyers late.

Most of the outsourcing companies started in IT services and selling to enterprise companies where the expectation has always been you scope the work, you take ownership and you move it forward. And in that model, you can have a lot of leeway in terms of the kinds of talent you have on the team. You can have a mixture of senior and junior. So you can manage the margin. Margin, right?

Yeah.

And there's definitely a cost benefit of having done it offshore, near shore. That was a big driver. The cost, the labor arbitrage was a big driver initially. Absolutely no question about it. The gap between what the savings were back then to what it is now has continued to shrink. And the reason for that is because there's also been a shift in the talent pool. There's more demand for software engineering talent talent versus systems integration engineering talent, which is very different. DNA. Well, I could be a systems integrator working on a third party software, doing customization and doing that kind of work. That's a different skill than someone who can write code from scratch and build a product. Someone who could take an idea from a napkin and build a product. So over the years a lot has shifted towards agile, towards building more products. Software has really kind of eaten the world. And not only technology companies have had a need for more developers and there's not enough of them in the US So it's become an issue in just where's the talent? Right. So when you get to a place where you have 10 openings for every one available engineer, you don't have enough people. So you have to look beyond your boundaries. And so it's not so much where can I go save money? As it is where can I go find the talent to keep my roadmap on track, to make sure I follow through on the promises that I made to the board? Yeah, so it's, it's a critical shift. Now. There's still some who came from the IT space. They're always trying to negotiate a better deal. But it's like, you know, what's, what's really important here. You've made some commitments and you can't find people. So don't worry about the price. You know, the price is a component, but it's not the component. So the focus needs to shift and it's happening more near shore. Yeah, I've seen it. Which is one of the reason we've expanded into other markets in Latin America. We keep expanding into other markets because there's still that desire for labor arbitrage that's always there. Right. But as time goes by, you're going to see a continuous shift around that because. Yeah, especially with more technology that's driving everything and more software that's running everything. AI in some cases might eliminate some jobs, but in other cases will create more jobs for people who can build these things, who can manage these things, who can execute against them. And those are specialized skills that you're not going to get good talent if you're trying to be, you know, cheap. Right. So the idea is to balance that. There's still value in the labor arbitrage, but it's more like 15, 20% versus what it used to be, 50, 70%.

Yeah, sure.

And you can get more savings offshore. But then that's also shifting. I mean, let's look at India, right? India's got its own Silicon Valley approach to things today. So if you were a services company, you're losing people to folks who want to go work for a software company. They don't want to be in a services company, they want to be in a product company. They want to replicate what's happened in Silicon Valley. So. So it's taken a lot longer to find talent. The attrition rate's a lot higher if you're in a service business, because we want to work for software. So the market's shifting there. So you have to keep in mind that with that shift comes rising costs because you're competing for talent. And when you compete for talent, the prices go up. And the same thing's happening, you know, in Mexico and other marketplaces as well. So it's really about where can I find the best talent that serves the needs that I need for my roadmap? In the IT space, you still have a lot more different cost structures, lower cost structures, because it's not as complex as building. So software, you're really just customizing, implementing and Integrating.

Yeah, just for, for fun's sake. A lot of people I know in the US when they think of Mexico and tourism, they're thinking Cancun, Acapulco and so forth. They're not necessarily thinking Monterrey, Guadalajara, you know, places that you've, you spent a lot of time in. Give us your, your tourism pitch for those, those cities. And you know what, what would be draws for, for, for people to check those out.

I mean, Monterrey, Caprito Rey de Monterrey. You know, it's like you want some good goat or lamb that's thinking they know how to make it really. Well, oddly enough, one of the best Italian meals I've ever had was actually in Monterrey, Mexico. And I, and I grew up in Italy, so that says a lot about the kind of. It's a very, very much a foodie kind of area. So. Yeah, and if you like lime mountains and, and that kind of thing, you'll definitely enjoy it a of lot. Um, but every, every place is different. You know, Hermosillo, you want, you know, they make the best steaks on the planet there. And they're known like New York Times rated them as the best hot dog in the world. Right. So if you want a doggo, you go, you go to Hermosillo. And they have some other things there from a foodie's perspective that you can't find anywhere else. Even, even the bacanora, which is a form of tequila that's very specific to the Sonora region. You can't find that even in other areas of Mexico. And then of course, Guadalajaras has its own delicacies too. You and, and that's a very modern city. If you go into like Zapon, the downtown area, you feel like you're in New York City. If you take a picture from a restaurant outward and you send it to a friend, they're going to think, oh, you, I thought you were in Mexico, you're in New York. It's a very different vibe. So it's a very modernized city. So. And in Mexico City it's the biggest. I mean it's huge. You can fly, you fly over it for an entire hour before you land. Right. So, so it's, you know, there's something for everybody. Everyone but the people are very service oriented. It's a giving, hard working kind of culture. And so there's definitely a lot that you'll enjoy. So you know this, I'm talking about the cities that are non tourist cities.

Yeah.

So of course the tourist locations, the beaches, etc. All that thing is wonderful. But in the, in the other cities you won't feel like you're in such a foreign place. Yeah, people always surprise like this feels like I'm back home because. Because it's a modernized country with a lot of modern cities.

Yeah, that's great. Talk about what you see for the future. You know, of nearshoring and development and you mentioned AI before. What are some trends or predictions that you recommend? We're mindful of.

I think we're going to see more globally distributed teams where the project management, the subject matter experts, the architect, architect type will be close to home. So you're going to see more of onshore, nearshore demand for that kind of expertise because it just makes sense, it's smart business to do it that way and leveraging still some arbitrage opportunities offshore where you can. So I think ultimately there's still some companies that have waterfall methodologies that allows them to do follow the same sun. And then there's those who have more agile methodology that doesn't allow it. So they, they need to work more in the same time zone. But I think over time what AI will do is a couple of things. I think AI can enable a follow the sun for everyone so that you can leverage globally distributed team more effectively. So, so in some ways, if done correctly, AI can build some program management expertise that can automate the distribution of work and also help facilitate it because that's hard work. Sometime you can't be up all day and all night managing these teams. Right. So yeah, I think AI will be a game changer from a, from that point of view also you're going to see more of AI being used for some automation like testing and qa, even some development. So some of the teams will play more of a not kind of a role. Right. They're monitoring the bots, doing the work, making sure it's following a good cadence and they're playing that expert role. And as a result of that you can do it more effectively no matter where people are and what ultimately will happen. This is just my own prediction. I don't know if it'll take 20 years or 10. The price points will be very similar no matter where you go in the world. I think the arbitrage model will eventually disappear and it's just going to come down to where can I find the best talent? How am I leveraging AI to manage it all in such a way that's transparent and seamless and that's going to change the trajectory of the entire software development industry. Industry. We're not there yet. I don't, I don't think we see it yet. But this is just what I'm seeing in terms of how AI will evolve our space and really just in some ways create more equivalence worldwide. You know, I think this idea of arbitrage shouldn't be there. So in some regards it's going to equalize things worldwide and, and the cost savings will come from some more automation and using AI. So you'll still get it, but it's not going to come from, from the arbitrage of labor based on where people are. That's just my personal prediction based on what I'm seeing and what I've seen over the past 34 years of where things are going to go. When are we going to get there? I don't know, 10 years, 20 years, maybe the next five years. But I think that's where it's going to go.

Sure. Now in the present day, I really think this is the decade for Latin America. And more and more conversations I'm having, there's more awareness which leads to more curiosity of oh, like nearshore. What, what is that? Can you explain it to me? Which means there's more companies trying this out for the very first time. What sort of advice would you have for companies that are making their first venture into nearshoring?

I think it's a valid point, not just for North America, but you'll see the same trend in the UK and Europe with South Africa, for example, example and Eastern Europe. Both are good near shore locations from a, from a concurrent working hours. And you'll continue to see more in Asia with like India and Vietnam. Vietnam is an emerging market that is actually very strong. For example, our company, we have 2% attrition rate out of Vietnam, which is unheard of in this industry. So it comes down to this. Don't look at it as near shore or anything like that. I think that term, while I'm proud that, that I was part of the team that created it, needs to be dropped. Just remote work. And the, if anything we've, the Pandemic has taught us is that you can get things done no matter where you are. So if you're new to near shore, just think of, I'm just hiring remote workers. It doesn't matter if they're in Guadalajara, in Lima, in Cali or Santiago. It really doesn't matter. It's no different than them being in Dallas, Tucson, you, York, Miami or Seattle. And that shift in mindset will open up many, many more doors for technology leaders because they'll begin to realize that there's people on both sides, whether they're onshore or near shore. And it really just comes down to having good connection, being able to communicate with each other, being able to have intimacy, which is what happens with concurrent working hours. And ultimately, just think of it as remote workers. It'll save yourself a lot of headaches. Like, oh my gosh, such a big thing. We're moving offshore, near shore. Now you're just tapping into another remote worker marketplace. Yeah, that would be my advice.

That's good advice. Tulia. Since I, I met you, you've spoken a lot about design thinking. Can you share a little more about what that means and also how it's come into play with remote work?

Yeah, I've really embraced design thinking because what resonated for me is this idea that the pillar of design thinking is ambition, empathy. You know, the genesis was different. It was very focused on product and user experience. But it really has evolved to be a way to organize your efforts around either solving a problem or finding solutions or creating opportunities. And it's not just how you look at user adoption for a product or your go to market strategy. It's really about how you organize people, people and how you get people working together. And at the end of the day, Brian, no matter whether you're a B2B company, a B2C company, or B2B2C company, we're all in the people to people business. There's a person who's buying your product or service, there's a person who's selling it. There's a person who created the code on the website that's selling it to you. There's a person who invested in the company. There's people involved, whether it's a direct person to person relationship or there's an app in between, between on both sides as a person. And so understanding that empathy allows us to get at a deeper level, not just a transactional level, allows us to think about how do we create better experiences that meet people's needs. So when I think of design thinking, it's a model for finding ways to get closer to providing on the needs of people on their terms. And so it creates an environment where when you think about what you're solving, solving, you elevate it. Right. So for example, what does a CTO really want? They're in charge of a product roadmap. They need developers, they need testers, they need architects, they need scrum math. They need all kinds of people that can perform transactions. Right. But the ultimate desires to be successful in order to meet the needs of the commitments being made to the investors or the board. And tied to that, your ability to be successful is your ability to take care of your family, to achieve your aspirations. All the personal things that drive us on a day to day basis.

Yeah.

So when you're selling to a cto, you know, you have to keep in mind empathetically, what is it that they actually really want? Those are the things that they really want as a human being. The rest is just transaction that enables them to achieve what they really want. So what design thinking does, is enables you to ask the question five whys deep to understand what is that you're really solving? What is the real problem? What is the real desire that you're delivering, delivering on? And it's got to be an emotionally tied desire because we're emotional creature. And so as you begin to think about how you structure your organization, how you structure how you serve clients, how you structure how you build products, when you keep that in mind, it changes your approach for the better. And what happens is you begin to operate with the adoption in mind up front because it's all about creating a great experience for your employees, for your clients, for your investors, for your partners, for your vendors. If you keep that in, the only way to effectively do that is to use design thinking methodologies which allows you to listen, ask more questions, connect, understand what the real problem is or what the real desire is. Prototype and test ideas, reiterate and get it to a place where you're actually driving intimacy. And I mean when you think about someone like Steve Jobs, he was masterful at it. Apple, the Mac was not a superior product when it first came out to the people. D.C. quite the opposite, it wasn't even close. But he created this emotional attachment where if you're a cool kid, you're going to use the Mac. You know, cool kids use Max or the crazies making the world go around use Max. I mean look at that commercial that they had out with Einstein. You know, we're, we're supporting the crazies who believe that they can make a change in the world, right? So if you're one of the cool kids and you're the creative type, it's like I'm one of the crazies. I'm going to buy a Mac. He created a culture, culture around this, you know, being part of this, this group of cool kids, you know, they're that are creative and even though the product was not up to snuff, Eventually. And it's now the leading PC in the marketplace. Computer in the marketplace. Right. But. But he was masterful in appealing to the need and desire of emotional creatures. And he's not the only one who's done that. There have been many other brands who have done that. So if you can apply that in a B2B context, especially. Especially because a lot of people think I'm just trying to get a transaction done, but there's still that. It's not true. You can apply empathy into everything you do. And I always say empathy wins. Always. If you're in a competitive environment and you're presenting your solution and transaction versus transaction, the client's going to choose the one that they feel like. These guys understood me, they validated my concerns, they created a better experience. And it's all subconscious. It's not like they're actually consciously thinking through this. It's. It's because, you know, they feel that they were more understood. So if it's apples to apples, the one that's going to win is the one that's applying empathy. So I really love it for many reasons, because I believe that as leaders, it's our duty to help people feel empowered and to meet their needs. The more we meet people's needs, the more we can all be successful. So it's. Everybody gets lifted up by doing that. No one suffers, no one loses by applying empathy. So design thinking is really a system for improving the human. To use human connection to be more people centric in how we do business.

Great points about intimacy and empathy. Yeah, thanks for sharing that. Well, as we. As we start to wind down the show today, Tulio, I just had a few fun questions for you.

Sure.

Your favorite purchase in Latin America under $50.

Oh, goodness, that's a. I wasn't ready for that. One bucks. My favorite purchase in Latin America under $50. I gotta think about that one besides food.

Because I will if food's the answer. I'd love to hear that.

I mean, food. I would just say food. I remember $50 would get you really far.

Yeah.

I mean, you and your friends can eat like, like kings and Queens for 50 bucks. Yeah. I would have to say probably only food. You know, you can have an incredible meal for under $50. And I'm not talking about like, like it would be equivalent of having spent 500 here, that kind of level meal. So if you want to have like a. An incredible like dining out experience for less than 50 bucks, you will, you know, Latin America will not fail you.

Yeah, agree. I agree wholeheartedly.

Yeah, absolutely.

How about vocabulary? Larry, do you have a favorite Spanish word?

I have one cute word, but it's an inappropriate word.

You'd be surprised how often that comes up on the show.

It's just a cute kind of way of referring to someone. But I think in recent years, there was someone I worked with in my last company that always said goodbye by saying besitos. So I kind of adopted that as a cute little word. Sometimes I'll say things like besitos, which means kisses. But he could get away with that kind of thing. I don't know if I can get away with it as much as he did, but that was definitely a cute word, besitos as a way to say hi and goodbye. Sure.

Fair point. Well, Tulio, that's all the time we have today. Really appreciate you coming on the show. I wanted to give a thanks again to our sponsor, Plug Technologies, Plugg Tech, a great place to find software engineers in Latin America for US Companies. Tulio, thanks again. It's really been a blast.

Pleasure. Thanks watching for for having me.

All right, everyone, we'll see you next time.

Besitos, Thanks for joining us at the Nearshore Cafe podcast. Tune in next week for a new episode featuring another special guest with exciting stories.

Sam.