As the developed economies crater, many vendors are looking beyond the borders of North America and Western Europe to grow into Asia-Pacific, Eastern Europe, and Latin America.
For open-source companies, in particular, Latin America shows a great deal of promise, as countries such as Brazil and Argentina deliver many leads--but to too few closed contracts.
Dorian Turner
Over the past three years, part of my role has included managing Alfresco's business in Latin America. In so doing, I have sought expert advice from Red Hat, which has a booming business in Latin America, and other trusted sources. This weekend, however, I was privileged to hear from an unexpected source: Dorian Turner, president and founder of Lingo Consulting, a firm that helps enterprises expand internationally.
Turner gave some excellent advice on the nuances of building a business in Latin America, which she has kindly allowed me to share here:
- Most Argentines do speak English, and certainly, (that includes) Argentines in IT and hard-science fields...The most common issue was not the language barrier, but a) understanding other employees with accents over the phone..., b) correctly understanding differences between American and British English..., and c) getting nervous when speaking with their English counterparts here in the USA or when they visit. The same is very true of Brazil.
- Understand that (Latin American) employees are in awe of how American business works (especially how we work as a "team" that even includes management, when they are so used to an "employees vs. the big, bad boss" kind of mentality). So if you are hiring there, and (your company) has one of those "we are all one" corporate cultures, this is something you will have to train new hires in, as it is not the norm culturally.
- When you don't have operations there, hire someone local to help with local hiring...Argentine and Brazilian people are accustomed to doing things in person. Of course, IT professionals and other corporate employees are typically very Web-savvy, but as a rule, they do everything face to face.
- In addition, (Argentines and Brazilians) are used to going through several grueling rounds in the hiring process...In both Argentina and Brazil, it is permissible to ask for photos, have age and gender requirements mentioned in job descriptions, and even to visit a potential employee's home during the hiring process. Unlike the U.S., it is not only legal, but acceptable that a potential employer also ask personal questions, such as marital status, as well.
- I highly recommend that you make sure to have a representative team from your company or a U.S. representative team to train and/or assist in recruiting. Argentines have a way of hiring friends and relatives that makes an objective eye (who has your company's interests at heart) essential when it comes to hiring decisions.
This also helps to set the tone of inclusiveness, rather than that these new hires will simply be "cheap labor," even if that may be one of the perks of hiring there. Argentines have a complex about American businesses because of a past history of U.S. companies coming there and abusing employees.
- You should look at Uruguay as well. It is a small country wedged between both Argentina and Brazil. They are almost identical culturally to the Argentine people (sort of like how Canadians are similar to Americans), but with more flexible tax laws and reciprocal agreements with the USA that may make it worth your while to investigate.
- Ideally, (your company) would put a small or satellite office in either Argentina or Brazil (preferably both) as again, it has been my experience that this is best for everyone; these will be "full-time employees." The only other alternatives would be to either work with a partner firm or to have a designee fly there periodically to ensure that your company's goals are being met.
Great advice, and great insight into how to pragmatically grow in a growing, but sometimes difficult, market.
I'm asking the question about how to hire well in Latin America because of Red Hat's success in Latin America, as well as my own company's download rates and incoming leads from Latin America, but it could very well be generalized to, "How do you hire employees in areas where your company has no physical presence?"
I don't know. For months I've been meaning to hire a pre-sales engineer/consultant down in Brazil or Argentina, but I haven't the first clue as to how to find someone capable of working alone so far from the rest of the company's operations. If I wanted to do near-shore open-source development, I'd look at North-by-South, but I'm looking for full-time employees here.
In the US, Alfresco is widely distributed, but we all live in the same country. (Well, some of us live in Utah, some in Texas, and some in California, but theoretically they're the same country. :-)
We have people scattered throughout (Western) Europe, too. But this is different.
Anyone have a good experience hiring in a country far from most of your company's operations? Perhaps more particularly, anyone know if there are "gotchas" (tax laws, etc.) to hiring in Latin America, particularly Brazil and Argentina?
Red Had recently announced a strong quarter, but it neglected to mention whether it, like IBM, Dell, and others before it, was making progress in developing markets like Asia-Pacific, Latin America, and Russia.
Well, the answer just came out: Latin America was Red Hat's fastest-growing region in its second quarter of fiscal year 2009, according to Martín D'Elia, Red Hat's marketing manager for the region.
Brazil ranks highest in commercial open-source adoption in Latin America, with Argentina and Mexico also delivering, according to D'Elia. Top industries for peso-paid open-source adoption include government, banking, and telecom.
Despite the common assumption that Latin America won't pay for software, Red Hat's open-source solutions have done well there, a fact confirmed during my recent visit to Buenos Aires. Key drivers behind the trend? According to Red Hat:
(O)ne of the reasons why Latin America recorded the fastest growth was the good level of IT adoption and the faster decision cycles, compared to more mature regions and the fact that open source has a higher penetration than in other regions.
"The cost factor is also an issue (in boosting the adoption of open-source technologies) in Latin America, particularly in countries that are mostly affected by the fluctuation of the dollar...We have also seen many migrations at the data center level to Linux, complemented with virtualization," (D'Elia) added.
Latin America is unlikely to make up for weakening demand in North America or Europe for companies, as it's still a comparatively small market. But for open-source vendors looking for a fast-growing region in which to invest, Latin America may be just the thing, which could be one reason that MySQL will soon open its first office in Brazil. Open-source salsa, anyone?
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