With President Mauricio Macri’s new government poised to drive job creation and open Argentina’s sectors to greater foreign investment, optimism about the country is growing, despite recent concerns about its newest president’s Panama Papers connection. Following his election, CNBC reported that investors were confident that “the center-right president with a pro-business bent can repair much of the economic and diplomatic damage to Latin America’s third-largest economy.”
Argentina’s IT sector has always been robust and has seen a number of success stories, including Globant, one of three “unicorn” public tech start-ups that have achieved a valuation of over $1 billion. Martin Umaran, Globant co-founder and chief of staff, spoke to Nearshore Americas about the company’s continuing growth, its unique culture, and how President Macri’s government might benefit the sector.
Nearshore Americas: Globant recently tweeted about working with President Macri to create more jobs. Can you tell us a bit more about this initiative?
Martin Umaran: I wouldn’t say we are working with the government. We have a growth strategy and we are executing on that. But at the same time President Macri is very keen and is working on creating jobs.
We are in an industry in which there are a lot of possibilities to generate new jobs. So I think there is synergy between what Globant is trying to do and what the government wants to do.
President Macri came to our office — we are very proud of that — and we used that opportunity to show him what we are doing, to share our experiences, how people enter Globant very young and become senior professionals over time, how we train. It was about showing him the big opportunity that the country has in terms of generating jobs in this industry. That is why he visited us.
We are aiming to add 5,000 employees in the next five years. It is totally compatible with what we are doing, with our growth plan.
NSAM: How confident are you that you will be able to source the needed talent from Argentina to meet these new demands?
Umaran: We think that there is a good platform, but at the same time we are investing in an online educational platform. We think there are good people for these jobs, but at the same time we are investing in young people in the skills that we need to deliver our services. This is what we are doing. So we think that with the right investment we can get that number of people in the next few years.
We are hiring professionals to deliver our services — highly skilled individuals, highly trained. We harvesting what government has created. In education, the main investor is the public.
We know that what we are doing is collaborating with the public sector to generate more well-trained candidates to employ. It is an area that companies like us need to understand what is happening in each country where we are to make the best out of that.
We have similar programs in India, a kind of Globant university. The programs that we are using in Argentina are the same that we are using in all locations.
NSAM: President Macri is seen by many as a catalyst for change in the country. What impact do you think his leadership is having on the tech sector?
Umaran: He is very new to the job. It seems like President Macri is more open to the world, more open to see what is happening in other places in the world. The country is going to be more open. This is good, especially in technology. We are a small country and we need to know what is happening in the rest of the world. This is very important.
Also he is a businessman, so he understands companies and is very committed to the success of business. He takes a personal interest because it means the country is doing well.
At the same time, barriers to trade, to importing things, the currency change and movement, he is working on fixing that. This is good.
We are very optimistic about the future of our company and the sector because we believe in it. We believe that the government is going to work with us to make it happen, listen to us about what we need to create more employment, and I think this is a good opportunity.
We have always had very good relationship with some people in government and had an open dialog with them. We are using those relationships to share what we think are good ideas to grow the business in the country.
NSAM: What would you still like to see happen? Any specific government initiatives or incentives that would further grow the sector?
The raw material for us is people. Anything related to the cost of labor is good for us. The government is developing a new employment plan, which is very good. It gives us the opportunity to hire young people for the job.
Everything that is related to training people, to reducing the cost of labor, is very good
You don’t need a big investment to generate a new job. That is very important.
NSAM: Globant has grown into a unicorn, a publicly owned company valued at over $1 billion. It is one of only a few Latin American unicorns. Was this always the goal?
Umaran: Our expectations are always based on growing and making a stable and profitable company in the long term and then to have a market that speaks for themselves. It is strange to have a valuation of your company on the screen by the minute, so we try not to focus too much on that. We have been working for more than 10 years to build this company and the result of that is that the markets are giving this that valuation, transforming into less than two years into a company that is valued at over $1 billion. But it’s nice!
NSAM: What factors do you think contributed to Globant’s ability to reach this landmark status?
Umaran: When you consistently perform like we are performing in terms of growth, profitability, and consistency in terms of the product you are delivering, the market says these people have an edge. They are making the numbers, they are delivering good quality services, they have amazing customers. So all these things together make is what is making Globant a unique company. We are always working to keep on that track.
Everybody believes that their culture is unique, but our culture is something that we have worked a lot to bring. We are very focused on making that. We are giving a lot of freedom to our people. We believe that people need to be autonomous to deliver the services that we do. In our industry and with the age of our people, the best way to do this is to give give power to all our offices, decentralize decision making, and always remember that although we are working, we should also be having fun.
We founded Globant 13 years ago, and I still love what I am doing. I want everybody in our company to love what they are doing. We have always been very clear about our goals that we are aiming to build a big company and we share that with all of our people.
Sometimes founders and top management are reluctant to share their dreams and expectations. But we are open about that. In the past, people were saying these people are crazy. They are going to be public from Argentina? They want to be listed on the New York Stock Exchange? This is crazy. But we always said we wanted to do it and we did it. I think that our people can trust in what we dream. So sharing that dream is a big part of our culture.
NSAM: What makes Argentina a good potential breeding ground for unicorns? Is it a good breeding ground?
Umaran: I must say yes, you know. We always try to focus on building our business, on building strong practices, good people around us, to inculcate the right culture. The balance has been up and down.
We started in Argentina, but now we are more a global company than just an Argentinian company. About 60% of our people sit in Argentina, so we have great affection for this country, but today we have offices in India, Spain, the U.S., Mexico, Peru, Uruguay, and so on. We are a kind of United Nations company. Argentina is important in our strategy, but we are not 100% an Argentina company.
NSAM: Globant is moving into different areas. How do you go about selecting these new locations?
Umaran: Almost from day one, one of our main drivers was to take work where people like to be. Usually in Latin America, it is difficult to get good opportunities in high-tech. We are providing top-end services from Argentina to the world and it is not necessary to be Buenos Aires to do that. So we can go to Córdoba, to Mendoza, to Tucumán, to different places in Argentina to do that. In the same way, we expanded that all around Latin America, so we went to Uruguay, to Peru, to Mexico, to Colombia, with the same spirit.
Then, to be a global player, you need to be in the U.S., and in India, so our strategy is to become a global player. The places we have offices are the most suitable for that strategy.
Before starting operations a country, we send people to understand the local cultures, we contact the universities, we visit companies, and we do research.
NSAM: If you had one piece of advice for a startup that wants to emulate your success, what would it be?
Umaran: You must have a goal in your mind. You can call it a dream. But you must have something to achieve, and you have to work on a daily basis to achieve that. It is also good to have a role model company. With that you are covering the basis of the growth for your company.
We had four people 13 years ago, and now we are 1,500 people. That growth is only possible if you are working towards it everyday. It sounds very simple, but everything is related to this.
NSAM: While Globant is continuing to grow, there are obstacles that it faces. What are the core challenges Globant is facing?
Umaran: You have to have an organization that can cope with growth, especially with a company that is growing at the rate that Globant is growing. It is no easier to make $100 million than to make $200 million or $400 million.
It is very important to have the eyes open on that, to have the right organization for the size of company and not to make changes too fast because this will impact your DNA. But if you wait too long it will impact in your performance of your company.
NSAM: Are you afraid of losing that unique culture you mentioned earlier as you grow? Is it harder to maintain in a larger company?
Umaran: For sure, it is harder to do. We think that we have the tools to do it. Since it is a core part of our company, we are always taking care of it. Good companies keep that even when they grow a lot
NSAM: What would your vision for Argentina’s IT future be?
Umaran: Argentina is moving up very fast in quality and complexity of services that are being delivered from here. It is improving infrastructure.
Argentina has have been doing IT for years, but in terms of doing nearshoring, outsourcing, offshoring, I think that in the last 10 years there has has been a big, big change in the market here. The industry is becoming more and more mature, and things like the comparative advantages are now better leveraged. We know how to to take advantage of that and make the most of it. And that is why we are able to deliver more complex projects and serve our customers.
We are very optimistic about the future of the company and we are going to work on a daily basis to continue to grow.