And the story that is coming now and that we are going to tell now and that he is going to tell us now has to do with this: how did he, in the same year that I was failing with this venture, manage to create a successful venture and turn it into the most valuable company in Argentina and one of the most valuable in Latin America? So I want to welcome now the founder of MercadoLibre, Marcos Galperín, and the director of content of La Nación, José del Río. A round of applause for them.
That is why when you are... What were you two doing back there that you didn't come out? Before the interview, I leave you to Cannes and the line for you. No, thanks. They commissioned me that photo.
We are involuting. Good afternoon, good morning to everyone. A pleasure to have the opportunity to interview Marcos Galperín. We are going to talk more about the future than the past. You already know the story. It is the story of someone who managed to be in one of the most important companies in Argentina. Today I can say it is the most important in Argentina according to market valuation, surpassing even YPF, a company where Marcos had worked long ago, with a market valuation of over 12 billion dollars. I don't have the latest figure but it is in line with that. Marcos, how do you imagine your future? You had said at 45 you would retire. You turned 45, right? How old are you now? Between 45, so many say I come to be inspired by Marcos, at 45 we say goodbye to him today, yes or no?
And the truth is no, what happens is that I would like to live many lives because there are so many things I would like to do. I don't want to, of course, besides my family, which is the most important thing to me, but to leave MercadoLibre as the only thing I did in my life. And I also think that being able to leave MercadoLibre functioning, and in fact better than when I was there, is a challenge that I would like to be able to do, because it doesn't happen much in many of these technology companies. They are very founder-dependent, like Google, Facebook, Apple even, where Steve Jobs left and it went very badly and he had to come back. So I think it's a challenge that I would like to be able to do and do it well, to dedicate myself to other things, but there is nothing I like more and am more passionate about than what I am doing. So those are two forces that I don't know where they will end. Although clearly they are long-term.
This week you were also in the news, actually the company you lead, because on Wall Street they had an ascent to the Nasdaq 100. For you to get an idea, it's a list that includes Apple, Alphabet (Google), Facebook, Microsoft, Amazon, and MercadoLibre entered the league of the hundred, in a place that was already occupied by Yahoo, which was left far behind. How did you feel?
Well, I had two things. One is of course enormous pride and great satisfaction and recognition for the entire MercadoLibre team. When we started, you asked people here in Argentina and Latin America, 'Do you know what the internet is?' and they would say 'Yes, I use Yahoo.' Or Yahoo was what Google plus Facebook are today, more or less. And on the other hand, I think it's also a very strong signal of what this industry is, where capitalism really works very well. That is, creative destruction all the time. So it's also a warning that we don't want to be the next Yahoo. 20 years ago it was Google plus Facebook, today it leaves this list and MercadoLibre enters, which 20 years ago didn't exist. I think that is very healthy. That is what keeps us all very alert, innovating and improving every day. It is a very important adrenaline. It is also one of the reasons why I love what I do, because the moment you stop innovating, they take you out of the ring. And that's how it is.
When one also looks at the evolution of your projects, one of the issues is that it started as a marketplace, but now when we see the latest steps, you got into the world of finance and even into credit. Why do you reinvent yourselves this way and where are you heading?
Well, the marketplace part continues to exist and it is still the heart of MercadoLibre. In fact, it is growing faster than ever. In some countries we are growing above 100%. But I think we have also gone from being an auction site for used goods - not long ago people still called us the auction site - and we have evolved. Auctions still account for about 1% of what we do. We introduced fixed-price items, we brought individuals, small and medium enterprises, now large companies. So all that has grown and evolved. And what we have seen is that credit is a great lubricant for commerce. And we have what we have built over the last 18 years: a very large network. Last year we had about 29 million buyers and 8 million sellers, which we reach very easily without necessarily having branches, etc. And we have seen that more than half of these sellers do not have access to financing and need it. So we started providing financing ourselves. And what we see is that we don't really lend to them. We send them surveys, then notifications on their cell phones: 'You have 150,000 pesos available, with an average rate of 40%. Are you interested?' They click and it is credited to their MercadoPago account instantly. They cannot create defaults because it is our own funds, not deposits. We lend our own funds. Eventually we will securitize those loans. But the sellers really love the experience, and we have seen that they sell more on MercadoLibre. Those who have received more than 5,000 loans sell more. We just started, so I think it's a huge opportunity, very synergistic with our e-commerce ecosystem, and it's a way to add value.
I think it is a huge opportunity. It is very synergistic with our e-commerce ecosystem. I mentioned the technology industry. If you look at the largest companies from 20 years ago and compare that ranking to today, you will see a huge change. Microsoft is maybe one of the few that is still there. AOL, Yahoo, Motorola, Blackberry... a huge list of very important companies that have appeared and disappeared. If you look at the same list in other industries, for example the banking industry, I can assure you it is the same as 20, 50, 80 years ago. So there is also an opportunity in industries where there is not so much innovation. I believe that in the long run, all industries will have to transform due to this internet phenomenon. I think financial services and states - we were talking about the media industry earlier, it suffered much earlier, commerce is suffering or benefiting. I think the financial industry is one that is arriving, but it will happen to all. For us it is a huge opportunity. What I like to do is use technology to do things in a completely different way, and in that process benefit as many people as possible through better productivity, efficiency, etc.
We have the luck or bad luck for Marcos to be neighbors at work. La Nación is located in Vicente López and MercadoLibre has one of its offices there. One of the things that always draws attention is that when you run into Marcos, he is surrounded by entrepreneurs or engineers, always with part of the team. On the one hand, how important do you give to your face-to-face talks outside of the hierarchy? And on the other, why do you dedicate so much time to entrepreneurs?
Well, for me it is essential to be in a very, very flat organizational chart. I don't have an office - a desk like everyone else, a chair. And when I'm not at my desk, I'm in meeting rooms with people from all levels of the company. That is fundamental for me because it gives me a pulse of what is really happening. I think it is very important for me not to isolate myself, to understand well what are the problems of our employees, our users, our sellers, our buyers. The more in contact I am with people, the more I personally use our platform, the better I understand it. So in that sense it's super important. And regarding entrepreneurs, I get a lot from them. I think it's more than what I give. When I meet with entrepreneurs, they have an energy, a desire, a force, and an audacity that is like a balm for me. I try to absorb from entrepreneurs that energy, that audacity, that healthy rebellion against the status quo. I think one of the challenges we have at MercadoLibre is precisely not to be caught by the status quo either, because we enter new industries and try to disrupt. It's very easy to do it when you don't exist, you're trying to create something new. But when you already have something and it went well, there is a tendency to rest on your laurels.
On the other hand, I read a phrase that I loved, from Greece in New York where they talked about the US and New York. When someone wants to give back to society, they go to an NGO, a charity dinner, etc. In Silicon Valley, when someone wants to give back to society, they support an entrepreneur. I really believe in that. Beyond the fact that I do all the charity I can, for me the best way to give back to society is to support an entrepreneur who can grow, generate sustainable employment, take risks, generate innovations. And if we have ten cases like MercadoLibre in Argentina, a lot of value is generated. So that is the story of Silicon Valley. Why is it so difficult to generate more cases like MercadoLibre?
When you look at the map of local unicorns, companies worth over a billion dollars, there are very few. There are actually four Argentine companies, which is not so few for Latin America, not so few. And most are based here in Buenos Aires, and it has a very important impact on the city, on the number of people working in these companies, the employment and wealth generated around them. They are not so few today in the city. It is much more than Silicon Valley sometimes. People don't realize that Silicon Valley and its surroundings are 16 million people. San Francisco has 2-3 million. But I think for Latin America we are doing well, and I think we have advanced a lot. There are venture capital funds that didn't exist before, very important ones. The most important in Latin America, Kaszek, is based in Buenos Aires. I think there are very important things happening. All these changes take time. It doesn't happen overnight; otherwise many other countries would have done it before. I think it is a magic that we must care for, capitalize on, and work together to make it happen.
It's interesting what you say, that they are not few. Because today there is a lot of talk about the lack of new unicorns, but actually what you say is that for the average in Latin America we are fine, we are leaders. And in other fields in Argentina we can say we are number one in Latin America, ahead of Brazil and Mexico, economies much larger than ours. On a political level, there have been some concrete definitions. One has to do with the Entrepreneurs Law, with the aim of making it easier to create companies. What do you think of that project that finally became law?
I think it's great. I think it's a very important step in the right direction.
When you look, Marcos, also at the other issue: how the entrepreneur versus the businessman is seen. Today the entrepreneur is a powerful brand that grows, and the businessman - there is a study that just came out that associates it more with the world of privileges, with another story. How much is there of guilt and how much of not knowing how to share the success of others?
I think there is a bit of confusion. I believe there are traditional Argentine businessmen who are spectacular. We have talked about it in the past. At the forum we actually give awards every year, and many times it's hard for us to choose one because there are many. Some of the awards we have given: Carlos Miguens, Hugo Sigman, Eduardo Constantini - people who take risks, don't do business with the state, and have created enormous and exemplary companies. They are businessmen, they are great companies, they are great entrepreneurs. What happens is that in Argentina the word 'empresario' (businessman) is much more associated with people who have done business with the state, opaquely, without adding any value, simply capturing value from society. And in those places there is no capitalism. I believe the entrepreneur is where there is capitalism, where there is movement of winners and losers. When a businessman enters a business where he can never lose - when you are going to do business with the state, the only risk is the contract you are negotiating with the state, and you will generally negotiate it better than the state. There is not much risk, not much generation of value, not many problems. Probably these things need to be done because public works are necessary, it is necessary for the private sector to participate in all those things. But I think in Argentina there are too many businessmen who have done very, very well without taking many risks. I think people understand that when someone takes a risk and does well, it is justified. What people don't like is when people did very, very well without taking any risk, capturing value from society instead of generating it.
There are several definitions, and with an entrepreneur suit, with people who want to inspire, who make you invest in a project, and who, let's say, when they come to knock on your door all the time... What is the most important thing for you when looking at an entrepreneur?
