Yahoo Finance Presents: Hispanic Stars - Marcelo De Santis

This series of Yahoo Finance Presents highlights Hispanic and Latinx executives and leaders in the fields of tech, science, and finance for Hispanic Heritage Month. On this episode of Hispanic Stars, Marcelo De Santis, ThoughtWorks Executive Advisor and President of Angeles Investors, sat down with Yahoo Finance's Ines Ferre. He discussed the shifts in consumer and business behaviors during the coronavirus pandemic, as well as the need for more VC funding for Hispanic and Latinx owned businesses, and how Angeles Investors is looking to fill the gap of investing in those minority owned businesses.

Video Transcript

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INES FERRE: Welcome to "Yahoo Finance Presents Hispanic Stars." Today, we're talking with Marcelo De Santis, Executive Advisor of ThoughtWorks, a software consultancy company. Marcelo, thanks so much for joining us.

MARCELO DE SANTIS: Yeah, thank you. Thank you for having me, Ines, it's a pleasure to be here.

INES FERRE: During COVID-19, we've really seen the acceleration of the digital transformation on companies, and I know that you worked in a wide range of industries when it comes to this. Which companies do you think are doing this well, and which ones have lagged?

MARCELO DE SANTIS: Well, I would say, you know, COVID-19, I should say, is only an acceleration of something we have seen for many years, right, which is the pervasive, I would say, innovation of technology into business models. To your question, which ones are doing well and not so well, I would say that companies that have been delaying their digital transformation for years, they are now getting into the realization that they need to catch up. So it's not that they're not doing well, they have to invest all at once and in a very short period of time. But, you know, industries that are, I would say, focused on collaboration platforms, industries that are related to ed-tech, health-tech and things that are doing very well.

Now, traditional companies, you know, as I said before, are going through an adaptation time in a short period of time, and, you know, hopefully they catch up soon.

INES FERRE: And what we've also seen are brands going direct to consumer. So Nike has been doing this more and more. We even saw Beyond Meat offering a direct to consumer site. Are we going to be seeing more of this-- brands that are directly selling to consumers?

MARCELO DE SANTIS: I think so. I mean, even if you look at traditional consumer packaged with companies, they're all open, and they have been opening for years, but now at the faster rate, direct to consumer channels. And the reason is that, you know, many of the habits that we see in consumers today as a result of COVID-19 are here to stay, right? It's sad that, you know, a human being takes 60 days to, you know, get the new habit, and we have been in quarantine for more than 60 days at this point, so many of the ways of connecting with products and services that we are, you know, we could use through COVID, are here to stay, here to stay. So I would think this trend will continue in the future.

INES FERRE: And big data is also a big part of the digital transformation of companies. We saw that some were surprised, for example, when Walmart said that it was going to join the bid along with Microsoft for TikTok. Are you surprised that a retailer would want to take part in a social media app?

MARCELO DE SANTIS: Well, these days, I'm not surprised about almost anything. I think the more you get to know your consumers, the better you can react, because you can pick up early signals of what they are, you know, trained to do and that they want to do. So the closer you are to what, you know, in these industries call us first party data, the better your business model can adapt to sudden changes as COVID-19. So not surprised that not only supermarkets or retailers to try to get into the social media more, I would say, aggressively. I think any single company should be in channels of communications with their customers, get those feedback loops in place, and continuously monitoring them so they can react on time to whatever changes, you know, could be coming in the future.

INES FERRE: And you're also the president of Angeles Investors, which funds Hispanic and Latinx entrepreneurs. What are you seeing there when it comes to now COVID-19 and some of the ideas that you're coming across?

MARCELO DE SANTIS: Minorities, unfortunately, there's reason that Angeles Investors exist. I'm not well funded by VC. It's only 2% of the minority owned businesses are funded by venture capital firms, and that's a recent Angeles Investors exists is to, you know, close that gap, provide opportunities to these Latinx and Hispanic founders, but also to build an ecosystem, because we want to help to scale up the companies owned by Hispanics and Latinx, but on the other side, bring more investors, Hispanics and Latinx investors into the ecosystem. So we are building on one side the capital availability, and on the other side, the strength of the founders.

INES FERRE: And why do you think that minorities have been not receiving as much investments when it comes to angel investing?

MARCELO DE SANTIS: Well, I think there are many reasons. I'm going to tell you my personal point of view, right? I think when you look at venture capital firms and their teams, you know, the diversity in the leadership teams, so for those venture capital firms, is not, I would say, what we would like to see, right? So as a result of that, also, there is a lot of bias as we look and evaluate companies, so that might be one of the reasons. On the other side, I think specifically, the Hispanic and Latinx community, we need to be better and helping each other, right, and actually getting together, building these alliances, helping each other with funding, with resources, education. And again, that was the main reason why we built Angeles Investors.

INES FERRE: And you came to this country from Argentina. What were one of your biggest challenges being here in the US coming from another country?

MARCELO DE SANTIS: I think was to understand the culture of working in large corporations, right, which was pretty different to what I was experiencing in Argentina, right, or in other countries in Latin America. Because before coming to the US, I work in Brazil, I work in Mexico. It was a shock for me, right? I mean, we manage our businesses in Latin America with more, I will say, family oriented culture, right? In where, you know, personal relationships are extremely important. I found that here is different. It's not better or worse, it's just different. Have to learn how to balance that cultural bias that I brought from my country and adapt, learn the new ways of, you know, conducting businesses and building relationships that we have here in the US. And honestly, I feel much better now, because I feel that I am bilingual from the cultural perspective.

INES FERRE: Certainly, and what is some of the advice, for example, that you give to the entrepreneurs that you talk to?

MARCELO DE SANTIS: Well, I think I tell them a couple of things. If you're going to get into entrepreneurship, make sure that you know what you are getting into, right? I mean, it's a risky game. Hopefully you understand your strengths and weaknesses and specifically your weaknesses, because you will need to ask for help. This is not about heroes, this is about knowing what you can do and do well and knowing what you cannot do and ask for help, right? That's number one.

The second thing I tell entrepreneurs is make sure that you are very clear about what product are you trying to solve with your business. I mean, you have no idea how many times I am in pitch competitions or presentations, and it takes like five or seven minutes for me to understand what is the problem the entrepreneur is trying to solve, and that puts off many, many investors very early in the pitch presentation, right? So I would say those two things. Last but not least, in COVID times, make sure you know that you take time to re-energize. It's very energy draining to deal with the stress of entrepreneurship, the economy and our personal lives, so take time for, you know, take care of yourself and also when you take care of yourself, you will be able to take care of your business and your team and your customers.

INES FERRE: And what are the next steps for you? I mean, I know that you are right now with ThoughtWorks. You work with entrepreneurs. I know that you do triathlons as well for Unicef, I believe. What is the next big challenge that you want to take on?

MARCELO DE SANTIS: Well, I think if I think about my next challenge is to join a public board that's of technologies, right? I mean, I'm very passionate in the industry about telling companies that I don't know where they are going to realize that they need technologists at the boards, right? And the reason is that I do believe profoundly that every single company it is or it's going to be driven by technology and data, right? And we see that every day more and more, and I hope that one of the benefits, if I can call it that way, from COVID-19 is that traditional companies understand that they must change, right, and they must embrace technology in a different way, not as a support function, right, but the business driver and as a business engine of their operating models.

INES FERRE: Marcelo De Santis, thanks so much for joining us.

MARCELO DE SANTIS: Thank you. It was a pleasure to be here, Ines. Thank you very much.

INES FERRE: Thank you.