Way back in June, something crystallized for me as we covered the Colombian elections: Tech alone is never enough. Candidate Rodolfo Hernández bet everything on an innovative system of social media campaigning; it got him past the first round, but he got crushed in the second. There are many factors behind his loss, but I am still astounded that the man would not go out and press the flesh — shake hands, kiss babies or whatever politicians do as they knock on doors. The same is true of companies that have prioritized tech over the human touch.
Ever since, I’ve been slightly obsessed with solutions that shun “tech” or rather, the standard practices associated with the industry over the past decade. Practices that go from cringeworthy, company-sinking gimmicks to the received wisdom of tech bros and VCs that some of the world’s greatest startups have ignored, and thrived without.
Start with the tech ecosystem’s received knowledge.
In 2019, a panel of Latin American fintech gurus, there to extol the virtues of all-digital finance, sat alongside a top official from the Bank of Mexico. The fintech mantra of “cash is the competition” was already beginning to get cliched, so the panel and audience were duly unsettled when the official argued that his priority was to facilitate the installation of ATMs in the more rural parts of the country. To be openly supporting the continuation and — shock — expansion of cash solutions was seen as a step away from the digitalized utopia that fintech fans had in mind.
Years later, adoption of fintech solutions, payment options, and digital banking has been spotty at best (including the Mexican government’s own digital payments solution, CoDi). I hope those cash points were actually installed in those remote towns in the meantime.
I always harken back to this story because it so clearly illustrates the obsession with the high-level ideology of capital-f Fintech, which gets in the way of entrepreneurs pondering what people actually want or need.
The issue can be solved by going out and talking to the people you’re meant to be serving in person. Unfortunately, the Latin American tech bubble is a pretty closed affair, so I worry when its members use language like “democratize” or “revolutionize,” since it often reveals companies and investors who are more interested in speaking to their in-crowd than their customers.
This obsession with in-group approval can lead down some dark roads. The most infamous case in Latin America was that of disgraced Mexican edtech startup, Yogome, whose founder was accused of inflating user numbers to entice further investments, but less catastrophic examples also abound. A closed-off tech community also results in the gimmick-loving herd mentality that gave us the rise and fall of dozens of scooter companies that, ultimately, made little economic sense.
Meanwhile, people dissatisfied with gimmicky tech offerings have started to skip over slick “revolutionary” new apps for tried-and-tested digital services. Community-led solutions like Venezuelan WhatsApp-run taxis and neighborhood last-mile delivery group chats in Mexico have sprung up across the region, each being eyed lustfully by entrepreneurs keen on turning them into monetizable products. Some, like Brazil’s neighborhood produce-delivery service, have succeeded at this, but only after others did the hard bit: building up a community of real people and thoroughly testing the product on the ground.