Jonathan Gheller went from selling tequeños, or fried cheese breadsticks, to being a founder of companies sold to Facebook and Google. In a world where unit economics became the new king for startups, Gheller is a long-term preacher about building businesses that are scalable and profitable.

Now, the Venezuelan entrepreneur not only advises early-stage startups. He also connects Latin American talents to Silicon Valley companies through Matilda Explorations.

Today, Jonathan and I talk about:

• His first endeavors, and how to build scalable and profitable businesses;
• Advice for early-stage startups and just-exited founders;
• Reflections about remote work, being an efficient manager, and a new standard for salaries and hiring in tech

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Brian Requarth

Thanks for taking the time to chat with us. I know you're in Spain. Let's talk about your experience, I mean, for the audience that doesn't know you. 

You've been building companies for a long time, you've sold a couple of companies. You were born in Venezuela, and you started back in college. And your first business was an online calendar if I'm not mistaken. And then you did a fast food chain, like, you did tequenõs if I recall. Like, the delicious little Venezuelan cheese breadsticks. And so, when and why did you decide to become a founder? When did you take an interest in technology?

Jonathan Gheller

That's an interesting question. They [the questions] are actually deeply related kind of chronologically, but I think the reason is very different. I think, in respect of technology... I think very early on I had a very deep suspicion that I would be a terrible employee.

I've been an employee elsewhere. I spent some time on Facebook and other places in which, where I, you know, enjoyed working, and learned a ton, and so forth, but I kind of knew I wasn't cut out to be a good company man.

I mean, I guess I knew that because I had a lot of discipline issues in high school, and so forth. I kinda suspected that that wasn't gonna work for me. Both my parent were company people. Both worked at the... My mom worked at the iron public company in Venezuela, and my dad at the oil-producing company. 

So I saw what it was like to be a company man. And just generally thought, "I should try something else". Technology, I think what happened was that my dad is one of the guys that were writing code in punch cards, a long time ago. He's been in software and telecommunications forever. And I was kind of aware, and it was interesting. 

And when the first wave of the internet came along, while I was in Venezuela, and kind of updating myself in the new, you know, that seemed like an interesting way in because, before that, if you thought about starting a company, it meant having a store, having an import and export business, having a factory. And I didn't have money for any of that. But, you know, to write an app that helps people to, you know, have their calendar in, was cheaper. It was, like, hours of code. It was hard, but it was doable.

So for me, it was more, like, "well, this I can do. I don't see a path for me owning a factory, or having a financial services institution or a bank, or importing tuna from wherever". I just didn't see a path for any of that, that seemed very expensive. This was a cheap path and it was close enough for me because I saw my dad working on this and I had a sufficient idea of what it would take to make it happen. It was just a path, open, and I took it.

Brian Requarth

It's amazing. We caught up recently, and there's this thing that I'm gonna, kinda like... I'm not gonna quote you exactly, but one thing I understood is you told me that you've decided to start building businesses that scale and are profitable. And you're very deliberate about that. 

And the implication I understood was, when you said that, that you're kind of tired of building businesses that had value but were more powered by venture capital and were unprofitable by the time you sold them.

So, clearly, the current market is now obsessing about unit economics, right? So do you think that the classic growth at all cost, and blitzscaling model, is that gone forever? Or are we just in one of the new cycles, [given] that the world tends to repeat itself? And how do you think about this when you think about building companies that don't depend on venture capital?

Jonathan Gheller

Yeah. Well, there are a couple of things to unpack there. The main thing, the last thing that you've said is... No, I don't think that blitzscaling, that growing fast is gone. I think, to your point, I think it's cyclical.

I think it would be very sad if it was gone. I think it would be the end of, you know, modern human history, right? I mean, a lot of stuff has happened this way, you know? You throw the ship out at sea and hope to find a way home, right? And good luck... You know, I don't think there's a world where there's human progress without, like, taking outsized risks in search of outsized returns. I think the world would, you know, go back to middle age.

So, I don't think it's going that way. I do think that we're in a transition right now. So that's one point, just to answer that. I think specifically to, I guess my personality included, but extending beyond me, I do think that there are two types of entrepreneurs that can build massive, you know, massive, massive companies. I think it's almost, you know, orthogonal to the company that you're trying to build.

But I think there's a type of entrepreneur... The image I have in my head is that they're very good at kicking the ball forward. If you're playing football, if you're playing soccer, you know, you're very fast, you kick the ball, start running over everyone else, hoping to find the ball on the other side of the court and to keep playing with it.

And I mean that as a metaphor for spending to drive growth, to take market share, to dominate, and that type of stuff. It's kind of more high-risk, and more high-reward. Maybe Uber is that image of this company, you know, just taking over the world and spending lots of money. The business is good, right, the unit economics are good. It's just how you spend to grow. And I think there are people, various amazing companies that have been built that way.

And Brazil has an odd way of building a company, again, in respect of one type of company, where maybe again, if it's still soccer, you're just passing the ball more. You're just touching back and forth, and going back. And it's more like "let me open one cart at a time, let me figure out if I can survive if things go wrong, let me make sure that I don't die." And you can build massive things that way as well, in respect to that.

What I do think is that, you know, if you're of the second type, more like a, more of a, kind of a cockroach mentality, right, which is like "I just don't wanna die, and I want to keep growing, and growing, and growing, and build something big, but I need to not die," then I think these times are much better for you, for your temperament.

And I think if you're the type of guy who likes to throw the ball ahead and overwhelm the market with growth and so forth, which again can work pretty well, this market is not so good for you. I'm more of the cockroach temperament, so I feel great in this market, in respect to what I'm building, right?

It's just like when people are like, "oh, we have to manage the business tightly," and, you know, "really put a close eye on cost", and "make sure the unit economics work." I just, personally, couldn't do it any other way because the alternative generates an enormous amount of anxiety for me. It doesn't matter what I'm trying to build. So, anyway, I think there's a temperamental thing where... Yeah. I think it's better for people who are more cautious in how they spend money and so forth, which is somewhat independent of what you were saying as well, which is "well, there are some businesses where you don't know how they're gonna make a profit." 

You know, hopefully, they should have some positive unit economics, otherwise, they'll never make a profit. But, you know, they're willing to spend and lose money for a long, long time to build something massive. And it's very dependent on venture money and very dependent on acquisition strategies to be successful.

And there's another type of business where you control your destiny because you're, you know, you're making money from day one. And you have certainly very high margins, very good unit economics, and just generally a profitable business. Which you can reinvest, or cash out, and so forth.

Those are two different things. To your comment on our conversation, how I'm thinking about it, I think what happened to me is that my brain kind of split. And so, I'm either thinking "what is the craziest, most amazing thing that can be built?" And I think I'm doing more of that as an angel investor. And then there's this type of stuff that I'm more likely to build these days, that I can see a path to... It makes money. It's kind of more straightforward in how it makes money. And these are different ways of building those companies, but yeah.

Brian Requarth

So, you're kind of enabling yourself to leverage that risky thinking in more of, like, kind of just like home-run thinking, more on the investing side so you get leverage across many different companies, and then your businesses, the businesses that you're building, are more kind of cash-flow oriented and I guess you can also fund the big bets with the cash flows in your businesses. Is that kind of how you think about it?

Jonathan Gheller

I think kind of. I mean, you and I also spoke about this in an in-person conversation the other day, but I think you would get to the same conclusion if you'd think about it that way. And if I'm doing [some] kind of mental gymnastics and exercises… I do think about it that way.

But, like, the real way how I think about this stuff, emotional, the way I connect with all of this, is that there are a ton of problems out in the world. Some I can add value and be useful. In many, many, many, I'm completely useless. 

And so, that's one thing. And the other thing is I have things that give me energy, things that I find fun. And so, I end up... And I think you're doing the same thing with Latitud and with all of your efforts, right? We've talked about this. It's like, well, how do I structure my little box, my little space in this world, where I'm kind of doing what I want, in conjunction with what the market needs so that I can add value and, again, it can be profitable. 

And if I'm very... If I try to be very honest about that effort, then that box looks, maybe not the box that you get, you know, it's not like happy meal number 3 on McDonald's right? It ends up being something else. And I think, again, if you try to look at Latitud and what you're trying to do, I think one could say the same thing. Like, "well, you can see how -- Brian being Brian, what he likes to do, what he's good at, and how he's structuring something around him and the team that he's built -- it looks like this".

And it's functional, right? It can make money, it can add value, it can grow, and it has kind of flywheels that reinforce themselves. It's more like that, it's more like "what am I competent, what gives me energy, what does the market need?" And then whatever comes out of that can be weird, I don't care, it could be split into... It just has to be something that I feel competent, that gives me energy, that I think it's useful, right? I get paid for it. But it's more than that. I just want to be happy, be able to work, and add value. And I need to do it in a way that works for me. So, yeah.

Brian Requarth

Awesome. I want to dig into some of your businesses in a second. But, before we do that, you mentioned adding value. And, you know, you've invested and advised early-stage teams. Oftentimes, they're pre-product, right, really early. What is the most common advice you find yourself giving to those startups figuring out those early iterations of products, and maybe what's the most common mistake that you see? 

Jonathan Gheller

I don't know if I'm good enough, or systematic enough to have good answers for that. I know so many people who are better than me at this. But I guess, from my vantage point, I think I'd say that there are two extremes.

One is very easy to identify, but emotionally very hard to manage. And the other one is kind of all the other way around.

The one extreme is [that] it's just not working. Right? And most things don't work, and there are many reasons why things don't work. Sometimes you see a hole in the market. You know, there's Uber for people, so there should be something like that for cats maybe, you know what I mean? And maybe there is a hole for that in the market, maybe there isn't. Then, it's... Until you go, try it, and talk to people, it's just hard to know.

And so, sometimes, there are good ideas around bad businesses, right? That's just a... And I'd say the majority of good ideas are not really good businesses. And so, I think that's just one reason. And that takes some time to... I think if you've failed a ton, as I have, or are surrounded by other people that have failed, it's a little bit easier to put, just to... The ego gets a little bit smaller, and the memory of pain gets a little bit more salient, then you're like, "gah, this is not working."

I think that's one. And that's kind of hard, but you know, at least straightforward. The other one, which I think it's harder, is: you have a thing that works. And you have an idea in your head for why it works. And it's different from the actual reason that it works. And the customer cannot really articulate better than you why it's kinda working. 

You see, this happens a lot in products. Like, in consumer-facing products. Where you have a thing that kinda works, and you think these five things matter, and it's just really one, and you start iterating on these five things at the same time. Until you find the real core of what makes this thing really special, it's just not gonna go anywhere. 

That's hard, sometimes impossible. And that's hard because you have a very complete idea of the product, that led you to build the thing the way it is. But really people may just care about a very small aspect of it. And it's just very hard to see unless the customer is yelling at it, just yelling at it, just pointing at it, and that doesn't always happen.

I think that those are the two main reasons. Then there's stuff like teams not getting along, and cofounders not getting along. It's just a typical, common thing that happens a ton, but yeah.

Brian Requarth

It's probably the biggest reason why things fail, actually. If you take it from the numbers.

Jonathan Gheller

Yeah, I'd think so as well. You know, cofounders or early team members just not getting along. And I think the reason why that's so common, like why, cofounders, you know... And I think a good deal is just expectations and communication, right? What you guys think you're building might not be exactly the same thing. And, unless there's a ton of success, you have to make very calculated decisions. If the vision doesn't compile, then it doesn't work really well.

I think the other reason why that happens is that... I think of this famous story by a US general that survived... You know, I think the longest surviving prisoner of war in the Vietnam War. And they asked him, "how did you do it?". And he said, "well, most people thought, Christmas would come, we were gonna be liberated. Or Christmas would come, we wouldn't and people would just kill themselves, or stop trying. I just thought this is it, for as long as it is, and I'll make it work." 

And I think, you know, generally in startups, you need both people or all three [people] to have a similar mentality. And that's a very kind of hardcore mentality, that it's not always easy to have.

Brian Requarth

Man, expectations. It's amazing what happens when expectations are set and this becomes reality, whatever your expectations are. And so, yeah, I can see that the divergence of expectations amongst cofounders, what you're trying to aim for, like, how big do you want the company to be, how long do you want to stick it out, like, those are all things that, like... 

And sometimes it's hard to know, I guess. But the more you can explore that before you start a business, probably you're setting yourself up for success because there won't be any surprises. Because you've already kind of flushed all of that stuff out.

I think that's good advice for founders that are listening to this, that are talking with their cofounders in the early days. And the more you can get on the same page about what you're building, why you're building it, and kind of what you expect out of it, I think that's something that will serve you.

Jonathan Gheller 

Yeah, and another thing that I learned while working at a big company for a while, when I was at Facebook, I was having a conservation with this guy, he's very senior now, and I was talking to him, and I was like, "how do you become a successful product person, product manager, in this company?"

I remember him saying, "if you think you've communicated how you think about stuff enough, no, you haven't. You have to do it more, and more. It's so easy to say a thing, and have someone hear something else. It's just the practice of being explicit about what you expect, being explicit about what you're thinking, getting their reaction, and then mortifying your language, your tone, or whatever, to make sure that the thing you want to communicate it's communicating.

It's really important. And, at a startup, you're just very busy, you know. Very busy building, selling, and writing code. So you don't get time to sit down and talk, and I think that's such an important thing. Just to make sure you talk enough so that expectations are leveled. Communication matters, and it's just hard to make time for it at a startup. 

Brian Requarth

Two things you've mentioned. You've mentioned Facebook a couple of times, and you sold the company to both Google and Facebook. I think you stuck around for a couple of years. What advice would you have for a founder that ends up getting swallowed by an enormous company? And how did you manage during those three years at Facebook post-acquisition, considering you are not a company guy, as you've mentioned? 

Jonathan Gheller

When we were doing the transaction, I was talking to just this amazing human that worked at the, you know, M&A team, kind of corporative team -- which is hard, you know, to find such good people in that type of department. Just amazing people. And I remember, I just had to tell him the truth, how I felt about it. "I don't know if I can be a good employee, I'm terrified, I've never really done this, and the few attempts I did at this, I hated it."

And he's like, "you know you're not the first we've acquired, you're not...". Basically saying, "you're not that special", right? "I mean, a lot of people will say 'wait, someone will have to manage.' If you wanna try it, you can manage as well."

So, I think that's just one piece, right? I mean, those companies are, you know... If anyone else feels the same way that I feel, we're not that special. So, it's a common thing. 

And the other thing is that, you know, as I got older, you know, you get a little bit more humble, and you're like "maybe I can learn a thing or two from Facebook, you know? I can learn a thousand things or two thousand things," right? You come in so cocky about being independent and so forth. And it was very humbling, but I did learn a ton. At some point I had this position, "I'm here to learn and I should just kind of be humble, and try to learn however much I can."

And some of the things that you can learn in that corporate environment can be very useful for running a company, going back to what I've just said. Big companies require really good, clear communication, otherwise, it's very hard to steer the ship. If you run a small organization, you can just, you know, say the same thing 50 times and that's it. You learn to be a better communicator at a large company. So I tried to focus on that and get better at it.

And I also just got lucky, because the acquisition was driven by a guy that I felt very akin, very close to intellectually, emotionally, and in personality. So I thought "well if I can work with him, I'll work with more people."

I guess the one thing that's really hard, and I think anyone joining a big company should know, is, you know, when you're a small startup, it's really all about output. You gotta get stuff done. Just get it done. It's very much about you know, what we're getting done, why are we getting it done, and just getting it done. Whether it's you, it's me, I don't care, let's just get it done, and get it done fast. There's no other way of learning. There's really nothing else to protect, right? You can make mistakes. You got nothing, and you have to get something.

So, output management. Get stuff out. And I think large companies are all about input management. You have a very big ship, it's hard to control. If you wanna to move it to one direction, you gotta have a lot of people coordinating work to move the ship in that direction. If some crazy person steers the ship too strongly, you can kind of capsize, you know, [like] an aircraft carrier. You don't wanna do that.

And so, a lot of it is input management. And it's a completely different skill. And, by the way, I used to shit on that, you know, went like "aghh", but you know what? You end up finding these amazing managers, who are outstanding at this, and who make a craft out of it. And it's very fascinating to see. 

But effectively, what I mean by input management is, you know, you want to get X done, but X influences or affects your core metrics and maybe affects, directly or indirectly, five more organizations. And then you need to get approval and consensus for that. So, you're like "ok, VP of Y, I wanna do X and it's gonna affect you in these ways, but I think it's good and it's gonna pay off in those other things. Are you ok with this?" "Yes."

And you do the same thing with other team. But then you realize that the language that you're using is threatening, so you have to talk about it some other way to say the same thing. And then somehow coalesce all of that and then go back to the CEO, whoever, and go like "we're doing this, and everyone is okay with it". So it's a lot of input management, yeah. 

I'd say one more thing. If you worked at product when I was there [at Facebook], you'd spend a lot of time at meetings with Mark [Zuckerberg]. It is a good thing to spend some time with someone who's, like, a thousand times better than you at everything you're doing. Even if it's not too much, just to see what an absolute beast, you know, looks like. So you get that sense of, "I don't think I'm ever going to be this". But it's good to have a bar, you know. But specifically, if you have that kind of cockroach type of mentality, "I just don't wanna die", and then you see this guy who is effectively truly winning at the game of company creation, you learn a thing or two about what optimism, drive, focus, and ambition looks like. And again, if you come from a small town somewhere in Latin America, and you have the privilege of seeing that, it's cool to see. So big companies also offer that, someone is running that, someone built that, they're likely very good. I'm sure you can learn from them a ton.

Brian Requarth 

Any anecdotes you wanna share about that?

Jonathan Gheller 

I can't come up with anything specific. He's just very smart, right? It's a team of very smart, driven people. Guys who can think ten years out, guys that can make really ambitious bets, guys that, you know, don't settle for anything other than the best management team.

There's also luck. You know, good product at the right time. Good timing, you know. It's not, you know, a bunch of brilliant people who don't have the position. But I do think that, you know, there's a difference, right? There's a difference between, you know, building a Ferrari and building a Lada, in Russia. You know? It's just not the same car. The difference is just everything, right? It's not just how it looks. It's everything, every little screw, everything is thought differently. I guess you see it, and you're like "Oh, I see. I don't know what I'm doing. These guys are hardcore."

Brian Requarth

That idea of input versus output is really interesting. And I wanna actually talk about being a good manager, particularly in this kind of remote world. And maybe a good segway for that would be, you know, you're operating a handful of different businesses, right? 

 One of them is called Matilda Explorations. You connect remote engineers with full-time opportunities in Silicon Valley. It seems to me like remote work is kind of a polarizing topic. You talk to people and it's like, they hate it, they love it. Do you think that remote teams are a superior model to office-based teams? And what's your opinion on hybrid?

Jonathan Gheller

I don't know. I think that, something not unlike the conversation that we were having earlier about what do you do for a living, Brian, and what do I do for a living, and why it looks the way it looks… It comes down to, I think, a ton... You can rationalize a lot of this stuff, and create a lot of mental models and reasons for, pros and cons, but it comes down a lot to temperament and what type of stuff you like. 

I think the basics of remote management are harder than the basics of in-person management. Because there's a very low cost to a marginal piece of communication in person. I just go to the desk, [and] tap on your shoulder, "this thing you just said, Brian, I just didn't... Could you repeat?". And then I go back, get yogurt from in the macro kitchen, go back, "I thought I got it. I'm so sorry. Can you tell me again?" You know what I mean? It's ok, you can kind of get it done. You can not be a great communicator, not be a great manager, and kinda somewhat hobble along because there are infinite micro-interactions, right?

If you are a shitty manager in a remote setting, I think you ruin the company. Nothing will get done. So I do think there's a higher bar for, like, minimally acceptable managerial competence, whatever you wanna call it. 

I do think, however, that if you are a great manager, a great remote manager, I think the best managing that can happen will happen remotely. And I think the reason is that to be a good remote manager, you have to basically run the organization somewhat async. 

I, for one, am not a big fan of all this, like, "we're remote, but let's all be together virtually". I don't see that as a thing. I see it as you really compress the number of times that you're in sync, doing phone calls, or seeing each other in person, and try to make it very high quality. And a lot of it happens async. 

So you're forced now to write documents and to have people comment on documents. You have to effectively take advantage of the setup. You have different timezones and so forth, you have to make the best out of it. And the best out of it is just to write documentation.

And to write documentation, you're forced to make your thinking clear. So it can come out in words. And, you know, writing in words can be, you know... If you think you know what you're thinking, and then you sit down to write and it doesn't come out, you're like "I don't know how to write". No, really, what happens is that you haven't thought about it clearly enough. So you have the specter, like the silhouette of an idea, and you think you have an idea, but you don't have it. And so, it forces you to be clear in your mind. And it forces you to be a clear communicator.

And so, what happens if you're good at that is that a lot of the BS of people management goes away. A lot of it is "I thought you said, you make me feel, you looked at me," you know? It's all of that. Whereas if you're forced to think deeply about what you want from someone else, and you have to write it, and you give them time to think it through, right? Four hours, to look at a document dispassionately, criticize you, find holes, and ask questions. And you have to respond to that. Generally, you know, that time upfront that you paid deciding what to do, you get paid back amply by just getting done the thing you have to get done.

So, I think it's, like, temperamental, for one. And I think each one has its own benefits and disadvantages. The way I see it, right, is if you're running an organization async, you have to run the whole organization async. And so, you have to change how you do in person. So, if you have a hybrid organization, you have to rethink how to do in person, what the purpose of that is.

Because if you're like, some stuff happens async, and sometimes it happens, you know, word-of-mouth, tapping on someone's shoulder, you don't know what truth is in information. And that just goes to hell.

So, if you're gonna do... You have to figure out, like, this is less about remote and not remote, you need to figure out if it's like an async organization or a real-time organization. You know, if you're gonna do a real-time organization, then in person is much better, but you can make it work remote. If you're gonna do it async, then remote is much better, but you can do it in person as well. And I have heard of these stories, and I'm sure you have too, of Amazon, where people are forced to write these documents, and read them at the beginning of every meeting. That's effectively async in person, right? 

So I think it's more about async and in sync, and then how to adjust. And then, the other piece is temperament, right? Some people thrive in person. [They're] Charming, motivating, running the troops, staying late, having pizza, and drinking beer. And some people are like, "I just wanna think deeply about what I wanna do, and I wanna be told very clearly what I should be doing. And I'm less good with, like, all the emotional dynamics of the office space." And so, you set it up to whatever makes you happier, I think.

‍Brian Requarth

It's really interesting, you know, I feel like I communicate a lot more when I'm in person with people. I'm more of a verbal communicator, so I kind of had to adjust my style. I do actually like writing and I agree with you that you need to be a good writer in order to be able to be a good remote manager, probably, because if you're doing it async and, you know, you're trying to communicate and articulate ideas, you have to be very crisp and succinct, as you said, and very clear. And so, it sounds like you think that that's probably a skill that you need to brush up on. 

And it's funny because we actually just had an onboarding session with, like, the new people that started, I literally came directly from that. And one of the people there mentioned -- Bruno, a new guy that just joined our team, he says -- "I feel like I have to really sharpen up my writing skills at Latitud, because we're not seeing each other, we're not all together."

So I think that's something. But how do you feel about building trust? Because trust is ultimately the thing that allows you to generate velocity, and I say velocity specifically and not speed because it's, you know, the vector and the direction, not only, like, how fast you go. How do you build trust in an async way? Do you have to just overcompensate with, like...  We're doing company offsites every three or four months, where it's like really focused on trust building. So, what suggestions do you have there in order to have that kind of deeper connection with people and be able to move quickly?

‍Jonathan Gheller

I think the way I experienced it is... I think trust is a function of clarity for me. So, if your expectations are crystal clear of what needs to be built, by when, by whom, what good looks like, and so forth, then either things happen or don't happen, and you can debug. And there are a couple of debugging issues. Your trust grows, you know, or goes down.

What I do feel... Again, this is very personal to how I experience what you're saying, so it's not a really direct answer to what you've asked, but what I do think happens, where in-person meetings and when you get people together matters a ton is, you know, sometimes you have a list of things you wanna work on, right? And you talk about number 1... You have them stack-ranked, like, we have to do 1, 2, and 3. And you talk about 1, you talk about 2, and you talk about 3. And you say 1 is more important than 2, and 2 is more important than 3. 

And then, for some reason, 1 is not getting done as fast or is not as important, and then you're like... Then you can, again, be even a more dramatic communicator, and go like, "2 and 3 are out of the table, and we're only going to do 1," and then end of story. But that's not always easy, sometimes you have to do more than one stuff. 

And so sometimes the sense of urgency or importance of things are harder to communicate, I think, in writing. I find that meeting in person is really good for saying "this stuff here, I think it's mission-critical. And I think it should keep us awake. And this is why."

Even if you write it... I think things that appeal to emotions, which are generally things that appeal to a sense of urgency, are very hard to communicate. Writing is really good to communicate importance, but not urgency because it's kind of more emotional. I think you get people together to say that. The other thing that is emotional and that is hard to communicate by writing is, like, celebrations and things like that. You're like "hooray!", that's not really good. You wanna do something else. So it's, at least for me, it's more [like] that, but I don't know.

Brian Requarth

That makes a lot of sense. Yeah, I mean, a celebration emoji doesn't really warrant closing a huge contract that's going to be transformative for the company, right? Like...

Jonathan Gheller

There's nothing you can write... I mean, you can write something and it can help. But when you wanna give that person a hug, and thank them, and celebrate them, and toast to them, it's just a little bit different. Yeah.

Brian Requarth

Totally. You've mentioned that you started a couple of companies in Silicon Valley and had distributed teams of engineers in Latin America. And now, with Matilda Explorations, you're doing the same for other companies. 

What are some best practices in terms of recruiting teams and building out really talented and diverse teams, [so] that people are motivated and you're able to retain the top talent? What advice do you have to founders about [that]? And I guess engineering and product is the area that you specialize in. What's your wisdom around that? 

Jonathan Gheller

I have some thoughts, but I'd also like to hear your thoughts on how you see engineering teams in Latin America versus the US. Because I'm sure you have a... So, I know you called me, but I'd love it if we could spend a couple of minutes. I think I could learn from your perspective.

But the way I see it, there are a couple of things. So, one is: it's very hard to find really good talent that has the skills that you need and who's interested in what you're doing at the stage you're doing it. That's why it's hard to recruit, right?

And so the first thing that is a big cost when you decide to not go remote is that you're deciding to just fish in a specific pond, under massive constraints. So, from my perspective, the first thing is you wanna be region-agnostic. Your goal is not to find someone in Guatemala versus someone in São Paulo, it doesn't [matter]. Your goal is to find someone incredibly talented, with the skills that you need, who cares about what you're building, at the stage that you're in, with agreeable people. Argh, that's so hard! 

You just want that. I think that if you start adding more constraints, you're shooting yourself in the foot. Now, if you're building, you know, with friends and things have evolved, where you need a lab, right? You need some people with some drills, you know, okay, I understand that. But if you're just doing software... I think that's the number one thing, right? So that's one thing that I think is critical to remote. It's a mindset. it's not about creating hubs, it's not about creating some hybrid thing. It's about finding the best possible talent for your team. The best match. And that's really, really, hard. And so, you shouldn't, you know... I think you should just focus on that. That's enough.

The second thing that I believe matters... I was writing some notes to some of my investors, and you and I talked about this the other day. It's timezones matter, you know? Time zones matter a ton if you have kids, more so, right? If you have to, like, wake up at 6 AM or 7 AM to take your kids to school, and you have meetings at 2 AM or 3 AM, it's gonna be hard. And so, time zones allow for a lot of... You know, some businesses don't need it. But there's a timezone tax, and you either pay it or don't pay it. And you have to really think about it. That, of course, gives LatAm a super competitive advantage on the US market, which I think it's a real thing. So, I think that's the second thing.

And then the third thing is... We're getting better at this, but the mental model started changing a year or two prior to the pandemic, due to cost, I believe, in SF, New York, and so forth. But let's call it, four or five years ago. The model was: in-house, collocated, we build the core things. We send out the shit that we don't really care about that much. Fix that little bug, I don't care about the Android app so go build it, that type of stuff.

And some people are trapped somewhere along that line, and that line is very unproductive. You have to think about these guys as team members. Otherwise, it's not gonna work. That means a high level of trust. That means access to the Bithub repository, you know? You have to give the opportunity to make mistakes, right? When you start gating someone for a month before they can get full access to the repository because you don't trust someone in Colombia to be as trustworthy as someone in Austin, Texas, then you already kind of screwed that up, right? And so, you have to have a system that is resilient against these types of mistakes, no matter where they're made. And then, if you find someone remote, you have to make them a full-time team member and give them access, right?

And then another thing is a compensation thing, right? Where there's a changing tide in some sense. If you're coming from the US, and you're paying someone that used to work in Banco do Brasil, or whatever, Cemex in Mexico, then you can pay less than in the US and everyone's happier. And yet, if this person who's in Mexico was working for Kavak, or was working for QuintoAndar, or Nubank, then everybody kind of leveled up.

And so, I think there's something around navigating the marketplace for pricing, that is a little bit kind of changing tides. But you just gotta do the right thing to make it work.

Brian Requarth

No, yeah, and I think that the natural evolution is that probably, I mean, maybe salaries will just kind of like merge more closely, right? I mean, they'll lift up, probably, and then there may be some pricing pressure on engineers in the US. I don't know, I haven't seen that happen yet. But I mean, if you can find the talent.

So that's definitely something difficult to navigate. But one thing that I just want to highlight, that I think you said that... I didn't learn this the hard way, but I remember having unnecessary, like, frustration about this, is that I would find some people that I think were really talented, like, they were really passionate about, you know, what we're building big companies, but, like, the stage... I lost some people, like, that I tried to hire from big companies, you know, that decided to go somewhere else.

And there is like a DNA thing in terms of digging in on some, like, really hard stuff, having a lot of uncertainty, and the discomfort that brings. Or the people that thrive in this environment, right? There are these people that you just throw a bunch of problems at, and they just love it. They just, like, embrace it. 

So, I think, I remember taking these things personally. I'm like, "if this person loves what we're doing, and is so, like, motivated, they see the potential, yet they decided to join this other big company, it's just a different..." 

So, understanding and assessing priorities. One exercise that I've learned from a former VP of Engineering in my company is that -- and it helped me in hiring, and I used this framework when I decided who my investors were gonna be -- I have the candidate really just outline everything they care about, and then have them stack rank what they care about. And then I ask them to assign, like, a multiple, you know, if you care about autonomy, and X, Y, and Z. 

And that serves two functions. One, it creates massive clarity for the candidate you're trying to recruit, because they can really start making a really rational comparison of, like, how they should be making their decision. And two, it gives you the advantage of understanding what they care about and allows you to sell through a little bit more on the benefits of joining your team because you understand what they value. And I think that's, you know, that's part of sales, really understanding what people care about and then not highlighting the things they don't really give a shit about, right? 

So, I think those are two quick reflections on, like, team building and hiring that I think are relevant not just for product engineering but probably for the rest of the organization as well.

‍Jonathan Gheller

Yeah, I mean, in Matilda we see a lot of engineers. One is kind of programmatic-alert, that we already have. It's just, like, built-in or workflow-ist. 

If someone is interviewing at a startup or at a big company... We, like, stop everything. We're like, ok, let's talk about the differences, just to make it super explicit. If you care about autonomy, and care about end-to-end system ownership, and if you care about creativity, and if you care about being thrown into things you've never done before, and if you're willing to endure the pain of seeing half of the customers disappear one day, and seeing the company pivot, and the uncertainty about your future, you have this. If you want to maximize income, if you want stability, if you want bla bla bla... These two places are not the same. It's like wanting a doctor, wanting to be a biologist. Yes, loosely related, but no. Not really, you know? Yeah, that's a big issue.

Brian Requarth

I think that, like, less experienced people also, like, they don't have the pattern recognition, right? Like, of what... You know, if you haven't worked in these different environments before, you kind of, you make more of an emotional decision on where you wanna be. And I think that's something that with time, you kind of gain perspective and experience about what it looks like.

Jonathan Gheller

Can I ask you a question about remote work, and see what you make of it?

Brian Requarth

Yeah, go. Yes.

Jonathan Gheller

I have anecdotal evidence on this, I don't have hard data. And I don't know what makes this so, so maybe you can tell me. I have found that, generally, US-based engineers working for US companies churn more than Latin America-based engineers working for LatAm companies or working for US companies.

While you were doing QuintoAndar [investment], or on all the investments you've done with Latitud, does that ring true, as statistics, or not really?

Brian Requarth

It's interesting, I'm gonna have to reflect and just kind of try to think about it a little bit more. I mean, I think that, like... I think if you look at the... And we can actually dig into data, this is available on LinkedIn. And, actually, now that I think about it, you know, if you look at the big tech companies in the US, people aren't there for very long oftentimes, right? It's like...

Jonathan Gheller

No.

Brian Requarth

I'm probably more anecdotal as well, rather than, you know, some... But I think back to, like, my teams and how long people stuck around, I think it was a relatively like, before any M&A stuff, any mergers, and stuff like that, when we were just like in execution mode, I think we had a pretty, like, stable team at one point. It lasted, the core team was pretty consistent.

And if I think about other… I don't now, I'm gonna lean towards the direction that you're saying, and I'm gonna try to make a hypothesis about it, without, like, you know, judging an entire region. I don't know, I feel like it can be kind of risky to, like, just jump around because you end up working somewhere that you... 

And maybe there's slightly more risk aversion, I don't know, in Latin America. This is me generalizing, I have no data to back that up. It's like, when you're working at a really good company, you know, if you're working at Nubank and you're super happy because the culture is great, and you're challenged, and working with smart people... And maybe that's not a good example because that's, like, singularly, probably, like, one of the, you know, top places for engineers, that they wanna work in Latin America. 

But I don't know. What's your hypothesis on that? It sounds like you've seen anecdotes on that. Do you have any kind of prediction on why that is? Or…

Jonathan Gheller

My feeling -- and, again, it's a conjecture, I don't know -- it's that Latin Americans care deeply about relationships. The role of friends and family, it's a little bit different. And I think if you're working at a place where you have people you like and respect, and they like you and they respect you, that means a ton. That means a great deal.

Brian Requarth

Yeah, loyalty is something that exists more, I think. And I think people probably take things more personally sometimes. And I mean, that's like, that's how it's manifested on the opposite side, of like, you leaving and someone's like "I can't believe you left us!" Even in the case where it's better for the individual, but they stick around because they feel some kind of duty to... 

Which I think is a great quality, as long as you're not sacrificing too much personally. Because you should probably, you wanna balance what's good for yourself and then what your opportunities are. It's interesting.

Have you seen that, has that manifested itself in what you're doing? You're promoting more talent to be kind of exported to the US, which I think is overall positive because people should go where opportunities exist. Obviously, that will increase salaries. And generally, I think that's a good thing because it will give people different exposures, different work environments, it will create more, kind of, just broad understanding about how things operate in different places. So, I think it's ultimately positive.

Obviously, it's hard for those companies locally, that are making money in reais, that their income is in reais, and then all of a sudden they're expected to compete with US salaries.  

The way we've kind of taken a stance on this so far is that we probably wanna be paying really well for Latin American standards and we're not, we can't compete with a top tech company. And we can layer in equity, you know, because wealth is built through equity, versus salary. But it's a challenging thing.

So, how do you... You've written that, you know, there's this movement where you've got a more flexible and global labor market, and it's gonna be a more equitable and sustainable market economy, and ultimately this could lead to, you know, talent learning best practices and disseminating that locally. Which, maybe they'll start companies. 

Maybe you can kind of close this out with your perspective on that because you're thinking about that more than I am.

Jonathan Gheller

Yeah, I think there are two pieces from my perspective. One is kind of, what the company Matilda Explorations thinks, right? So, Matilda has a customer, and it's the company, it's the engineers. That's the customer. And so, we just wanna do right for the customer. That's it, right? If we help someone work with people that are energizing and they can lift them up professionally and financially, not only them but their family and their surroundings, then we feel great. That's our job, and that's what we do. We cannot solve all problems with one company, we'll just solve that one. And we're solving it slowly and steadily. So that's kind of the end of it, right? Which is, we should do just one thing, that's a good thing, end of story.

Now from a macro standpoint, right, if you think about the nations, and what happens to Brazil, and what happens to the startups, to the startup ecosystem, and so forth, it's exactly what you're saying, which is... How much Nubank, Bitso, and QuintoAndar have benefitted from the investors and the team members that they could pull from somewhere else, that have seen something else?

In the US, this talent gets recycled, you know? I don't think you couldn't have built Google without Yahoo and SGI, you know, talent, and you couldn't have built Sony without HP talent, you couldn't have built Facebook without Google talent, and Uber without... You just cannot, it's... At some point, you need best practices if you wanna move fast. 

That is to be bootstrapped in LatAm. Now, it's happening. There are a couple of companies that are truly world-class. We're gonna get more, and hopefully, you guys will help do a ton of this. But the region benefits from this, right?

And I think from a very macro standpoint, not just in company creation and best practices, at a macro standpoint, you know, rich countries are rich because they're capital rich, and capital can move freely across the world. If you're a banker in New York and you like a business in Brazil, you go, you buy, yeah, some paperwork, whatnot, you can get it done. So your capital can be wherever it can be best served, and the city of New York is better for it. You know, you live there, you may donate to the opera, buy a better apartment, whatever it is you're gonna do. But the capital can go where the capital needs to go. So, if you own capital, your capital benefits from globalization effectively. And so, nations that own capital benefit from it. 

If your competitive advantage is not capital but it's labor, like maybe Brazil, and certainly, well, Venezuela is a different case, but most of Latin America, you actually don't get that advantage. You don't get to export the best thing you have, which is people. And so, now you're locked in, and your talent is making subpar growth on market rates, which, if they could make more, there would be more wealth in the country to spread around. And so, to me, remote work is like a virtual bridge that we're building across nation states to make a more fair, global economy. So, to me, it's like, I just don't see how it would do in any other ways. But anyways, that's my take.

‍Brian Requarth

As long as Facebook, Google, and Amazon don't just hire all the engineers.

Jonathan Gheller 

They won't, they won't. This has been the fear all along. We've lost and seen engineers go to Google, Facebook, and Uber. I'm so happy to have that option. If you're the type of guy who wants to build something really from scratch and you wanna go to Google, you're going to the wrong place. You have to go to one of the Latitud companies, or to one of the stuff that I'm doing, and then you'll do something from scratch.

Whether it's a company in the US or a company in LatAm, honestly, to that engineer may matter more or less. But, you know, Facebook is like a thing, for some people, to do a specific job. There are other jobs, I don't worry about them.

There are nuances, but it's not because they're doing it, it's because we haven't communicated well the difference between working on a big company and a small company, that's more on people like you and me than on the engineers.

Brian Requarth

No, you're totally right. And I think the one thing that... Like, this time is way more fun because I'm building a company and I'm so grateful that we actually have, like, impact, we have a mission that's, like, exciting, and we're, like, you know, we're building something that's, you know, reducing friction for entrepreneurs. And so, like, this actually... People gravitate towards that because, like you said, people care about what they're participating in and it feels good to make an impact.

That's something that I've learned. You know, not that I don't like real estate classifieds, but it's kind of fucking boring compared to, like, building a startup ecosystem.

So, anyways, this has been a great conversation, we're coming to an end here. So, thanks a lot for, you know, sharing your expertise, you've been around a few cycles now, you did kinda date yourself, but you also outed me in the process, so now everyone knows we've been around a little bit. But I think that you've just taught us a lot of things, and you've always kind of kept the beginner's mind. And so, I think that came through, also in this chat, that we can always learn from other people. And so, this is something... I feel very lucky to have this podcast, [because] I get to have talks with people like you.

Jonathan Gheller

That's awesome. Thanks for making the time to chat, though. It's awesome. Let's keep talking. Don't get lost.

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