Tijuana's New Breed Of Entrepreneurs Create Technical Businesses

In the Mexican border city of Tijuana, entrepreneurs are going after a share of the Internet economy that usually goes to Asia. At a business incubator, they want to work with U.S. tech companies.

LINDA WERTHEIMER, HOST:

This is MORNING EDITION from NPR News. I'm Linda Wertheimer.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep. Good morning. Tijuana, Mexico stands so close to the U.S. border, the city practically leans on the fence. We drove through the city with NPR's Carrie Kahn.

CARRIE KAHN, BYLINE: This is the original border fence. That's all there was. Now you'll see there's a road, a dirt road, and then there is another fence, which are pylons, and then you'll see in some places there's actually a third fence.

INSKEEP: We met Carrie Kahn as we neared the end of our road trip along the border. She's our Mexico City correspondent and has covered Tijuana off and on for two decades. She's an enthusiast for a city that is in many ways still developing.

Can you drink the water in Tijuana?

KAHN: No.

INSKEEP: But also strikingly modern. Visitors to India are told not to drink the tap water either, yet India became a powerhouse for the tech business. And Carrie Kahn took us to see how Tijuana is reaching for a piece of that Internet economy. Tijuana wants business that usually goes to Asia.

KAHN: Where we're driving right now used to be a residential neighborhood and you can see in there spots where there's some new architecture. And we're going to go down this driveway right here. Stop, stop, stop, stop. We're going down this driveway right here, and that is the Mind Hub right there.

INSKEEP: That was our destination, a wide-windowed office building with outdoor stairs.

KAHN: Typical Tijuana. You have a very architecturally new dynamic place right next to a shack. And here is one of the oldest families in Tijuana that raise roosters for cockfights. So it's the old and the new and it's quite a mixture.

(SOUNDBITE OF ROOSTERS CROWING)

INSKEEP: Carrie led us up to the roof of the tech building, which she described as a business incubator. Tijuana has modern foreign-owned factories, or maquiladoras, as do many Mexican border cities. But the entrepreneurs at Mind Hub are aiming for something more. They want to work with U.S. tech companies across the border.

KAHN: They do software design, they do software support, they do - they make apps. And one of the founders is Jorge Arroyo.

JORGE ARROYO: This whole building was conceptualized basically as a working space to collaborate and kind of converge...

KAHN: Arroyo, born and raised in Tijuana, launches into his rapid-fire business pitch. He's excited about his building, his company and helping out other young engineers. He sees Tijuana becoming an outsourcing hub for U.S. companies, bigger than Beijing or Bangalore.

ARROYO: These companies traditionally do it in India and not - are usually associated with horror stories in terms of time difference, cultural mismatch and so forth. They find a way, you know, a more improved alternative doing it in Mexico.

KAHN: And especially, he says, in Tijuana, which is graduating top rated engineers. Arroyo's Mind Hub team helps new graduates develop and market their ideas like new apps for kids with autism and custom Spanish language accounting programs. Arroyo says his giving back model is a break from Mexico's usually top down business culture.

ARROYO: We were trying to be disruptive in that sense. I mean we've been very much committed to walking the talk, so to speak, of reinvesting it. But aside from that, there's this whole bet on entrepreneurship and innovation.

KAHN: This isn't the first time Tijuana has bet on reinvention. Business leaders have long tried to entice more technical companies in attempts to move beyond low wage, low value manufacturing. However, this new breed of young entrepreneurs is doing it themselves.

(SOUNDBITE OF MACHINE)

KAHN: Check out 3D Robotics. The company's Tijuana general manager, Jose Guillermo Romero Mendez, shows off its number one seller, a small four propeller battery operated drone which hovers over the production room floor. Romero and a childhood friend designed and manufactured the copter's autopilot out of their Tijuana apartments with backing from a San Diego entrepreneur. Romero says growing up on a steady diet of San Diego TV, cartoons in English, and lots of music videos, got him to dream big.

JOSE GUILLERMO ROMERO MENDEZ: They were like blowing my mind when I was watching all those videos, so it was part of my - of the education here in this region. We grab a little bit from San Diego, we mix it with Latin culture and we have a new thing.

KAHN: Romero's new thing now has more than 100 employees and sales of $10 million last year. San Diego venture capitalist Bob Watkins says there are plenty of opportunities waiting in Tijuana. He's setting up a $20 million cross border VC fund. But even though he's bullish on Tijuana, he says it's a challenge to get Mexican investors to loosen their purse strings and invest in start-ups.

BOB WATKINS: I think it's symptomatic of just about every underserved economy that's growing and maturing. And I don't care whether you're in Mexico, Great Britain or in Somalia - it's going to take time.

JUAN PARDINAS: Mexico, it's a tough place to be an entrepreneur. It's starting to change but it's still tough.

KAHN: Juan Pardinas runs a Mexico City think tank focusing on competition. He says Mexico doesn't have a culture of risk-taking It's only been the last 15 years that the country has had relative economic stability. The previous three decades were dominated by one economic catastrophe after another, which Pardinas says took a psychological toll on business people.

PARDINAS: Here failure it's just extremely costly. We need to create a culture which you can fail fast, which you could learn from your mistakes and you could still have the drive and the energy to promote this entrepreneurial culture.

KAHN: Tijuana's entrepreneurs, most in their early 30s, aren't afraid of the risks. Take Andres Reyes Botello and his 3-D computer animation studio, Boxel, located in Tijuana's upscale Rio Zone. He started with just a handful of artists 10 years ago and has grown to one of the largest CGI studios in Mexico. Last year, Botello convinced actor Edward James Olmos's production house to let him animate a full-length CGI feature film.

ANDRES REYES BOTELLO: And as a good Mexican, of course, yes - you say yes, and then you figure it out.

KAHN: He's kidding. The film is called "El Americano" and it's about a group of parrots struggling to save their circus. It features Lisa Kudrow, Rico Rodriguez of "Modern Family," and Cheech Marin as an evil bullying bird.

(SOUNDBITE FROM FILM, "EL AMERICANO")

CHEECH MARIN: (As Martin) Well, well, if it isn't el cappuccino come to save the day. Well, you're too latte, chocolate.

KAHN: Botello delivered as promised. "El Americano" opens in U.S. movie houses later this year.

INSKEEP: And NPR's Carrie Kahn delivered that report. She was in Tijuana, another of the correspondents who joined us as we traveled the length of the U.S.-Mexico border.

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