Empowering Mexican Businesses with Adolfo Babatz, Founder & CEO of Clip
In this podcast, Miguel Armaza is joined by Adolfo Babatz, Founder and CEO of Clip, the leading solution in Mexico for small and medium businesses to accept digital payments. Founded in 2012, Clip now has more than 400 employees across Mexico and the US and has raised close to $150 million in equity from leading investors, including SoftBank, General Atlantic, Google for Startups Accelerator, and Angel Ventures.
Originally from Mexico City, Adolfo entered the fintech industry in Silicon Valley in 2008 upon graduating from MIT’s Sloan School of Management. He joined PayPal’s Latin America team where he worked on multiple projects, including the launch of PayPal in Mexico and Brazil. After working in Mexico for several months, Adolfo returned to PayPal’s headquarters having realized there was a huge need for a payment terminal that would allow small and medium-sized businesses (SMBs) accept credit and debit card payments. After pitching and failing to sell the idea to his bosses at PayPal, Adolfo recognized the only way to make his vision a reality was to leave the firm and do it himself.
As Adolfo and his co-founding team were getting ready to launch the company, they decided to build Clip’s technology in-house rather than outsourcing it. This was not the standard for Mexican and Latin American startups and it certainly was not the easy route, but according to Mr. Babatz, this decision ended up being one of their biggest competitive advantages.
Eight years after founding the company, Clip has become a fintech giant in Mexico and the go-to payment acceptance platform for SMBs. However, their journey hasn’t been easy and Adolfo and team have had to quickly learn from several mistakes along the way.
Building Customer-Centric Products and The Right Team
His product management experience at PayPal taught him the value of building customer-centric products and he decided to carry this practice to Clip. Before building a product, they spent countless hours with several small businesses conducting in-depth interviews to understand and solve their business needs. These interviews were so crucial to the development of the company, that the learnings that came out of them continue to be useful to this day.
After years of managing the ups and downs of a growing startup, Adolfo attributes his biggest mistakes to culture and people management. He admits not realizing the importance of building company culture and hiring the right people for the first three years but is now convinced talent is absolutely everything. And, although people and culture mistakes are hard to recover from, Clip was able to course-correct in 2015 and Adolfo revamped the firm by bringing executives that complimented him and helped him drive and execute his vision.
Navigating COVID-19 and the Road Ahead
Overall, the COVID crisis has not derailed the company’s strategy. Having always been a cash-conscious and conservative firm has allowed them to fare the pandemic much better than other regional startups and their strategy remains unaffected. As luck would have it, Clip launched contactless payments just as the effects of the pandemic were unraveling and this capability has quickly become crucial as consumers increasingly opt for cashless and contactless payment methods to reduce transmission or infection risk.
Although several clients experienced a sharp slowdown of activity, Mexico’s informal merchants never really stopped transacting and Clip’s payment activity didn’t suffer too much. However, Adolfo does worry the situation will probably lead to more inequality in the region unless governments act fast and do a good job. He also expects Venture Capital investment levels to drop significantly in Latin America as large international VCs retrench to their home markets.
When it comes to advice for aspiring startup founders, Adolfo urges them to spend most of their time in people matters as culture always beats strategy. It’s precisely during crises like this one that the right team will help you come out stronger on the other side.
Adolfo is the founder and CEO of Clip, the leading solution in Mexico for SMBs to accept digital payments. The company currently has more than 400 employees in different offices located in Salt Lake City, California, Utah, Guadalajara and Mexico City. Before Clip, Adolfo was responsible for Customer Engagement and New Product Development for PayPal Latin America. Before moving into the Engagement team, Adolfo led the team that opened PayPal in Mexico.
Right before PayPal, Adolfo studied an MBA at MIT where he specialized in Entrepreneurship & Economics of Information. Previously, Adolfo worked as an advisor to the Executive Vice President of Grupo Desc, one of the largest industrial conglomerates in Mexico and shortly thereafter, was part of the founding team of The Carlyle Group Mexico, where he worked as an analyst.
Clip is Mexico’s leading solutions for SMBs to accept digital payments. Clip transformed card acceptance in Mexico by offering different models of portable card-reading hardware to accept all credit and debit cards as well as other payment options. The company is focused on empowering Mexican businesses via a set of tools designed to increase merchant’s sales and help them manage their business. The company currently offers hardware products and other solutions to help merchants thrive. For more information visit www.clip.mx Clip is a financial technology startup based in Mexico City (MEX) and Silicon Valley (USA).