- [Marcos] Competition is so healthy.
When you have a a powerful competitor,
it avoids this internal battles.
It's doesn't give you the time.
It's (indistinct)
If you, if you spend too much time with that, you die.
It's as simple as that.
- Goddamn, I'm old.
I can't believe I'm saying this,
but strategy has changed dramatically
in the 38 years since I've been at Bain.
When I started, the name of the game was anticipation.
If you could predict the future better
than your competitors, you'd win.
It was kind of simple.
And we would build models, low case, high case,
and that just right Goldilocks base case.
And if reality didn't match the base case, well, you know,
people lost their job.
It was all about perfect anticipation.
If you could predict the future better
than your competitors, you win.
But today the game and strategy is very different.
It's not just about predicting the future,
it's about how fast you adapt to changes in the future.
Sure, we think deeply about what's ahead.
Of course, we try to predict,
but we know uncertainty isn't some freak event.
It's the norm.
And that's why in this podcast series we keep hammering on
about this idea of deliver and develop.
You've got to anticipate what you've got,
but you then also have to evolve fast enough
to stay relevant in a changing world.
You know, the winners zig when markets zag
and they're gonna zag when those markets zig.
But how do you create
an adaptable strategy and organization?
How do you build a culture that thrives in uncertainty?
Well, now we're at the final episode of the season
and we're gonna explore that question
with someone who's lived it.
This is a founder who's navigated chaos
and competition at the very highest level,
and he's lived to tell the tale.
I'm Jimmy Allen, and this is "Founder's Mentality,
the CEO Sessions".
And my guest is Marcos Galperin, Founder, former CEO
for almost three decades
and now Executive Chairman of Mercado Libre,
also known as MELI.
What started as a garage project in Bueno Aires
is now Latin America's e-commerce giant.
This is $100 billion ecosystem
spanning across 18 countries.
And Marcos has played
against the absolute best and he's won.
So what I wanted to know was this, what's the one thing
that led to Mercado Libre's continued success?
- [Marcos] It's hard for me to pinpoint
perhaps specific things.
I think it's more culture.
It's a cultural thing.
It's something that you can lose.
I see the things that are happening in Europe, you know,
culture can change.
You have to enjoy the path.
And it, it's a marathon that ha doesn't have a finish line.
The minute that you think you finished, it's the end.
If you look at the brands that have existed for 150 years,
I don't think they've beaten a competitor
like the one we've beaten in Latin America
for the last 10 years.
They've made it, they, they feel like they've made it
and things don't change that much for them in our industry.
On the one hand, it's amazing
because in in other industries,
you cannot create the most valuable company in Latin America
out of nothing in 26 years.
So this change and this continuous disruption
is what creates these possibilities.
On the other hand, you can never feel, okay, we've made it,
now we can, we can enjoy for a while.
But that is also helpful
because I think it's a Darwinian process.
If we wouldn't be the way we are, we wouldn't be
who we are or what we are.
And probably we wouldn't even exist.
- But a lot of what founders often talk about
with their frustration is, you know, you started
with the pioneering team and by definition.
You know, we're not talking about the ones
that didn't make it.
There was a group that made it with you for two decades.
You then, they recruited managers who saw you working,
saw them working.
But there are also 10,000 people
that have probably never been in a pit
with you working on something there have probably,
you've probably given a town hall 10 times,
but they have a manager from another company talk
to them 1,000 times.
And founders often say the frustration
is my core team gets it,
but when I look at the edges of the business, I start
to see those toxic people entering.
I start to see the bureaucrats coming.
So how do you make sure that's not happening?
- [Marcos] It's many, many, many things.
This culture of trying
to act like an elite sports team is key in the sense
that oftentimes you keep some people
because they have the culture,
but maybe they're not performing.
You know what?
Sorry.
Performances has to be there.
Maybe if you have the culture will find you
a different position.
Maybe you know, you, you're no longer number nine,
you won't score anymore.
But you know what? You will be the assistant to the coach
or you will be in the manager's office
or you will be helping us sell more tickets
or you will be helping us, you know, making sure
that the stadium is in good shape.
But we need in the field, the people who are performing.
Now, maybe you have in the field someone
that is a great performer, but he's a pain in the ass
and he's toxic and he's making great scores
and we're winning many games,
but we're not going gonna win the championship with this guy
because he's a, he's toxic or she's toxic,
and sometimes you need to take some decisions that are tough
because you know, this guy is really good
and he's scoring, you know,
but we won the game, which was a great game,
but we lost the championship
because then we lost against a team
that was inferior to us, but this guy wasn't motivated
because, you know, it wasn't an important game or,
and you know what, the unimportant games, the points
of those unimportant games are as valuable as the point
of the classic, you know?
And so you need someone who performs
when they have the spotlight,
but also have to perform when they don't have the spotlight.
So all these things, you know,
in this 26 years there's been moments of quiet enjoyment.
You know, since we IPO'd in 2007 all the way
to the moment when Amazon launched in Latin America,
those were six years of continuous growth and scaling
and we had no competition.
But then you have to know that this is a calm
before the storm because the storm always is going to come.
- God, I love this.
The storm is always gonna come.
Marcos's genius, he built an all-weather company.
Of course MELI's growth story
is an exception, not the rule.
They thrived in the calm and they thrived in the storm.
For the rest of us mere mortals, growth is bloody hard.
Think about it.
It means every customer from last year comes back
buying a little more and bringing a few friends.
We've got to win millions and millions of times.
So what is it that lets some companies grow year
after year while others stumble?
To find out, we turned to someone who spent
his whole career chasing
that single answer, Chris Zook.
And I've spent my whole career being his mentee,
his bad carry, his lackey, his fanboy.
I'm proud of every title you give me, as long
as Chris Zook's name's up front.
He actually saved me from being fired in 1988
when I was a useless summer associate at Bain.
More than once since then, he's reached across the Atlantic
to pick me up and set me straight.
I'll tell you, everyone needs a Chris Zook in their life.
Luckily I've had mine for four decades.
So who is Chris Zook?
Chris is an Advisory Partner at Bain & Company
and one of the world's leading strategy thinkers
and my co-author.
Look, I'm shamelessly claiming that co-author title,
but the truth is Chris has written five books on strategy
and I've been a big idea contributor.
The books are his.
He gave me a width on "Profit From The Core"
and two co-author credits
on "Repeatability and "The Founder's Mentality".
That's a generous mentor.
His body of work, which is five books
and dozens of articles, is a master study into the patterns
of growth, what drives it, what kills it,
and why ultimately
"The Founder's Mentality" matters so much.
And since I've known him, Chris has been obsessed
with a single question, what are the secrets
to sustainable profitable growth?
So first, he takes us back to how that journey began.
Chris, I would love to just hear you start
with your own journey on strategy.
For me it kind of, I think probably the first phase ends
with "Profit From The Core", but you probably have a journey
that started long before writing that.
But just tell me how you thought about strategy at the time
you wrote the "Profit From The Core".
- Well, you know, I was lucky to join Bain & Company
when it had 70 people,
and it was part of the leadership team
that in a great growth story of its own, grew it now
to something like 18,000
with only really one bump in in the road when the founders
had a messy transition to the next generation.
And so in a way, as an older guy looking back on my life,
I realized if there was one continuous theme,
it is about the topic of how to grow a business.
And we were very lucky to have a focus
on what really are the lessons learned
and the laws of gravity
and the microeconomics of how trying to find your next wave
of profitable growth,
and realizing that that's really what we decided
to focus the strategy practice on, focus the building
of tools on, ultimately focus a series of five books
and 30 articles on, and that actually took up the rest
of my life.
- I think it's a journey of chapters.
And just let's talk a bit about the beginning chapter.
You know, so when you first said, a asked the question
of yourself and answered it, what drives sustainable growth?
What, what was the answer?
- You know, I think it was a very interesting period
of time in the history of business in the world
because it was just before the internet bubble.
The internet was obviously on the rise.
We felt that it was a time when people were using
their gut instincts too much and that there were no tools.
So we did something
that at the now would seem pedestrian,
but at the time was actually quite unique.
We created a database of all the partners
of all the public companies in the world for 20 years.
No one had ever done that with full financials.
And we've used it as the actuarial tables of business
to ask questions such as what percent
of companies actually do achieve 10 years
of profitable growth, earning their cost of capital,
outgrowing their industry and maintaining
or growing their margins?
And we found that though every company
in the world aspired to that.
Only one in 10 actually achieved it.
So then we began drilling down further
and we found about three more insights in the data
that all came together as the sort
of epicenter, intellectual epicenter
or empirical backbone
for what became "Profit From The Core".
Number one, more than 80%
of the variation in company's ability
to achieve profitable growth was not the choice
of the industry they happened to be in.
That was the cold truth of hot markets.
What we found was that more than 80% of the variation
was among competitors in the same industry.
Number two, there were no bad industries.
You could make a lot of money in airlines,
which Southwest was doing,
or in package delivery, which UPS was beginning to do,
or in rental cars, which Enterprise was doing,
as you could if you were in a growth market.
The key was becoming the best
and achieving leadership economics.
And then we looked at the profile of those companies
that did achieve 10 or 15 years (clears throat)
and we found that about 85 to 90%
of the value growth in all of those companies
that did achieve was a function of one
or two very strong, dominant
or leading core businesses.
And it was less a function of diversification.
In fact, we found that two thirds
of the main strategy studies we did costing $1 million
at the time or more had one common type
of insight, which was amazing
'cause you know, you could have said,
well, you're gonna discover new hot markets,
you're gonna find acquisitions to double your industry.
You're gonna use it for international?
No.
What we found was that nearly 70%
of the main insights from these huge studies of strategy
was that more potential existed in the core of the core.
That the core of the core had been underappreciated.
- Look, let's take ourselves back because context matters.
This was the middle
of the dot-com boom when almost every CEO
was chasing greener digital pastures.
And Chris's message was profound.
"Sustainable growth",
he said, "Demands that you define your core business,
drive it to full potential
and from full potential, get leadership economics."
And his warning was clear,
"All your fancy growth strategies,
they're distracting you from what you do best,
which is the hard execution in the core business."
I feel like we're exactly here again
with all the discussion about AI, because defining our core
and a turbulent market is tough.
Market boundaries are shifting,
business definition is evolving,
new competitors are emerging,
often expanding from their core business
into what you thought was your market.
So the real question you have to ask yourself in the world
of AI is will today's core still be right
for our customers tomorrow?
That strategy 2025,
and that's exactly the challenge
that Marcos was facing at MELI.
As success and e-commerce grew, he had to ask,
do we double down on that core?
Or as market definitions are shifting,
do we move into financial services?
And the question was, where are our customers going,
and where must we go to meet their needs?
Do we deliver flawless execution
of known routines in the core business,
or do we develop, i.e. go
after the new businesses that keep us relevant for tomorrow?
Well, like other great CEOs, Marcos understood,
this is a false choice.
You've got to do both.
Deliver, optimizing, develop, staying relevant.
Here's Marcos.
So on one hand you're trying
to run a complex business, which means professionals come in
and begin to put in measures
and do things in its relentless execution of known routines,
and on the other hand, you want
to constantly disrupt yourself.
And oftentimes the, you know what happens
is that running motion, the status quo motion,
the keep things static, begins to take over
the founder impulse.
And you seem to have navigated both of those well.
How did you handle those two motions?
- [Marcos] What happens many times is you get so focused
in optimizing something,
but we say we're maximizing the minimum.
It's like, yeah, we're optimizing this process,
but all this processes irrelevant right now.
We're just talking about AI.
We have 20,000 developers, this is the first year ever
that we won't grow our developers.
And it's highly likely that five years
we might have 10,000 developers,
not because we fired them, but we're not hiring anyone.
10 years ago, I would've told anyone, you need to learn
how to develop.
Today I say, you need to know mathematics, you need
to understand like the basics of thinking and numbers,
but you don't need to code.
On one side, we're optimizing all these things with AI.
And another thing we're thinking, you know,
maybe all this is gonna be coming irrelevant.
We have another group saying, you know,
it's gonna be an agentic world.
And then we have a group in the middle
that is gonna optimize the experience.
And what I was telling them about the agent
being your personal banker, I am on one hand
still in my role as co-CEO thinking, yo,
how we go from, you know,
20,000 developers up to scaling, scaling,
increasing our margins, you know,
optimizing our minimum all the time.
And I'm also thinking it's highly likely
that this is gonna be irrelevant.
You know, what happens if ChatGPT partners
with I don't know what,
and all of a sudden our app doesn't show up anymore
and I actually Apple and the iPhone become irrelevant
because now it's gonna be a new device that, you know,
OpenAI has partnered with Jony Ive
and they're doing a new thing that you are gonna talk to it
and maybe our app is gonna become irrelevant.
So we're working on all those things.
- [Jimmy] What happens in organizations that fail?
Is the group that are maximizing the minimum
become the defenders of that status quo?
That they start to say, look at it, it's gotta be this way,
and if it's not this way, I quit?
And that other team that's trying to change them,
they become the enemy?
And you've managed somehow to say.
- [Marcos] It has to be the same group
that does both things.
You have to have in the leadership team,
they need to understand that you need to optimize a minimum,
you need to scale, you need to improve margins,
actually to use that money to innovate
and disrupt yourself.
- [Jimmy] And you have to have a culture that makes sure
that the guys in charge of maximizing the minimum know
they're gonna still have roles even if that goes away.
- [Marcos] Yeah, it's the same guy, the same guy
or the same team that is saying, Hey, we need
to optimize these things and we need to do all these things,
otherwise we won't survive.
I think that to be honest, competition is so healthy.
You know, when you have a powerful competitor,
it avoids these internal battles.
It's doesn't give you the time for that.
It's a (indistinct)
If you, if you, if you spend too much time
with that, you die.
It's as simple as that.
It's so healthy.
It's incredible how competition has made us a better...
A substantially better company.
There's a lot of thought
and a lot of analysis behind what we're doing,
and I think it's going to go work great.
I think it's gonna be an example.
And I know it's gonna depend on Ari
because whether you like it
or not, a lot depends sometimes on a person.
We poached a guy from another company, which we never do.
I got into a fight with (indistinct) who someone,
a founder I like a lot, and kind,
we had a kind of a gentleman's agreement
we won't poach from you guys,
and we said, this guy, this guy, we need him.
From the start, we saw this guy as this guy
is a different guy.
And the reason why I feel confident
about what we're doing is because I think we have
the right person,
and that he's gonna be able to decodify all these things
about which is a moment
and what things are important for this moment.
It's like raising kids.
You know, I have two boys and a girl.
The two boys are the...
You cannot understand how two children from the same parents
born in the same socioeconomic conditions
can be so different.
They are so different.
So I cannot say the same things to them at the same time.
You know, one guy, I, I don't need to tell him, you know,
you need to do this, this and that,
because he's like a machine.
He's gonna wake up in the morning, go to study.
I need to tell him, Hey, you know, relax,
you should go out with your friends.
You should do some exercise, it helps you.
And the guy is, hey, you need
to add some structure.
With kids, it's love and limits,
but it's important
to give them love at the right time and limits.
Even when the guy needs love,
you give you give him punishments or maybe it's, you know,
and you need to understand those things.
And with the company it's the same, I think.
- [Jimmy] So you started the interview, you know,
with a discussion of eBay
and whether they were the right partner going forward,
and one of the things that we are beginning to use a word.
- [Marcos] The culture of Amazon versus a culture
of eBay, it's incredible.
I mean, eBay had everything to win.
eBay made fun of Amazon.
Like when we were partnering
with eBay in 2001, eBay's media category, which was books,
musics and DVDs, books, CDs,
and DVDs was bigger than all of Amazon,
just its media category.
They were, they made fun of Amazon.
By 2006 when our best practice deals had expired,
it was like they were in panic mode
and it was already too late.
We always say how much we learned of eBay.
The first three, three years, it was everything,
because what happened a lot is they had
all these discussions about all these ideas and we were all,
it's a great idea.
And then we were back and a year later we had implemented,
I don't know, three out of the 10 ideas
and they hadn't implemented one.
It's not that they didn't know what they had to do,
they couldn't do it or they wouldn't do it.
And we were taking their ideas
and then next year, Hey,
you guys did this, you guys are amazing.
No, no, we just did what you guys told us.
You know, we just executed three
of the 10 ideas that you said.
And then the last two years it was, we need
to make sure we don't do what eBay is doing.
And I remember one thing that happened
is at a point in time when, when Google starts
to, you know, become prominent,
eBay's listings were all sorted using time remaining
because they were an auctions.
We were also auctions, but we took us like 10 days
to pivot away from the time remaining algorithm
to a relevant space algorithm.
We said, you know, the more listings we have, the better.
And even was no, no, no, everybody
has to have at some point in time
the first listing, it was like crazy.
And they wouldn't change that.
It took them years to change the sorting algorithm
or the search.
It took us 10 days to change that.
- Marcos is proud and paranoid.
He's built a brilliant foundation
for the next generation of leaders,
and he has seen the foundations
of other once great companies crumble.
Companies fail for lack of focus on the core.
And companies fail because they optimize the core too much
and became irrelevant as market shifted.
Marcos cares about the outer game of strategy.
He's obsessed with the world around him,
but he cares just as much about the inner game, culture,
leadership, turbulence, competitors.
And Chris and I have spent decades understanding
how great CEOs master both.
If "Profit From The Core" is a poster child
for the outer game,
"The Founder's Mentality" is the inner game.
- "Profit From The Core" came out.
We spoke about it around the world.
We had great examples, data, tools to mind full potential.
It became quite solid.
But people were asking questions
about, well I have extra cash and I'm near a lot
of growth markets.
How do I sort through those that are most likely to succeed?
Surely it isn't all just about taking a single business
and maintaining its homogeneity (clears throat)
which of course it wasn't.
So the second wave of work was also quite analytic.
It's said, what's the science
of moving into adjacent areas?
And so we then did another wave of work
that we called unstoppable, which was about the focus,
expand, redefined cycle.
That there was ultimately a point in most businesses
when redefinition very often happened.
And there are many iconic examples.
IBM was a hardware company that went into services
and information that rejuvenated the hardware business.
And then that led to more questions about, yes,
but isn't, isn't there more to, to the strategy?
And so we began looking more closely at those companies
that over 15 or even 20 years had sustained growth.
And we found something called a repeatable formula.
Companies like McDonald's, Tetra Pack
that grew into adjacencies,
but in addition to that had a repeatable model,
that they used to focus their innovation.
It wasn't about robotically doing the same thing mindlessly
in a changing world.
No, it was about knowing
that there are certain things you're very good at.
Then the questions became a little different.
Like the question that in the internet period about Enron,
you know, this was a huge darling company,
then it was a huge collapse.
How could this happen?
And so much of it turned out
to be the human factor of leadership, hubris, dishonesty,
failing to see the world as it was, surrounding yourself
with yes men, broadcasting messages
instead of truth, et cetera.
And that's what led to the question,
isn't there a deeper root cause here?
And so "The Founder's Mentality", the best analogy,
the bestselling sports book for the last 30
or 40 years has been the, the inner game of golf
and then the inner game of tennis.
Because so many tennis players have similar fitness.
Their strokes are not that different.
They play on the identical court
with the identical balls and rackets.
And what really differentiates the ability
of somebody like Djokovic
to eek out matches against people
over and over and over again.
And, and that comes to down so much to the inner game,
to staying calm, to staying focused, to not giving up
to human elements.
And so we began to look for deeper root causes
and began asking executives
about whether they thought situations where they fell short
as a company significantly short were external.
And they said that in maybe 70 or 80% of the time
or more, it probably came down to internal decisions,
hiring the wrong people, fighting the future like Nokia did,
bureaucracy that slowed them down.
These were probably the deep root causes.
We zeroed in on what we called "The Founder's Mentality",
which were the internal elements of health.
How do you know if a business is healthy
on the inside to achieve growth?
Very hard to know.
How do you know if it's healthy on the outside?
1 million measures?
- And how do you, you know, if you're asked, you know,
the classic elevator pitch, what do you say
the magic dust of founders' mentality is?
How, how do you talk about?
- I say that 80
to 82% in our research of root causes
of strategy, shortfalls, breakdowns,
free fall situations, disasters, traced
to internal factors
that could have been identified and controllable.
And that when we drove deeper into that,
we found three elements of health that tended
to reduce the chance of those pitfalls engulfing you.
Those three were exactly the main attributes
that people used to describe the great founders
who created the great businesses.
Number one, a clear insurgent mission of what you're trying
to achieve that is different
or even revolutionary to the industry,
even waging war on the norms of the industry.
Think of SpaceX, one 10th, the cost
to get rockets (clears throat) into space.
Number two was a frontline obsession.
The founders had an intellectual curiosity
and a love of the detail, a love of the business
that propelled them to constantly ask,
why is this happening?
How do the customers really feel?
Why is that?
And then the third element was the epicenter of the success
of private equity, which is an owner's mindset,
which relates to looking for responsibility
or accepting responsibility, not looking to point blame.
And that therefore the great founders
had a sense of urgency.
They reacted quickly, they acted
as if all their, the money was their own.
So that's a lot longer than an elevator pitch,
but the elevator pitch would say--
- We were on a very high floor.
- Something shorter.
So yeah.
- Is the answer now inner game?
You know, as you tell your journey is the beginning
of the journey, it was all outer game,
and now the answer is inner game?
- No, I don't think we've...
I don't think we've repealed the laws of microeconomics.
(Jimmy and Chris laugh)
I mean, if in fact, ironically,
if anything, the seven companies that have propelled 98%
of the value creation in the US stock market
for the last eight years are all leaders,
if not monopolists, near monopolists
or duopolies in their field, right?
So leadership, economics, a well-defined core market,
optimizing your core is still very important.
But I think what we realize is that to do that and to go
after the right internal opportunities, say no,
which is very often the most important question to answer.
And so the internal wiring of those businesses
to keep them transparent,
looking for what is really going on, not self delusional,
trying to avoid the very easy
and dangerous trap of hubris,
which ultimately engulfs so many, those are at the core
of all the companies that are still proceeding
along with these rules on the outside.
So it really is a higher synthesis
of the two just as it is in anything.
You know, the great musicians have magical ability execute
detailed things like Eric Clapton,
and yet an amazing intuition for what will work to write,
you know, a song like Layla.
- So the outer game is what Chris just called
the laws of microeconomics.
To grow sustainably, of course you have
to have a well-defined core business, drive it
to full potential, achieve leadership economics.
But the inner game matters too,
because your growth will create complexity
and that complexity will kill your growth.
To fight it, you need to maintain,
or in most companies, rediscover your founder's mentality.
And this will demand two things.
First, with your people, rediscover the why.
Why the hell do you exist?
Then reorient your company to the frontline
and customers away from head office and managers.
Create an owner mindset,
which involves a hatred of bureaucracy and a bias to action.
Second, you gotta bring back a vertical orientation.
Focus on real customers and win,
then take a winning solution and scale it,
and then figure out how to amplify
what you've discovered across the business
through horizontal moves.
Outer game, focus on the core balance, deliver and develop.
Inner game (laughs) it starts with just get your mojo back,
start winning again, and then celebrate the heroes
who make those victories happen.
And it's interesting, as Chris notes, in the last decade,
almost all the value in the stock market has been done
by the big tech players, all founder-led,
all playing the outer and inner game with new rules.
One of the things that's coming up more
and more in our work is this notion of resilience.
And I thought the, I thought the best line you talked about
was when I go out to external markets, I'm a hero,
and everybody looks at the journey I've been on
in the mountain I'm on.
When I talk to a user, I'm as good as the last transaction.
And, but that energy, Marco--
- [Marcos] So physically happened to me.
- [Jimmy] Well, then you said that, but--
- [Marcos] And I said, you know what?
I need to physically move.
We had an office that I shared
with my two kind of co-founders (indistinct)
We had the, we, the three of us sat together
in like, in a place like this.
I said, guys, yes, as of next week I'm going
to sit in the middle of the engineers with (indistinct)
And I did that for three years.
I wanted to physically change everything
because I said, you know, it's been one era
of building the company.
Now we need to build the product.
The people that you know,
the business people love us and our users are here.
I want the opposite to happen.
I want our users to have us here
and the external work to be here.
And this is, this is unsustainable,
this is sustainable, you know.
- [Jimmy] And so that, Marcos, takes so much energy, right?
To, to face the gaps in your business, constantly say,
I'm gonna listen to the user that hates me,
not the external market that loves me.
You answered, I think for yourself, you, you said,
"I get passion in everything,
from big things to small things."
You talked about your family.
Did you specifically with in Mercado Libre talk
to your people about how they keep energy levels,
how they stay resilient?
Because what we've seen is tired people
do incredible damage to companies.
It takes energy.
- [Marcos] We talking about career
about leading for example.
That for me is the most important thing.
When this guy told me, the, the board director telling me,
"Hey, why are you doing what you're doing?
You know, this is your company, you can do what you love,
you can go and play golf."
You know, I said, "No, no, no.
I don't wanna go and play golf,
because I don't want the CEO of Mercado Libre.
Now I'm gonna be chairman, and now Ariel
and everybody else knows that I was willing
to leave the thing that I love the most
because I want to be 24/7, 365.
Now, everybody better work 24/7, 365.
I'm giving the example.
I'm giving up my salary,
I'm giving up my job, I'm giving up the position
because whoever leads this company cannot be focused
on Mercado Libre and other things.
Mercado Libre has to be your life.
- [Jimmy] You say that, but you also talked
about the incredible importance of your family.
I know you love rugby with a huge passion.
- [Marcos] I'm not saying
it has to be the only thing you do.
- [Jimmy] Good, okay.
- [Marcos] But I can be with my family
and I am with my family.
I'm thinking of Mercado Libre.
(Jimmy laughs)
- [Jimmy] Don't say that to your wife.
(Jimmy laughs)
- [Marcos] No, no, my wife knows it.
My wife knows it.
My wife thinks about Mercado Libre 24/7 as well.
I mean, it's our fourth kid.
It's a life project.
It's a life project for me, for my children and for my wife.
We're all trying to understand how is this gonna work out
in the next few years?
- [Jimmy] But how did you,
where did you replenish your energy?
- [Marcos] I think what happened to me,
it's also with Jeff Bezos, it's also with Mark Zuckerberg,
it's also clearly with Elon Musk,
all these founders, money's irrelevant.
It's never, ever, ever about the money.
So, so it's always about the objective, about the project,
and the project is so fascinating and it's growing
and it's changing that it, right now, it's as fascinating
as it has ever been.
I get the energy from there,
but it's also certain kind of people that you need
to try and attract.
And clearly Addie is like that and Danny is like that,
or that's, you know, what I try
to detect when I'm interviewing, you know,
is this guy a manager?
And sometimes we know this guy's a manager and that's fine.
He's gonna be, I don't know, the controller.
It's great.
So you don't need also founder mentality in every role,
in every position in across the company
because it's a problem,
because founders want to grow, create, ambitious,
and if everybody wants to be like that,
you don't have enough positions to satisfy all those things.
- [Jimmy] But no, no one's gonna keep the books (laughs)
- [Marcos] Yeah, and you don't have enough positions
to satisfy all those egos, you know?
But, but that's another thing.
The process of me leaving creates
opportunities which you need.
Because when you have all these ambitious people,
if you don't create opportunities, you end up losing them.
We saw that one at federal level,
we gave four internal promotions.
It was fantastic.
We have an incredible bench,
but if those people are in the bench forever,
one day they're gonna play in a, you know, in another team.
So I mean, in Mercado Libre it's very clear
that the guys from the marketplace, the guys
from the FinTech and the engineers are the ones
who deliver the value.
Everybody else is supporting role.
And that is very clear.
I mean, in my team meetings, those are the guys
who start the, let's talk
about (indistinct) and Ari would take us
to (indistinct) and Valdo would take us
to (indistinct) and then Danny
is gonna talk about technology.
And then the CFO talks about what's going on
and the (indistinct) who's kind
of a COO, he talks about legal and HR and...
But first we talk about Mercado Libre the business
and then the technology and then it's the rest.
And everybody knows that, and it's like that, and we don't--
- [Jimmy] When we say most big bureaucracies,
it's the tyranny of the functional excellence programs.
It's all the functions just give PowerPoint
in a presentations all day.
- [Marcos] These guys are there to support the business.
That is very, very clear.
Yeah.
But again, competition is so helpful.
Is so helpful in aligning everybody.
I think Amazon, these guys are really good,
but they have a discipline, you know.
They're not willing to lose $500 million
per year forever in Brazil.
I don't know how many they've been losing,
but they've been losing substantial money in Brazil.
But there's a point where they say, Hey,
maybe this amount of money is better spent in Germany
where we make money, or in the UK.
At some point in time, there's some discipline.
So far with the Chinese, we've seen no willingness
to restrain anything,
and their technology is really good and they work a lot.
And so we say, it's gonna be a long and tough battle.
- Look, Marcos doesn't beat around the bush.
His job is 24/7.
It demanded relentless energy, and he warns us.
If I didn't have that energy, my job was to step aside
because there are four other leaders
that would take my place
because they wanna write their own chapters.
We may all wonder, could we do a 24/7 job?
Would we even want to?
If you can't or won't devote that much time to your job,
it's important to remember,
you know, we all deserve work
that energizes us, work that excites us so much
that, you know, it steals a bit
of our discretionary energy.
Work we think about in the shower
or while walking in the park,
because we all deserve to be on noble missions.
All right, so how the hell
are we gonna recap this episode?
First, it's the outer game.
Power of the core, leadership economics.
Chris showed us that sustainable growth does not come
from chasing hot markets or diversifying for the sake of it.
It comes from doubling down on what we do best,
building repeatable models and, well, comes from dominating.
But of course this is the era of turbulence,
so we have to optimize the core
while also adapting it to stay relevant.
Second, the inner game, the founder's mentality.
Nurture it, rediscover it, and then shift
your orientation more vertically.
Focus on customers in the frontline,
win then scale, then amplify.
Third, of course, it's a balance
between the inner and outer game.
The CEO's job is never just one thing.
It's economics and competition,
but it's also leadership and culture.
The best leaders help their teams win
against external competitors
and help them overcome those internal energy vampires.
It's the outer game against competition.
It's the inner game against complexity.
And the best CEOs know how to win
with both without losing energy,
without losing focus (giggles)
without losing their people.
So that's the final CEO interview for this season.
(Jimmy giggles)
But guess what?
We're not done with you yet.
In two weeks, we're gonna come back with a wrap up episode
and we're gonna try to pull this all together.
So thanks for sticking with us.
Stay curious.