How Emi Labs Closed $1M+ Contracts in Mexico

The audio and video are in Spanish. These notes are a translation.

Today I interviewed Mateo Cavasotto, founder of Emi Labs, one of the recruiting software products most used by corporates in Latin America, with clients such as OXXO, Walmart, and Alsea. One in ten people hired in Mexico goes through their platform.

I brought him on for something concrete: he told me they had closed enterprise contracts above one million dollars in Latin America. As an investor in SaaS in the region, I had never heard that this was possible at that scale.

We also talked about why they say no to pilots, about how they structure a first contract with the upsell already inside, and about why in the last year they reduced the team to less than half and doubled sales.

Structure and Key Highlights

Why He Moved to San Francisco While Selling in Mexico

• They did YC, then he spent three years in Mexico, their first and main market
• What happened to him every time he visited San Francisco: he felt like the dumbest, the slowest, and the least ambitious. And he loved that
• His description of what he gained: every time he went, his perspective changed, and that translated into the company
• The cost: a lot of flying. Spending time with clients, prospects, and the team is irreplaceable, so the only way to balance it is by traveling
• What he notices most as a difference: what people believe is possible. There is no limit, and that settles into the ambition of the company
• Why it feeds on itself: there are people around who have already done it, in industries they did not know, and that turns the belief into a self-fulfilling prophecy

Conversations with Vinod Khosla

• He participated in their seed and in their Series A
• What makes them different: 90% of the conversation revolves around the moonshot. What would happen if this works, and what are the hypotheses and risks that threaten it
• The contrast with the rest: most investors focus on SaaS metrics and on growth metrics, which is correct, but for them the platform is a means to an end
• The other thing that surprises him: the speed. A check for millions of dollars on the spot, without leaning on other partners
• And the level of involvement in the details of a small seed round, while he invests in OpenAI

Selling a Business Problem, Not Human Resources Software

• What they do: a platform so that recruiting teams hire operational talent faster and better
• Their two client profiles: retail and hospitality, and companies that produce or distribute food and products
• The reasoning they use: each store is a source of revenue and has an optimal number of people to produce those sales
• If the store does not have those people, it sells less
• And that is the twist: that is not a human resources problem, it is a problem for the CEO, the CFO, and the board
• What changes when you frame it that way: the urgency, how much you can charge, how much they are willing to pay, and who is willing to push it internally

How They Get the First Meeting

• Two historical channels: cold outbound and referrals
• What works has been changing. Before, LinkedIn messages, then email, and today cold WhatsApp is one of their largest sources
• The most decisive source of referrals over the years: people who move from one company to another. Losing your champion is a risk, but it is also where many deals come from
• Events and inbound were not relevant until now
• Why: their market is small and fits in an Excel. They only do enterprise and midmarket, with contracts of more than 50,000 dollars as a minimum, and they have already been in contact with close to 75%
• The underlying reason outbound mattered so much at the beginning: the market was not mature and they had to evangelize. Nobody was going to search on Google for a platform for operational workers

Who They Write to First

• Everyone, with different messages. There is no enterprise sale without human resources, operations, finance, legal, and systems taking part
• The difference is whether you control that process or not
• What they do before writing: a stakeholder map of who the relevant people are and what strategy to use for each type
• Concrete examples: the human resources director, maybe reach them through a referral. A recruiter, by applying to one of their openings in order to learn about their day to day
• His explicit disagreement with the rule that you have to enter through the owner or the C level: that path exists, but it is not the only way
• The most decisive thing is reaching a champion, defined as someone with a personal or professional interest in pushing it, with access and influence that does not come from the hierarchy, who speaks the language of the business, and who shows with actions that they represent you when you are not in the room
• The Latin American caveat: in family businesses, regardless of size, the person who decides and who has discretionary use of the budget is the owner
• On in-person meetings: during the pandemic they closed over Zoom, but today they force in-person meetings, because the building of trust happens there

When a Long Deal Was Not a Waste of Time

• There were opportunities they dedicated a lot of time to without closing, and many of them became clients years later. OXXO is their example: the first time, OXXO chose another platform
• Their rule: in enterprise you have to invest time while thinking about the long term. Thinking in terms of transactions works against the building of value
• Where they really did lose time: when there was no critical business problem that they could solve, or when there was no champion
• Their underlying framework: you are not going to win 100% of the deals, and how you approach the 80% that you are not going to win determines how fast you grow

Why They Say No to Pilots

• Before a conversation about a pilot or a contract, months go by. The first meetings are there to understand whether there is a critical business problem that is a priority today
• What a pilot actually solves: it mitigates the risk of the buyer, who is putting their name on a big decision
• But for it to work you have to be able to deliver value in that time and make sure that it leads to a contract
• The hypothesis they tested and that failed: that if the client pays something, they are going to take it seriously. They never did free pilots and even so they did not receive the necessary attention
• The second problem: the person who pays is not always the person who uses it. They had pilots where the buyer was from another area and they could not force usage
• The third, and the most structural: the minimum unit of value of their product is using it in a region or in a relevant set of locations
• Why that sets it apart from other SaaS: it is not giving five seats to five developers. The value is in the organization, not in the individual recruiter
• And the commercial risk: if you cannot exceed expectations in a short time, the only thing you achieve with a pilot is shrinking your contract
• How they mitigate the buyer’s risk without a pilot: with the pricing, with the structure of the offer, with referrals, and with a long-term view
• Yes, they have said no to clients who asked for a pilot. Many times, explaining why

How They Structure the First Contract

• The principle: give the client optionality so that they feel they control how much risk they take
• The two variables they play with: how many locations they implement and how much product they use. The client chooses their quadrant
• Each quadrant has a fixed annual cost, and the contracts are annual even when they are signed as multi-year
• What they do not negotiate: the minimum value proposition that ensures they deliver a result
• Their example: for certain industries the integrations are fundamental, so they push them or even include them at no charge, because without them the business case does not show
• The underlying effect: the upsell stays embedded in the contract from day one
• Why that matters beyond the administrative friction: if you sell at 10 and, after exceeding expectations, you say that it now costs 1,000, trust breaks

How You Get from the First Contract to a Million

• Everything starts by delivering the value that was promised. There is no upsell without that
• But you also have to make it so that the value is perceived
• Their main tool is the business reviews, monthly during the first quarter of implementation, with the champion and also with the person who manages the budget
• What gets done there: translating recruiting efficiencies into money
• What they push from day one: not signing a contract, but signing a contract with an associated business case. A financial model that says what impact on revenue comes from bringing the hiring process down from 15 days to 5
• The best thing that can happen to them: that the client puts someone from the CFO’s team on reviewing those numbers. They make the cases conservative and even so they talk about millions of dollars of impact
• And the effect that has on growth: even if the price is already signed, expanding the implementation does not get approved on its own. With the business case followed and clear, it stops being a sale and becomes a formality

Why Startups Do Not Capture the Value They Generate

• First, the value has to be real. The Excel is not reality
• Second, the who. Many sell at the level of features and of users, and not to the person who has the budget
• Third, and he says it straight: they charge too little out of fear
• Their pricing rule: unless you can show that you are losing opportunities because of price, raise it. And you can always lower it afterwards
• The case that Enzo brings: companies that stalled while selling to the human resources director, who was a fan but did not have political capital on the executive committee
• Mateo agrees: selling to human resources is difficult. At their clients, operational talent is critical to the operation, so there it carries more weight
• But he recognizes his own mistake: there are contracts that today, looking at them from operations, make him think that they left a lot of money on the table

Keeping the Urgency, Not the Momentum

• His correction of vocabulary: in a long process, what you have to maintain is the urgency
• How it gets built: by identifying the milestones that generate it. A peak season, Buen Fin, Christmas, the change of a vendor, the allocation of budgets
• The concrete tactic they use is a mutual action plan with the champion, mapping everything that can happen
• His warning: if you have not identified why this deal has to close on a particular date, you do not have it under control

How the Corporate Buyer in Latin America Changed

• The buyer is much more sophisticated, and is much closer to technology
• His example of what changed in the requirements: in the early years they never talked about security certifications. Today you cannot sell without them
• The data point that illustrates the contrast: their first enterprise contracts were sold when their interface was a spreadsheet connected with APIs and macros. And enterprise clients paid for that
• Why the change seems good to him: he prefers competing for a budget that already exists to creating one from scratch
• On speed: on average it does move faster, because now there are companies that already have the need, often because another vendor is not working for them
• What changed with AI: there are more people inside the company willing to put budget toward experimenting, and with much more knowledge
• His honesty about that: it opened interest and an experimentation budget. He still does not know whether it translates into permanent long-term contracts

The Checklist for Someone Who Is Starting

• The most common mistake of founders is wishful thinking, thinking that everything is going well
• The uncomfortable questions you have to ask yourself: if they told me that it is critical, why do they not give me a meeting in three weeks. If I have a champion, why do they not answer me
• Why it matters: time is a luxury in a startup, and when you know that something is not working you can attack it
• First point of the checklist: the founder 100% involved, because at the beginning they are buying you and the vision
• Second: be authentic and transparent. Hiding what you do not do lowers your odds and hurts the future growth of that client
• Third: an obsession with there being a business pain that you can solve
• Fourth: an obsession with the champion. Without the champion there is no deal
• On the Latin American advantage in emotional intelligence: it comes naturally to him to take an interest in the other person instead of mirroring in order to sell, and with several clients they ended up being friends
• But he sees a flip side to it: when you build a good relationship, it is harder to ask the uncomfortable questions and harder for the other person to give you bad news

Reducing the Team to Less Than Half and Doubling Sales

• His explanation does not start with technology: as organizations and as humans, when we have space we fill it
• His analogy: having four weeks to study for an exam does not mean that you study more than with one
• What they did in twelve months: simplify what they wanted to do, how they did it, and how many people were needed
• The scale of the change: there are teams that today are one and that before were subdivided into as many as three
• The trigger was not the size, it was the speed. The internal conversation was why we are becoming more bureaucratic and slower
• His bucket of cold water: every person they added was becoming counterproductive, and not because of the people, who were excellent, but because of the system
• So they sat down with a blank sheet to ask themselves how they would do it if they were starting from zero

The Two Concrete Changes

• The first one is counterintuitive: widening the scope of each person reduces the need for communication
• His example: an account executive who also covers part of the sales engineer’s work, supported by tools that allow it
• The same principle applied to product: that a product manager also be the owner of support or of adoption. More context, more ownership, fewer tickets passing from hand to hand
• The second change: define the basics of each team in a one pager
• What the basics are: the variables that team controls in order to achieve its objective
• What that exercise achieved: distill what matters, reduce communication, increase focus, and clarify the gray areas about who does what
• On revenue per employee: they measure it, but he does not believe there is an optimal number or that you have to obsess over it
• His nuance about where not to optimize: in Latin America, human contact with an enterprise client is fundamental. You can give your team much more context without visiting the client, but eventually you want to visit them
• What he would have wanted to say earlier: dare to experiment and to question what he believed was correct

The Mission

• The seed of the idea was born while he was doing volunteer work in Argentina
• What they want: to increase professional opportunities for operational workers, not only by getting them a job faster but also by helping them acquire skills and grow where they are
• The size of the problem: more than 70% of the population of Latin America are operational workers

Silicon Valley Glossary

People, Companies and References

People Mentioned

• Mateo Cavasotto: founder of Emi Labs, an Argentine based in San Francisco
• Vinod Khosla: his investor, who participated in the seed and the Series A
• Francisco Larraín: a previous guest on the podcast, cited for his advice on pricing
• Alex Karp: of Palantir, in the anecdote about how commercial empathy is trained
• Enzo Cavalie: host of the podcast

Companies and References

• Emi Labs: one in ten people hired in Mexico goes through their platform
• OXXO, Walmart, Alsea, Home Depot, KFC, and Domino’s: the clients that he mentions
• Femsa, Heineken, and Danone: the corporate profiles that they sell to
• Y Combinator: where they went through before settling in Mexico
• Palantir: the example of a very technical company that learned to sell to traditional sectors