From MBA to Entrepreneur Part 3: Gabriel Mijares, Mirlo

Photo Courtesy of Gabriel Mijares

Gabriel Mijares grew up very close to his father’s family-owned business in Mexico and made sure to interact with the employees on a regular basis. As he continued to have these conversations, he realized the financial struggles they would face on a day-to-day basis.

Because of this memorable experience, the MIT Sloan MBA student and Legatum Fellow decided to start Mirlo, a FinTech company that allows employees to access their earned wages on demand. In this venture, he aims to disrupt the traditional biweekly paycheck cycle in a massively underbanked population.

I knew that I wanted to start a company but also do some good in the world beyond making rich people richer. I wanted to do something bigger to bridge economic inequality and provide more inclusive financial services to those who need them most,” said Gabriel.

He quickly realized that there is a massive opportunity to target SMEs (Micro, Small, and Medium Enterprises) which make up 52% of Mexico’s GDP as well as 78% of Mexico’s formal employment. Mirlo makes it easy for these companies to offer a key benefit to their employees and simultaneously allows these employees, mostly low-income workers, to access their hard earned wages.

Mirlo is already in pilot with over 2,000 customers and is growing rapidly. We sat down with Gabriel to hear about the founding story of Mirlo, his thoughts on founding a start-up in a developing market, and the challenges of leading a remote company,

Tell me a bit about yourself. How did you decide to become an entrepreneur and found Mirlo?

I was born and raised in Mexico then went to college at the University of Michigan where I studied industrial and operations engineering. My brother went there and my dad has two masters degrees from Michigan so it’s quite familiar to me and I loved it. After graduation, I went into finance with JP Morgan in New York, specifically in the wealth management industry covering the Mexican clients. I had a lot of responsibility and doing portfolio management for high-net-worth individuals helped me make connections back home in Mexico.

I always wanted to do something with entrepreneurship from a young age. I come from a family of entrepreneurs — my dad has a metal manufacturing company back home in Mexico and he started it about 20 years ago. He risked it all, including a morgate on his house, to build something. Being exposed to that kind of atmosphere made me inspired to do the same.

After four years at JP Morgan, I lost the appetite to keep working at a big corporation and started doing research on new fin tech companies in the United States. I saw a few new start-ups in the US allow workers to access their wages on demand and thought it would be incredibly applicable to the Mexican market. Every time I would go back to visit my family’s business, I would go to the factory and talk to the employees to understand their background and needs. From a financial standpoint, they were blue collar workers who were very limited in what they could do. They lived paycheck to paycheck.

How difficult was it adapting this US based experience and business model to the Mexican market?

I think there are three main challenges. First, there’s an education issue from the end users, second there’s an informality of the whole economy that is challenging to address, and lastly, Mexican HR doesn’t place an emphasis on employee well-being like the US does.

These workers barely graduate from high school or college, so they don’t have extensive financial knowledge. Providing them with resources and education are crucial so they know how to manage their finances correctly. A lot of these people are underbanked so they rarely have access to loans from banks so at the beginning it was challenging to try to get them to understand our product. It was challenging to provide our services at scale when individuals don’t have a connection to the banking system.

Lastly, our clients are companies given our B2B2C model and they give us access to employees. We have to go through HR and Finance departments to implement our services which is a bit frustrating. There’s not as many employee benefits provided to Mexican employees so you have to convince HR to implement a solution and the sales cycle ends up being a little longer. Also, the payroll systems are somewhat antiquated and not easy to integrate with so we have do a bit of manual work which creates more friction in the sales cycle. We’re targeting SMEs so they likely don’t have the most up to date tech stack.

How did you think about the business model and target audience? The motivation behind a B2B2C model makes sense, but it seems like it elongates the sales cycle.

Immediately, I knew I wanted to help those that were underbanked and there was definitely a social impact angle. The SME space in Mexico is huge and there’s 4.2 million companies contributing 52% of Mexico’s GDP as well as 78% of Mexico’s formal employment. Most of my competition is focusing on big corporations and for me I felt like those that were working at SMEs were the ones who most needed this service because they’re working paycheck to paycheck. We utilized a lot of market research and just seeing the competitive landscape, we decided to come at it from a different angle. It’s been a bit of trial and error but we’re still working to define our beachhead market and industry.

Also, I knew I didn’t want to raise any money initially and to target some of the biggest corporations I would need a ton of capital. By focusing on SMEs, we can have more of a direct interaction with HR that’s not as formal and more reachable.

You mentioned the competitive landscape — how did you think about the dynamic? Did you want to put your head down and run your own race or did you consider the moves they made?

When I first saw a company in this space, they had raised millions of dollars back in October. A lot of people were thinking that this was terrible for my business, but the market is huge and there is going to be more then one winner. This funding was the market validation that there is a need and the investors are putting attention to this space which is motivating. After that funding, I started doing more research on their business and I think it’ll take a long time for this model to scale and prove itself.

My focus is to be somewhat conservative and try to test this on my own pace and just bootstrap until I felt comfortable. I wanted to try it out and give it a go on my own.

Taking a step back — how did you get the ball rolling when you had the foundations of the business? How did you recruit other team members to form a company?

Before I started this business, I had a previous start-up relating to dark kitchens in Monterrey, Mexico and that did not go as expected unfortunately. But I did learn a lot from that experience and now I’ve been able to apply those learnings to something I’m more familiar with.

I was living in New York at the time, so I knew I needed to choose a business partner on the ground. I chose someone that was a close friend that I could trust, and he agreed to come aboard in Mexico City. I ran the show strategically and he was on the ground running the operations.

I decided to develop an MVP using no code tools. While we haven’t built out a full stack platform that integrates with banks, we’ve been able to work without hiring a team of engineers. Potentially, over the summer when I return to Mexico, I could see myself hiring more full-time employees. It’s been a challenge to build up a culture from Boston and I can’t wait to do that in person.

I know that no code tools are very popular today. How easy was it for you to utilize them to get things off the ground? Would you advise a new founder or MBA student to leverage these tools?

At the beginning, I had no clue that no code tools even existed. I started asking for proposals and budgets from engineers, but everything was out of my budget, so I started to investigate no code tools. These tools facilitated a lot of processes and features that I wanted to incorporate, and for me did everything I needed. If someone came to me asking for advice about building, I would recommend taking a step back and look at no code tools. I’m a huge advocate for that and think it was the right way to go.

You mentioned how hard it was to run a remote start-up from Cambridge and balance other time commitments as a full-time student. How have you balanced those two and managed to work across borders?

In the beginning, I thought that I was going to be able to do it all and just conduct business as usual. After the first few weeks I realized that wouldn’t be possible. Whether it was meeting people, homework or whatever, I realized that it was getting overwhelming, and I needed to think strategically about how I could keep everything running smoothly. I was talking to prospects, talking to clients, talking to end users and doing manual work all on a regular basis.

I decided to hire someone from Mexico to do all the back-end admin and manual work which was taking up a big portion of my time. Now, I have more time to think strategically how things should be done and focus on sales & new user acquisition.

How do you split your time now? What do you think are the highest value activities for you as a student founder?

From a topline standpoint, talking to potential customers through cold calls and meetings is crucial. From the product side, ensuring that it’s getting better, and our product roadmap is getting built (i.e. incorporating open banking APIs or incorporating more personal finance dashboards). I’ve also been exploring testing different market opportunities like a B2C play and other related solutions. I want to make sure we’re doing our due diligence on all potential lines of business, and this is something I want to focus on, especially with the growth of the gig economy and independent workers.

What have you found to be the most challenging aspects of building an early-stage start-up? There’s obviously a lot of things going on at once — how do you think about your biggest challenge?

I think the biggest challenge has been positioning the product so that it resonates with both my client and the end user. The companies need to realize that there’s a benefit for them in employee productivity, loyalty, and turnover but it’s hard to get Mexican SMEs to buy into it. They think it’s going to be more work for them so we need to be able to explain to HR that this is actually a net positive for them. I’ve had to do a lot of follow-ups, which isn’t easy from Boston, and given that these are SMEs, they’d prefer to meet in person to build trust, which isn’t possible in the short-term.

One other big issue we’ve faced is user education. We need to ensure that employees understand that this is not a loan and that we can’t give them more money than what they’ve already earned. Sometimes it’s a difficult conversation with them because they ask for more money due to illness or hard times but I’m not able to provide more. It’s hard to reconcile that with the personal and mission driven aspect of the business.

That sounds like a tough situation. How do you deal with those difficult times? What kind of coping process do you go through?

When I’m stressed, I love to just go on a run. It helps me clear my mind and take a step back in a rational way. I also rely on my girlfriend for advice — she’s become my go to person on everything and has always given me good recommendations. She was also a manager at an SME in Mexico, so she has a lot of first-hand experience dealing with the types of employees I work with. Just having that second opinion always helps and she provides a unique perspective that adds a lot of value. It also means a lot that she has practical experience, because she’s not only a support system but she’s lived the exact same experience that I’m trying to tap into.

As I talk to a lot of MBA founders, I think many people are interested in the worth of the degree to entrepreneurs. How do you think the MBA program at MIT and the Legatum Center has set you up for success?

I wanted to work on something seriously on my own and at the same time continue to meet interesting and smart people who could add to my thought processes. The MBA was the perfect intersection of those two things. I felt like my progress had plateaued at JP Morgan and I wasn’t ready to start a business just yet because my previous start up experience did not go well. I knew I needed to build additional entrepreneurial skills and resources, and so MIT was a no brainer for me.

My brother went to MIT Sloan, so I was quite familiar with the program here. With the entrepreneurial ecosystem here, I only applied to Sloan and one other school because I knew I wanted to focus on startups. The school has given me the frameworks and relationships to tackle a lot of the entrepreneurial problems that I have been faced with since I started. Just meeting people who have done similar things or worked in roles I need to get familiar with have been extremely helpful.

At the beginning, I didn’t really believe all the positive things I heard on campus until I actually got here. An MIT email address gives you numerous opportunities and allows you to work with people who likely would have never responded. For me, the MBA really adds value and was worth it.

What kind of traction have you guys seen thus far? Have you piloted with customers and what’s been the response?

The reception from our users has been very good. We have about 2000 current users on the platform and around 20% are active on a weekly basis. We’ve found the service to be very sticky for users who use it initially. We’re currently doing more research on our users to understand behaviors and usage metrics better to see if we can derive any conclusions.

Now that you’ve gained some traction, how are you thinking about the near term future? Are you thinking about raising funds or continuing to bootstrap?

There hasn’t been a need for fundraising just yet, but it could definitely help to scale and grow faster in the near term. Ironically, I talked to a VC a few days ago and he was very interested in what I’m doing but he wasn’t interested in investing in a student founder until I graduated in 2023. It seemed like unless I dropped out, which I’m not planning to do, it might be difficult to raise funds from an institutional standpoint. I’m probably going to wait until the summer and start raising a small friends and family round.

What does success look like for you by the end of your MBA and beyond?

I hope to work on this full time, so success is knowing that I’ve taken the necessary steps, whether that’s hiring, planning, and building the product, to make that happen very comfortably. If I can do this full time and remain 100% committed to the mission, I really want to continue so it’s mostly about validating the business model, the product market fit, and start raising money.

Given your success thus far, is there anything you wish you’d known when you first started the company?

I think the only thing is that there’s going to be a lot of disappointments along the way and you’re not going to get a great hit rate with clients up front. I knew that would be a part of the process but actually going through it has taken a ton of mental strength. Some failures were hard to take and it’s difficult to not question the startup or idea and potentially lose some traction.

I’d also have probably tried to do more up-front work on the ground. When I was back home, I wish I had done even more customer conversations and further developed my MVP to take advantage of being on the ground with my customers. I think that could have accelerated the process a little bit.



Glenn is currently a 1st year MBA student at the Massachusetts Institute of Technology, Sloan School of Business and a VC Fellow at Unshackled Ventures.

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Glenn Borok

Glenn is currently a 1st year MBA student at the Massachusetts Institute of Technology, Sloan School of Business and a VC Fellow at Unshackled Ventures.