Transcription
Welcome to the Consular Innovation episode, where we will explore the border zone between curiosity and creativity, data and decision, inspiration and application. Today I have the privilege of having a high-impact guest, Andrés Vázquez del Mercado, director of innovation and digital intelligence at América Móvil. Andrés brings with him a trajectory that reflects how corporate innovation can become a driver of real transformation, from his business education to leading the digital strategy of one of the telecommunications giants in Latin America. In this conversation, we will discover how ideas arise to apply patterns of existing business models, those improvements to what works or creative twists on what already operates, and how they become proposals that generate value for millions of users. During the episode, we will address questions such as, how does Andrés identify models worth replicating or adapting in different contexts? What role do mind maps, data, and experimentation play in that process? How is an initial idea transformed into a viable, scalable, and sustainable business line in a corporate environment? For you who share the commitment to building a mindset of curiosity, creativity, and innovation, this talk becomes a source of inspiration, but also a pragmatic manual, because innovation is not just an inspiring concept, it is a discipline that is practiced with rigor, passion, and a vision for the future. Prepare for an agile, intelligent dialogue, where we will explore not only the what and the how, but also the why of innovating with purpose. Let's begin this journey together. Ready. Very well, Andrés, it is a pleasure to have you today then on Innovation with Suluaga, this initiative and this podcast that I started to develop this year. I think it is a very interesting initiative to learn about the stories of leaders like you, and for me it is an honor to have you today on my podcast. Yes. You have been a witness and protagonist of the digital evolution of América Móvil, without a doubt. And today I want us to take a journey from the origins of that transformation to the vision you have of the future. Let's start from the beginning. Tell me a little about your story. Where are you from, how did this whole thing of innovation and creativity begin, Andrés. Well, the truth is that I couldn't attribute this solely to myself, but I'll tell you a little about what I've experienced. Well, for those in your audience who don't know me, Andrés Vázquez del Mercado is my name. I am Mexican, I have lived in Mexico practically my whole life, and I am currently the director of digital intelligence for América Móvil and Grupo Carso. I'll explain what that means in a moment, and I've been working for this group, primarily owned by Carlos Slim and his family, for about 35 years. And well, my story goes back to when I graduated from university and started working at Telmex. Telmex had just been privatized, it had just been bought at the time by a consortium formed by Engineer Slim, France Telecom, and SouthWest Bell, which is now AT&T. And they acquired about 20% of Telmex's shares, which was enough to control it and direct the company's future. The rest of the shares were floating in the market, some were also owned by the government, etc. But well, they had just taken control. Three months later, I joined the cellular division, which when I joined, the priority was mostly on the fixed line part because the backlog was brutal. We're talking about 1991, there weren't even 5 million lines for the whole country, so the penetration was very low, the wait to get a phone line was two or three years, I don't remember. The service was terrible, there was a lot of corruption, everything was bad, honestly, the company when it was operated by the government. And well, there were many commitments when they acquired it, and among the commitments, they had to double the number of lines in a certain time, grow the number of public phones. Well, there were a lot of things to do, and the priority was indeed to organize the company. Being very young and not having much idea about telecommunications, I was sent to Telcel, which was the cellular unit. When I arrived, it probably had, I don't know, a little less than 30,000 customers. Telcel was band B for those who don't know the cellular world. In almost all countries, as cellular technology developed, two companies were created. Band A and B. That's what the spectrum on which cellular companies operate is for. And in Mexico, private companies were given the opportunity to start cellular telephony around '88, if I'm not mistaken. By the time Telcel arrived or started operations, there were already many customers, and private companies were operating throughout the country. And well, I started working there, practically fresh out of university, and got to know the world of cellular technology from scratch. Honestly, I was curious about it, but I came from selling clothes and selling trips and selling all sorts of products that I sold to support myself during... But are you an engineer or what is your educational background? I am a business administrator. Everyone tells me I'm an engineer or thinks I'm an engineer because of my focus on technology and because, well, I think I have a good capacity for technological abstraction, but no, not really. I am a business administrator, but well, I ended up learning a lot about how things work. I'm very curious, you know, and little by little in the interview, you'll see some of the characteristics of my personality and some of my abilities, but one of them is that: I am very curious. And when I arrived at Telcel, even though my objective or my first job was to develop a distribution base because when I arrived, there were practically three stores for the entire country, and the Americans who already knew how to sell cell phones in the United States, even though at that time they were these bricks, you know, I'm talking about 1991. They already used many distributors to get the phone. They saw the cell phone, even though in the United States telephone penetration was practically total, the only place where there wasn't a phone was in cars, because there were phones everywhere: in all homes, all businesses, all shops, all restaurants, practically there were public payphones on every corner in the United States. The only thing they didn't have was for the car. So, the cell phone was really a mobile phone for that, and they had the idea that it had to be mass-marketed. So, they practically took me when I was very young, taught me to work, with the permission of Engineer Slim, they said, "Hey, we need to create a distribution network immediately." And I learned there with them. That was my first job, learning by doing. And at what point did América Móvil decide that digital innovation was not just a project, but a long-term strategy? What can you tell us about that? Look, the word innovation, I don't know when it emerged at América Móvil. This is really a term that I think, at least in Mexico, in Latin America, the term innovation must be about 25 years old. Before that, of course, innovation has existed all along, but perhaps it wasn't called that. And there's a lot of confusion between innovating, inventing, and making continuous improvements. But if you were to ask me when the great moment of innovation at América Móvil really dates back to, well, América Móvil didn't even exist as such, it was Telcel, because we started, remember, in Mexico Telmex, the fixed line, Telcel mobile, and it was years later that América Móvil was created within the company's expansion process. But while it was Telcel, that's when we invented the, well, Engineer Slim invented the prepaid system, which here was called the "Amigo Kit." I don't remember what it was called in Colombia, but I think they also called it "Amigo" there. What happened is that Colombia joined later through an acquisition of ours, but prepaid, I don't know if we've discussed this, prepaid is legitimately an invention of Engineer Slim. This comes from the fact that when we took over Telmex, the public phones on the street used coins and were heavily vandalized, they didn't work, the coin boxes filled up, and it was a problem to collect the money from the coin boxes. So, the recommendation from the French, who were already doing it there, was more practical: that the phones work with prepaid cards. One would buy the card at a store, the card already had what would today be a SIM card, it was inserted into the phone, and it gave you, at that time, the cards were for 20 pesos, the equivalent of today. So, that card would last you a long time because calls cost one peso, something like that. So, it eliminated the issue of collecting physical money and all those things, and you use that pattern and apply it within this concept, right? Of course. At first, people found it strange. "Hey, why do I have to put money into something I'm only going to use now? Why do I have to pre-purchase a card that will last me two months?" After a while, people loved the concept because the phones worked, people always had their little card in their pocket, there wasn't that much mobile penetration at the time. So, public phones were very useful, very used, and we had, I don't remember the number, but 300,000, 400,000 of these phones installed everywhere. Well, that concept of the public phone was what led the engineer to say, "Hey, couldn't I do this with mobile telephony?" And first, they thought about whether the phone could be inserted with a card like the public phone, but the manufacturers said no, that we were crazy, that it was too complicated, it would be like making custom phones for us. And the challenge was met by implementing the mechanism within the telephone exchanges that you know. There was no internet, there wasn't much of the technology we know today, there was no cloud, there was no artificial intelligence. Everything was already electronic exchanges, but practically that was a challenge that the engineer set, if I'm not mistaken, for Ericsson. I want to think for Motorola too, and they developed it in a short time, to say it like that, I think about a year, right? I call that concept innovation because you won't deny it, if you had to say today what you attribute the penetration of the cell phone to, which is practically absolute, there must be between 7 and 8 billion cell phones in the world. I know many people have two, or they count cell phones that go to a product and not a person. But M2M, telemetries, GPS, and all that, which in Colombia would be about a million, more or less here. If we combine that, I can tell you that we're talking about many more cellular units installed, but let's talk about phones, there are tons, and that penetration, I think you have to look at it for two reasons. First, because obviously the phone evolved from being a device for making calls, then messages, to being a computer in your hand, but also because of the business model, because 80% of phones in the world are prepaid, and in Mexico, the invention of ours, of the engineer, was the first prepaid in the world. Then from there, fools who perhaps didn't even try to patent it, I don't even know if we tried to patent it, honestly, but that was my question, if it was a completely new invention or if they had already identified a prepaid somewhere in the world. In a book I read, one by Drew Boyd called "Inside the Box," they talk about that. I'll send you the article so you can read it, and it surprised me because they attribute the concept to another Telco, but since you have it clearer and lived it firsthand, you'll know, right? I also found a reference to a company, I think it's Irish, but if I'm not mistaken, they launched it with a totally different objective. Ours was about inclusion, ours was because people couldn't have a cell phone because they didn't have a bank account or credit card. In the case of Ireland, if I'm not mistaken, it has more to do with banking protection. I have to check it thoroughly to be honest, but it didn't have the origin and the original plan that it had in Mexico. The engineer, in fact, when he talks about this, he doesn't boast about, "Oh, I came up with it from scratch." The engineer always calls it the Gillette model. And although I'm going to steal a bit of your podcast time, I think it's interesting for those listening. Go ahead. Of course, because Gillette, I mean the one who invented, what do they call it in Colombia? The little razors or Yes, yes, the razors. The little razor, right? Here they call it a "rastrillo," right? But anyway. He was really the inventor of the business model. When I talk about innovation, I always tell people not to just focus on the gadget, the device, the artifact. The business model is very important. Gillette invented a razor around the beginning of the last century. And the boom really came when he managed to sell it to the Army during World War I. It was a small box where he sold the razor and included a lot of blades so they would last for X months for the soldiers. After World War I, the product declined because it was expensive. Really, the blade and the device, the kit, to call it that, was costly. And the moment of lucidity, I think, came, I've studied the history of this Mr. Gillette several times, it came from an advisor who told him, "Hey, why don't we change this and make the blade, the device, I mean, sell it for a dollar and live off selling blades?" Blades, at the end of the day, lose their sharpness and have to be replaced. And that's where that concept was born. They called it the Brownie. It was the first, they didn't really invent it. Well, yes, the Gillette was the first famous razor with interchangeable blades, but it wasn't the only one, there were others. But the business model, when they created the Brownie around 1922, that's when the concept of a product that needs a replacement accessory really took off. How does it work? Because Gillette is the most well-known, but then came... Well, you won't deny it, here's an idea. Kodak cameras, remember how cheap the cameras were? The replacement was the important thing. Printers, they don't give them away, but really the companies that make them don't make money on the printer, they make money on the cartridges. The recurring ink. Exactly. The recurring ink, video games, tons of businesses are based on it. It has a name in economics, and I don't remember what it's called, this mechanism of this business model or economic model where the product has an associated consumable. To give you another example, the Nespresso machine, you need the machine, but the cartridge is specific. Nowadays, you can buy cartridges that are not from the Nestle or Expresso brand, but at the time, that was it. So, that has a business model, but that's innovation. The engineer, when he refers to prepaid, calls it the Gillette model because he took that idea, which we had already seen in public phones, and applied it to mobile, but nowhere in the world was it a huge challenge for technological companies to develop it, and there you have innovation. I think that's the crucial moment for us where you say, "How innovative are they?" Having created prepaid, which, I insist, if you had to decide today what to attribute the fact that there are 7 or 8 billion cell phones in the world to, you have to put very well, I don't know if it's the chicken and the egg, but you have to put, first, that there is prepaid, which makes it very easy to have a phone, you don't need a credit card and so on. And the other is that, well, the phone becomes a very useful computer for the amount of things it's useful for today, right? Yes, in fact, if you look at it, for example, well, I would define, and with the experience I've had over several years in innovation and reading a lot of literature and applying it in many business models that we've also applied, I think it's also about applying patterns within those innovations. That is, there is a pattern that is preserved, in this case, as you mention, it's the business model. How do I apply Gillette's business model to the concept of prepaid cards, for example? And that's where one starts connecting things. There's even a concept that is often talked about: form follows function. So, you see a form and you apply functions to that form. So, it seems to me that it's a topic that makes perfect sense, and sometimes one imagines that innovation is something very complex, very complicated, that it's cutting-edge technology, and sometimes it's combining elements, right? Yes. And I would think today, you and I could spend 4 hours here iterating on ideas about which are truly new and which are the product of the fusion of ideas. I think there's more of the latter than totally new things, right? Let's talk about something that is truly new, with no precedent: the printing press. Before the printing press, people really copied things by hand, from one paper to another, and that's how the few books that had to be made were made by scribes. But the printing press is really a product that had no precedent. Well, of course, they had to use stones and presses that already existed, and they had to use molds that already existed, but they put all that together to invent something totally new, right? The steam engine, I want to think that was also something very revolutionary because the idea didn't exist, right? To make a piston powered by steam. But when you look at the iPhone today, the iPhone wasn't the first smartphone, it was perhaps the most relevant, and that paved the way for Android to be created. But we already had BlackBerries, we already had Nokias that weren't as attractive or as simple to use as an iPhone, but they already existed. For those of us who like music, the iPod, which is like the great portable product that Steve created before the phone, think about it. There were already, I used to have, I think I had three MP3 devices before I had my iPod. They weren't pretty. The first was a Logitech, I had another one called Archos that looked horrible, but they had the function. I downloaded music from my computer onto it, and I had my 1000 songs there, but what it did was improve, combine, add the business model of convincing record labels to say, "Hey, let's sell songs for a dollar each." It took what existed, improved it, and gave us a magnificent product, right? In fact, I want to tell you something. In Colombia, we implemented the SIT methodology, which is Systematic Inventive Thinking, the Israelis, and it's a super innovative innovation methodology in that sense. And you got me thinking when you talked about the iPod, because the first thing that happened was the iPhone, then there's a subtraction, they eliminate a fundamental element which was voice, the iPod enters, and then they start subtracting, subtracting, subtracting until they reach the iPod Shuffle, which was simply random, you didn't select the songs, it was like a radio, it looked for a random song within the device. So, you're referring to the iPod, you start with something with many functionalities and then you start removing, removing, removing, and it's a very interesting pattern in many innovations, right? Yes, yes, yes. Interesting, interesting what you say. Well, that methodology you mention, I know it well because you invited us to a course that you gave there in Colombia, I sent a couple of people there, and besides, I think we did it here in Mexico once. Your concept is very good. Well, at least it's not yours, but it's very good that you did it and very good that you had that initiative at the time, right? In fact, there are very interesting things because one says, well, what drives innovation? Sometimes it's the restriction itself, and part of the concept that the SIT team and Abnom, who is the CEO of this company, mentions is that everything starts from restriction. So, the more restriction there is, the more innovation there is. So, he says, "Come on, there's a principle called the closed-world principle." And how is it with elements from the closed world? What do I have at hand, within reach, what can I access? How can I solve the problem? And there are very interesting parameters and mental algorithms like the path of greatest resistance, where the problem itself becomes the solution. How, for example, combinations and subtractions are made, as we mentioned earlier, how attributes can be combined, for example, something fixed and something variable for business models. And when one starts to add all this up, I really like and it also bothers me a lot, Amn and the SIT team, because I like to decode the innovative pattern of everything I see, and then one makes me look, and there are very innovative societies, and it's precisely from a restriction that it's generated. Under those restrictions that you've found, let's say, beyond that very interesting innovation that was prepaid, what other new things came out of it? Well, look, it's not exactly that, but it's another brutal change globally, and this is an interesting anecdote that I think I've never told. So, you have the scoop, even though many years have passed, but when I got married about, about 29 years ago, I was already the commercial director of Telmex, very young, by the way. An experiment, I hope, well, by Engineer Slim, to put young people with not much experience. I had 3 years of experience at Telcel, but they transferred me to Telmex. But they brought together young people who, what we had was drive and desire and perhaps more tolerance for making mistakes, etc., but they brought us together with brains, people who knew, who had experience. So, that combination was interesting. They sent me, as I said, very young, but when I got married, I remember he told me, "Well, when you return from your honeymoon, we're going to move you to Sección Amarilla, for those listening." Sección Amarilla, I don't know what they call it in Colombia or other countries. I think you told me that story, that it was Yellow Pages, but go ahead. Yellow Pages. Yellow Pages. Over there in Colombia, the Carvajal family had that business, if I'm not mistaken, and it was almost always a business of telephone companies because, for the young people listening who have no idea what a directory is, before the internet era, directories were distributed to homes that contained the phone numbers of homes and businesses, and in the case of businesses, businesses paid to have a nicer ad than just a number. And it was a very interesting business, honestly, for us it was a very big business at the time. And so, when I got married, they told me, "When you return from your honeymoon, you're going to be the director of this business, right?" And I was surprised and said to the engineer, "Hey, but why are you doing this to me?" "No," he said, "why are you doing this to me?" I said, "Is this a punishment or are you crazy? Here, we remove people who don't perform, we don't reward them." I said, "But why do you think that?" This was to give you perspective in '94. So, I told him, no, in '96, excuse me, and I told him, "Engineer, this business will eventually die." He said, "What are you talking about? This business brings us, let's say, a billion dollars a year." I mean, it was, you don't know, it was a huge business selling ads in directories, but it had already emerged. Although in Mexico, people were just starting to talk about the internet, it didn't exist. But I, who was always restless to see what was happening in the world, knew that first in the United States it had already been born, Google didn't exist yet, Google is around '98, but Mosaic already existed, remember the first internet browser? Of course, Netscape, well, these types of companies already had their first iterations, people were starting to talk about it. In Mexico, the internet hadn't arrived yet, it had arrived in a very incipient way and with very complicated connections, but it was very rare for someone to have the internet at home. There already existed in France a huge precursor to the internet that few people give credit to, called Minitel. Minitel has existed since before the internet, it's from the 80s. And it was a way for France to find a use for the telephone line because it was a computer that had text, and you could, it wasn't a cloud, it wasn't the internet, it was closed, but you could look up the phone number of a business there, you could ask it very basic questions about movie showtimes. It was a very, very small closed internet, but it was already a precursor, and homes had it. They had that small screen there, it was the size of one of the first Mac computers. So, I saw that coming, and when they told me about Yellow Pages, I said, "Why are they sending me to the past?" or not. The fact is, I don't know if the engineer didn't like my comment or if he reconsidered, because when I returned from my honeymoon, he told me, "No, I've thought about it again, and you're not staying at Telmex, you're not going to Yellow Pages anymore." So, well, I don't know for what reason it was, as I said earlier, but that was an interesting moment because although that business reached its peak, I did get to see, practically, great, great luck, fortune that I've had in my career is that I've gotten to see practically all the innovations that have occurred in our sector, because first in the cellular world, I got to see the change. I was practically 3 years at Telcel, and although my role was fundamentally commercial expansion, there was nothing innovative there, but I got to see, still at the beginning, at Telmex, the invention of the Amigo Kit, I got to see the birth of videophones at Telmex, of the internet, many novel things, not all of them, let's call them innovations. Take into account that you also spent a lot of time in the same telecommunications industry, that many of our innovations, apart from, I insist, the Amigo Kit, the prepaid, are really the evolution of an industry. We implement what the industry as a global consortium decides. "Hey, let's all move to a technology that is more capable of handling more calls." Ah, well, let's move to 2G, and then to 3G, and now 5G is coming, and the standards on which we all operate, well, in a way, we all follow them. So, there, I don't know if I can call it innovation, innovation happens in the industry. If you look at the transition from a phone or a network from 25 years ago to what you have today, it's brutal. The bandwidth that was handled in 5 years was nothing, and you still handle it, yes, with more frequencies, but it's not like operators have been allocated 50 times more frequencies. All of that is the product of great innovations in compression technology, encryption, tons of technological stacks that allow telephony to function as it does today. The bits already existed, but not within telephony. Imagine this. We were in a class in Silicon Valley, not on the trip we took with you, but on another trip, and we had the opportunity to have a class with a Stanford professor. The man made the following reflection. Jeff Bezos, remember that Amazon has been one of the companies that has been most successful in innovation, not only in its own developments but also in the invention of the cloud and everything they did, but in addition to that, every time it acquires a startup, it hits it, and it's correct, it gives the impression, let's say, that it's like the company that is most accurate in terms of technological acquisitions. He is asked, "Come on, what will the future be like?" And what Jeff answers is that he doesn't have a crystal ball, but what he does know is that there are basic human needs that are stable over time. So, people will have the need for enjoyment and entertainment in the next 50 years. Yes. People will continue to buy in 50 years. Yes. People will continue to eat. Yes. We are generally fulfilling those basic needs with different technologies. How do you see that comment from Jeff Bezos? Well, very accurate, right? Totally, right? It's not, let's say, it seems obvious now, but it has a lot of depth. To say, "Hey, if I just focus on the simple," and when we look at Amazon, which is a company that has transformed from selling a product very well and using that same logic of satisfying the customer above all else, to extending that to everything it sells and then doing it in cloud services, etc. If you notice, that company has evolved from being a retail company, a logistics company, and a cloud company. But practically, from the people I know who work there, that mindset you mentioned is maintained: simple things and always keeping the objective. If people will always, over the years, require those simple functions of wanting to buy, wanting to eat, etc. So, how do I give them that? Easier, better, cheaper, right? So, yes, yes, in fact, Satya Nadella, and I recommend a book called "Hit Refresh" by Satya Nadella. They mention from Microsoft how they hadn't foreseen the cloud trend when Amazon was already working on all that cloud capacity with AWS, they hadn't seen it coming yet. And in fact, if we look at it, Microsoft was slow to react, and it took them time, perhaps 4 or 5 years, to be at the standards of AWS. So, they had been overtaken and hadn't seen the trend coming from a technological tradition. But there is a more important party that Microsoft missed than the cloud party, and that is the mobile phone party. Oh, of course. Absolutely, right? And look how many companies let things pass them by and think they won't be a trend, right? We had a company together with Microsoft called Prodigy, which was Mexico's favorite portal. We directed our broadband customers there. When you bought basic internet, it was automatic, with broadband it became more complicated, but that company was the leader in Mexico as an internet portal for years. And there, it had a messaging product, I'm talking about before phones had WhatsApp, and it was called Messenger. It still exists, nobody uses it. But it's Messenger, which is, let's say, the second iteration of ICQ, which was the most famous of the... I used Messenger and ICQ myself at university 20 years ago. So, imagine, they had this, and when cell phones came out, they didn't see it coming, and the whole internet party happened, and they didn't even get to pop the balloons, as we say here in Mexico. The most interesting thing is that the disruptor sometimes doesn't even come from your own industry, as you mentioned earlier. So, like the disruptor of the cloud was a retail company, the disruptors of the telephone part, of the operating systems, sometimes they come and attack you from a completely different industry, right? Exactly. Exactly. I use the analogy, right? You know how all cars have a legend on the right side mirror that says objects appear closer than they really are. So, you're careful, right? And don't get complacent. I tell them, "Well, now imagine that not only that, but what's overtaking you isn't another car, it's a scooter, right?" You say, "How is a scooter going to overtake me?" I mean, they overtake you on the right, and furthermore, they overtake you with a vehicle that isn't what you expected, because you expected a car, a motorcycle, not something you never thought could happen. So, of course. Disruptors often come from unexpected areas, right? I propose something to you, and it's the following. Up until now, we've talked about innovation, about how it has occurred in the América Móvil group all this time, but I also know that you've been working a lot on open innovation and working with startups. Not long ago, you even received recognition from Forbes as one of the 50 most relevant leaders in this whole area. What do you think, Andrés, if we leave that topic for a second section of this podcast and leave people listening now wanting more, because there are some very interesting things around startups too, right? Of course. Well, that's a very interesting stage of my life because years after I was commercial director and new business development at Telmex, that's when the engineer wanted to enter this world of startups, well, technology companies, looking to find new variants for telecommunications, and without much experience, they threw me into the ring, as we say here, with very little experience, but with a lot of enthusiasm to learn to invest in startups for the group. And well, that's a story, as you say, quite good. A bit longer due to the variations in the companies we invested in. And so, we close a fascinating conversation with Andrés Vázquez del Mercado, a leader who not only understands innovation from strategy but from action, connecting patterns, reinterpreting business models, and transforming ideas into solutions that scale within one of the largest corporate ecosystems in Latin America. Today, he reminded us of something essential: innovation doesn't always mean inventing from scratch, but recognizing what already works, adapting it intelligently, and amplifying it with purpose. That ability to observe the world with curiosity, detect weak signals, and turn them into real opportunities is the greatest competitive advantage of the 21st century. I am left with an implicit phrase in everything Andrés shared with us: Innovation happens when curiosity is organized. Thank you, Andrés, for opening your mind to us and showing us how strategic thinking, digital empathy, and continuous learning combine to design the future from the present. And to you, thank you very much for joining us on this journey of ideas and purpose. If something inspired you today, share it, discuss it with your team, or simply put it into practice, because innovation begins when a conversation turns into action. We'll hear you in the next episode of Innovación con Suluaga, where we will continue to explore how curiosity transforms.