It didn’t start with the cry of independence of Manuel Belgrano, or with the fake spiel of Juan Carlos Onganía who overthrew a dictator to install himself as the despot of another age of tyranny.
Rather, Borchardt’s revolution is being plotted through education, by empowering people to think outside the box and capitalize on the opportunities that the digital transition toward another revolution, the one of flexible and remote work, brings for people to transcend country boundaries.
Martín Borchardt is the founder of HENRY, which stands for High Earnings Not Reached Yet. This acronym describes the situation of Latin America, the region with the highest wealth disparity in the world, yet is full of hardworking and inventive people who, daily, take to the streets as part of their hustle, whether that means selling arepas, tacos, textiles, or electronics. Despite their resilience and intelligence, most peddlers live hand-to-mouth. Success on the streets merely means they will be able to feed their family the next day.
“We have eight of the ten most unequal nations in the world,” says Martín, emphasizing that his mission and purpose is to “accelerate the transition of Latin America to a more equal society.”
This is what drives HENRY, a school that teaches people how to code without charging them anything upfront. The classes are online, but in real-time, as Borchardt says that “being in a group provides them with a real motivation and commitment, instilling in them the necessary discipline to succeed.” After graduation, HENRY helps students to find jobs as developers, usually remote, for companies in Silicon Valley or other innovation hubs in countries like the United States and Canada, allowing them to gain upward mobility.
For the employer, it is a value proposition. They have access to equally qualified talent for considerably less than they would pay in a city as expensive as San Francisco. But for the employee, the opportunity is similarly prized. HENRY’s graduates make, on average, four to six times more than they were earning in their previous jobs, further, they no longer must worry about commuting, which enables them to spend more quality time with their families.
Beyond the investment opportunity, Borchardt’s real innovation comes with his business model, an Income Sharing Agreement. Since students don’t have to pay tuition, how HENRY recovers its investment is when they find jobs, when they reimburse the school with a fee of up to 4,000 dollars, which can be paid in installments as a percentage of their salary.
In other words, they only make money when their students make money.
Organizations like the World Economic Forum or the World Bank have extensively reported on the wealth inequality in Latin America. According to the WEF, “the richest ten percent of people have amassed seventy-one percent of the region’s wealth.” But the solutions proposed by these macro-focused, neoliberal organizations often fall short of dealing with the continent’s underlying issues. In fact, they often do more harm than good.
HENRY is different. First, it emphasizes the power of the individual and the importance of teaching them how to fish instead of merely giving them fish. Second, it doesn’t box people in like the education system and international financial organizations do. Some of HENRY’s alumni are recent high school graduates, while others are seventy years old. There is no admission by age, background, or socioeconomic status. All that is needed is the drive and desire to succeed.
“We believe that talent is everywhere, but opportunities are not,” says Borchardt, who does acknowledge that even though anyone can apply to become a student at HENRY, the process is very selective, yet guided by a different set of criteria. It prioritizes real talent and capacity for the task at hand rather than the economic capabilities of disbursing significant amounts of money for tuition.
This meritocratic approach has attracted a considerable number of applicants.
“We used to joke that we had more applicants than Harvard,” Martín told me, as he unpacks the backdrop story of what now has become one of Latin America’s hottest start-ups, and how his journey has unfolded.
Before HENRY, Martín Borchardt had been fascinated with the possibility of being an entrepreneur, and early on, he began experimenting with different ideas.
“Some of my products didn’t see the market, and some failed,” he recalls, reminiscing of one of his first attempts to build a startup, a marketplace and social network that offered virtual stocks of football players. Had that been conceived now, in the time of the NFT-driven craze, when even flowery toilet paper and digitized versions of old tweets tend to trend, and when Manchester City, Paris St. Germain and Inter all have their digital tokens, then Borchardt’s idea might have taken off. The timing wasn’t right. Neither was it right for 99 Designs, his attempt to commercialize limited editions of apparel like hats and swaggers that were designed by famous personalities.
However, what those initial ventures did for Borchardt was to help him understand that he was here to create something that could leverage the potential of technology to help humans increase their quality of life and make the world a better place.
Being an entrepreneur in Latin America is a difficult endeavour. As someone who hails from a Latin American background myself, I can relate to it. Only recently have the ecosystems opened to new ideas, but a substantial part of the population remains ruled by conventional ways of thinking and resistant to change.
For someone like Borchardt, this meant that his projects would keep hitting a wall, simply because the society that he was a part of was not ready for them. Therefore, it is no surprise that Borchardt’s journey changed when someone in his inner circle suggested to him, “You need to go to Silicon Valley.”
“I had saved some money, but it wouldn’t be enough to be there for as long as I would have liked. Then, I found out about Draper University, where I applied for a scholarship. Also, they organized company visits and meetings with entrepreneurs and investors for us, so I thought that would be a fantastic way to become familiar with the ecosystem. That solved the financial question, and it also saved me a lot of time because I did not need to go knocking on doors. I had access to a network, right away.”
His immersion in Silicon Valley shaped him in more ways than one. Beyond all the benefits that Draper University provided, there were intrinsic advantages to being there – in the heart of the action, at the time when idealistic programmers were dreaming of changing the world from their dorm rooms, or of developing software that would earn them heaps of money.
And in the epicenter of technology – or at least where it was at the time – all that time feeling out of place in Buenos Aires seemed to vanish when he encountered fellow disruptors everywhere he went, in coffee shops, coworking spaces, and parks.
“I would go to a coffee shop, and everybody was talking about how they would change the world with their apps,” Martín remembers, adding that beyond the idealism that he now shared with newly found kindred spirits, one of the main eye-opening realizations was cultural, and it had to do with failure, and how it was perceived.
“Move fast and break things,” goes the Mark Zuckerberg-inspired ethos, one that has been equally cult-acclaimed as it has been criticized. If there is something in its defense, nevertheless, is that some things will fail, period, and there is nothing we can do that can stop that. We can, however, use those failures as learnings, and move on. Failure is part of life, and therefore, if it is inevitable, wouldn’t we like it to happen fast so that we know exactly what doesn’t work and move on to what does? At that point in time, the San Francisco-San Jose corridor was one of the few places in the world that accepted that universal truth – Latin American societies were on the other end of the spectrum.
Andrés Oppenheimer, a fellow Argentinian and Miami-based journalist was equally surprised when he visited the California innovation corridor for the first time.
“Most entrepreneurs I met volunteered their failure stories, and they did so with a smile,” Oppenheimer wrote in his book, Create or Die, which distilled his learnings during these trips and applied them to the biases and prejudices of Latin American societies, especially when it comes to the way where failure is harshly condemned. “We crucify those who fail without realizing that failure is an essential step on the way to success,” is one of Oppenheimer’s quotes, which I frequently share with my business students and which Borchardt agrees with – this stigma can be hard to transcend, severely limits the development of new ideas, and ultimately, hinders societal progress.
Throughout history, there have been many Latin American revolutionaries, perhaps the most famous one also born in Argentina – Ernesto Guevara, who later became canonized as Che. A middle-class, idealistic, and kind-hearted man – reading The Motorcycle Diaries shows there’s more to him than his dominion of the battlefield for which he became idolized – who went to medical school before his motorcycle wanderings across the continent changed him, Guevara also believed in the unlimited potential in Latin America that could be untapped if people had access to more opportunities.
The continent was a playground for dictators for much of the twentieth century. One regime would overthrow one another, sometimes with American assistance, in the hopes of obtaining and keeping power. One of those ways, aside from outright violence, was controlling access to information, banning access to books and magazines that held any contrarian opinions in blatant suppression of free speech, an easier task in an age of centralized analog media.
In The Motorcycle Diaries, Walter Salles’s film adaptation of Che Guevara’s memoir as young doctor traveling South America, his companion Alberto Granado tells Che he is hoping for a peaceful revolution, to which Che retorts: “A revolution without guns? It would never work.”
A revolution without guns might have not worked then, in an age of shattered libraries and burned books. But what makes the education revolution possible now is that access to information is no longer restricted.
Despite its inequalities, Latin America’s internet access rate is skyrocketing, surpassing the seventy-five percent benchmark recently. Even if there are still obvious improvements to be done – especially when facilitating access to marginalized rural areas – this is being increasingly accomplished via smartphone penetration, which, according to Statista, now reaches over seventy-four percent of the population. From the entire continent, at any given time, there are 500 million smartphones connected to the rest of the world through the net.
This connectivity creates infinite possibilities, and it is the critical difference between a revolution with guns and one without. If there is limited wealth, and it is controlled by a few pairs of hands, then those who want to access it would need to take it from the ones who have it. If the potential for unlimited wealth has been unlocked, however, then there is no need to take anything from anybody. Everybody can create their own. This is the real power of the Internet. Of facilitating opportunities for economic abundance where earnings can come from beyond what was perceived as the immediate providers – governments, large private firms in the region, and so on – and where individuals can have an impact beyond their immediate communities.
As someone who was formed in Silicon Valley, Borchardt is disrupting the way that the companies based there operate. While before, talent would strive to get a chance at one of the big firms we all know, now, firms can choose from a larger pool of potential candidates, who are located all around the world.
The challenges are there, however. Will Borchardt’s model disrupt Silicon Valley and benefit Latin America in the process? Or will Silicon Valley’s race to pursue enormous growth–ultimately a race to the bottom–absorb HENRY’s idealism? The cautionary tales of WeWork and Theranos are all too familiar, and beyond that, companies like Amazon, DoorDash, and Uber keep squeezing their employees and contractors alike for the sake of massive user adoption.
Transiting through the same streets of Latin America, millions of people struggle to make ends meet working for those platforms, and even throughout the United States, Amazon is notorious for its infamous labor practices. I remember personally visiting an Amazon fulfillment center–one of those that gets advertised for its automation and intelligent robots – and it was a transformative experience. Never had I seen so many people with dreadful faces, weary eyes, all together in one place – with zero joy about working for the company that keeps aiming to take over the world.
In an article for Business Insider, Mark Schnewart said that “the ultimate goal of technology is to create efficiencies within other businesses or consumers lives,” and this is something that HENRY needs to be mindful about. Are the employees that are being hired really valuable for the companies that employ them? Or merely pawns in a model that will spit them out when the next arbitrage opportunity becomes available?
Nevertheless, in the age of remote work and digital transition, Martín is confident that technology can increase the quality of life of people, instead of it being a drag that keeps people chained to a desk – or as some people claim, to a different type of desk or at a different location.
Equipping the workforce with essential skills is important because it makes them independent of their current employer. It gives them the tools and the confidence to create their own ventures, and the belief that they can lift themselves out of poverty. Even if the job didn’t pan out as planned, they can now access opportunities than before HENRY they didn’t even know existed.
Borchardt gets excited as he shares some of HENRY’s success stories, the tangible evidence that his model works and that there are people who have benefited from this opportunity. “There was this guy who was working for Rappi, one of the largest delivery companies in Latin America. He spent all his day on his bicycle, delivering food for a pittance. As you know, many cities are very crowded, and traffic is not very friendly to cyclists. So, beyond the poor salary, he was risking his life. When he graduated from HENRY, he got a job as a developer, and he started making four times as much money as he was, all from his house, which also allowed him to spend more time with his family.” Borchardt perks up when relating more stories, giving a face to the thousands of hours that he and his team have spent hatching up their venture. “Then there was Malena, who was working at a restaurant and was exhausted every day, receiving a low pay and dealing with stressful working conditions. Even with that salary, she was studying for a design program on the side when she heard about HENRY. Now, her life has changed, and she can live a life where she doesn’t have to be worried about whether she will have enough money to make it to the end of the month.”
Stories like these accomplish several things. First, despite the increasingly louder discourse of isolationists, they show how interconnected the world really is. Second, they reshape the perception of a region that has largely been associated with crime and poverty, and where talent was mostly worshipped in areas like music and sports celebrities. Third, they alter the economic interaction between nations.
Think of it like a different type of FDI (Foreign Direct Investment) where, instead of billions of dollars being held in the pockets of public or private institutions that build sweatshops and siphon out the profits back to their nations, the investment foreign companies make in hiring talent stays in the country, and it tangibly helps to improve the life of people who otherwise would remain marginalized, at the mercy of demagogic and populist policies.
These are the faces that HENRY is proud of, and we will likely see more of them, especially as the educational institutions remain battered and sluggish to react to the adaptation needed from them following the ongoing global crisis.
“Do you think the Income Sharing Agreement is a model that could shape the university of the future?” I ask Borchardt, to which he enthusiastically responds. “Yes, aligning interests is something that will be critical. I think if HENRY succeeds, and other startups succeed with the same model, in the end, everyone is going to change their model to ISAs because they are going to go out of business if they don’t.”
To lay the bricks for the university of the future is a lofty goal, but Borchardt remains confident that their model works. “We build our curriculum in a way that it is completely aligned to what employers are looking for, essentially, we talk to them before crafting our curriculums,” he says, remarking that this is part of HENRY’s unique value propositions when compared to more conventional schools.
Also, it helps him to remember how HENRY started; how, like many of the entrepreneurs that became his icons, he can create something that has an enormous impact having had humble beginnings.
As it often happens – I remember hearing Tobi Lutke tell Shopify’s story and how it all came from a need they had for software to power an online store – Borchardt’s spark for founding HENRY was ignited by some of the painful experiences that he lived through, especially through another previous company that he founded, financial services startup Nubi.
Number one, he could not find talent. Borchardt was amazed that in a country that was the birthplace of iconic platforms like Mercado Libre and Despegar, a land flooded with millions of natural-born entrepreneurs and problem solvers, he could not find the people that had the right capabilities to grow at Nubi and help scale it. Second, even if he had the talent – at some point Nubi employed sixty people – many factors could lure them away.
“In 2018, Argentina had two very severe macroeconomic crises, and the currency was significantly devalued. A significant part of my workforce quit, and Nubi was left in very dire straits. It was a very painful experience,” he remembers. But the cliché that what doesn’t kill us makes us stronger can be true, and Borchardt’s resolve made that the case for him. He set out to look for ways in which he could help bridge this gap, in which the field of opportunity could open for those that wanted to thrive in tech but didn’t know how to start.
The technical and economic aspects are important at HENRY, as they have been at his other ventures, but conversing with Martín, something that emerges is that a very relevant component of the model’s impact is cultural and social. Because of the wealth divide, Latin America is a continent where there is a lot of social resentment. I remember a trip to Bogotá, where I had the opportunity to visit Ciudad Bolívar, one of the most isolated and poverty-punished communities, and where I spoke with several young men who at the age of fifteen had already committed murder and been a part of gangs. I met them at a rehabilitation centre.
“You know, at that time, when I used to steal, for me, stealing your iPhone was the difference between feeding my family for a week or starving.” For those that don’t know of any further opportunities, those who don’t see any better options on the horizon, taking from others that have is the survival norm. It goes back to the point that was mentioned earlier – when the mind perceives limited wealth and doesn’t see a road to a share of the pie, the natural rationale becomes to take away from others. It is that principle that lies at the root of the deep resentment and anger that many people have, which reminds me of psychologist Marshall Rosenberg, who said that “at the core of all anger there’s a need that’s not met.”
When the opportunity field is wide and needs are met, however, there is no need to take. The effect of this becomes further strengthened when someone is willing to help. This is where Borchardt and HENRY step in. “I’ve found that there is an incredible positive in somebody when they know that someone is investing in them, someone is believing in them,” he says, reinforcing the importance of his model, and how it can shift the “us vs them” paradigm that keeps increasing the continent’s gaps. “There is nothing like having somebody that believes in yourself, especially when the signs have been telling you otherwise all your life.”
If successful, HENRY can validate a model that schools in the U.S. and worldwide would do well to replicate. Uruguayan author Eduardo Galeano said that the South was trying “to be like them” by emulating conspicuous consumption in the north. Now, there is an opportunity for us to infuse a positive twist of conscious use of the free market to build shared prosperity, and we could, as Galeano said, “be like them,” and only then, perhaps, offer a better opportunity for our younger generations.
Borchardt and HENRY recently raised $10 million to do so – some of it coming from Tim Draper, from Draper University, and other renowned venture capitalists – showing that there are people that believe in their mission just as they believe in the abundance of talent in Latin America.
The main challenge will be, like with all revolutions, to always remember why they started, and to keep acting in a way that is congruent with their mission, something that in Silicon Valley can be easily put out of sight in detriment of the need to produce returns for a venture capital portfolio.
The opportunity, however, is enormous, and if Borchardt and HENRY get this right, they could forever alter the economic landscape of the nation, provide a model to lift millions of people out of poverty through an empowering mechanism, and give a successful ending to the education revolution – paving the way for a revolution without guns to come to fruition.