Built on Curiosity: Deep Tech, Humility, and the Undervalued Opportunity in Latin America

In this episode of Leadership Quotient, Lindsay Guzowski speaks with Pedro Lopez Sela, Managing Partner at FrissOn Capital, about why Latin America and the Global South are often systemically undervalued in venture capital, despite producing resilient founders, strong science, and overlooked deep tech opportunities. Pedro shares how curiosity shaped his entrepreneurial path, why humility and gratitude are critical leadership traits, and how his team evaluates founders by working alongside them before investing. He also discusses the role of purpose in decision-making, the limits of AI as a substitute for experience, and why the best entrepreneurs pair deep obsession with the ability to empower people around them.

Transcript

SPEAKER_00 0:00

Welcome to Leadership Quotient, a podcast by The Crucible, where we explore how leadership teams in investor-backed companies are built, aligned, and scaled for impact. I'm your host, Lindsay Gazowski, and in each episode, we'll talk with the people shaping value behind the scenes, from operating partners to investors to advisors to C-suite executives, about what it really takes to drive performance through leadership. On today's episode of the Leadership Quotient Podcast, I chat with Pedro Lopez-Sela, managing partner at Frisian Capital, about the systemic undervaluing of Latin America as a market, gratitude as a key to value creation, and why you can't substitute a GPT for experience and insight. Pedro, welcome to Leadership Quotient. So to give some context around your background, I'd love to hear how you got into the venture capital space to begin with. And then we'll dive a little more deeply into some leadership lessons.

SPEAKER_02 1:13

For sure. So it was, I would say, quite a long journey and it was not planned. I started as an entrepreneur when I was a teenager. And after creating a few companies, I started supporting other entrepreneurs with an incubator and an accelerator that we founded, then a company builder. And then I started investing as an angel. And after uh basically having, you know, a lot of learnings and fun in those different stages of entrepreneurship, uh, I decided with my partners that it was time to build a more institutional vehicle to support other entrepreneurs. And that's how on 2022 we started Frison Capital.

SPEAKER_00 2:04

Fantastic. So, what created that entrepreneurial bug in you back when you were a teenager?

SPEAKER_02 2:13

I would say it was probably my Montessori background as a child, you know. Uh, my parents supported me and instilled in me curiosity as a fantastic tool to do stuff and learn stuff. And that has been basically, I guess, my my North Star throughout my journey.

SPEAKER_00 2:40

And being an entrepreneur, there are a lot of lessons in building a business and trying to grow your own teams. Having done it myself, a lot of failure that generates positive lessons. Can you share what you learned from that entrepreneurial journey that you ensured you took forward into helping other entrepreneurs make fewer mistakes, maybe than you did?

SPEAKER_02 3:05

You know, I I guess my my two biggest lessons come from uh some of my mentors. Uh most of them I've been humbled to to be taught and guided by by fantastic human beings. And these guys have been uh ever since I started the relationship with them, to show me that humility is is basically a synonym to quality. And when you have a person that is knowledgeable, that has a very important gravitas, uh, that has achieved a lot in life, uh, they usually automatically become humble and they want to support other people around them, in this case, entrepreneurs. And and that really synced in. Uh, I've been blessed to to be taught and mentored by by some of the most important entrepreneurs and and authors, and and and that has been a fantastic lesson. The other one, uh it's kind of between the lines with with some of the conversations that I've had in the past, but but one of them in particular, Richard Branson, I I think he uh in in that sense is is very clear about the the lesson. If you take care of people, they take care of everything. And uh in my journey, if uh there's a lot of people that I've dealt with that understand entrepreneurship as a as a company, as a revenue generator, as a process machine. And I don't disagree, but I think that if on top of all that stuff, you add that layer of understanding that you're working with people, and those people are gonna make a company great, then that changes everything. And it takes uh the company, the startup to a point that they actually become so empowered that you don't have to worry about processes and KPIs and all that stuff. They're just gonna do it because they believe they're part of the family and that's good enough for them.

SPEAKER_00 5:18

And when you're evaluating companies or working with some of these entrepreneurial leaders, are you seeking people that already are people-oriented and thinking about humility as a natural outcome of their skill, or are you helping to shape and grow these leaders into that mold?

SPEAKER_02 5:43

I frankly don't think those things can be taught.

unknown 5:47

Oh.

SPEAKER_02 5:48

I think that uh humility is something that you either have it or not. And maybe throughout your journey, uh life is gonna give you lessons that you get enough uh, you know, punching that it humbles you a bit. Uh, but that's not the type of people that we want to work with.

SPEAKER_00 6:08

So it's not it's not externally enforced humility, it's people who naturally feel grateful for what they're able to achieve in life.

SPEAKER_02 6:20

Definitely.

SPEAKER_00 6:22

How do you think about that when you're engaging some of these entrepreneurs? What what do you see as you're talking to them or evaluating their companies that indicate someone who is truly exhibiting those those traits rather than someone who can just put on a good face for the diligence process?

SPEAKER_02 6:46

You know, it it I think that when when we're uh interviewing people that we want to partner with or we want to invest in, uh it really comes across easily. And and for somebody that is not humble enough and uh is not a team player, uh it's very easy to see with the language, uh, even non-verbal. Uh one of the things that that we are always looking for is uh specific wording uh in their pitches, uh in the interview. And then we always want to hear about personal stories, uh, and and that really you know brings the light into the conversation when they start talking about a personal story where they failed or they learned something or they had this uh, I don't know, massive uh undertaking to achieve and that sort of thing. Uh it and again is not specifically what happens in the story. Uh you can see it through the through through some of the wording that they use. Uh, and and that says a lot about a person, I think.

SPEAKER_00 8:03

Yeah, I won't uh make you give away the the secrets of the words you're looking for. But when you're hearing these stories, is there a a common theme about how they developed a solid sense of engagement with others? Is it upbringing? Is it truly through that that failure in life lessons? Is it something that you know you mentioned you can't really teach us? It's just something they were born with.

SPEAKER_02 8:31

I I wouldn't know if it's innate. Uh maybe there are a few lessons along the way. I had my share of that when I was in in primary school and middle school and even and even college. Uh, but by the time you're 20, 25, and and and you're starting a business, uh either I think you have it or not. And if you still don't have it, then good luck to you, and I hope you achieve it someday. Uh, but at that moment, we're not willing to work with you because you know we we want a partner. Uh we we do not need a student uh that we can teach or that that we can educate. Um probably something important to share is that uh most of the people that we end up engaging with are people that usually when when we have a conversation with, they're very grateful about a lot of things, and they can share stories about how they have been generous in in some way, and they are not even aware of that, and that's why we love those conversations because that automatically says a lot about a person.

SPEAKER_00 9:42

I think that's absolutely true, and having that sense of gratefulness truly does pervade a variety of topics, not just when in speaking about things for which we are truly thankful. What are some of the other skills and attributes from a behavioral standpoint that you see in some of your most successful entrepreneurial partnerships?

SPEAKER_02 10:09

Uh, we need them to be obsessed about the topic that they're working on. Either a co-investor or an entrepreneur or the people in an incubator or accelerator that is sharing pipeline with us. Uh because when when they are so obsessed with that thing, with creating the best companies in X space, or when when they're uh obsessed about funding the entrepreneurs or empowering the entrepreneurs or solving a specific job to be done, that that is gonna give them the drive that we need them to have uh because we are obsessed with what we do. And and again, we need to partner with people that have you know the same motivation uh so that they can become unstoppable. There are gonna be times, especially in the space that we work at, which is early stage in deep tech, uh, there are gonna be many times uh throughout the year that you're gonna be facing uh big challenges, uh frustration, uh uh stuff that you planned for for a while and that you invested time and even resources in, and it didn't go through. And and if you do not have that motivation, then you're just gonna throw everything away.

SPEAKER_00 11:35

And as you're working with some of these teams, you know, the the opposite of humility in a lot of ways is arrogance. It's something that we test for with the crucible because we think it's absolutely undermining, not just to that individual, but to the team as a whole. How do you investigate the entire team to make sure that their team dynamic works well together, not just a series of individuals that are excited entrepreneurs or excited about the mission to build and grow others?

SPEAKER_02 12:11

So, specifically uh in the process that we have for the IC for the for the investment committee of the fund, uh, unlike some other funds, uh, we don't do a traditional due diligence. Uh, the typical due diligence is part of the process, but before we even go into the uh in-depth process of due diligence, we work with them for a couple of months. Uh, we try to find out uh how is the model that they have, the evaluation, financial planning, the the marketing plans, the road maps of scaling the tech, intellectual property strategy, like the whole thing, kind of like an acceleration program. Uh, but that's before we put the check in. And then after working with them for a few months, that's probably between four to five, uh, when we finish that process uh and we uh see uh the commitment that they have with the process, uh uh the hours that they put into the process, how skillful they are about what they're supposed to be knowledgeable about, uh, and so on and so forth, then uh we can start the conversation about the IC and the check.

SPEAKER_00 13:28

And I think that that's a very different approach to investing than a lot of students take.

SPEAKER_02 13:34

And it probably is politics, you know, and it has to do a bit with the story I was sharing with you. Uh, we are not investors, we are entrepreneurs that are investing, and uh that that's a totally different approach. I I've been blessed with uh participating in almost 30 experiments by now, uh 30 startups, and uh like any entrepreneur, I had a few exits and I've been broke a couple of times. And uh, but uh most of my my my companies have been built on on bootstrapping. I am not comfortable with having other people's money, uh, and it works the same way as a VC. So for that reason, we're super careful about who we are investing in because it's not our money, it's money that we're managing for somebody else.

SPEAKER_00 14:26

And I think it's interesting in the deep tech space because a lot of people who are investing there really are just looking for products or problems and investing directly in that and then saying, okay, we'll figure out who's running this later or how it's being run. It sounds like you guys are looking at it again, entrepreneurially, but from the opposite lens of who are the people? Is the is the problem interesting? Are they following good process and can they solve something real?

SPEAKER_02 14:58

You know, one one of the things that we were blessed with is that most of our team is based in global south. So we early came to understand that unlike some people think, it is an advantage because we're in a place where 85% of the world population lives. So 85% of the population share as challenges, as jobs to be done, as opportunities. Uh, and and that's important because if you make uh an evaluation and analysis of entrepreneurs from global south, automatically you're gonna realize that they are very, very resilient. Uh, I spoke to uh a guy from Argentina many years ago, and I was telling him that I was super frustrated because I understood that Argentina was a hot mess uh politically, economically. It was like a super complicated place to build a company. And I told him, I just cannot figure out how you guys have more unicorns than other countries that are more stable. And and the answer of the guy was like so simple and so illuminating. He just said, you know, the thing is that we just have nothing left to lose. And and that's true. And if you think of it from a wider lens, it applies to people in Vietnam, from India, from Mexico, from South Africa, because that's 85% of the planet. Right. And for that reason, when you find somebody that is obsessed with a specific problem, then that's exciting for us. The other thing is that, because a lot of people don't understand if if we're so much into uh deep tech, and then we talk about impact, and then how come we're trying to solve challenges and stuff? And for us, the answer is like super simple. You cannot solve climate change with an app, you need science for that. And if you want to solve cancer, then the same thing applies. And if you want to go to space exactly, the same thing applies. So when you find somebody that is super intelligent, uh, another interesting uh uh data, I don't know if you know this, but it depends on the country because the statistics are are based on country. Uh countries in the global south produce two to 29 more more papers than the global south per year. Uh so when you think about the production of stuff that these guys are doing, it's just crazy. The thing is that they do not have the proper platforms to convert a paper into a product. Uh but it's just, you know, a bit of money and a bit of empowering, and and that would be the formula for success.

SPEAKER_00 17:47

So do you think other VCs and angels in the US are overlooking a lot of these opportunities?

SPEAKER_01 17:54

Of course.

SPEAKER_00 17:56

And so that creates an excellent market niche for you, but also then seems to inherently limit the upside for some of the other groups because they're pursuing a definite.

SPEAKER_02 18:10

So we we we ran an innovation hub in Hanjo for about eight years. Um, it was one of the first connections that Latin America had with Asia. Um, and we we understood the formula was basically to find the the best brains in the region, developing frontier tech, and then taking them to a place where they can actually scale. We know now, and and this is obviously not shared by everybody, because then there would be a lot more VCs like us. Uh, but we believe that you have people basically 30 years approximately going to the best Ivy leagues in the world that are back in their countries. So they these guys are developing technology from Universidad Javeriana or Católica de Chile or Tech de Monterrey, and it's the exact same knowledge base that you have from MIT or Oxford or Stanford. They have very similar infrastructure, they have the same microscopes. Maybe they don't have 20, maybe they just have one, but it's that microscope. So they can build the tech. The other thing that is interesting is that there's an undervaluation because there are no market conditions for investments. So just so that you get the numbers, in the health space that we're investing right now, if I find a startup here in Latin America, just by putting money into the startup, I make money. It's an arbitrage because these guys are undervalued more than 50% of the valuation of the company just by the zip code. Now, the problem for them is that they cannot raise a serious round uh in the region. So they maybe can do pre-seed and seed because there are grants for the government, and there's probably a crazy angel that is going to invest a series A, but that's it for them. And for that reason, we have a model where we basically connect with a network of innovation hubs that we built in Canada that allows us basically entry to the North American market. And we think that that's the important space to be at, because when you access especially the US, then you have access to the largest market of early stage investing. And for VCs in the US, it's complicated to invest in Latin America. It's a complicated region, they have no visibility. Uh uh it's complicated, I guess, to find a pipeline and to de-risk it and so on and so forth. And that's what we're doing. And for the startups, it's it's complicated to connect with a VC from California or New York or or Chicago. So that's what we're doing, basically. We're building a bridge.

SPEAKER_00 20:58

Yeah, and I think that the traditional forms of diligence are a lot harder for a lot of American VCs in Latin America.

SPEAKER_02 21:08

Definitely, because there are there are so many factors that you cannot see on a spreadsheet, right? And then uh culture is going to be different, language may be complicated, uh, and not all the guys have fluent English. So that's how we how we help.

SPEAKER_00 21:25

Fantastic. Well, I'd love to hear a story if you have a a favorite one, um, where leadership skill and talent really made the difference in one of the businesses in which you either invested or with which you got to partner.

SPEAKER_02 21:47

Um there are so many stories. Um so um this is not from a startup, uh this is from an ecosystem builder. Um I guess We've been working with the World Intellectual Property Organization for some years now, building a system similar to what you guys in the US have that is called ICOR from the NSF and the SBIR and STTR from the SBA. The guy who just retired last year, Paul, he was uh Paul Regis. He's probably one of the best examples I can give you on leadership. The World Intellectual Property Organization is uh is kind of like the USPTO. So it's an it's the global entity that is in charge of patents and trademarks, uh, and they're focused mainly on that. Um this guy early on understood that it was important to patent an invention, uh, but it was also important to develop knowledge economy. And he basically uh understood that his, I guess his undertaking or his mission in life uh was to change Caribbean countries in terms of knowledge economy, and he solely started promoting the the formation of deep tech companies in the region. Uh for the years that we worked with him, it was uh very uh humbling to see how Paul was able to gather every country in the Caribbean, uh getting people involved, like uh authorities from Korea and from Japan, obviously from Geneva, supporting the efforts. And this guy, uh a long time, you know, he had a few help with people like us, uh, but I would say that he was primarily the guy that built the deep tech ecosystem of startups in in the Caribbean.

SPEAKER_00 23:54

Yeah, that's fascinating. And one of the things that I keep hearing in a lot of how you're talking about the stories and the building of these ecosystems is that it takes someone that has that vision, but then can be a true connector. And that takes a lot of interpersonal skills.

SPEAKER_02 24:12

Yeah. It's it's uh there's this there's this guy, actually, two of them. Uh you probably know them, Peter Diamandis and and Stephen Kotler, and they talk about purpose. And uh I I drank the Kool-Aid with those guys many years ago. I've been blessed with with uh uh their mentorship and and learning from them and and working alongside them. And and it has been very interesting to finally understand what purpose actually means. Because when you read the books and when you go through the programs, of course you might get the concept, but once you put it in action and you see the real transformation, just because somebody made a sentence that became again the the North Star, then that changes everything. Uh, and if you're able to have clarity on that, then you're gonna have clarity to to make decisions. And and that's why we think purpose is so important. It gives you basically uh uh a code that is literally binary to answer any question related to what you're doing in terms of your personal life or or your professional life. If it aligns, then you should do it, and if it doesn't align, then you shouldn't. And if you're able to put that in one sentence, then making decisions is going to be super easy for you. And if you put that sentence of the MTP, the massive transformative purpose as part of your organization, then the same thing applies to everything you do as a startup or as an even large company.

SPEAKER_00 25:45

Do you have a purpose statement for yourself?

SPEAKER_02 25:48

Yeah, it's basically empowering people. That's what I do.

SPEAKER_00 25:54

Fantastic. Well, I'd love to shift yours just slightly. Um you know, we're in a rapidly changing world from a technological standpoint, and obviously that directly impacts the space you're working on, but also the rest of the VC um ecosystem. How do you see leadership skills changing and rising and falling in importance relative to the next phase of value creation?

SPEAKER_02 26:29

Oi, that's a good question. Um for starters, I would say that for people that are taking decisions, uh leadership roles in in investment firms, uh not all of us understand uh the potential and the impact that technology can have. And that in our case, uh I I would say that most of our team knows a bit about everything and a lot about nothing. So that gives us the capability of lateral thinking and and at least having a basic conversation about exponential technologies and the future of society. And in that sense, uh we do understand the impact or the potential of the impact of technologies like AI and quantum computing. Uh, but we also think that there are a lot of people that are at a leadership role that do not necessarily get a uh a complete grasp of how things are today, and they fantasize about the potential of the stuff. Uh, we've been around for a while. So uh, for example, we were uh alive already and doing and doing companies when the dot com bubble, and uh so so we've seen this kind of cycle before, um, and and after that the digital transformation bubble, and and now we have the AI thing, right? Uh, we definitely are excited about some technologies, we're using them. Uh, we're about to launch, probably in a couple of weeks from now, uh, an incubator that is gonna be totally based on AI. So you're gonna have agents there mentoring the entrepreneurs, and we're happy about that. Uh, but in no way that means that we as decision makers in the accelerator, the company builder, the BC firm are gonna stop making decisions and and just delegating everything to a GPT. It just doesn't make sense. It can it can help, I think, augment the capacity of our team. Uh uh, we believe from some people that we've spoken to and what we've seen so far, that maybe it can help you be, I don't know, 40-50% faster at your task, but but you still need somebody that has enough knowledge and enough capability to work with the GPT. I don't know what's going to happen in five or 10 years, but right now I'm pretty certain that you cannot substitute a person with a GPT. And and in that sense, I think they are tools that you can use uh to make decisions of of any sort to grow your team, to invest, to define the pipeline, uh, to do follow-up on an investee. Uh, and and definitely you should take advantage of that. It's gonna make you uh probably crisper and faster, but it doesn't mean that it's gonna substitute the neither the team uh nor nor the startups that you're working with.

SPEAKER_00 29:34

Yeah, I I've heard even the best GPT is described as a phenomenal intern. It's not like you wouldn't check their work, but you certainly can go out and do a lot of the research that you wouldn't be able to do, and then you can take that and apply knowledge and insight and the that next level critical thinking to the information provided.

SPEAKER_02 29:59

And and you know, I think also uh it at least in in our space, experience is also important. It is not only about data, that that uh uh uh seventh cents that you get because you've done the thing for 25 years, uh we think that's important. And that's why some of our board members are people that have been in the industry uh uh for you know three decades or more, uh, and you cannot substitute that with a with an algorithm that can scrap the internet with with present data.

SPEAKER_00 30:36

Yeah, that's absolutely true. And I appreciate that insight. Um in closing, as you're thinking about how you would want to advise the entrepreneurs who are really excited about a problem and thinking about pursuing something today, what would you want to say to them?

SPEAKER_02 31:03

I I guess uh for them or or you know, thinking about uh me when I was 20, what what I would have appreciated a lot is somebody telling me that curiosity and studying are are critical. If you're curious enough uh so that you want to understand better things and and uh you you start studying and and trying to be an expert on the thing that you're getting into, uh that's gonna be good enough to make a difference and make a change. Because with information, I think comes empowerment, and with that you can change the world.

SPEAKER_00 31:45

And that wraps up another inspiring episode of Leadership Quotient. Thank you to Pedro for taking the time to share his judgment and point of view. To our listeners, if you found this conversation valuable, be sure to subscribe to Leadership Quotient wherever you get your podcasts. You can also learn more about The Crucible and how we're helping investor backed companies align leadership teams for scale at thecrucible.com. We'll see you next time for more real conversations on leadership, talent, and value creation.