Why Sol Trujillo’s L’Attitude Ventures Sees Latino-Owned Businesses as a Growth Market

13 minute read

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Barack Obama and Lin-Manuel Miranda were just a few of the thousands of people who gathered in San Diego this week for the fifth annual L’Attitude conference, an event helping executives understand the potential of Latinos in the U.S. economy. L’Attitude is the brainchild of Solomon “Sol” Trujillo, who has served as CEO of international companies including US West, Orange, and Telestra, the Australian telecoms company.

Trujillo has focused, since his return to the U.S. from Australia in 2009, on changing negative perceptions of Latinos in the U.S. Through the Latino Donor Collaborative, a nonprofit he co-founded in 2010, Trujillo is working to circulate data that can help convince leaders that they should invest in Latino businesses and appoint more Latino executives. The total economic output of Latinos in the U.S. was $2.8 trillion in 2020, according to a report released Sept. 22 by L’Attitude. That’s a figure that is higher than the GDP of the U.K., India, or France, and one that he hopes will turn executives’ heads.

Trujillo is also CEO of L’Attitude Ventures, a venture capital (VC) firm he founded in 2019 to invest in businesses led by Latinos. He says he’s tired of seeing Latino founders coming out of good schools that people don’t recognize and then struggling to secure the funding they need. “The punchline is, they’re hungry,” he tells TIME. “They have ideas and they’re willing to do what’s needed. They just need fuel for their business.” It’s not all that different from how he had to hustle when he graduated from the University of Wyoming in 1974, he says.

This interview has been condensed and edited for clarity.

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You were a longtime CEO when you decided to start a nonprofit, the Latino Donor Collaborative. Tell me what motivated that shift.

I’ve operated companies all over the world, but I was born in the United States. My family’s roots go back about 500 years. I feel a lot of pride in what our country stands for. But when I was living abroad, I saw people [in the U.S.] talking about building walls, deporting people.

I thought, number one, that’s not what our country is about. I was a young business person when Ronald Reagan was telling the Russian President to take down walls. We believed in opening things up.

And number two, it doesn’t make sense economically. As a country, we’re aging, and we need workers. Once you start cutting off immigration, then you start running into the problems that we now have in today’s economy. The reason why we have inflation—the driving variable that nobody wants to talk about—is that we don’t have enough workers. The wage inflation drives pricing inflation, which then creates disruptions all over.

So when I was coming back in 2009, I decided to start gathering data and create a nonprofit, which was called the Latino Donor Collaborative. I co-founded it with (former San Antonio mayor) Henry Cisneros—he was the Democrat, I was the Republican. We decided to start thinking about the Latino brand, and why the perception was that Latinos are all bad people. We knew the perceptions were wrong. We wanted to get the data so we can help people understand it.

What were the perceptions at the time and how did that differ from the reality shown in the data you gathered?

A poll we commissioned then found that two thirds of Americans believed that Latinos were here as takers, tying up schools, tying up hospitals, with everyone going on welfare. And only a third thought that they were here as productive, contributing citizens.

But we found the Latino cohort is the most productive of all cohorts in the United States. Because people came here to essentially pursue the American dream. They disproportionately serve in the military, protecting our country. They’re the most entrepreneurial—the highest percentage of net new business formations were being developed by Latinos. Our recent study found that out of all net new small businesses with employees, 52% were created by Latinos.

Where do those negative perceptions come from?

Everywhere in the world we live with perceptions of others. If you’re the most common cohort in a country, you understand that cohort, but then when there’s other people that are different, you make assumptions about them.

Part of this stems from the media. Our most recent study shows that although Latinos are 25% of all American youth, Latinos have only 3.1% of lead roles in shows, are only 1.5% of showrunners, and less than 1.3% of directors. In many of these shows, portrayals of Latinos are as gangbangers, drug dealers, criminals. The few that are positive, you have a Latino nanny or maid—or Pablo, the trusted gardener who speaks with an accent and does low paid work. So perceptions develop.

Part of your work is trying to change the perceptions that Americans have of Latinos. How do you run that advertising campaign for people who are getting bombarded with the opposite images in the media?

We live in a capitalist economy. And one of the common things I’ve seen around the world is those who create wealth have the most influence. And so you need to think about how you help people understand how core the Latino cohort is to the economy, and also show that they’re creating a lot of wealth.

That’s why I came up with the idea of this GDP report that shows the total economic output of Latinos in the United States. Between 2010 and 2020, the U.S. Latino GDP was the third fastest growing among the 10 largest GDPs. The broader U.S. economy ranked fifth.

If everybody understood that, as we did when we were looking at China 25 years ago or India 20 years ago, it would really help. There’s all this growth, you create funds, you go after it, you allocate capital to grow. So it’s always about capital flow. You make money by investing where the growth is.

So it’s not only that this is an economic force that helps the economy but that you, the person reading this message, can benefit from it. Kind of the capitalist pitch almost.

Well you know, I’m a believer that capitalism works 92.5% of the time. If capital is flowing properly, you can grow an economy which benefits everybody. And you can help the most productive cohorts become wealth creators.

We have a youthful Latino cohort. They’re very entrepreneurial. They’re very productive. So let’s feed capital to them and that will grow the economy for the next 20 years or so.

You mentioned that the U.S. economy needs Latinos for demographic reasons too. Can you elaborate on that?

If you think about it, the highest periods of GDP growth in our economy in modern times were during two presidential terms—Ronald Reagan’s and Bill Clinton’s. We had 16 years, basically of 3.5% GDP growth.

We found the single most explanatory variable in terms of GDP growth was not the unemployment rate or some of the things that you hear Fed chairs talk about. It is basically the labor force growth rate. If you look at it. It’s really logical. GDP is a function of outputs of goods and services that workers produce. If you’re not increasing the numbers of workers, your outputs of your goods and services are flat.

Both the Baby Boomer cohort and the Gen Xers that were such a disproportionate share of our economy didn’t replace themselves with high birth rates. And they aren’t running as many businesses anymore.

So now, we have a natural phenomenon that’s happening, a youthful cohort called the Latino cohort. So the future success of our economy and the success of the Latino cohort are intertwined. If this part of our economy doesn’t grow, the whole economy is not going to grow.

You recently started a venture firm to feed capital to Latino entrepreneurs. What was the motivation behind targeting that demographic?

Latinos are creating 50% of all employer-based companies. But I wanted to look and see how well these Latino firms were doing. They’re doing well in terms of growth—to a point. Once you get to be about $1 million in revenue, then you’re really accelerating, you need capital. And, there’s no capital availability. We had Bain & Company do a study and we found that less than 1% of all invested capital by private equity and VCs was flowing into this cohort.

I decided rather than continue to try to explain to people that it’s a problem and an opportunity, we’re going to create a prototype called L’Attitude Ventures, in order to show people there’s a lot of companies out there that need capital, and that can create growth. We’ll show you how you should do it.

A lot of the leadership of many companies are well intentioned, and they give a lot of good speeches about ESG and diversity and inclusion. But sometimes people don’t know quite how to do it. We are creating the prototype so that people can see and say: “oh, okay. We can start flowing capital like L’Attitude Ventures does.”

Why do you think a mismatch exists if these Latino-owned firms have so much potential and there’s money out there looking for places to invest?

These firms collect capital, and then put it to work, but they put it to work in the same places as they did in the ’80s and the ’90s. So the same structures have only gotten bigger, but they keep on investing in the same way. And they’re not looking in these other places to grow.

A corollary would be—people talk about talent, where do I find talent? Do I keep on going to the same universities and the same places where you used to hire people? The answer is, you start looking in other places, because there’s talent almost everywhere. You really need to start thinking differently in the 21st century.

I think a lot of Americans have been taught that this is a zero sum game: If this younger Latino cohort gains, then some other group is losing, and they were taught to fear this. Do you think there’s a way to reverse those perceptions?

I think the more we’re educated through news media, through entertainment media, people will learn. We’ve seen a shift in perceptions. A decade ago, two thirds of Americans had negative perceptions of Latinos. Today, two thirds have positive perceptions.

What we found was that if you had a neighbor, or if you work with somebody who is Latino, your perceptions were a lot different than if you never did and your perceptions came from entertainment media.

So the more we provide data and information, the more people will learn. Which is why I co founded L’Attitude. We’re creating a platform where we invite in what I would call resource allocators of the country. CEOs, public leaders, venture capital funds and private equity funds. So you create that new conversation. You create that new set of data, and you share it and people talk about it and understand how they benefit from it.

Now you’ll start seeing changes in boards and changes in senior leadership. For example, Target, which just appointed their third Latina to the board (PepsiCo COO Grace Puma). If you look at their growth in the company, a very high percentage of net sales growth is tied to the Latina mom. So they need people on their boards and in their senior management to help understand that cohort, just like they did the Anglo mom in the ’50s and ’60s, as this country’s demographics looked dramatically different than they do today.

Speaking of boards, some states like California have mandated that companies have a certain number of women on their boards. Do you think that mandating a certain number of Latino executives on boards would be an effective policy?

Well, I’m not a big believer in mandates, because I like how markets work. So one of the things that I like to do is look at structural reasons why things aren’t happening. What do I mean by that? If capital is flowing, there’s going to be a lot of growth. It will be a natural phenomenon that Latinos are going to be starting businesses more and more frequently and grow to be larger sizes.

People are going to see Latinos as entrepreneurs. Elon Musk or Mark Zuckerberg were getting capital even pre-revenue from people that say we don’t invest in startups. Name a Latina that has been able to do that.

You’ve worked abroad, in Australia and in Europe as well. Do you think the perception of immigrants is different there? Or is it difficult everywhere if you’re not the majority?

Life is the same around the world. When I went to Australia, that first day, on the front page of one of the financial newspapers there was a caricature of me, the new Telstra CEO. It was a Mexican on a burro with a sombrero. That was different. They’d never had anybody like me there.

Was that discouraging to you?

Actually, those kinds of things charged me up. Because that said that people don’t understand who this cohort was. They found out that their perception was wrong. We were dynamic, we dramatically transformed the company. Rather than being discouraged, you become charged up because you want to help people understand.

When I first started in business, I knew I wanted to be the CEO. I graduated from the University of Wyoming. Not Harvard, not Stanford, not any of the elite colleges. So I knew I had to be five times better or 10 times better than the next person to me. But I didn’t carry that as a chip on my shoulder. I carried it as a challenge that said, “Okay, those are the rules of the game.” Once you understand the rules of the game, you play by the rules. If you have to score 10 more goals to be considered a winner. I’ll do it.

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