José “Pepe” Shabot Cherem is a serial entrepreneur who has started six nonprofit organizations and more than a dozen for-profit ventures in Mexico City. At 34, Pepe embodies the notion of a “growth mindset.”
A YPO member who is always finding new ways to improve people’s lives, Pepe creates synergies among his companies, new entrepreneurs and even competitors.
He’s been named Mexico’s EY World Entrepreneur Of The Year, considered to be the world’s most prestigious business award for entrepreneurs. The EY awards celebrate those who are building and leading successful businesses and inspiring others with their vision and leadership. Three other YPO members from Sweden, South Africa and the USA will be competing in the global finals as well. The top award-winner will be named in June at EY’s annual event in Monte Carlo, Monaco.
Workforce education helps businesses and communities
Of all the themes that run through Pepe’s endeavors, perhaps none is more prominent than education. When he was only 19 years old, he was inspired to create a nonprofit to provide on-the-job education to construction workers. While working toward his civil engineering degree, he worked on construction sites and learned that many workers were illiterate.
“The people I worked with were often immigrants to the city from rural parts of the country and they never had a chance to study,” he says.
He called the nonprofit Construyendo y Creciendo (“Building and Growing”). It was initially focused on literacy, but quickly expanded to include computer and technical training.
“We now have public classrooms so low-income workers can learn trades like electrical work or plumbing,” he adds.
Convincing construction companies to host on-site classrooms wasn’t easy, but Pepe positioned education as a way to boost productivity and employee retention.
Construyendo y Creciendo has educated 20,000 construction workers over the past 15 years. It also serves as an adult education model for government institutions throughout Mexico.
A community-first approach to housing development
Through his experience with Construyendo y Creciendo, Pepe became laser-focused on the social impact of entrepreneurship. At 20, he launched his first development company, Habitavi, with his brother. They raised enough financing to build 115 small, affordable apartments in Mexico City.
To broaden his perspective, Pepe enrolled in the Stanford Graduate School of Business School. He received his MBA in 2009 and founded another company the same year, Quiero Casa (“I want a house”).
He identified an opportunity to develop low-income housing in an area of Mexico City with a new subway station. His plan for a 200-unit apartment building was derailed for a few months because the local community was opposed to the plan.
Pepe explains, “Mexico City has a huge lack of services. Neighbors were saying that if we built more apartments, they would get less water.”
He took the community’s concerns to heart.
“That setback gave us an opportunity, Pepe acknowledges. “Our job in Quiero Casa was to improve neighborhoods — not just build apartments. We were able to negotiate with the community to add new infrastructure: water and sewer, electrical grid, lighting and sidewalks. We were able to create a very successful project for investors, the community and buyers.”
Since 2009, Quiero Casa has raised USD632 million in equity to build apartment complexes and communities. Five percent of all proceeds from housing sales go to support Provivah, an NGO that partners with the federal and local governments to build homes in marginalized communities across Mexico.
“We’re now the largest residential developer in Mexico City. We’re adding about 2,000 new units every year,” Pepe discloses. “This really changes lives for some of these residents. Many of them used to travel several hours a day to go to work in the city, but now that they live closer, they have more time with their families. Children are in better schools. It’s a win-win.”
Developing talent, new businesses and new markets
Pepe has remained passionate about workforce education since his first nonprofit venture. His holding company, Desarrolladora de Ciudad, now operates a program that is like an in-house university for his employees called Universidad Desarrolladora de Ciudad (UDC). It offers courses of study in a variety of business-related topics, such as customer satisfaction, engineering and sales.
“I personally teach a workshop every month and a half that is based upon what other companies have done successfully,” he says.
Pepe’s companies use UDC to cultivate candidates who have exceptional qualities but lack specific training. Some of Pepe’s former employees have even become entrepreneurs themselves — with his help. They are among his top suppliers.
In 2011, Pepe’s holding company created ION Financiera to offer mortgages to professionals who weren’t being served in the marketplace. ION now offers home equity loans and a program that allows people without a credit rating to purchase a home after saving for a period of time. Much of this is managed by AI360, a technology division of Desarrolladora de Ciudad that leverages artificial intelligence with data and strategic analysis to determine if applicants are creditworthy.
One of Pepe’s most surprising moves has been to make construction bridge loans available to small, urban residential developers. Why would Pepe’s company help the competition? “We felt like the city needed a lot of housing,” he answers. “We get a lot of immigration from around the country. If other developers want to develop apartments, why not do financing? Now there are 8,000 apartments a year built or financed by our group.”
Mexico City is one of the largest cities in the world, but Pepe is thinking even bigger. “What motivates me about the challenges I see — with housing and how a city can work better — can be applied to other cities. Currently, one in eight people live in 33 megacities around the world. That will increase to one in five very soon,” he adds. “The lessons I’ve learned here can have a global impact.”
EY is YPO’s strategic learning advisor.