The Cost of Assumption

“No, no, Marco. That’s the HS code for ‘general electronic components’ in the US. We needed the 8517.62.0006 designation for ‘network apparatus capable of wireless communication’ in Mexico. It’s a completely different regime. They are holding it under suspicion of mislabeling, Marco. Sus-pi-cion.”

He slammed the cheap plastic pen down. This was the third fire this week, and it wasn’t even Tuesday. Headquarters, 1,700 miles away and comfortably insulated by North American infrastructure, kept asking why the initial sales forecast-the wildly optimistic one based entirely on population density and perceived desire-was currently underperforming by 46%.

They called this an Emerging Market. They forgot the Emergency part.

That corporate blindness is the most dangerous kind: the blindness of assumption. It’s the belief that because your product sells well in Scottsdale, it will simply translate to Santiago if you just change the language on the box. It ignores the fundamental, messy, beautiful truth that markets aren’t maps of consumers; they are complex, interlocking systems of legal frameworks, ancient trade habits, and wildly different transactional trust mechanisms.

I’ve seen this script play out 6 times now. The biggest blunder? Always the payment systems.

HQ decides to integrate with some shiny, global-sounding payment gateway. It looks good on the PowerPoint slide showing global reach. But when the launch goes live, they discover that 76% of their target Mexican consumers prefer cash payments via convenience stores (OXXO, 7-Eleven). Their beautiful, optimized e-commerce checkout flow, built for US Visa utilization, chokes.

And even for the 24% who do use credit cards? That specific global gateway, optimized for low domestic fraud rates in Europe, flags almost all international card transactions in Mexico City as high risk, resulting in a disastrous 20% failure rate. Dead on arrival. The transaction looks successful on the front end, but the money vanishes in the back end, and the customer receives an error 46 minutes later.

This isn’t just about technical plumbing; it’s about cultural disrespect masked as efficiency. You built a perfect road for Audis, but the entire population drives pickup trucks on dirt roads. You didn’t study the road; you just assumed everyone would buy an Audi.

The Invisible 94%: Skewed Intelligence

This level of foundational failure often traces back to the very first step: the market intelligence. When I was deep-diving into a recent collapse-a SaaS company that couldn’t understand why their enterprise sales projections were off by $676 million-I stumbled across a fascinating person in the metadata of their botched report: Natasha J.

Natasha J. was listed as an AI training data curator for the third-party research firm they had hired. She was the human who tagged, labeled, and validated the raw, real-world data points the algorithm would later use to predict consumer behavior.

The issue? The firm, desperate for speed, had asked Natasha to primarily source her data from high-income, digitally native populations in capital cities-the “easy to scrape” data. They had modeled the entire country on the habits of the top 6% of the demographic. The AI wasn’t wrong; it was perfectly trained on skewed, insufficient, and deeply misleading data, curated by a stressed-out Natasha J. who probably had 6 other jobs.

The AI predicted a high conversion rate for online subscription payments, because, yes, the top 6% of Mexico City do behave like Manhattan consumers. But the other 94%? They were invisible in the model.

Corporate hubris isn’t arrogance; it’s believing your limited internal worldview is statistically significant.

The Labyrinth of Local Governance

This idea of relying on limited, polished data has been bothering me lately. It’s similar to how I was scrolling through medical forums last night-you know, looking up a little headache, and suddenly the AI is telling me I have a rare tropical disease based on 6 random symptoms I typed in. The data sets are too clean, too fast, and they ignore the messy human context. It’s an affliction of the modern world: the assumption that a clean spreadsheet represents a complex reality.

The regulatory environment is where the real complexity resides, far beyond a simple tariff code mix-up. It is a constantly shifting labyrinth built on local trust, personal relationships, and a deep understanding of why the rules are the way they are-which often has nothing to do with efficiency and everything to do with established power structures.

You try to bypass this, try to run the entire operation remotely from Dallas, and you end up facing fines, operational freezes, or worse, completely misinterpreting labor laws that result in costly disputes. We often advise clients that the cost of proper compliance is less than 6% of the potential cost of non-compliance litigation in a major market like Brazil or Mexico. Yet, the temptation to cut corners persists.

Operational Transposition

This is precisely where the global expansion strategy shifts from an internal HR problem to a core strategic competency problem. You can’t hire a remote junior analyst to navigate these waters; you need people who have lived and breathed the local system, who know which regulatory bodies prioritize what, and who understand the 6 unspoken steps between submitting a form and getting it approved. Navigating this operational complexity-the tariff codes, the cash payment systems, the regional logistics-requires hyper-localized expertise.

It requires more than just translation; it requires cultural and operational transposition.

Physical Reality: The Last Mile Contradiction

Let’s talk logistics, because this is where the physical world insists on contradicting the digital promise. The last-mile problem in major US or European cities is frustrating; the last-mile problem in Bogotá or São Paulo is an operational black hole.

The reality? The delivery schedule became so erratic that the customer experience tanked. Customers, used to a certain level of localized service (often requiring specific, handwritten instructions for accessing gated communities or calling a specific person 46 minutes before arrival), simply rejected the delivery attempt, leading to a massive 36% returns rate. They lost millions not because the demand wasn’t there, but because they treated infrastructure deficiency as a minor inconvenience, rather than a defining characteristic of the market they were entering.

I know I sound overly cynical, but this perspective is forged in watching genuine, innovative products die slow, miserable deaths because the global leadership team refused to believe their infrastructure wasn’t universal. This isn’t anti-globalism; it’s pro-reality.

The Humility of Adaptation

I remember arguing vehemently in a board meeting 6 years ago that digital adoption rates were high enough in the middle class to bypass physical distribution entirely. I was wrong. Gloriously, spectacularly wrong. I was looking at the percentage of people with a smartphone and equating that to the percentage of people with a dependable address and reliable residential access for a delivery van. Two vastly different metrics. I was chasing the Arizona illusion, too. My data, sourced from glossy trend reports, was just as flawed as Natasha J.’s curated database-clean but contextless.

It felt like admitting my own mistake was a form of professional self-sabotage at the time, but the humility it forced upon me was the best consulting tool I ever acquired. You have to criticize the system, yes, but you must also be willing to do the uncomfortable work of adapting to it. You criticize the failure of local bureaucracy, then you spend three weeks understanding why that bureaucracy exists and how to efficiently navigate it, using all the local nuance you can muster. You criticize the payment system, then you spend $46,000 integrating the three major local cash-payment providers.

The headquarters view-that Latin America is merely a monolithic, high-population area ready to be penetrated-is deeply reductive. The region is 26 distinct, fiercely proud countries, each with its own customs regime, unique consumer preferences, and distinct digital wallet landscapes. Treating Mexico, Colombia, and Argentina as “LATAM” is like treating Norway, Italy, and Greece as “EUROPE”-a geopolitical shortcut that guarantees operational failure.

It’s the small, unseen friction points that bleed the budget dry. It’s the 6 different municipal taxes you didn’t account for. It’s the 46 different types of data privacy consent forms required across the region. It’s the moment the Chief Financial Officer calls you screaming because the local banking regulations require capital repatriation rules that negate 50% of your projected profits.

The transition from “Emerging Market” to “Operational Emergency” is usually so subtle it feels like the heat death of the universe. It’s not a sudden explosion; it’s the gradual accumulation of 6 small, overlooked deficiencies. It’s the customs paperwork, the 20% failure rate, the lack of last-mile delivery, the irrelevant data model, the misunderstood labor laws, and the banking restrictions. Each one individually manageable; all 6 combined-a deadly sticktail of complexity.

We are told, constantly, that we must be globally minded. But global-mindedness must never be mistaken for the assumption of global uniformity. The true expert is not the one who can explain the home market in minute detail, but the one who can admit they understand maybe 6% of the new market, and knows exactly who to hire to cover the remaining 94%.

The Final Question