Brazil and Argentina startup ecosystems are further along, but here comes Mexico.
My impression (which could be wrong), after visiting Brazil and Argentina and meeting with some awesome startup founders, I’ve come to the conclusion that these ecosystems are at a more advanced stage than the rest of Latin America. Nonetheless, because of macroeconomic factors and the rise of startups and investors, Mexico has great potential to catch up quickly.
I’m using that horrendous and overused term, “ecosystem”, to denote the startup environment (startups, investors, etc.) as a whole because I’ve met awesome entrepreneurs in Colombia (I advise come great founders here), Chile, etc. I’m dying to meet with entrepreneurs in Uruguay and Peru (though I advise Magnolia), among others, so I’ll leave them out for now because I don’t have any first hand knowledge. Also, these are my impressions and I’m sharing them openly more to solicit opinions in favor or not of this point of view (particularly, those who don’t agree).
There are some similar things that I like about Brazil and Argentina, but there are very strong differences. Because of their ability to target a large home country, my impression was that Brazilians were more advanced in their thinking about how to build a big organizations relatively quickly and were more cognizant of the importance of focus and company culture in achieving this.
What impressed me about the Argentinian ecosystem was the ability of founders to think in terms of regions or globally from the outset. Also, they seem to have a much more active Angel Investor who community than other countries and, I’d say, they are the most tapped into Silicon Valley’s network (e.g., investors, founders, etc.) that I’ve seen anywhere. Many more of these (compared to other countries) are entrepreneurs with successes under their belts who are now looking to give back. This is true in other countries, but, in my opinion, not on the scale that I observed it in Argentina.
With respect to the founders, I believe it’s key to be able to filter among those who talk a great game and those who can back it up. I say this because the characteristic I most admire about Argentinian entrepreneurs is their confidence in themselves (and I do mean this in a good way). Obviously, this can degrade into hollow bravado, but it’s a characteristic that I feel I was lacking in my failed attempts as an entrepreneur and, for this reason, perhaps, it’s more on my radar.
Brazil
Though they are going through a tough political and economic moment right now (versus the go-go days of yesteryear) and their tax and regulatory system is taunting, I felt closer to Silicon Valley (with a great Caipirinha flavor) there. They have more top level VCs with experience and entrepreneurs who are working on building strong, focused organizations. Though it’s historically been incredibly difficult for startups to expand out of Brazil (I remember this from my days at Intel Capital in Mexico), I saw a lot more plans that included countries outside of Brazil (even if it was in the medium term).
These are entrepreneurs with a big market (Brazil) and, in some cases, backed by smart institutional money. The result, as one would expect, are founders who are upping their game in order to rise to the challenge in front of them. In other countries, founders must start trudge along without investment and small initial markets. Most of these companies had at least 30 employees already (sometimes a lot more) and were racking up impressive revenues.
Argentina
I didn’t get to meet with as many startup founders as I would have liked during my visit to Argentina as I was there as a panellist at a conference. Nonetheless, I met with founders of growth stage startups (e.g., Invoinet and Afluenta) as well as founders of earlier stage companies (e.g., Bitex.la, iBillionaire, etc.).
With respect to Invoinet, Pablo Sanucci has built a strong and growing online invoice marketplace. Thanks to a solid product, big name partners, strong growth and the deep industry expertise, IFC recently invested $4M in the company. A couple of weeks ago, IFC also participated in a $8M round in Afluenta, a P2P lending company founded by Alejandro Cosentino. Alejandro is from Argentina and has, likewise, proven his model and overcome many obstacles thanks drive, talent and deep industry experience.
After meeting with these founders as well as with Alejandro Estrada of iBillionaire and Moni and Manuel Beaudroit and Nubis Bruno of Bitex.la, it’s clear that these are founders who are incredibly capable, determined and think big (beyond the borders of one country). As a side note, Alejandro Estrada’s previous startup was DineroMail which, along with Pagos Online (now PayU) was acquired by Naspers. I mention this just to give a shout out to some Colombian pioneer entrepreneur/angel investors: Jose Velez and Martin Schrimpff.
In general, I think it’s such a great time to be in Latin America. I just returned from a trip to Santiago, Chile and fell in love with that city and the culture of the people. As I mentioned, I met incredible entrepreneurs there, in Colombia, Mexico, etc. Nonetheless, I’m making a comment with this post about something which is out of the control of individual founders and has more to do with the entrepreneurial environment in each country.
In Brazil’s case there seems to be more of a startup infrastructure (especially, experienced institutional VCs locally and from outside) and the “luxury” of a humongous market. In Argentina’s case, it seems to me to be more of a culture thing with a can-do attitude (from angel investors and founders) that seems to connect them really well to similar cultures (such as Silicon Valley).
I’m sure not everyone would agree with my assessment and that’s great and I’d love to hear alternate viewpoints. Nonetheless, if the region is going to accelerate it’s development, I think it’s important to put provocative viewpoints out there. The ideal outcome would be a vigorous debate and ideas for how to learn from each country’s strengths and make the region as a whole.