Startup Costa Rica

Costa Rican Countryside
This is just a gratuitous photo from Costa Rica so the post wouldn’t be all text.

While I experienced an epic fail last week when my dog ate my homework (aka my computer had a meltdown and lost my video interview with Ignacio Castro, the Founder of Startup Costa Rica) I think that the work Ignacio is doing through Startup Costa Rica is valuable and interesting so I am giving the organization its own post.

Ignacio is a Costa Rican who’s relocated to the U.S. but still has high hopes for building the entrepreneurial ecosystem in his home country, which is why he founded Startup Costa Rica. While he sees entrepreneurship building momentum throughout Latin America, he believes there is a gap in Central America with most of the major activity and growth happening and South America and Mexico. Partly, that is because of the small size of the countries located in Central America. Costa Rica, for example, has a population of around 5 million. However, if you take Central America as a whole, you have a viable market with approximately 45 million potential consumers.

According to Ignacio, Costa Rica has a lot going for it: it’s population is very well-educated and has the talent to build exciting new companies. Additionally, many people speak English – a definite advantage for entering the global marketplace – and the country is a Green leader. He’d like to see companies attacking the Central American, or larger Latin American, market with a base in Costa Rica, and that’s exactly what he hopes to encourage through Startup Costa Rica and would be thrilled if Costa Rica could develop to the point of having a model similar to that of Startup Chile or Startup Spain. It will be tough to get that level of monetary support from Costa Rica’s government, however, so he’s hoping to work with international agencies to help develop the program.

Ignacio’s vision for the future of Startup Costa Rica is based on two pillars: learning and acceleration. The organization will promote learning through an annual conference, startup school, angel school, hackathons and similar events, meetups, and workshops. It will also help to accelerate startups’ growth through the creation of competitions, a diaspora network, co-working spaces, demo days, investment, growth support, and promotion abroad.

If you’d like to get involved with Startup Costa Rica, visit the website and signup.

Tips to Attract and Retain Top Employees at Your Startup or Small Business

Every entrepreneur knows that the team he or she builds is the backbone of the business and that without great employees your company won’t thrive. But when you’re just starting out or are a small business without the mounds of cash the titans have to attract top talent, how do you find -and keep- the stars you need?

1) Understand what motivates the type of people who would look for -and thrive in – a job at a startup for small business to begin with.

2) Connect what your company’s mission is with what the candidates’ passions are.

3) Provide autonomy and a clear vision of how that role directly affects the success of the company.

4) Provide opportunities for growth.

5) Build an awesome team with complementary personalities.

6) Consider stock options, profit sharing, etc.

Remember, attracting and retaining star employees is about making them feel fulfilled both emotionally and intellectually more so than keeping their bank accounts topped off, so a business need not be a large multinational to get and keep top talent.

For more details, check out the video:

Do you have additional tips for how to attract and retain top talent without spending everything your business has? If so, please share your tips below!

 

Tips to Create a Credit Policy That Helps You Collect from Customers

We’ve all heard the phrase cash is king and know how important a small business’ cash flow is to its success. We know that we want to get customers to pay upfront when possible, collect receivables quickly, and stretch payables as long as we can. But our customers know the same and their payables are our receivables – so here are a few tips to create a credit policy that will ensure customers actually pay up when we need them to so that we don’t run into cash flow issues that could cripple the company.

First and foremost, only issue credit to customers if you really need to. You should try to get customers to pay you at the time of sale, if possible. If you do need to issue credit, make sure you only do so for trusted customers and perform a credit check before you let someone walk away without you having payment in hand.

Secondly, make sure you put all of your credit terms in writing so that there is no confusion about when you expect to be paid and how much. Make your customers sign off on the terms so you know they understand what will happen if they don’t pay you on time.

Thirdly, make sure you gather all of the necessary information from anyone to whom you issue credit so that you can easily find them if they don’t pay. You need to have their contact info, their EIN or social, and in some cases you may want to ask for a personal guarantee from the business’ owners.

You may also want to consider if offering discounts for payment makes sense for your company. Simply run the numbers – it may be more beneficial to you to give someone 2% off if they pay you within 7 days than to try to collect the full amount in 30. Of course, if you decide to do this, make sure that you have everything in writing and that both sides are on the same page about what the payment terms are.

Lastly, don’t forget to follow up. If a payment is due on the 1st you shouldn’t be waiting until the 1st of the next month to realize that you weren’t paid and give that customer a call. You can’t effectively manage your receivables unless you stay on top of them.

 

Have you ever had trouble collecting payment from customers at your small business or startup? What tips do you have to help other entrepreneurs get paid what they’re due?

Costa Rica’s Entrepreneurial Ecosystem – Interview with Jose Cayasso

Jose Cayasso is the Founder and CEO of Saborstudio, the creator of Pota-toss – a game dubbed the next Angry Birds by Techcrunch and CNN. He’s a Costa Rican that has participated heavily in the U.S. startup community including being selected for Dreamit Ventures, so he has a very interesting take on the entrepreneurial ecosystem in Costa Rica and how it compares to the entrepreneurial ecosystem in the US. He was kind enough to sit down with me and discuss how he sees the entrepreneurial community in San Jose. Take a look at the video below to hear his thoughts:

Do you have experience with Costa Rica’s entrepreneurial ecosystem? Let me know your thoughts on what Jose had to say in the comments below. 

Our next interview will be with Adrian Garcia and Allan Boruchowicz of Carao Ventures. 

Give Yourself an Entrepreneurial Goal Alignment Check-Up

No matter why an entrepreneur starts his or her new company, it’s very common that somewhere along the way s/he loses sight of what the original goal was. That’s why it’s so important that all entrepreneurs regularly check in with themselves to ensure that their actions and business strategy continue to align with their overarching goals. This goal alignment is the secret to achieving what you wanted to achieve by becoming an entrepreneur in the first place.

In order to make sure you’re still on track you first need to identify what your original goals were with starting the business. Did you seek freedom, autonomy, and control? Work-life balance? An IPO and billions of dollars? Whatever it was that kickstarted your career in entrepreneurship to begin with, take a second to remember it and write it down.

Next, identify what your current goals are with your company. Maybe they’re exactly the same as when you started but maybe they’ve changed. It’s perfectly acceptable to have reassessed where you want to go, but when you compare your current goals to your original goals, make sure that if they don’t match up you’ve given some real thought to why they’ve changed and that you’re 100% comfortable with where you now intend to go as opposed to having just let your goals wander away as things came up in your business or having been influenced by others. Comparing current goals to your original goals can often highlight for you where you may have let things get away from you and bring you back to focusing on what’s really important to you.

Now that you’re 100% clear on what you want out of entrepreneurship, take a look at your business’ strategy and check that it aligns with those goals. So often people get sucked into running their businesses and forget to keep their eyes on the prize. If you became an entrepreneur because you wanted to improve your work-life balance and spend more time with your family but your company’s growth strategy will require you to work 15 hours a day, 7 days a week – you need to take a step back and figure out how to adjust your business strategy. If you want to IPO but you have no plan in place for growth or financing, you need to do your homework and develop a strategic plan that will get you there.

And finally, once your strategy and goals are aligned, you have to check in on your actions and make sure that they match up with the strategy you’ve already confirmed will get you to your goals. Creating a growth strategy that involves you making 100 sales calls a week and then going to the beach instead does not get you where you want to go, nor does hiring a manager to handle your business so that you can spend time with your family and then micromanaging him or her so that both of you are working 15 hour days.

Entrepreneurship has a great many benefits to offer, but only if you remember to give yourself and your business a check-up and keep your strategy and actions aligned with your goals.

Yesterday’s quotable seemed very appropriate for this post so here it is again:

If what you are doing is not moving you towards your goals then it's moving you away from them.

Costa Rica’s Entrepreneurial Ecosystem – Ricardo Arce Interview

Ricardo Arce is the co-owner of InterGraphicDESIGNS and Quazar Web Design as well as co-organizer of BarCamp Costa Rica. He fell into entrepreneurship after college when he was doing freelance programming work, loved the freedom of freelancing, and his business took off to the point that he needed to hire employees and build a company. At the time Ricardo started his business, Costa Rica didn’t have a lot of high-quality web-design companies so Ricardo and his partners -Steven Guzman and Pablo Barrantes- were able to develop a solid reputation quickly and build InterGraphicDESIGNS to 35 employees (a mid-size company in Costa Rica). Computer science and programming are where Ricardo’s expertise lie so he has been learning how to be a entrepreneur as his company has grown and merged with others and has a unique take on the tech entrepreneurship world in Costa Rica and some of its issues.

According to Ricardo, Costa Rica has very high-skilled and well-educated people so it’s been attracting companies like HP and Intel who want to access its human capital. This has resulted in competition for programmers – and a steep increase in the expected salaries for those programmers – that’s forced many of these small web design firms out of the market. In fact, Ricardo says, many Costa Ricans who were entrepreneurs are now employees of these larger, mostly U.S.-based companies.

“The competition now is not for clients anymore, but for human resources…Web design is a matter of talent, of skills, so it’s important that you have the best designers.”

This competition has led Ricardo and his business partners to adapt their company’s growth strategy and has shaped the way they do business:

“[Big companies] can hire a lot of people with good salaries because they are selling in bigger markets. So we can do the same,” he says, “but we need some international presence, we have to change our business model, and we are at exactly this point…Some years ago, 90% of our clients were from Costa Rica and now it’s just 40%.”

While international expansion may sound like any entrepreneur’s dream, it also comes with its own set of hurdles. Until now, Ricardo has built his business by reinvesting the profits back into his company, but he’s currently exploring the possibility of raising outside funding to expand his company’s international presence and he’s noticed that access to capital isn’t so easy in Costa Rica.

For one thing, he says, Costa Ricans just aren’t as educated about or comfortable with the concept of equity investing. This seems to be the case in a lot of the Latin American countries I have and will be exploring, but Ricardo thinks Central America is even less educated about it than Mexico or South America. He says:

“If you look in the Latin American ecosystem as a whole, you can find more opportunities, but if you stay just in Costa Rica you will not find a lot of opportunities. You have to go to Colombia, to Mexico, to Argentina, to Chile.”

But while he sees Costa Rica as not on par with Mexico and countries in South America, he does identify Costa Rica as standing out from the rest of Central America:

“I think Costa Rica is a little bit different [than the rest of Central America] because of the talent. We have the same quality of talent as the countries that we’re talking about [Mexico, Colombia, Chile,etc.], but things with funding and investment are a little bit different. We have not developed that type of culture and ecosystem.”

But that culture is beginning to change as organizations like Startup Costa Rica and Carao Ventures try to fill in the gaps in Costa Rica’s entrepreneurial ecosystem (stay tuned for interviews with leaders from both organizations).  Ricardo sees this progress as good and wants multiple stakeholders to be involved in the ecosystem’s growth because – as he sees it –  journalists, the government, investors, and entrepreneurs all have a role to play. But he doesn’t see this growth happening quickly enough. The culture is changing, he says, but too slowly.

“If you grow slowly and the other countries grow faster, you will always have less even though you’re growing. So yes, we are growing, but we are growing too slowly.”

One sign that Ricardo says shows that entrepreneurship hasn’t taken it’s spot as a highly desired career choice: in Latin America there are a lot of entrepreneurs who are entrepreneurs because they have to be, not because they want to be. In Costa Rica right now there are a lot of multinational companies hiring and offering good salaries and benefits, so people are becoming employees and get comfortable not having the risks associated with building a business. This is happening so much that Ricardo predicts Costa Rica will actually have fewer entrepreneurs (as a percentage of total population) over the next few years.

As a lover of entrepreneurship, I can only hope that Ricardo is wrong and that entrepreneurship in Costa Rica continues to expand, not to contract.

 

Do you have experience with Costa Rica’s entrepreneurial ecosystem? Let me know your thoughts on what Ricardo had to say in the comments below. 

Our next interview will be with Jose Callaso of Sabor Studio. 

How to Get Over Self-Promotion Shyness So You Can Market Your Small Business or Startup Successfully

Many entrepreneurs and small business owners, especially women, feel a bit uncomfortable with tooting their own horn to promote their business. But getting the word out is key to success in business, so here are a couple of tips to help you get over this self-promotion shyness and start telling the world about the amazing product or service that you have to offer:

Have you ever struggled with self-promotion shyness? If yes, please share below how you’ve managed to deal with it and to effectively promote your small business or startup. I’d love to hear everyone’s tips!

Do you know anyone who struggles with feeling good about promoting him/herself  and his/her business? Share this post and maybe you’ll help them get over it, get out there, and get more business. e.d

Costa Rica Startup Overview

Mexico was amazing and I can’t wait to get back there to dig a bit deeper into all of the opportunities that I discovered, but now I’ve moved on to Costa Rica and looks like this is going to be a wonderful stop on my Latin American journey as well!

Costa Rica has a lot going for it in comparison to some of the other Latin American countries: it boasts solid infrastructure (which is always important because it can get pretty tough to build the next Google if your internet doesn’t work), a great education system and well-educated work force, the presence of some power players – like Intel, and growing interest in building the entrepreneurial ecosystem in the country. On the down side, however, Costa Rica is a small country of approximately 4.5 million people and it’s becoming increasingly expensive. Entrepreneurs in Costa Rica need to set their sets on the larger Latin American (or other international) market because the country is simply not large enough to provide a customer base able to sustain the type of growth that would interest equity investors and it needs to find a way to differentiate itself from the rest of the region in order to justify the additional costs of setting up shop here, as compared to some of the other, much less expensive countries.

During my first week in San Jose, the Costa Rican capital, I was lucky enough to be able to attend the presentation of the Global Entrepreneurship Monitor’s report on Costa Rica. This is a bit of a big deal because Costa Rica has only been included in the GEM reports for the last few years and the event included a brief speech from the country’s Commerce Minister.  Because data on Costa Rica has only recently begun to be gathered for GEM, the graphs are not nearly as useful as those I showed you for Mexico. However, it’s exciting that Costa Rica’s ecosystem has grown enough that they are at least now on the map and being included in reports like those produced by GEM.

Hopefully, the next few years will show continued growth for entrepreneurship in the country, but there are definitely some challenges to be overcome if Costa Rica wants to become the Central American Silicon Valley.

 

 

In Costa Rica, I began by talking to entrepreneurs so we’ll have 2 weeks of interviews with the business owners on the ground in the country. Then I’ll speak with a couple of former PE professionals who are building a modern business incubator and partnering with Costa Rica’s largest angel investor group to make sure promising young startups get access to the resources – both educational and monetary – that they need to succeed. Finally, I’ll finish off my stint in this Central American startup hub with a chat with the Founder of Startup Costa Rica. 

I’ve also had some pretty great adventures seeing the sites, so make sure to take a look at the Where in the World? section to get a taste of the fun things you can get into in between business meetings. 

Mexico’s Entrepreneurial Ecosystem Interview 4 – Jackie Hyland: Project Analyst, Angel Ventures Mexico

It’s almost time to leave Mexico (okay, by the time I post this I will have already been in Costa Rica for 2 weeks – but it’s almost time for the blog to leave Mexico) but before heading to the airport I was lucky enough to be able to sit down for a coffee chat with Jackie Hyland. She’s a Project Analyst at Angel Ventures Mexico and interacts regularly with both startups and investors, so she has a pretty insightful take on the entrepreneurial ecosystem in Mexico City.

Since Jackie works at an angel fund, our conversation naturally started with a discussion of the investment environment and, according to Jackie, there’s a big gap at that initial seed-stage capital between what entrepreneurs need and what investors are willing to offer. She says:

“There are people who want to invest but very few that want to join in on a company that is at the prototype or even seed stage. [Investors] want to see sales.”

Just like some of the other insiders I spoke to, Jackie says she’s seen a lot of the family business culture and the monopoly culture. While in the U.S. when we think of an angel investor we may conjure images of a serial entrepreneur who’s started and sold numerous businesses, in Mexico the angel investors tend to come from a more corporate traditional background or have run a family business so they’re more risk averse.

On the positive side, however, Jackie says that the investment environment in Mexico is very open, meaning that investors share deals with other investors rather then trying to keep the next hot thing to themselves.

“Between the funding organizations, we want to share what we know,” Jackie says. 

She thinks the risk aversion and openness will change though, and that change process has already begun.  The government is saying the growth of the entrepreneurial ecosystem is a priority for them by creating the new entrepreneurship institute  and the entrepreneurs and investors are becoming more active.

“The movement has started now. There are people saying ‘I don’t need to just take over my Dad’s company or get a job. I can start something,'” she says. “But it will take another 3 or 4 years before people start seeing it’s not just about starting a company, it’s about coming up with something really unique.”

Unfortunately, Jackie sees that increased deal flow leading to less open communication between investors: “I think [funding organizations’ openness] is going to change once the deal flow changes and there are a lot of really hot projects with high value,” she says.

These changes are a part of the evolution of the ecosystem. According to Jackie, just a few years ago in Mexico entrepreneurship was just starting to come out of people’s mouths and now it’s exploding. Now that there are numerous incubators and accelerators that have started, people know about them, and people are in them; people are beginning to try to figure out how to make them better.

“Everyone says this is the prototype phase and now let’s go to phase two: let’s make it better,” Jackie says.

And part of making the ecosystem better is about tweaking the models so that they fit with the Mexican culture and ecosystem. “A lot of other countries want to mimic Silicon Valley: What do they do? What do they have? How do we bring that here?” Jackie says. But in order to truly succeed, the Mexican entrepreneurial ecosystem needs to adapt those models to Mexican realities.

“What I think and what I always ask Mexicans,” Jackie says, is “why do you feel like you need to mimic when you’re bringing something from another culture? Why not try to do more than transplant and see how this model fits with Mexico and make it bigger and better?”

However the ecosystem continues to evolve – as an attempted direct copy of places like Silicon Valley or as something intentionally uniquely Mexican – Jackie says, “the flow will pick up when entrepreneurs say: ‘Okay we’ve been doing this, we’ve been making companies, let’s figure out how to do this better, how to make a big difference.'” Thus, the question of the growth of the entrepreneurial ecosystem in Mexico seems to be one of how and how quickly, not if.

 

Do you have experience in the Mexico City startup scene? If so, please let me know your thoughts on what Jackie had to say in the comments sections below. Next up we head off to San Jose, Costa Rica to explore the entrepreneurial ecosystem in Ticolandia.