My final interview in Lima was with Professor Karen Weinberger who runs the entrepreneurship program at Universidad del Pacifico in Lima. Universidad del Pacifico has been leading the charge to build Peru’s entrepreneurial ecosystem and has a variety of courses, events, programs, and services to help entrepreneurs build their businesses and build the ecosystem and community around entrepreneurship and startups. Because she works directly with students, Professor Weinberger has a unique view of the next generation of entrepreneurs and the building of the ecosystem.
She notes that the improvement in Peru’s economy has actually drawn young people away from entrepreneurship, at least temporarily.
“Now that it’s a very good economic climate and a very good labor market,” Karen said, “students prefer to go out, get a job, and then later start their businesses with their own savings.”
The trouble is, once they start working, it becomes difficult for young people to walk away from the security of their jobs.
“People want to invest in businesses and want to have businesses but they don’t want to give up their salaries to do it.”
Despite the temptation to stay at a bigger company holding back some potential young entrepreneurs, Karen sees the overall environment as positive in Lima.
“It is very easy to start a company,” she said. “Small businesses have a special system for taxes – you don’t have to pay full taxes if you’re a small business” and, “in Peru, there are a lot of people that have money that want to invest in companies…Local entrepreneurs know that there are very good opportunities here.”
However, she does identify some negatives, mostly associated with the newness of the ecosystem.
“There’s a very informal mentality and I think we still need to work on that,” she said.
“For example, you see students that think they have an extraordinary idea and are ready to go look for investment but if you talk to them they haven’t done very good research on the market, they don’t know the size of the market, and they think they can just sell based on a feeling.”
Additionally, a focus on bringing in sophisticated investors from the outside isn’t going to have a very large impact because, “startups usually don’t look for venture capital here. They look to family friends, their own families, their own savings. It’s not very common to have young startups or young entrepreneurs with venture capital.”
So where does Karen see the ecosystem in five years?
“Five years ago people were talking about entrepreneurs and not enterprises,” she said. “In another five years I hope that people should be talking about enterprises and not entrepreneurs…because we need many more small and medium companies than so many startups with entrepreneurs who do it more for the experience than because they have the passion, skills, and experiences to be good entrepreneurs and to build good enterprises.”
Are you connected to the entrepreneurial ecosystem in Peru? Let me know what you think of Karen’s thoughts in the comments section below.