Colombia’s Entrepreneurial Ecosystem: Interview with Carlos Castañeda

My next stop in Bogotá was to speak with Carlos Castañeda at Wayra. By now, you should all have a pretty good idea of what Wayra does as I’ve chatted with the Wayra teams in Chile, Argentina, and Peru before making it to Colombia. (If you’re just starting to follow Startup Nomad you can go back and take a look at the interviews with the other Wayra leaders here, here, and here. Instead of rehashing the Wayra discussion, Carlos and I jumped right into talking about what sets Colombia’s ecosystem apart from the others in the region and the world.

**Please note, my interview with Carlos was conducted in Spanish and I’ve paraphrased some of what he said.**

According to Carlos, a lot has changed in Colombia over the last 2.5 years. Previously, neither the government nor the private sector invested in startups so an entrepreneur who really wanted to build a new company had to go to a different country. In the last 2.5 years that has changed a lot, however, not only because of Wayra or because of the support of the government, but also because new investors have arrived in the country.

“We still don’t have an ecosystem that is fully developed,” he told me, “but we have one where we’re growing much faster than other countries on some metrics…

The number of people who are thinking about startups is greater and the talent is developing their technical capacity more…the coders are more skilled, the business people understand better how to get venture capital…

We’re raising the level…I’m confident that we will be the new hub in the region.”

Despite the rapid development, however, Carlos mentioned the same couple of issues that have continued to pop up with the majority of the people I spoke with throughout the region.

“The difficulty here is that we don’t have success stories and we don’t have access to capital,” he told me.“The investors here are more interested in traditional investments. They want to buy another building or something like that, not invest in a risky startup…[and] in Colombia there are very few people with a track record. Cases of major success don’t exist. We don’t have a rock star.”

Colombia is also still at the stage that many of the budding startups are still copy-cats of successful companies in other parts of the world. Carlos noted that it’s logical that there would be a lot of copy-cats because the development of things like e-commerce in the country are very low, even the adoption of the internet is very low. As Colombians gain access to and confidence in using these technologies, the opportunities are there for the copy-cats.

“It’s very different to build a startup here than to do it in San Francisco or in Tel Aviv. You have to understand the Latin American culture,” Carlos told me.

We also talked about the rivalry and differences between Bogotá and Medellín, Colombia’s two startup bastions. “I’m from here, I live here, I love it here, but I’m fascinated by what’s going on in Medellín,” Carlos said. From his perspective, Bogotá has a much larger population and the people know a little more about startups and the startup process but Medellín now has a program from the city government [Ruta N – you can read that interview here] to support the development of entrepreneurship. Additionally, in Bogotá, the majority of entrepreneurs are still Colombian. Unlike in Medellín where there is a huge population of foreign-born entrepreneurs, foreign entrepreneurs are just starting to arrive in Bogotá. Plus, Medellín is very small and all of the entrepreneurs congregate in one area so if you visit, you will see tons of them. In Bogotá everything is more spread out and there are many more people, so you won’t see the density of foreign entrepreneurs even though they are coming.

And Carlos’ advice for aspiring entrepreneurs? “The first thing is to think like your customer. Think like your customer and how your product will solve their problems. Why would they spend their money or spend their time for your product or on your platform?”


Do you have experience with the entrepreneurial ecosystem in Bogotá? Let me know what you think of Carlos’ thoughts in the comments section below. 

Colombia’s Entrepreneurial Ecosystem: Interview with Cesar Cortes

My next stop in Medellin was at Ruta N, an amazing public non-profit that is playing a huge role in Medellin’s rapid acceleration into a major Latin American startup hub. While there, I met with Cesar Cortes, the Director of ICT in Science, Technology, and Innovation Plan for Ruta N. Cesar is  a Colombian who spent many years in the startup world of the United States (Boston, DC, and Silicon Valley) before moving back to Medellin in late 2012.

He gave me a tour of the absolutely gorgeous building where Ruta N is housed and let me pick his brain about the startup ecosystem in Medellin and its rapid growth. Below, you’ll see my interview with him as well as a video showing the Ruta N space because it was such a beautiful office building that I couldn’t help but let you all take a peak.

Unsurprisingly, Cesar had a lot of the same observations of the ecosystem as some of the other players in the scene with whom I’d already spoken. He said that currently,

“there is a lot of excitement [around entrepreneurship]…there are a number of co-working spaces being established around the city, a number of Meetup groups, a lot of foreigners coming to Medellin.”

While Cesar recognizes that Medellin is still in the early stages of developing its ecosystem, “this is a very fertile ground,” he said.

“This is the right time to be here, the right moment…It’s still at the very early stage but there are a lot of resources and initiatives and money that are being invested in the ecosystem at various levels…In 10 years Medellin will be recognized as one of the most innovative cities in Latin America.”

Because the ecosystem’s development is still at it’s early stages, however, “there are a number of gaps that we still have to fill,” Cesar said. “One of the gaps that we have is access to mainstream capital.” This access to capital is one of the gaps that Ruta N seeks to fill with its numerous programs and is, in fact, a lead investor in Velum Ventures, one of the first venture capital firms in Colombia, whose founding partner I interviewed as well.

Ruta N is also a key player in promoting Medellin as an entrepreneurship hub and has a program to help foreign companies bring their business operations to Medellin – complete with office space in their incredible building – along with their many other programs to help foster entrepreneurial growth and innovation in the city.

So what’s Cesar advice for new or aspiring entrepreneurs?

“Dream big; think globally, and really get to know the programs that are available to you [no matter where you’re located] because there are a lot of resources available.”


Here’s a look at the beautiful building where Ruta N is housed:

Colombia’s Entrepreneurial Ecosystem: Interview with Esteban Mancuso

I hope everyone’s off to great start for 2014. We’re back in action here at Startup Nomad, so let’s dive right back into the interviews:

My next stop in Medellín was at Velum Ventures, one of the few venture capital firms in the country, to speak with one of its founders, Esteban Mancuso. Esteban is actually an Argentinian who has relocated to Colombia and brought his vast experience with startups to Colombia’s ecosystem. He’s been a founder, CEO, partner, mentor, or advisor at a host of companies and is a major player in the development of the startup ecosystem in Colombia.

He sees the environment for business as much healthier and more stable in Colombia than in his native Argentina.

“In Colombia, the government is fostering innovation and startups,” he said.

He also sees Colombia’s position within the market as advantageous for entrepreneurs saying,

“As a market there are a lot of opportunities. We have a lot of stability. The middle class is growing. There is a lack of many business models that already exist in Spain or wherever and are successful, so why not come to Colombia and then expand to Peru, Ecuador? Maybe go into Mexico. Maybe go into Chile.”

And he’s not the only one who sees this opportunity. A theme throughout all of my interviews in Medellín was that foreign entrepreneurs have been falling in love with and moving to the Colombian city in droves. According to Esteban, there are a lot of foreigners that came to start businesses in Medellín because “they like the city, they like the climate, and they can buy a house for cheap.”

He sees this as a great opportunity for Colombia to take its place as a leader in the growth of Latin American entrepreneurship and, more selfishly, recognizes the benefits for his own fund.

“What we are realizing is that there are many entrepreneurs from Argentina or Chile or Mexico where there is also a lack of early stage financing who are willing to come and live in Medellín for many reasons,” he said.

The city, the climate, and the universities all rank high. Additionally,

“there is a lot of talent here and the human resources are still cheap compared to other countries for coders and designers,” he said.

There are some hurdles that Colombia still needs to overcome if it wants to create a truly thriving and sustainable ecosystem, however. Many of those hurdles ring true throughout Latin America, and Esteban recognizes that the region, as a whole, shares these hurdles, a major one being a lack of investors.”I think all the rest of Latin America [excluding Brasil and Argentina] is in the same situation,” Esteban told me. “Lack of funds, lack of professional investors.” He continued:

“One of the problems we have in the region, at least in Colombia, is the lack of investors, the lack of angels. Because traditional business people in Colombia are related to traditional industries…and they are not interested in investing in innovation. They’re interested in investing in traditional assets.”

Additionally, it can be tough to attract outside investors that do have experience because the risk is greater in the region due to lower deal flow and lower valuations.

“Valuations in Colombia and in the Andean region are not high,” Esteban said. “You are not going to find acquisitions for more than $30 million in the region [with the possible exceptions of Brazil and Argentina]…because of the size of the markets…When you see the valuations in exits you realize that it’s impossible to get a relationship of 1 hit in 10 companies that you invest in, you need to invest in 10 companies and have a success in 5 to return something interesting…Because the exits aren’t high you need many more exits,”

Therefore, entering the early stage market here can be very risky business and “there is not enough deal flow right now in Colombia to invest a $50 million fund or a $60 million fund in a few years.”

That’s probably at least partially why, according to Esteban, “nowadays there are only 3 or 4 VCs: one focused on impact investment, another one more focused on BPO, and another one really active in VC and they’re the only fund in Colombia that has exits.”

That also means there aren’t examples of successful entrepreneurs for new entrepreneurs to look up to and to learn from.

Despite the hurdles, however, Colombia seems to be poised for growth in the startup ecosystem and Medellín in particular is becoming an international hotbed of entrepreneurial talent.

So what’s Esteban’s advice for new entrepreneurs?

“Entrepreneurs have to be much more prepared, to understand what it means to take a company from zero  and make it grow in 3 or 4 years, in 4 countries…being really excellent in execution.” They need to “prove much more and be much more in the market. You don’t build a company from behind your Mac coding.”

Finally, if you have the newest hottest app, don’t go knocking on Esteban’s door just yet. “We don’t invest in applications,” he told me. “We won’t invest in applications. We invest in companies.”


Colombia’s Entrepreneurial Ecosystem: Interview with Conrad Egusa

I began my Startup Nomad adventures in Colombia in Medellin. This is the first non-capital city I visited for Startup Nomad in Latin America and that’s because its entrepreneurship community simply cannot be ignored. It’s rapidly growing and is attracting lots of interest from entrepreneurs and investors from outside of Colombia.

Case in point: Conrad Egusa of Espacio, a co-working space in the heart of Medellin. Conrad is from the United States, has founded multiple businesses, and had experience in the startup scenes in Silicon Valley, New York, and Miami before moving to Colombia. Once he touched down in Medellin he fell in love and never left!

Check out the interview below to hear why he loves Medellin so much and how he thinks the entrepreneurial ecosystem there compares to that in the U.S.’s startup hubs.

Metro Cable in Medellin, Colombia

As I mentioned last week, one of the coolest things about Medellin is its metro and aerial cable car system connecting the main city in the valley and its outskirts in the mountains. The metro and metro cable were part of the transformation and revitalization of the city and I have never seen a more spotless public transportation system in my life. Plus, because it’s part of the normal public transportation system, the metro cable is one of the most affordable tourist activities you will ever enjoy.

For my “tour” of the metro cable I decided to ride it all the way up to Parque Arvi. You will likely have to take the regular metro from wherever you’re staying in Medellin and then switch at the Acevedo station to the metro cable. You’ll ride this all the way up to the top at Santo Domingo where the publid transportation metro cable ends. This ride alone gives you some awesome views and a sense of the metro cable, but I recommend you switch to the metro cable that will take you all the way up to Parque Arvi, even though you’ll have to pay more. There’s actually not much to see at the top but there are local vendors with some delicious Colombian food, fresh fruits, and artisan crafts. Despite being a tourist destination, everything is very reasonably priced. I enjoyed a lovely lunch (including fresh strawberries for desert) for less than $3 USD.

The metro cable is definitely something not to be missed if you visit Medellin so take a look at the video below (sped up a bit) to get an idea for what you’ll experience.

Medellin, Colombia

I absolutely fell in love with Medellin. I have to start this post by saying that because the city is lovely. The weather is perfection, the people are warm and welcoming, the public transportation system is spotless, and it’s practically impossible to believe how recently this city was one of the most dangerous places on the planet. I truly can’t say enough nice things about this city. Even the drive into Medellin from the airport was a lovely experience.

This week’s video will give you an idea of some of spots to see in the city itself. Next week, I’ll talk about the cable car and my visit up into the mountains. Enjoy 🙂