Interview with Alejandro Mayta

This week we’re talking with Alejandro Mayta, the organizer of Startup Peru. Startup Peru is a bit different than Startup Chile or Startup America because it’s completely private and Alejandro is building it without the support of the government (the Peruvian government is working on their own initiative with a different name). Alejandro has been involved in entrepreneurial projects of his own and is learning more and more about the ecosystem as he builds up Startup Peru, so it was interesting to hear his take on what the entrepreneurial ecosystem in Lima is lacking.

One of the key problems that Alejandro sees in the Peruvian entrepreneurial ecosystem is a lack of talent skilled in the business side of building startups. Unlike in the U.S. where technical talent – programmers, designers, etc. – are a hot commodity, Alejandro says that it’s actually fairly easy to find top technical talent in Lima but that filling out the business side of the team is difficult.

Along those same lines, he says that it’s difficult to find qualified mentors and role models for new startup teams. Even in the organized programs, if you ask a mentor what his business is/was he’ll respond saying, “No, I’m not an entrepreneur, I’m just a mentor,” because he’s likely coming from a corporate background. While he can still be very valuable to the new entrepreneurs, there are going to be things that would be better addressed by someone who has gone through the process of building a business from nothing.

This lack of mentors due in large part to the fact that Peru doesn’t have any startups (with the exception of Papaya) that have successfully been able to expand to other countries and it doesn’t have examples of big exits. Peruvian startups stay entirely Peruvian and Peru is a very small market, so finding huge success stories like Mercado Libre and pulling from their founding teams for mentors is basically impossible.

“More than just innovation we need knowledge and understanding of what it is to build a business,” Alejandro said. 

He feels that Peru is behind in understanding and learning about widely known startups concepts in other countries, for example, the principles of lean startup, minimum viable product, and pivoting rapidly. And Peru is also behind in certain infrastructure – internet bandwidth and the adoption of ecommerce, for example – that would encourage and support the creation of rapid-growth businesses. This is partly because there isn’t a community that works together to push Peru forward.

“The worst thing [about being an entrepreneur in Lima] is the lack of cooperation between us. There isn’t trust. We don’t share,” Alejandro said.

It’s difficult to see rapid growth in an entrepreneurial community when its members won’t help and support each other.

Finally, Alejandro said,

“Investment doesn’t exist…It could, but it’s an enormous problem and it depends in large part on the politicians.” 

Despite all of those hurdles, Alejandro does see Lima as a city ripe with possibility and is committed to building a vibrant entrepreneurial ecosystem there.

“The best thing about being an entrepreneur in Lima is that there is still a lot of undiscovered opportunity,” he said. 

The question, then, is how do people like Alejandro go about taking advantage of that undiscovered opportunity and building a startup community that supports and shares with each other?

 

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.

Peru Startup Overview

Welcome to Peru, Startup Nomads!

Upon my arrival in Lima (the second time because the first time I was in full tourist mode for my 1 day in the capital before heading off to Machu Picchu and Lake Titicaca) I was greatly impressed with the amount of energy swirling around about entrepreneurship. While the startup ecosystem didn’t seem to be quite as mature as many of those in some of the other capital cities I visited, the energy was palpable.

Overall, Lima gives the impression of being a bit less advanced than many of the major cities in Latin America, but it’s still holding its own as it develops and the entrepreneurs in the area are committed to making it a tech hub. Additionally, it was the only city that I visited in my entire journey where a lack of access to capital wasn’t continually mentioned as a major barrier to entrepreneurial growth.

When I looked into data on entrepreneurship in Peru using the GEM data visualization tool I was surprised to see that Peru actually trounces the U.S. in entrepreneurial activity but that there has been a decline in the past few years. This data runs counter to what I experienced in the city, but I only met a small sampling of those involved in the entrepreneurship world.

Total Early-Stage Entrepreneurial Activity (TEA)
Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business.

 

New Business Ownership Rate
Percentage of 18-64 population who are currently a owner-manager of a new business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than three months, but not more than 42 months.

Clearly, there is a lot going on in the entrepreneurial ecosystem in Lima, Peru so stay tuned to see what the key players on the ground there had to say about the ecosystem and its growth.

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 🙂

Argentina’s Entrepreneurial Ecosystem: Interview with Juan Melano

My next stop in Buenos Aires was to speak with Juan Melano, one of the original organizers of Palermo Valley and the Founder of Comenta.tv, which is a portfolio company of the Wayra program in Argentina. Juan is a cancer survivor and after that experience he knew that he needed to find a way to have his dream job before he died, which is how he ended up in entrepreneurship.

Juan shared with me that Argentina’s biggest asset when it comes to entrepreneurship is its talent pool.  “If you’re starting your company here the good thing you’ll get is the human resources here…very good people who are very good at what they do,” he said. He continued:

“There are a lot of talented people here – very well-educated, very capable, very creative – and not very expensive compared to the United States…[Unlike in other countries, in Argentina] there is a lot of talent everywhere – a very good mix of engineers, of business people, of designers. It’s a very good mix to create.”

Because he recognized this talent pool in Argentina, Juan was one of the original supporters of Palermo Valley back in the mid-late 2000s. Through Palermo Valley, he said, Buenos Aires started to develop a real community of entrepreneurs. Before that there wasn’t a community and people didn’t share and communicate but Palermo Valley was able to start connecting people and an ecosystem began to develop. However, there was still a lack of capital because venture capitalists were the only source and they would only invest in copy-cats of U.S. based companies with already proven business models and that were designed to be quickly acquired when those U.S. companies decided to expand into Latin America. Truly innovative new companies didn’t have the opportunity to start or grow until more recently.

When Wayra, government programs, and other sources of capital started to come in to fund these truly innovative companies, it wasn’t long before the community really took off. “Now we have another problem,” Juan said, “that there are a lot of startups trying to raise an additional amount of money…We do have a great local ecosystem and I think everything is because of what happened in those early meetings at Palermo Valley…

…In 2011 we [people in the Argentinian entrepreneurship scene] took a trip to Silicon Valley and they were like ‘Who are these guys?’ Now they know who ‘these guys’ are.”

And since Argentinian entrepreneurs are now recognized, “VCs are no longer investing only in clones but also in original ideas.” Plus,

“there is a lot of angel investing as well that wasn’t happening before and is contributing to the growth of this ecosystem.”

On the negative side, however, Juan said that government regulations aren’t very “open-market friendly.” To open a company and get everything up and running will take six months so Juan actually wouldn’t recommend starting a company in Argentina unless there is a clear strategic reason to do so. He would recommend a country with a more streamlined process for opening a business, like Chile. However, these regulations could change at any moment with the whims of the current politicians.

“That’s the thing in Argentina,” he said, “you never know.”

So what’s Juan’s advice for aspiring entrepreneurs? First he said, jokingly but seriously,  “it’s a nightmare, don’t do it.” He continued on, however, to say, “but if you’re really passionate about it, it’s the best thing that can happen to you because it’s like a little baby that you see grow up and it’s an extension of yourself.”

So his real advice?

  1. “Just do it.”
  2. You need to build a team that you can really care about because you will be with them every day and every night.
  3. “At the end of the day it really doesn’t matter where you’re based but how you deal with the different markets and how you build your company.”

Finally, some parting words of inspiration from Juan:

“[Entrepreneurship] is not about the money. It’s about really being passionate about something: about an idea, about something you want to change, you want to do, you want to create and you make it possible, and by making it possible you are living the dream.”

 

 

Lima, Peru

Obviously, after my amazing vacation to Machu Picchu and Lake Titicaca in Peru, it was back to the capital, Lima, to get some work done. In a few weeks you’ll be able to learn about the entrepreneurial ecosystem in Lima over at Startup Nomad (we’re still in Argentina on that blog). However, I also managed to do a little bit of exploring in my down time in Peru’s capital city.

While I have to say Lima was probably one of my least favorite cities in all of my travels ever based on pure aesthetics, the food there was absolutely amazing! Because I was more interested in stuffing my face than in taking in the sites and architecture, this week’s video is pretty short, but it does give you a look at a bit of the downtown historic area of the city, so enjoy.

Argentina’s Entrepreneurial Ecosystem: Interview with Martin Vivas

My next stop in Argentina was to speak with Martin Vivas. He’s a powerhouse in the entrepreneurship scene in Buenos Aires helping to organize Palermo Valley, Founders’ Place, and Startup Weekend and basically being a part of everything having to do with startups. Because he’s been involved in the ecosystem for so long and has been an integral part of helping it to continue to mature, he had some interesting observations about what the entrepreneurial ecosystem is like in Argentina and why it has developed the way it has. Check out the video below to hear what he had to say and then weigh in with your thoughts in the comments section.

This is interview is in Spanish (except for the first few seconds) so I apologize in advance for my lack of skills in the language department.

Sillustani Funeral Towers, Peru

As I mentioned in previous posts, when I visited Peru I took a little vacation from the entrepreneurship world and visited Machu Picchu and Lake Titicaca. I booked through a tour group that arranged everything for me and it included visits to some other, lesser known sites to break up the travel time between the big attractions.

On my way from Puno, where I visited Lake Titicaca, to the airport in Juliaca where I would catch my flight back to Lima at the end of my vacation, we stopped at the ruins of the Sillustani Funeral Towers. Situated at the edge of a lake this archaeological site is home to dozens of funeral towers, which, I can only assume, hold hundreds or possibly thousands of skeletons.

While Sillustani was far from the most exciting tourist attraction I’ve ever visited, I still wanted to share what I saw there in case any of you would like to break up your journey between the Juliaca airport and Lake Titicaca like I did. This week’s video is short, but you’ll get a very good idea of what you will see if you visit Sillustani.

Argentina’s Entrepreneurial Ecosystem: Interview with Lorena Suarez of Wayra

My first stop when I arrived in Buenos Aires was at Wayra to speak with Lorena Suarez. Having visited the Wayra offices in Santiago when I was in Chile I knew that the people at Wayra in Argentina would be super well plugged in to what was happening in the ecosystem and might be able to point me in the direction of some great events and/or people to talk to so I was psyched that Lorena agreed to sit down with me and chat.

Lorena came to Wayra after working in telecommunications for a number of years and she transferred from another group within Telefonica (the telecommunications company that owns Wayra) to Wayra. She has a background in economics and business and has been with Wayra for 2 years.

According to Lorena,

“Argentina has a very strong entrepreneurial culture.”

There are a lot of large internet companies created in the lates 1990s and very early 2000s that are still up and running in Argentina. After 2001 the activity stopped but nowadays the activity is growing again. “The quality and amount of startups in Buenos Aires today is significant and interesting,” Lorena said. “We’re seeing more and more major projects with major teams and balanced teams…We evaluated almost 3,000 projects [this year].”

Lorena noted that while “the political and economic context is not very simple for entrepreneurs [in Argentina],” this instability has actually aided the entrepreneurial ecosystem in some ways.

“Fortunately or not, we are trained to handle uncertainty and perhaps that’s why Argentinian entrepreneurs can be so creative: because uncertainty is something that’s been present in our history and our economy,”she said.

She also noted that Argentina has a lot of talent to offer and “talent is the most valuable asset.” Entrepreneurs that start their companies in Buenos Aires have access to people who are well-educated and can find talented and experienced engineers, designers, and others.

On the negative side, however, starting a company can require a massive amount of patience as you’ll need up to 2 months to wade through the regulations and processes necessary to open a new business there.  Additionally, as with many countries in Latin America, there is a lack of funding available for startups – especially at the early stage after seed funding but before they’ve created enough traction for a Series A round. “After finishing at an accelerator the companies already have clients, they’re already at break-even, they have a clearer idea of where they’re going but they don’t yet have enough traction to go to a VC for a series A,” Lorena says. “We are starting to see people filling this space but, for me, there is still room there for people to fill that space.”

Lorena continued:

“Investment is also something that needs to be created and developed. 50% of investments in Argentinian startups came from abroad, from foreign investors. I believe that it’s a matter of time all over Latin America but we still need to mature in this area.”

“At the beginning, we needed to explain what an accelerator is here in Buenos Aires and it’s very, very new how to pitch, how to deal with an investor, how to present yourself, what an investor looks at, what you need as a team, all of those things. Nowadays I think we’ve improved a lot but at the beginning we needed to explain.”

So what advice does Lorena have for entrepreneurs just starting out?

  1.  “Focus on traction. Don’t fall in love with your ideas, just go out and try to communicate with your customers. Customers or users are the ones who really say that what you are creating has value.”
  2. “Focus. It’s really easy to get distracted…I prefer to see a company that does, in an excellent way, 1 thing and not a lot of things in an average way.”
  3. “Give back. We are all players, not only the venture capitalists, accelerators, and other investors but also the entrepreneurs. If we want to create an ecosystem we need to understand that we are all key players, entrepreneurs too…Creating a very strong and very creative entrepreneurial ecosystem in Buenos Aires is something we all need to keep in mind.”

Lake Titicaca

After my visit to Machu Picchu I headed off to Puno to visit Lake Titicaca. Lake Titicaca is a massive lake on the border between Bolivia and Peru which is famous for its extremely high altitude and its city built on man-made floating islands.

If you visit, you can take a tour out to the islands to learn about the peoples that live there and how their islands are made as well as walk around and take pictures. It’s a super strange experience as you can definitely feel that they’re not solid land. You also have the option of traveling between islands on their traditional boats, which appeared to be at least partially woven out of the same reeds that they use to build their islands.

After visiting the floating islands, your tour will likely continue out to a typical island where you’ll climb up a steep hill to see the views of the lake – which is so large it appears to be the ocean – and have a lovely lunch of typical food.

Check out the video below for a quick look at the floating islands and how they’re made.