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.

Colombia Startup Overview

I can’t believe we’ve already arrived in the last country of my Startup Nomad journey for 2013! It’s insane how quickly the year blew by. I’m now thinking about where to go for 2014, so please leave your suggestions below!

Colombia is an amazing country and the entrepreneurial spirit has certainly permeated. Colombia is actually the only country along my Latin American tour where I conducted a solid number of interviews in more than one city and spent considerable time outside of the capital. The federal government of Colombia has created initiatives to encourage entrepreneurship, as have a number of local governments, and the decline in violent crime and overall improvement in safety and the economy has created quite the boom in the country. I spent time in both Medellín and Bogotá and absolutely fell in love with both.

My time in Colombia was chocked full of interviews and events and I’m going to leave it to the locals to explain what’s going on in Colombia through the interviews you’ll see over the next few weeks. Nothing I can say would do it justice, so I won’t try, though you can check out a couple of graphs below that I pulled from the GEM data visualization tool to get an idea of how the entrepreneurial activity there compares with the U.S.

Total Early-Stage Entrepreneurial Activity (TEA) Colombia vs USA
Percentage of 18-64 population who are either a nascent entrepreneur or owner-manager of a new business
New Business Ownership Rate Colombia vs USA
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

See you next week as we jump into interviews in Colombia!

Sailing from Colombia to Panama

While I am an avid traveler and am pretty relaxed about most of traveling’s annoyances, sometimes I hit the wall and cannot deal with another airport. That’s how I felt when it was time to leave Colombia to head back to Panama so, instead of a quick flight, I opted for a 5 day sailing aboard a 52′ catamaran and stopping in the San Blas Islands.

The first time I was in Panama I heard quite a bit about San Blas but never made it out there and, as a former cruise ship worker, I love being out on the open ocean so I thought the sailing would be a great way to see the islands while giving me a welcome break from the airport.

I booked through aboard the Santana and then headed off to Cartagena to meet the ship. Now, I am not a backpacker but this was a backpackers’ sailing so it was quite a bit more rugged than I am used to but I had an amazing time. While I was sailing solo, I especially recommend it for couples as the open ocean and sunrises and sunsets are gorgeous and romantic. The living quarters are cramped and there is nothing to do but enjoy the view, swim, tan, and snorkel so be sure to bring a good book, but if you like the water you will have a fabulous time relaxing on this trip because you are completed disconnected.

You start in Cartagena and meet the boat’s captain and the other passengers the day before you set sail. Then your journey begins with 2 days of sailing before you arrive in the San Blas islands and get to swim, snorkel, and explore a number of different islands in the area as well as a ship-wreck. The last morning you’re up early and dropped off in Puerto Lindo where you can catch a bus to Panama City.

Check out the video below to get a quick taste of the ship and the sailing:


Peru’s Entrepreneurial Ecosystem: Interview with Karen Weinberger

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. 

Cartagena, Colombia

After many months of travel and visits to Medellin and Bogota in Colombia, I was completely sick of airports and wanted a different option for heading back to Panama  so I opted for a sailing between Cartagena, Colombia and Puerto Lindo, Panama on a catamaran. I’ll talk more about the sailing next week but in order to join the ship I had to go to Cartagena, Colombia. This week’s video is a quick look at the coastal city.

Cartagena is on the Caribbean coast of Colombia and, like many Caribbean and pseudo-Caribbean former Spanish colonies (like San Juan Puerto Rico or Panama City, Panama) it’s broken down into the historic district full of old Spanish architecture and defensive fort remnants and the rest of the city, which is more modern. I found the people in Cartagena to be welcoming and friendly, however, it seemed like a tourist trap to me. At risk of offending the people from Cartagena, I didn’t see what it had to offer that was much different than any other Caribbean port city and, having traveled in the Caribbean extensively because I used to work on cruise ships, I think there are nicer places to visit. I met plenty of travelers that were enamored with the city, however, so you’ll have to see it for yourself to decide. To get a quick preview, check out the video below for a look at the historic area.

Peru’s Entrepreneurial Ecosystem: Interview with Luis Lira

Next stop in Peru: Wayra. By now I’m sure you’re all familiar with Wayra as I’ve already posted interviews with the Wayra teams in Chile and Argentina. In Peru I got to meet with Luis Lira who was gracious enough to give me a tour of the Lima offices and share his insights on the entrepreneurial ecosystem and startup scene in Peru.

Monserrate in Bogota, Colombia

Bogota is a city nestled within the mountains, like so many cities in South America, and one of its most famous landmarks is Monserrate, a small church at the top of one of the mountains on the outskirts of the city. If you make it to Bogota, this is one of the must visit attractions as it will give you a lovely view of the city below.

You have three options for reaching the fully operational church on the mountaintop: hike all the way up, take a cable car, or take a vertical trolley. Having had a lovely experience on the cable cars in Medellin, I opted not to hike and rode the cable car up and the trolley down, just to mix it up and experience both.

As Monserrate is a working church and a very popular attraction in the city, you may have to wait a bit for your turn in the cable car or trolley and you’ll be crammed in like sardines, but I think it’s worth it for the experience and the view. Once you arrive at the top there will be numerous opportunities for you to get some great panoramic shots of Bogota as well as the church itself, an artisans’ food and crafts market, and a popular wishing well.

Take a look at the short video below to get an idea for the view from the top:

Peru’s Entrepreneurial Ecosystem: Interview with Arturo Cánez

My next interview in Lima was with Arturo Cánez, the Director of Lima Valley and Co-Founder of Startup Academy. He’s also a mentor for Wayra Peru and is incredibly involved in the entrepreneurship community in Lima in many ways. Through his various initiatives, he works to provide events that both foster a community of entrepreneurs and offer training to aspiring entrepreneurs.

While Lima ranks high when it comes to entrepreneurship on measures like those used by the Global Entrepreneurship Monitor, much of the entrepreneurship in the country has historically been that of necessity and wasn’t the high-growth, technology-driven entrepreneurship that gets lots of press. Therefore, even though Peru actually ranks very high in entrepreneurial activity, its startup ecosystem is still a bit behind those in other countries. However, people like Arturo are helping to change that rather rapidly.

“The ecosystem now is better than just one year ago,” Arturo said.  “We have the fastest growing entrepreneurial network in Latin America…What other countries did in 5 years we did in 1 year and we did it without the support of the government.”

There’s still a lot of work to be done, however, to transform Peru from a country built on entrepreneurial necessity to one with a thriving culture of entrepreneurial innovation.

“For the stage our country is at right now, we have a lot of copy-cat ideas,” Arturo noted. “95% are maybe imitation and the other 5% are innovation.”

This preponderance of copy-cat companies is step one in the growth of a new startup hub and truly innovative companies are bound to come soon once entrepreneurs fully commit to their new ventures. According to Arturo, lots of entrepreneurs in Peru have a day job and are working on their startup on the side. “There are a lot of innovative ideas, innovative companies here in Peru and in Latin America,” but people are scared to leave their jobs and do their startup full time.

Additionally, Arturo argues that

“today, it’s easier here in Peru to get funding than in a different country or even in Silicon Valley…there is a lot of private capital but that capital is not necessarily focused on technology companies.”

He also believes that more accelerator programs focused on technology startups are needed to help anchor the entrepreneurial community in Lima and that the community shouldn’t focus solely on tech and business experts.

“We believe that a new venture, a new company, works better with different skills,” Arturo said, “not only business and technology…so that’s why we promote a multidisciplinary community.”

Finally, Arturo sees the future of the entrepreneurial ecosystem and startup community in Lima intimately tied to the other hubs in Latin America.

“You have, here in Peru, markets that are growing so fast,” Arturo said. And “at this time we need to detect what we are doing different than the other countries…[However], I think it’s so important that new entrepreneurs focus not only on their own country and take not only a local view…We want to focus on our local community but we’re connected to more developed countries…and we believe that those connections help to create a stronger environment.”

In fact, Arturo sees these connections as the future of the ecosystem.

“I think that in 5 years we’re going to have Latin America connected, a lot of countries linked, and a lot of startup entrepreneurs doing their jobs in different countries. In 5 years I think we will have a Latin America with an ecosystem similar to Silicon Valley.”