A Small Win Against the Bureaucracy

In 2010, during my first six months in Chile, I worked out of the Startup Chile office in downtown Santiago in the in the Ministry of the Economy. From day one, we had all sorts of problems with the internet. The government wasn’t used to 50 entrepreneurs burning up the bandwidth, so the internet was slow. We offered to share the cost of upgrading the line, but we were told it was impossible, because the government had to bid out all contracts. Luckily, that got fixed within the first month.

At the end of the first week, my internet stopped working. I’d been kicked off the network. I went to ask what the problem was and one of the startup chile staff members told me that the password had changed. I updated the password and didn’t think anything of it.

But next friday, I got kicked off again. I asked why the password changed and was told that it was government policy: the password had to change weekly. At 4pm each friday, some bureaucrat would send us an email saying what the new password would be. At 430, the password would change and you’d get kicked off the network.

I never learned the real story, but my guess is that some government employee must have decided it was imperative to change the password weekly. So they did it. As if the Chilean ministry of the economy needed to prevent potential Peruvian, Bolivian and Argentinian James Bonds from connecting to the government wifi!

And of course, the only way to find the new password was in your email. And since this was pre smartphones with data plans, if nobody looked quickly, the only way to find the password was to call the bureaucrat in charge. One of the Startup Chile staffers, Diego, at least made it more fun when he forced the government to make the ever changing passwords the names of styles of Chilean sandwiches. That information still comes in handy four years later.

After running through ~20 sandwiches, Diego switched it to sandwich shops. Sometime during the 5th month, he changed the password to the name of one of the better sandwich shops in Santiago. And somehow the policy changed so we didn’t need to change the password each week.

I went back to the Moneda office for the first time in about a year today and the current password hasn’t changed. It’s still that same sandwich shop. Diego really should have charged a commission! It’s a small win in the battle against the bureaucracy. And one I’ll happily take it. That’s progress.

Magma at Six Months: Five investments, Four in the Pipeline, Culture Starting to Change

I haven’t written anything new on Staying out of the Cubicle lately, but that doesn’t mean I haven’t been busy! In the first six months since we launched Magma Partners, we’ve invested in five companies and with four more in the pipeline to close before the end of the month. It’s been a great ride so far and I can’t wait to help our portfolio companies continue to have success.

I’ve written a series of blog posts on the Magma blog that outline our vision for the Chilean and Latin American entrepreneurial ecosystem, plus advice on how entrepreneurs can find success more easily, one of which is already changing the conversation in Chile’s entrepreneurial ecosystem. We’ve been recently featured in Pousta and GigaOm.

Frequent mistakes made by Chilean Entrepreneurs

Since we launched Magma Partners, I’ve reviewed 300+ applications for funding, the vast majority from Chile, with some from Colombia, Argentina, Mexico, USA and Uruguay.

Of those 300+, we’ve invested in seven. I’ve met some amazing entrepreneurs and have learned from many of them. But the vast majority of companies we’ve reviewed have similar problems that prevent us from investing. I’m writing this post to try to help entrepreneurs who are looking for money avoid these mistakes so that they can be more ready to accept an investment.

Full post English: Ten frequent mistakes made by Chilean entrepreneurs
Artículo Completo Español: Diez errores mas frequentes de emprendedores chilenos

Magma Investment Thesis for Chile and Latin America

At Magma Partners, we invest in the best entrepreneurs we can find. We would rather invest in an amazing entrepreneur with a mediocre idea rather than a mediocre entrepreneur with an amazing idea. An amazing entrepreneur can always change their idea. We also strongly believe that Magma must be able to provide direct help to each company we invest in outside of just money. If our only help is just money, it doesn’t make sense for us to invest in a startup.

Full post english: The Magma Investment Thesis for Chile and Latin America
Artículo Completo Español: Tesis de inversión de Magma Partners para Chile y Latinoamérica

Our publicly announced portfolio:

Propiedad Facil - A property tool with all the tools a real estate agent needs to list, sell and rent a property.

Deenty – An educational platform that teaches spanish speakers everything they need to know about dental health and allows people to find top rated dentists, book appointments and access quality dental treatments at fair prices.

Petly – One stop shop for pet supplies and connections to pet service providers like veterinarians and groomers.

Ttanti – High quality watches made of handcrafted Chilean wood, swiss movements and Patagonian leather.

Thinker Thing – World class games and tools for 3d printers.

Seeing Things From Other Peoples’ Perspectives

Note: I wrote this post in a spiral notebook in 2012, on my 27th birthday, when I was on a beach in Isla Baru, Colombia that had no potable water, no electricity and only hammocks to sleep in. I found it today going through old notebooks and decided to publish it.

I’ve been incredibly lucky to have been born into a great family that has always supported the circuitous, non traditional path I’ve taken so far. I’ve never lacked food, shelter or clean water. I’ve never had to fear for my safety. I’ve led a pretty good life so far. I’ve been lucky.

But once my basic needs have been met, is there one characteristic that stands out that’s made me successful and happy? Is it a characteristic I’ve seen in other successful, happy people? I think there is. But it’s not what most people think.

It’s not just intelligence or education. It’s not money. I know plenty of wealthy, educated, brilliant people who are miserable. After meandering through life for the past 27 year, I believe that, after meeting your basic needs, whether its in, friendship, family, relationships or business it comes down to one ability: the ability to see thing from other peoples’ perspectives. To really understand their motivations and truly understand why they react and behave the way they do.

It’s a simple concept, but it can be very hard to master. Humans inherently care about themselves more than other people. We see things from our own perspective. It’s human nature. So it can be hard to really think about what is motivating a person to act the way they do, no matter the situation: family, business, friendships, relationships. Over the past three years, I’ve realized just how important it is to be able to see things from others’ perspectives. And how important it is to me for other people to be able to see things from my perspective.

It’s such a powerful key to success because the vast majority of people are only thinking about what they themselves want. They might give passing though to what other people want, but at the end of the day, they’re mostly about themselves. If you try to see things from other peoples’ perspectives, it immediately sets you apart.

In business nobody cares about what you want. To be successful, you have to see what other people need and build solutions to their problems. The only way to do that is by seeing things from their perspective, not yours. I started to really understand this idea with Entrustet. We built an awesome service to help people access, transfer and delete their digital assets when they died. In the beginning, not enough paying users cared to make it a success.

I’m convinced that they didn’t care enough to use our service because we built a service that appealed to our perspective, young, digital natives, not to our potential users. We took a step back, spoke to more potential users and redesigned everything from their perspective, catering to their needs. A few months later, we were all over the press and our business was growing. It took seeing the problem from our prospective clients’ perspective to have any success.

It really hit home two years ago when I was helping another business get off the ground. Our team was made up of a designer, an engineer and two business guys (one of them was me). We had to both build a business and build a physical product. We were facing a very tough deadline and all four of us had retreated to the workshop to build two final prototypes of our physical product. Our product designer and engineer needed help building the machine and gave my fellow business guy and me tasks like “reinforce the door” or “connect the top and bottom pieces of the machine.” My fellow business guy and I looked at each other and asked tons of questions, finally doing a mediocre job. Our designer and engineer were getting exasperated at us. Finally, one of them yelled at us, “if you don’t want to be here, just go, we’ve given you the simplest tasks and you’re asking simple questions and not even doing a good job!”

What was a fun, simple project for them and their skill set was really difficult for me and my business savvy friend. On the other hand, my business savvy friend and I were apoplectic when our designer and engineer friends, even though on a tight deadline, decided to spend six hours designing a small piece of the project that had no real value, just because they enjoyed it. We yelled at them “how could you be so dense to waste so much time and money on something so trivial when we’re up against a deadline! It’s elementary business!”

It wasn’t until I went out for a walk to calm down that I realized that neither of us could see each others’ perspectives. What was simple common sense for me was incredibly difficult for him. And what was elementary for my engineer friend was complex and difficult for me. Once we realized that we had to see things from each others’ perspectives, things went more smoothly.

Being a “fish out of water” in Chile when I first moved here accelerated my learning curve. I quickly found myself out of my comfort zone. There were so many things I didn’t understand and a seemingly infinite amount of things that people didn’t understand about me. The cultures were clashing big time. People behaved differently than I expected them to in nearly all aspects of life. Two years later, I have a good handle on why people behave the way they do, which has allowed me to create value in business, make more friends and enjoy life more.

For example, one of the most annoying things I’ve dealt with in Chile is that vast majority of Chileans try to teach me spanish. In short, they are terrible at it. They mean well, they want to help, but its very hard to teach something when you cannot see the other person’s perspective. I’ve had countless people try to teach me the difference between ser and estar (two different words that both “to be” in english, but mean different things in spanish) by saying, “but one is ser algo and the other is estar algo” and looking at me earnestly expecting me to get it. Or trying to get me to pronounce the RR tongue roll by saying “just do this” and “rrrrrring” in my face. “No really, just practice it, try it, its easy.” Or saying “why do you say Pedro de Valdivia that way, its so much easier to say it correctly.” Ugh, newsflash, if it were easier for me to say it that way, I would! So frustrating.

I remember when I was 16, my Dad was trying to teach me to drive.  He drove to an empty park and stopped. We switched seats and I buckled myself into the driver’s seat. He said, turn the car on. I turned the key, nothing happened. I tried again, nothing. My Dad, a bit perplexed and a bit exasperated, said “come on, just turn it on” as if I were being dense on purpose. I got annoyed. He was genuinely perplexed as to why I couldn’t turn the car on. We switched seats again and I watched him start the car. He’d neglected to tell me to engage the clutch when I was starting the car. 35 years of driving a car had put him on auto pilot. He couldn’t see it from my perspective as a new driver and remember to tell me all of the necessary steps. The classic curse of knowledge.

In US politics Bill Clinton is a successful politician because he can truly see things from other peoples’ perspectives. He may not agree with you, but unlike many current politicians that seem to believe that everyone outside of this worldview is wrong, stupid or lazy. Nothing will ever get done if people don’t even make an effort to look at why people think and behave the way that they do.

This isn’t to say that we should say that all perspectives are equal and no perspective is better than the other. I think that’s the lazy way out. We should make an effort to realize why people act the way they do. If we want to change something, we must address the triggers that cause the behaviors, not just the symptoms. For example, I think I understand why fundamentalist muslims decided to attack the United States via terrorism. I think what they did was wrong and evil, but I think I understand why they did it: they felt they were oppressed, that the US was besmirching their religion, that they had little to no economic or political freedom and didn’t see another good way to get their voices heard . So they struck back. I understand their thinking, but condemn their actions in the strongest terms possible.

If you can see things from other peoples’ perspectives, you will be a better person, a better businessman, a better friend, family member, husband or wife. It’s why business succeed while others fail. It’s why politicians win and lose. Why friendships or relationships drift apart or endure. It is the most important quality that I look for in my friends, business partners, girlfriends and politicians I vote for. It’s a skill, just like any other. So I try to practice it every day.

“Never Give Up” is Terrible Advice

Never-Give-Up-on-Your-Dreams-300x225

Bad advice?

A good friend of mine started a business almost five years ago. He is one of the smartest, most charismatic people I know. His business has generated $100k+ in revenues. But it has never been profitable. And with the way he runs the business, it never will be. Even if he hired the best CEO in the world, it would never be a huge winner.

It’s hugely stressful and has taken a toll on him: mentally, physically, financially and emotionally. Over the past five years, he’s missed out on other life opportunities and wrecked friendships and business relationships. His friends have advised him to close up shop, take stock of his life and start fresh. He is smart enough that he could get a job pretty much anywhere or get a high paying consulting gig to get himself back on his feet. Or even start another business himself.

But he doesn’t. He bangs his head against the wall every day, digging himself deeper and deeper into a hole. He gets angry when friends try to give him advice. To a point where most of us don’t hear from him very often anymore. To a rational outsider, it’s time to cut losses and move on. But he wont. Why?

First rule of holes: when you're in one, stop digging

First rule of holes: when you’re in one, stop digging

Because he can’t bring himself to “give up.” He’s not curing cancer. He’s not stopping a war or saving the planet. He’s not going to the moon. He’s not stuck in a canyon with his arm crushed by rock. He’s working on a business that doesn’t solve a big enough problem that people are willing to pay for it. I’ve seen similar stories many times over the past ten years and it makes me sad every time I see it.

Some entrepreneurs are motivated by the problem they’re trying to solve. Others don’t want to “give up” because they see it as a character flaw or personal failure. Others because they don’t want to tell their friends, family or investors that their company isn’t going to work.

These entrepreneurs are smart people. They have options. They could start a different business. They could do consulting for awhile. They could get a job for six months or a year and get back on their feet. But they don’t.

Why? We’re inundated with well meaning motivational quotes, memes and success stories posted by the successful and those longing to be successful every day. They preach that if you just worked harder and banged your head against the wall longer, you would find success. The simple act of not “giving up” will make you successful, they seem to suggest.

While well meaning, in practice, it’s terrible advice that does more harm that good. Short of life or death scenarios, nearly everything has a point where it doesn’t make sense to continue. But we’ve been indoctrinated by hearing stories of successful people who kept at it and found success. Nearly all successful entrepreneurs have stories about not giving up. But it’s really easy to look back once you’re already successful and pat yourself on the back and tell others to keep banging their head against the wall.

Sure, these entrepreneurs wouldn’t have gotten to where they are today if they had “give up” before they found success. But they also wouldn’t have gotten to where they are today if they didn’t have the right makeup to be a CEO. Or the right timing. Or the right product market fit. Etc. Etc.  Sometimes more effort and not giving up is not the solution. Many entrepreneurs act like “never giving up” is the magic bullet to finding success. It’s not. It’s survivorship bias.

Remember the guy who never gave up and still didn't find success? Neither does anybody else.

Survivorship bias: Remember the guy who never gave up and still didn’t find success? Neither does anybody else.

What about all the people who never gave up but didn’t become successful? Who decided to forego other amazing opportunities because they thought never giving up on their idea was the way forward? Sometimes adding more effort and time to a project will just prolong the inevitable.

I’ve been in the hole before. Deciding to stop digging is always one of the hardest decisions you have to make. But “giving up” has always led me to another, better path. My philosophy is to take many small, calculated risks and see if they pay off. I cut the ones that don’t pay off as quickly as possible. I give up on them. And I try something new. My goal is to find things that motivate me and try to turn them into winners. I “give up” on ideas all the time. Until I find a winner.Then I invest as much time, effort and energy into it as possible. I live my life that way: business, friends and relationships. Failure and “giving up” is an integral part of life.

You can’t have success if you give up before you find success. But you can have success if you “give up” on one path and go down another.  You should weigh the pros and cons of continuing to work on a business, staying friends with someone or continuing in a relationship by evaluating your options. One of those options should be giving up.

By “giving up” on your project, you may keep your big goal alive. If you never give up, you may find success. But just as likely, you’ll be miserable, having left plenty of other great options on the table. So when you’re in a hole, stop digging, take a step back and evaluate your options. Giving up just might be the best one.

What do you think?

Oportunidad Para Emprendedor(a) En Chile!

Estamos buscando un emprendedor o alguien que quiere ser emprendedor para ayudarnos a hacerle crecer un ecommerce nuestro. Nuestra idea es encontrar a una persona emprendedora que quiera tomar las riendas operacionales de nuestra tienda de e-commerce. Lleva mas de un año de funcionamiento, tiene números azules, está creciendo mas de 20% cada mes y tiene mucho espacio para seguir desarrollándose.

Es la oportunidad perfecta para alguien que ha emprendido antes, alguien que quiere emprender por su propia cuenta en algún momento o algún emprendedor exitoso que está buscando un desafío.

Te ofrecemos un plan de expansión concreto, un negocio que ya está creciendo, con financiamiento y la oportunidad de aprender de tres emprendedores que ya han sido exitosos con otros startups. La persona ideal debe ser fuerte en temas comerciales, ventas y BizDev. Debe tener la intención de ser parte del equipo por al menos 12-18+ meses. Queremos entregarte la herramientas necesarias para tener éxito con este negocio y dejarte en condiciones para que puedas lanzar tu propia empresa después de trabajar con nosotros.

Podemos ofrecer un sueldo fijo bajo del mercado, con incentivos basado en metas que te ayudaría ganar un sueldo mercado y con la posibilidad de tener participación en la empresa.

Características

Puesto: Manager de Operaciones

Full Time

Lugar: En oficina central (Metro Alcantara), remoto y en terreno

Requisitos: Emprendedor, experiencia en ventas, BizDev, experiencia previa startups e e-commerce ideal, pero no es necessario.

Nuestro Equipo

Nathan Lustig – Emprendedor de estados unidos de la primera generación de startup chile. Ha lanzado y vendido dos emprendimientos, uno de una compañía publica. Socio en Magma Partners, un fondo de inversión Chileno/Estadunidense. Profesor de emprendimiento en Universidad Católica.

Enrique Fernández – El primer chileno en startup chile. Emprendedor exitoso con conocimiento de negocios internacionales, especializando en china. Profesor de emprendimiento en Universidad Católica.

Gonzalo Saieg – Emprendedor chileno con dos compañías exitosas. Profesor de emprendimiento y negocios internacionales en Universidad de Chile.

Habilidades Requeridas

  • Fuerte en temas comerciales
  • BizDev
  • Auto motivado
  • Emprendedor
  • Ideal si habla por lo menos un poco de inglés

Interesados mándame un correo con un párrafo explicando por qué eres la persona perfecta para esta oportunidad.