Doing Business in Latam: Advice for Foreign Entrepreneurs

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This post is a modified version of a talk I gave to Startup Chile entrepreneurs called “Doing Business in Latin America: Advice to Foreign Entrepreneurs.” 

When Startup Chile invited me to share my advice for new foreign entrepreneurs doing business in Latin America, it gave me an opportunity to synthesize the things I’ve learned over the past five years living and working in Latam. After coming to Startup Chile with a startup that did business in the US, teaching entrepreneurship at Chilean universities, starting a Latin American property business, starting my own ecommerce startups and meeting hundreds of entrepreneurs looking for investment via Magma Partners, I’d gotten a pretty good feel for the cultural differences between Latam and the US.

When I first got to Chile in 2010, I knew there were cultural differences, but I just worked under the impression that if I worked hard in the same way I did in the US, I’d be successful, like I had been in the US. Working hard helped, but there were many cultural misunderstandings that hampered my progress.

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From the Muscle Based Economy to the Brain Based Economy

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nathan lustig el mercurio muscles to mind

Note: A version of this post originally appeared in spanish in the Chilean daily El Mercurio with the title De la economía de los músculos a la economía de la mente.

Michael Bloomberg used his commencement address at the University of Michigan’s to tell graduates a stark truth: “For the first time in human history, the majority of people in the developed world are being asked to make a living with their minds, rather than their muscles.”

He continued:

For 3,000 years, humankind had an economy based on farming: Till the soil, plant the seed, harvest the crop. It was hard to do, but fairly easy to learn. Then, for 300 years, we had an economy based on industry: Mold the parts, turn the crank, assemble the product. This was hard to do, but also fairly easy to learn.

Now, we have an economy based on information: Acquire the knowledge, apply the analytics and use your creativity. This is hard to do and hard to learn, and even once you’ve mastered it, you have to start learning all over again, pretty much every day.

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Uber vs. Taxis: The Chilean Version

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uber nathan lustig

Note: This post originally appeared in spanish in El Mercurio, one of Chile’s largest newspapers with the title Uber contra los taxistas. This battle has played out in major cities around the world and is currently coming to a head in Chile, with the same mass taxi protests and government intervention to ban Uber and similar services.

The national debate has been focused on the battle between Uber, Cabify and “yellow cabs” during the past few weeks. Most people have focused on this battle as if it were the only battle between technology and the status quo happing right now and have only focused on one part of the battle.

As a tech investor and also a foreigner, I’ve seen this battle many times from afar in the US and from close up with companies that we’ve invested in. Continue reading…

Startups: Charge US prices, with Latin American Costs

nathan lustig mercurio 3

A version of this post originally appeared in Spanish as a column in El Mercurio, with the title Startups: vender a precios de Estados Unidos con costos chilenos.

The internet’s magic is that you can connect anywhere with any part of the world from where ever you are. We notice it when we talk with friends living in other countries, connect on social media, look at photos from around the world and keep up to date with the latest news from all corners of the world. We’re really living in a global world.

Tech startups are also global. A startup’s market can be the entire world from day one. But many Chileans only think about technology businesses from the US and Europe that have gotten to the Chilean market.

We’ve all heard about foreign startups that sell into the chilean market and many chileans have made purchases from sites like Amazon, Asos, Book Depository, Aliexpress and more. But the vast majority think it’s impossible to do the opposite: sell in the US from Chile. Continue reading…