Nathan Lustig

Tips to For Your Startup Chile Application

The startup chile application phase is open again and that usually means a blog post offering startup chile consulting and help with applications. Even though I’ve gotten emails from 10 companies wanting my help and I still have a 66% hit rate for the companies that I help, I won’t be offering my services this time. I just don’t have enough time this time.

Instead, here’s my tips for writing your application and getting into startup chile:

1. Public description, video, website

The most important parts are your public description, your website and your video. I know many judges who read your public description, then go to your website and watch your video. If they’re bored, they’ll skim the rest of your app and toss it in the no pile.

The judges are reading a huge quantity of applications, so make sure yours stands out.

2. Don’t write to fill space

Say what you need to say as directly as possible. Don’t write like a college term paper. That’s the opposite of business writing. Write directly and clearly.

3. Native speaker english

If you’re not a native speaker or aren’t a great writer, find someone to help you edit your application. It’s completely worth it.

4. No passive voice

It’s weak. Doesn’t inspire confidence. And it’s boring to read.

This: We make money three ways:

Not This: Money is made three ways by the company

5. Use present tense as much as possible

This: Our company sells sunglasses online

Not this: Our company will sell sunglasses online

6. No business buzzwords

Be direct. Buzzwords make you look weak. And they generally don’t mean anything.

7. Write like you want a 10 year old or your mom to be able to understand it

It’s not impressive to write in jargon. It doesn’t show that you’re smart. Clear, direct writing does. I’ve read countless applications where I truly don’t understand what the entrepreneur is trying to say. But it sure has lots of big words! And buzzwords.

8. Use Lists

You should answer a question about revenue model like this:

We make money three ways:

  • Selling products via our online store
  • Charging placement fees to vendors
  • Logistics fulfillment for partner vendors

This way you save words and go right to the point. Then add a few descriptive sentences and you’re set.

9. Start with your niche, then go bigger

For the target market, scaling plan and your plan, start with your niche, then describe where you’ll be in 6 months or a year. Something like:

Our first clients will be young males between the ages of 18-24 who go to our university and study engineering. They have the biggest pain point for the problem we’re trying to solve. After we win our niche, we’ll expand to the rest of the university, then replicate the model at other universities in our city, then expand internationally following the same model.

10. Tell a story and don’t be boring

Tell a story. Make it fun. The judges read a ton of applications. Stand out by not being boring.

Conclusion

At the end of the day, there are about 2000 applications per round. 100 make it in. Probably half will get thrown out quickly. Your job is to get into the top 300, where it’s going to be a crapshoot. It’s the luck of the draw that the three judges assigned to you will actually like your project.

You just never know. My favorite project ever didn’t make it. Some projects I’ve helped are decent, but not great and have won. Good luck and happy applying!

Andes Property: Furnished Apartment Rentals in Santiago Chile

When I first got to Chile in 2010 as part of the pilot round of Startup Chile, my first task was to find an apartment. We rented a hostel for the first week, and set out to rent an apartment.

It was a daunting task. I spoke a bit of spanish, but my business partner Jesse didn’t really speak much at all. We started looking for shared apartments, furnished apartment rentals and unfurnished units in Providencia, Las Condes and Bellas Artes, but quickly were stymied. We didn’t really know where to search, our spanish wasn’t up to snuff and even when we did find a decent property, many landlords either didn’t want to rent to foreigners or jacked up the rent 2-3x when they heard my broken spanish.

After looking for a few days, we thought we’d found the apartment we wanted right near Metro Pedro de Valdivia. The photos were amazing (like our three bedroom in Las Condes pictured below). It had a pool. Two bedrooms. A balcony facing the Andes. I called and asked for the price and a time to go see it. When we got there and walked in, I knew we’d been taken for a ride. It was a one bedroom studio that was no way close to what we’d seen online.

three bedroom apartment las condes
One of our 3br apartments in Las Condes.

When another apartment quoted me $1500 a month, I asked my Chilean friend Cristobal to call and try to rent it. He got quoted $700. They’d tried to gringo tax us! Other apartments just flat out told us they wouldn’t rent to us unless we could show a year of income in Chile, or have a Chilean cosigner.

We ended up using an agency that worked out ok, but we ended up paying high broker fees and having to put four months down. Other friends weren’t so lucky and ended up getting taken advantage of by brokers.

one bedroom apartment bellas artes
1 bedroom apartment in Bellas Artes

Many of our friends ended up paying way over market value or having to pay their entire lease up front. And forget about getting your security deposit back at the end of your lease! Most of our friends ended up losing nearly all of their deposit and had no recourse. It turns out that for most Chileans the idea of a security deposit is really a “I use your money as an extra month’s rent” deposit!

In 2012 when I first got back to Chile, I decided to start to solve the problem. Two of my ex startup chile friends and I decided to create Andes Property, a company dedicated to helping foreigners find apartments to rent with a US level of customer service, fully bilingual service and without the typical Chilean paperwork and demands.

We started by buying our own apartments in Bellas Artes and then have taken over management of Chilean owned apartments that allow us to rent to foreigners using our standards. If you’re looking for an apartment, shoot us a message. We’d be happy to help you out. Click on the logo below for more info.

andes property apartments in santiago chile

Introducing Magma Partners: My New Seed Stage Fund in Chile

magma partnersI’m excited to announce a new project I’ve been working on for the past six months: Magma Partners, a new seed fund in Santiago, Chile that invests in startups and high potential small businesses. Along with two Chilean partners, Francisco Sáenz and Diego Philippi, we’ll invest $25,000-$75,000 in 8-10 high potential entrepreneurs each year for the next three years. Some press: Andes Beat (en), Fayerwayer, Diario Financiero, Pulso Social, Pulso Social (en).

magma1
Me, Francisco Sáenz, Diego Philippi

Our goal is to then provide follow on investments in the successful companies. We held our launch event last night where we announced the fund and our first two investments and it was a great time.

I’m excited to announce  our first investment, Propiedad Fácil, a property portal and real estate service provider in Chile. I think Magma Partners represents an opportunity to help keep the Chilean entrepreneurial ecosystem’s momentum going since the Startup Chile burst onto the scene in 2010.

Ever since trying to raise money for Entrustet in Chile in 2011, I’ve seen an opportunity for a Chilean early stage seed fund that operates using best practices from the United States. Chile is a very conservative country, so most investors still treat startup investing as if they were investing in a bakery or a bank and try to get as much equity as possible in the first capital raise, killing startups in the process.

I strongly believe that a higher percentage Chilean entrepreneurs fail than they should because the nascent Chilean entrepreneurship ecosystem lacks high quality mentorship, people willing to connect startups to existing businesses and access to capital using US industry standard terms. The best Chilean entrepreneurs get their start and quickly move abroad to find funding.

Our fund aims to fill the niche of high potential entrepreneurs who are starting their business in Chile with the goal of expanding across Latin America. We promise to be transparent, use US industry standard terms, give real mentorship and help you connect with potential clients and investors in Chile, Latin American and abroad.

But we’re aiming much higher. One of the things that I like about Chile is that it’s small. With about 17m people, you can have a nationwide impact fairly easily. Our plan is to not only help the entrepreneurs we invest in, but also to be a real help to those who we can’t invest in. I believe that if we execute our plan, we may be able to change the culture in Chile.

We’ve partnered with the Kauffman Mindset program to give mentorship to both companies that we invest in and Chileans who are interested in starting a business.

If you’re an entrepreneur with a business based in Chile who’s looking for funding, please check out our site, fill out our application form and a partner will get back to you within 48 hours with a “no, it doesn’t meet our criteria and here’s why” or a “yes, we’re interested, lets set up a meeting!”

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The Chilean Mindset Needs to Change from Extraction to Value Creation

People always ask me questions along the lines of “what’s the one thing holding Chile back from being an innovative country?” It’s a question I’m really interested in, not just for Chile, but for the US as well.

My latest column in the Santiago Times titled The Extraction vs. Value Added Mindset talks about Chile’s current preference for business models that extract value, either from the ground, the sea, or even other people, rather than business models that create new value.

Note 22 January 2017: Santiago Times no longer hosts my article, so I reposted it here.

Chile needs to foster value creation over extraction if it wants to establish a real entrepreneurial ecosystem.

I was invited to speak at a roundtable at the Universidad de Desarrollo about the challenges of teaching entrepreneurship in Chile. We had a lively and wide ranging discussion about how best to continue to foment entrepreneurship at all levels of Chilean society. One of the best debates was about trying to answer the question: What is the biggest factor holding Chilean culture back from being more entrepreneurial?

The general consensus was that it’s the Chilean family’s fault. Kids live with their parents until their mid- to late-twenties and generally only move out when they get married. Moms and Dads tell their kids they can do no wrong. Many lead pampered lifestyles with doting parents (and sometimes nanas), who solve even the most trivial of problems. (more…)