Note: A version of this post appeared as a column in Spanish in Chile’s El Mercurio with the title Emprendedores chilenos: Pierdan el miedo a EE.UU. Although this post focuses on Chilean entrepreneurs, it can also apply to other Latin American entrepreneurs. From what I’ve seen, Mexican entrepreneurs are the least scared of the US market, followed by Argentinians, Colombians, then Chileans, who generally think they don’t have much of a shot at competing in the US. This mindset is slowly changing and this article’s goal is to push it along faster.
A few weeks ago, COPEC, a Chilean convenience store and gasoline service station chain, acquired Delek, a US convenience store and gas station chain with 348 US locations for $535MM. COPEC has operations in Mexico, Colombia, Peru, Ecuador and Panama, but this is their first foray into the US market. It’s an important step for Chile because it shows that both big companies and startups alike shouldn’t be scared of the US market. In fact, they should view the US market as a big opportunity to expand outside of their home markets.
For way too long, when Chilean companies large and small have wanted to expand out of Chile, they’d look at Peru, Colombia and maybe Mexico. But we’re recently seeing a big change, both by startups and by big companies like COPEC.
It’s important to show Chileans that they shouldn’t be scared of the largest market in the world and that there are opportunities to diversify outside of Latin America. At Magma, we’ve seen a multitude of entrepreneurs pitch and many of them are scared of the US. They think that the market’s too big. That it’s too competitive. That all of the problems are solved in the US and that’s its difficult to compete from Chile. In reality, it’s a lack of confidence.
We’ve seen this phenomenon close up with our most promising startup, PropertySimple. When the team and I were reviewing data from Chile, at first we discounted the possibility of moving to the US, assuming that if we’d come up with the solution in Chile, someone was doing it in the US.
But when we started talking to US clients first over the phone from Chile and later in person, we realized that many of the ideas that are “made in chile” are very competitive in the US, and in some cases, much better than the current solutions.
COPEC is leading the way for big businesses, showing them they shouldn’t be scared of the US market. Startups are doing it too. But Latin American startups need to change their mindset and realize that they really can compete in the big leagues in the US, sometimes even from Chile. Because if you’re successful, you’ll likely have a much bigger success story and more likely more quickly playing in the US market than doing the traditional Chile, Peru, Colombia and maybe Mexico. At Magma, we see a not too distant future where Chile and other Latin American countries will act as bases for successful tech startups that attack the US market, but have their back office in Latin America.