Latin America is the perfect market for full stack startups. I’m convinced of it after living and working in Latin America for the past four and a half years and am even more convinced after having met, worked with and reviewed over 600 startups in the past year and a half as managing partner of Magma Partners in Santiago, Chile.
So what is a full stack startup and why am I convinced that Latin American entrepreneurs should be exploring full stack startup business models?
First, lets start with a definition. Chis Dixon coined the term Full Stack Startup in a blog post in March 2014. He says that a full stack startup is a “…complete, end-to-end product or service that bypasses existing companies.” It bypasses the old, existing hierarchy to be able to control the entire experience. According to Dixon:
Prominent examples of this “full stack” approach include Tesla, Warby Parker, Uber, Harry’s, Nest, Buzzfeed, and Netflix. Most of these companies had “partial stack” antecedents that either failed or ended up being relatively small businesses.
So why are companies following the full stack method instead of the old school method of partnering with large companies? (more…)
Ever since I started blogging, I’ve done a year end post summarizing what I’ve done in the past year. These posts are mostly for me, so that I can look back and remember what I did, what I was thinking and what was important to me each year. Previous versions (2000s, 2009, 2010, 2011, 2012, 2013). Here’s what I did in 2014.
Like 2013, I rang in the new year on a friends balcony overlooking Santiago surrounded by friends, including my friend Polsky who was visiting from the US. Polsky and I took off for southern Chile, visiting Pucón, Frutillar and Puerto Varas during the first week of 2014. I was back in the south six weeks later when my parents and brother came to visit, adding Chiloé to the list. Every time I go to the South, I don’t understand why I don’t go more. It’s relaxing, stunningly beautiful, has incredible food and, in summer, has amazing weather.
I always come back from the south with new ideas, rejuvenated to get back to work and this time was no different. While 2013 was a year of starting many new projects, 2014 was the year that I focused.
In January, I partnered with Francisco Sáenz and Diego Philippito launch Magma Partners, a private seed stage investment fund and accelerator based in Santiago, Chile. Our goal was to bring US style investment and know how to Chile and pair it with Chilean connections and mentorship to help entrepreneurs create successful businesses.
A year in, I’m extremely proud to say that we’re already starting to see results. Over the course of 2014, we reviewed over 350 startups, met hundreds of entrepreneurs and finally invested in 13 startups. Running a fund has been much more work than I thought it would be. But it’s been worth it.
We’re already starting to see promising results from multiple companies, but 2015 will bring the hard part: helping our 13 portfolio companies make their way from nascent startups to real, scaling companies. I have high hopes and 2015 will be an extremely important year for Magma and our portfolio companies.
In addition to Magma, I started the year with four active projects Andes Property, La Condoneria, Startup Chile consulting and teaching entrepreneurship at multiple universities. By mid year, my head was ready to explode from so many different projects taking up brain space and I started to focus.
First, I realized that I was using the same part of my brain to mentor Magma companies as I had previously used to teach entrepreneurship at universities. I knew I had to stop teaching because I was getting mentorship overload, so I found other entrepreneurs to take over my classes. Next, I stopped doing Startup Chile consulting, as it was taking up too much brain space and tried to figure out how I could get La Condoneria and Andes Property to run more autonomously.
After a long search, I hired employees to help run La Condoneria and Andes Property, both of which continue to grow quickly month over month. At the start of the year, I was personally picking, packing and taking packages of condoms to chilexpress (chilean fedex) five times per week and was personally showing apartments to foreigners for Andes Property. I still work on both businesses, but Andres, Gonzalo and Bernadette have really stepped up to the challenge to take responsibilities away from me.
2014 was the year that I finally started to get better at spanish again after feeling like I’d plateaued in 2013. I still speak with a strong accent, but I can say 95% of what I want to say and am now happy making a joke per day, up from one per week last year. Baby steps.
2014 was the first time I wrote an entire post on my blog in Spanish and the first time one of my spanish blog posts went semi-viral in Chile. It was the first year I presented to large audiences in Spanish without notes, just like I do in English. I also did multiple radio interviews in Spanish for the first time. I’m still not as good as I’d like to be and I hate to see eyes glaze over because I’m not as engaging in Spanish and I am in English.
2014 was a great year for travel, as I explored Chile’s south on two separate trips to kick off the year. In February I took an incredible ten day trip to Uyuni, Potosi and Sucre in Bolivia. I’d previously been to Uyuni in 2011, but never to Potosi and Sucre, both of which were amazingly different from anything else I’d ever seen. I took a mile long tour of the Potosi mine, where miners as young as 10 years old use pick axes, dynamite, coca leaves, pure alcohol and their brute strength to try to scratch out a living. Sucre was an amazingly beautiful window into the Spanish Colonial past.
Cerro Rico, Potosi
I took an express trip to Lima for the first time when my Aunt Nancy and Uncle Paul decided to come go to Machu Picchu. It was fun exploring old Lima with them and I ate the best meal of my life at Maido, a japanese/peruvian fusion restaurant. I can’t wait to go back to Peru to continue exploring the rest of the country.
2014 was a World Cup year and I made it three world cups in a row, spending three amazing weeks in Brazil. I saw 10 matches in five different cities, traveling over 14,000 miles in the process. My friends Enrique, David, Sandra and Tiago each traveled with me for parts of the trip, making it an incredible trip. I’ll never forget the marathon trips getting to the first three USA games, early and late goals in USA/Ghana, Jermaine Jones’ goal in USA/Portugal and the trip to the jungle, and the incredible spirt of the Chilean fans, even in defeat against the Netherlands and Brazil. I’m so thankful I’ve been able to attend.
USA Germany
I took three quick trips back to the US, one in late May to visit family, another for a friends’ wedding and the third for my group of college friends’ 10th annual Friendsgiving and the holidays with my family. I think I stayed better connected to family and friends by visiting more, but for shorter amounts of time each visit, a plan I’d like to keep up in 2015, rather than one 5-6 week long trip as I’ve done in previous years. It still isn’t fun to miss weddings, bachelor parties, thanksgiving, the Forward Festival and birthdays, but life is all about tradeoffs.
I made it back to Madison on all three trips, including an extended stay where my friends and I reunited for a weekend of Badger football and memories. I honestly can’t believe it’s been ten years since I started college. Time really flies. Madison is noticeably more dynamic each time I visit. The tech scene is on the leading edge of this new dynamism and I’m thankful and proud of Madison’s entrepreneurs for paving the way. Capital Entrepreneurs (made one meeting this year) and Forward Fest (sad I missed it this year) continue to be pillars of he newly emergent startup scene, with other entities and institutions arriving to continue to progress.
2014 saw me focus on two key businesses, continue to explore South America, attend a world cup and still stay connected with my friends and family in the US. I’ve been very lucky that the years keep getting better and better and I hope 2015 is no exception.
Favorite Posts of 2014
2014 was my lowest blog output in the six plus year history of my blog. And even worse, I didn’t make up for the lack of quantity with better quality. I’m not sure if its because I’m writing less or because my brain is getting mixed up because I’m speaking more spanish, but my writing is noticeably worse than in previous years. Last year 10 posts made my list. This year only four made the cut. I need to get back to writing more.
1493: Uncovering the New World Columbus Created – I learned more from this book and its companion book 1491 than I’ve learned in a really long time. 1493 talks about how things changed after Columbus arrived in the Americas. It busts myths, adds new facts and really made me think.
1491: New Revelations of the Americas Before Columbus – This book completely changed my understanding of what the Americas were like before Columbus and opened my eyes to some of the amazing things that native cultures in our hemisphere had done. Really worth reading and makes me want to explore Peru and Mexico.
Five Days at Memorial – An investigative journalist looks at what happened at Memorial Hospital in New Orleans before, during and after Hurricane Katrina where doctors potentially euthanized patients.
The Boys In The Boat – A history of the US rowing team in the runup to and at the 1936 Olympics. Entertaining story at the confluence of history and sports.
I’m starting a new holiday tradition this year. Instead of giving me gifts, I’d like to invite you to donate to support two of my favorite charities. You can either donate directly or send money via paypal and I’ll make sure the money gets there. For more information on how to donate, send me a message via my contact form.
1. Someone who can’t afford dental treatment applies 2. A Deenty dentist does a diagnostic exam and quotes a list price 3. The same dentist discounts the treatment, usually between 40% and 70% 4. The patient puts up whatever money they can afford 5. The patient’s family and friends raise money to help cover the treatment 6. Donors cover the remaining cost of the treatment
Please read more below or donate here.
Meet Elcira, a 54 year old woman from La Pintana, one of Chile’s poorest neighborhoods. She’s one of the 14.5m Chileans who haven’t been to the dentist in at least five years. Elcira started to have dental problems over 10 years ago, but couldn’t afford treatment, so she opted for the cheapest solution: extraction.
Dental problems are a huge deal. Many people are ashamed of their teeth and stop smiling, cover their mouth’s when they speak and start to retreat into their shells. Studies say that one of the best things you can do to improve earnings potential is to fix your teeth.
And even worse, poor dental health makes it hard or nearly impossible to eat certain foods. Barbecues, asados in spanish, are an extremely important part of Chilean culture. Birthday? Asado. Graduation? Asado. You got a new job? Asado. You’re bored on a Sunday? Asado.
Chile’s national pastime is getting together, grilling large chunks of meat and enjoying time with family and friends. The asado culture culminates during Fiestas Patrias, Chile’s national celebration. And people with dental problems like Elcira cannot share in the asado like they want: Elcira’s biggest wish when she started to participate in Sonrisas Colectivas was that she could enjoy meat at her family asado. Other patients longed to eat their favorite ice cream flavor, but couldn’t because of raw nerves.
Sonrisas colectivas invites people who cannot afford dental work to get a free diagnostic from a dentist who then agrees to lower his price to cost, usually a 40-70% discount. Then the fun starts. The patient pledges what they can, then asks their family and friends to donate to help out. In Elcira’s case, her coworkers organized a bingo night to raise money and were able to fund 25% of the treatment cost. Then its up to people like us to help cover the rest of the cost, which thankfully happened last week.
85% of Chileans haven’t been to the dentist in five years and Chileans buy less than one toothbrush per capita per year. If you account for the people who buy a new toothbrush every three months, the numbers show that there’s a significant number of Chileans who never use a toothbrush. At the same time, more dentists have graduated from Chilean dental schools in the past five years than in the entire history of the country combined and dentists have an average of 60% of their bookable time without patients. It’s estimated that Chile has enough dentists to treat 40m people, but only about 3m go to the dentist yearly.
Deenty estimates that about 30% of Chileans truly can’t afford to go to the dentist, while the other 55% either don’t understand the importance of the dentist, lack dental education or would rather dedicate their resources to other places.
Sonrisas colectivas helps the 30% of Chileans who truly can’t afford to go to the dentist get the treatment they need so they can smile again.
You can check out the stories on Sonrisas Colectivas and donate directly via paypal or Chilean credit card or bank transfer. Or you can donate directly to me and I will transfer the money onto Deenty. Help Marisol, Jorge, Sara, Carmen, Elicier and others smile again!
Libro Amigo is a social program founded by Sandra Velasco and Camila Carreño that creates small libraries in public hospitals to foment reading among patients, visitors and staff. You can donate used Spanish language books directly to the Libro Amigo team or via paypal to me and I’ll buy used books to donate.
Books in Chile are crazily expensive. A hardcover generally costs ~$45-$60 and a softcover as much as $30. Used books aren’t much cheaper. In a country where 85% of families earn $1500 per month or less and 50% earn less than $550, spending $50 on a book just isn’t in the cards. Partly because books are so expensive and partly because of low quality public education, Chileans don’t have a culture of reading. Public hospitals generally serve families in the bottom 85% on earners and most patients, visitors and staff don’t have access to books on a regular basis. And many children who come from tough backgrounds don’t have parents who are able to read to them on a regular basis.
Libro Amigo helps bridge the gap by offering books at no cost to adults in the hospital to help them take their minds off of the reasons they are in a hospital. The Libro Amigo team also reads children’s books to the kids who are either visiting or are patients in the hospital. As you can see here, the kids love it.
You can donate Spanish language books directly to the Libro Amigo team or donate money via paypal to me and I’ll purchase used books to donate to Libro Amigo.
Libro Amigo, proyecto que fomenta la lectura en hospitales, estamos haciendo una campaña navideña de recolección de libros. Nuestros lectores son los pacientes, las visitas y los funcionarios del Hospital Félix Bulnes de Providencia a quienes les prestamos libros completamente gratis. Si tienen libros por ahí que ya leyeron y están empolvándose en algún rincón los invito a donarlos a nuestra iniciativa, que comenzó a funcionar hace 3 meses.
Si pueden donar, recibimos libros para niños, jóvenes y adultos directamente en el hospital o en la Casa Central UC (donde trabaja Camila). Si tienen problemas para llevarlos, manda un mail a las fundadoras para ver si pueden ir a buscarlos. Nuestra comunidad de lectores, que crece día a día, y el equipo detrás de Libro Amigo se los agradeceremos enormemente.
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.
For more information on how to donate, 
