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.
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.
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.
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.
After watching Costa Rica advance to the quarterfinals, we set out to the south, aiming for Salvador, about 750km away. Every Brazilian we’d told we were driving south to Salvador looked at us like we were crazy and tried to convince us to change our plans. They said the road was terrible, there were frequent robberies, potential kidnappings, random objects in the road to get you to slow down so that people could rob you, and that many of the police were so corrupt that you weren’t even supposed to stop for the police if they tried to stop you. I assumed this was another case of south americans exaggerating the danger, but I looked online on trip advisor and found dozens of stories of bad roads and dangerous conditions.
We needed to get to Salvador for the US game three days later and we wanted to see the beautiful Brazilian coast line, so we decided to go. Because the Costa Rica game went to extra time and penalties and we got stuck in traffic, we ended up leaving Recife after dark. We stopped at a truck stop for a traditional meal of grilled meat, farofa, beans, rice and fruit juice and planned our route south. I so wish I had a russian style dashboard cam for this drive, as it was one of the craziest of my life.
Within 20 miles of leaving Recife, the road went from decent highway to a two lane road with no shoulder, car eating pot holes and heavy truck traffic. This route connects Brazil’s third and fifth largest city, but at least half of it is worse than anything I’ve ever driven on, even in South Africa. Over the next few hours we avoided: a road kill horse that was blocking our lane, a fully intact truck tire in the middle of the road and a two and a half foot long piece of metal that would have popped our tires.
After avoiding pot hole after pot hole in the now dense fog, we saw red flashing lights off in the distance. We had been told not to stop for police, so we weren’t sure what we were going to do when we came to the flashing lights. As we got closer, we saw that the police were blocking the road. What to do? We slowed down and got closer and we saw the entire road sparkling in our headlights. And then we saw it. A jackknifed semi truck blocking 80% of the road that had spilled its entire contents across the road: 10,000+ now shattered glass beer bottles. The police had used shovels to clear two tire paths for cars to pass and were trying to direct traffic.
We finally cleared the area and pulled into Maceió, which we later learned is the most violent city in Brazil. As I was pulling into the city, I read an article that said Maceió was mostly lawless, people solved problems with knives and that the police could be bought off for even the biggest of crimes. It was late, I was tired and we weren’t paying too much attention as we sped into the city, keeping up with traffic going 110km per hour, blasting through red lights, in 50km zones.
As we got closer to our hotel, I tried to turn left and had to take evasive action to avoid an oncoming car, as I’d turned down a one way street. That oncoming car was a police car with its lights on. I figured we were screwed and he’d stop us and maybe demand a bribe. But he just kept on going and didn’t pay us a second thought. I can’t think of many other places in the world where you turn the wrong way down a one way street, almost crash head on into a police car and don’t get pulled over. The entire drive reiterated why Brazilians were mad about the world cup. Basic infrastructure connecting the 3rd and 5th biggest city just didn’t work. And was outright dangerous.
Praia Francesa
The next day we went to Praia Francesa, a small beach town about 30 minutes south of Maciaó. It was absolutely beautiful and really relaxing after the long, harrowing drive the night before. Besides for the natural beauty, the first thing I noticed was the amount of people with knife wounds. On their faces. On their chests. On their legs. I looked it up later and found articles saying that people solved their problems with knives instead of fists, guns or calling the police. And it showed. I bet we saw 10+ people that afternoon with some sort of knife scar, including our waiter who had a mouth to ear scar.
After spending the day at the beach, we headed south again, with the intention of getting to a small town about an hour from Salvador. We missed our turn off and by about 1030pm, ended up in Conte, a tiny town about 120km from Salvador. We were some of the only tourists in town and stayed in a beautiful hotel for about $50 for the night. We ate dinner at a small restaurant where locals were drinking beer and sampled the local food.
Fish, shrimp stew
Salvador and its region has some of the most interesting food in Brazil. It’s the center of afro-brazilian culture and you can see the influences in everything, but most of all the food. There are dishes that are very similar to southern food in the US, including Acarajé, which is very similar to hush puppies, boiled peanuts and stewed chicken with spices. Acarajé, one of my favorites and a ubiquitous street food, is made of smashed up black eyed peas and then covered with okra, boiled shrimp, greens and sauce.
There’s also fish and seafood stew cooked with spices, served with the stew sauce thickened by manioc flour. I had this stew in Salvador and had to convince the waiter to let me order it, as he thought the shrimp and fish stew, along with the manioc would be too much for my gringo digestive system. I’m glad I was able to convince him, as it was by far my favorite dish I tried in Brazil.
Acai is the hidden gem of Brazilian snacks. I’d had acai juice before and didn’t really like it, but the frozen acai with bananas, granola and honey. I had it for breakfast, in hot weather on the beach and after hangovers. An incredible treat that I wish we had either in Chile or in the US.
In Conte, I sampled a manioc and chicken stew that had been cooked for 4+ hours in a spicy broth, while my friend had carne de sol, the most popular meat dish in the region. We also ate cheese grilled over open coals, another ubiquitous street food in the region. It’s really easy to always order grilled meat when you’re in Brazil, but if you go off the beaten path a bit, you can find really interesting, flavorful dishes.
We got up early the next morning, ate Brazilian fruit for breakfast, and then headed south toward Salvador and the USA Belgium game. We stopped for a coconut water halfway to Salvador, then drove to the mall near where we would be staying to take the shuttle to the game.
Light house Barra, Salvador
Salvador was my favorite city I visited this trip and I would go back again. It’s a city that made sense to host world cup games. The historic Arena Fonte Nova is located downtown, within walking distance from Pelorinho, Salvador’s historic center, the beach and areas with bars. Located between a major street, a favela and a beautiful lake, the redone stadium is beautiful from the outside and had good sight lines from inside. We bought beers outside the stadium from entrepreneurial Brazilians and got into the stadium.
coconut water
I had tickets from the US supporters club and was expecting to be in an all US section as I had been in the previous games, but FIFA screwed it up and I was in a mixed section with Belgians, US fans and Brazilians. I’d stood and cheered the entire first three games with thousands of other US fans, but this time I had to sit as Belgium dominated the first half. The US were lucky to be tied at halftime, but were still in the game.
Arena Fonte Nova
My friend and I decided to move seat locations and stand with other US fans in another section, which improved the atmosphere. Tim Howard stood on his head the entire game, turning in the best goalkeeping game I’ve ever seen. Belgium really should have scored two or three times in regulation, but Howard kept them out. In the last seconds of the game, the US missed it’s chance win the game, missing a wide open chance from about six yards out.
Belgium finally broke through in extra time and scored twice, but the US fought back, scoring quickly and almost scoring again off a beautifully executed set piece. It would be have been nice to see the US play more attacking in the Belgium game, but it was a good end to a fun world cup run. I was surprised how anti-US the Brazilian crowd in Salvador was, chanting “USA go home,” “bye bye USA,” and whistling loudly to drown out our cheers whenever we got something started. Although the US advanced to the round of 16 again, just like 2010, it was a good world cup that showed US progress. Hopefully Klinsmann learns from this world cup and puts in a good showing for Copa America 2016 in the US.
The next day was a public holiday, for Bahia independence day. Salvador de Bahia, founded in 1500, was the first settlement by the Portuguese and just oozes history. We drove to Pelorinho, the old city, which gets its name from the stockades where the Portuguese originally hung and tortured slaves and locals. We watched the celebratory parade with full brass marching bands and dancers, had a beer and enjoyed the old architecture. Everyone was incredibly nice, open and willing to talk to us. This was true everywhere in Brazil, but especially true in Salvador.
We spent the next day in Barra, one of Salvador’s many beaches, enjoying the sun, caipirinhas and warm water. Barra is one of the only beaches in Brazil where you can see the sunset, which was absolutely beautiful. The Brazilians on the beach stood up and cheered as the sun went down, thanking it for making the day a great one. We decided to watch Brazil vs. Colombia in Pelorinho, the old section of town. People piled out of their homes to set up chairs in the streets and watch the game on tvs perched from windows and porches. When Brazilian won, this was the reaction:
I went to one last game, the Netherlands vs. Costa Rica in the quarterfinals, which was a tight, exciting and chance filled game. The entire crowd were behind the Costa Ricans, willing them to win. Both teams had great chances, but neither could convert. The Dutch manager substituted goal keepers in the last minute of extra time and his gamble paid off. Tim Krul, the substitute, taunted, psyched out and disrupted the Costa Ricans and then saved two of their shots, winning the game for the Dutch and sending them through. The atmosphere was electric, with the Brazilians singing anti-Argentina songs throughout the entire match at full volume. Argentines sang right back.
By the end of my three week trip, I was ready to sleep in my own bed and stop traveling, but I was sad to leave sunny, warm Salvador for cold, rainy Santiago. It was an amazing trip through northern Brazil and I’d love to go back to explore more of Salvador and the surrounding area, along with southern brazil. Although it’s still four years away, I can’t wait for the world cup in 2018, even if it is in Russia.
After recuperating in Porto de Galinhas on the 25th, it was game day again. USA. Germany. It had been raining off and on on the 25th, but that night, the skies opened up with a torrential, tropical downpour. We called it an early night so we could leave early the next morning for the 1pm game, 70km away in Recife.
We left Porto de Galinhas in a torrential downpour at 9am. We’d planned to drive to a bar near the stadium to meet up with more US fans, but we weren’t sure how the traffic would be, so we bought some tailgating provisions. We attempted to buy raincoats, or even just garbage bags, but the grocery store employees just laughed at us.
We covered the first 40km through the pounding rain fairly easily, but it took about double the time that we expected. We were amazed by the standing water on the road, but we made it through. Little did we know that this minor delay would seem like tiny puddles two hours later.
There are two “highways” that lead to the Arena Pernambuco and we decided to follow the shortest route. Two hundred meters after we merged with the direct highway, traffic completely stopped. I looked at google maps to check traffic and saw, for the first time in my life, black roads. I’d seen red and dark red, but never black. It was about 10am and after a quick check of Google maps, we decided that we would try the other highway. I maneuvered the car across three lanes of stopped traffic and took a “do it yourself” off ramp that brazilians had created and turned onto a small neighborhood street.
As soon as I turned, I saw the problem. The street was flooded. The large speed bumps that are a (maddening) fixture of Brazilian side streets were completely covered. Recife streets are not equipped to deal with torrential downpours. There’s no drainage. No storm sewers. Just potholed streets. Mud. And massive amounts of traffic. If it weren’t for the world cup, I would never have tried to cross the flooded streets. I would have called it a day and gone home.
When we finally got through the neighborhood and reached the other highway, we were greeted with stopped traffic. We needed to get 1km and move onto the other highway. But it didn’t work. We were trapped. It was 11am and we were getting worried that we wouldn’t make it to the game. We saw multiple US fans abandoning their cars on the sides of the street, in people’s front yards, anywhere they could park, and running to the metro, which amazingly, was still running.
US fans abandoning their car
We debated leaving the car, but we weren’t sure it would be there when we came back and decided to try to get to the airport, about 5km away. When we finally got to the freeway onramp, we realized the real problem: the entire freeway was completely flooded. The police had blocked the freeway and were starting to block the on ramp. We had a make or break decision: leave the car or make a break for it before the police blocked the road.
Other cars were attempting to drive through the 2-3 foot deep water. Some were making it. Others needed to be pushed. I took a poll of my friends in the car and we decided to make a a break for it before the police could close off the road. Just as we were about to start driving, a massive tour bus decided to ford the river. I followed, as the bus parted the waters and allowed our car to go through. And still we barely made it. I felt the car losing traction under us, but we made it. We navigated four more flood covered streets and finally made it to the airport, parked the car and tried to get onto the metro.
It was absolutely packed, but it was working! Hot. Humid. Sweaty. But at least we had cold beers. After a 45 minute subway ride, it was 1240 and we were dropped off a mile and a half from the stadium where we had to get on a bus. We were greeted with a 500 person line to buy $2 bus tickets. If we waited in line, we would miss the game.
Metro to the game
To get most things done in Brazil, all you have to do is ask. I ran up to a security guard and asked if there was a way to get a bus ticket without standing in line. He pointed me to a few guys selling tickets and we skipped the entire line, getting on the bus after a few minutes. As soon as I finished my purchase, I yelled “you don’t have to wait in line, buy your tickets here!”, setting off a mini stampede.
We finally made it to the stadium just as the first ball was kicked, in the constant torrential downpour. 4 hours to go 70km. We had amazing seats in the 4th row, just on the top of the 18 yard box. Germany were impressive, but the US held off the attack for 55 minutes, but the Germans put in a goal off a set piece and held on to win 1-0. The crowd support was amazing, as both the US and Germany brought about 20,000 fans each. As the game ended and we realized that the US was through, we continued to cheer in the rain, celebrating with the team.
The route back to Porto de Galinhas was treacherous, but we made it back safely. We were almost run off the road by a semi truck that got surprised when his lane ended abruptly, as is custom. We saw a Jeep driving through water that was over his headlights. But we made it back. We spent the next two days on the beach, enjoying the sun.
We took a few hours off from the beach and went to a bar to watch Chile vs. Brazil. Tiago and I decided to watch the game with some taxi drivers we met in their hangout/bar. They had amazing grilled meat for lunch and cheap beers readily available.
We entered the taxi driver betting pool as the only non taxi drivers and the only people who thought Chile had a chance. When the game ended 1-1 after 90 minutes, we were the only ones celebrating, as Tiago took the pot. We bought the taxi drivers a round of beer and became close friends. Chile gave Brazil all they could handle, but came inches short of pulling it off in one of the best games of the tournament.
Tiago with a taxi driver after winning the pool
On the 29th, we headed back to the stadium for Greece against the upstart Costa Ricans. This time we had no problems getting to the stadium and the weather was perfect. We had two extra tickets to sell so we bought beers outside the stadium and talked with fans trying to get rid of tickets. After an hour, we finally were able to sell for half of face value. As an aside, you could have gotten in for face value or below for about half of the games I went to, with only Chile/Netherlands significantly over face and Italy/Uruguay and USA/Germany 2x over face.
Costa Rica Greece
The Costa Rican fans were so excited to be in the round of 16 and showed it the entire game. They sang, danced and chanted throughout the entire match. It was fairly boring until Costa Rica scored a great team goal and the Greeks had to come out of their shell. A Costa Rican red card right in front of us (we were in the first row), turned the game on its head. The Greeks tried and tried, throwing everything at Costa Rica, but terrible finishing and an unbelievable effort from the Costa Rica keeper kept them out until the dying seconds. After extra time, some of the Costa Ricans, who had been defending with 10 men for 60+ minutes, completely collapsed.
We got lucky and the penalty shootout was right in front of us, so we had first row seats to see Costa Rica advance. Costa Ricans were running around the stadium, celebrating, going crazy. They couldn’t really believe they’d made the quarterfinals. But they deserved it!
After five days in Porto de Galinhas, I was ready to move on. We left the stadium to begin the last leg of the trip: driving from Recife to Salvador. And again, we almost didn’t make it.
