Tag: startup chile

How to Make Chile a Better Place to Do Business

Category : Startup Chile
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A Chilean newspaper asked me an interesting question this week:

What should Chile do in 2014 to make it a better place to be an entrepreneur?

I don’t think my entire answer will get published in the newspaper, so I’ll republish it here. What do you think? And what would you do to make Chile a better place to do business?

1. Continue to push ASECH inspired entrepreneurial reforms

ASECH, the Chilean entrepreneurs association, has pushed laws like making it possible to incorporate a business in one day, for free, without going to a notary, pushed banks to allow entrepreneurs to open bank accounts much more easily, a entrepreneurship bankruptcy law, and has pushed for laws that force large companies to pay in 30-45 days, instead of 90-120 that’s fairly common in Chile. It’s been an incredible success and should be continued.

2. Force large Chilean companies to follow Chile’s competition laws

If you want to foment entrepreneurship, you need a level playing field. Chile currently doesn’t have a level playing field, as large companies routinely price fix and squeeze out new entrants to the market. And many large companies receive little to no punishment when they break the law. No laws need to be changed. Just enforce the ones on the books.

3. Push for a law that requires payment in 30-45 days for most sales

The majority of large companies in Chile pay suppliers, especially new ones, in 90-120 days. In the US its 30. Sometimes 45. If you start a new company in the US, you only need two months or so of operating capital before your sales start to pay your bills. In Chile six or seven months. This kills most people’s ability to start a business before they’ve even started.

4. Pass a personal bankruptcy law

I think it’s very unjust that a bank can loan you money without taking risk. Chilean banks know that they’ll get 100% of their money back at some point because there’s no personal bankruptcy law to discharge a debt. Chilean loans are very one sided contracts, which makes it more difficult to take risks and be an entrepreneur.

5. Tell the truth about entrepreneurship

Entrepreneurs are NOT rockstars or superheroes. Having your own business is a lifestyle and it’s not for everyone. It’s really difficult, but there are many benefits. I’d like to see the government and entrepreneurship groups talk about the reality of being an entrepreneur, rather than blinding building up entrepreneurship as rockstars and superheroes. I fear that when the first crop of entrepreneurs who’ve been told they’re superheroes just for starting a business fails, as most entrepreneurs do, they’ll be so burned that they won’t start another business.

De-Pe: Real Entrepreneurship in Antofagasta Chile

Category : Entrepreneurship
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Last Thursday was Demo Day for De-Pe, the class I teach at Universidad Catolica in Antofagasta, Chile. It was the culmination of a 12 week class designed to give the students in the class the tools they need to be successful running a business. Nine teams showed up to the first class twelve weeks ago. Some had an idea, others a functioning business, others just a dream. But by the last Thursday, everyone had something they could be proud of.

It was amazing to see the progress the entrepreneurs made by the end of the course and I’m really proud of all of our entrepreneurs who were willing to keep an open mind and improve their product each week.

But the best part, for me, was that each entrepreneur was working on a real problem. It was refreshing to see. Nobody was there because entreprneurship is cool. Nobody was there for the free food. Nobody was there for the free beer. Nobody was there to get famous. Nobody had the next photo sharing app or the next cat social network.

Everyone had a real problem they wanted to solve. Everyone was working on their idea because it was a problem they had. And that helped someone. By the end of the class, everyone found a niche where a customer was willing to pay them to solve the problem. There were no bullshit.

Our class follows a methodology we call EPIC. Luckily it works the same way in English and Spanish:

Enganchar – Engage

First, we break down the myths of entrepeneurship. You don’t need a ton of money. That it’s necessary to fail small in order to avoid failing big. That if you fail its not because you were stupid, lazy, stole the money or a combination of the three.

Poder – Power

Second, we empower the teams by giving them the tools they need to succeed. Entrepreneurship has become more scientific and we give the teams the best practices to be able to succeed. We force them to pivot to find a niche, simplify and find success on a small scale.

Integrar – Integrate

Third, we integrate our students into the entrepreneurial ecosystem. We bring local and international entrepreneurs to Antofagasta to help mentor students. We force the students out of the classroom to speak with their clients and share their ideas with entrepreneurs and actually listen to their feedback.

Comunicar- Communicate

Fourth, students need to be able to communicate their value proposition to clients, to potential business partners and to potential investors. That’s the first step toward sales. We teach clear communication via multiple presentations that end in Demo Day.

While it was a bit of a long haul traveling to Antofagasta 8 times in 12 weeks, it was completely worth it. Our students are exactly what entrepreneruship should be, not the bullshit that’s permeating most entrepeneurial ecosystems. I have no doubt that a year from now all of our entrepreneurs will be successful in whatever they’re working on. Here’s some of our projects (spanish news story):

1st Prize – $5000

Veneno Detect – The world’s first rapid detection test for araña de rincón spider bites. The current test is to go to the hospital to wait for your flesh to start to rot. If it does, it’s araña de rincón, if it’s not, you’re safe.

2nd Prize – $3000

Ecocrea – Solar panel arrays for off the gird mining offices to replace diesel generators at lower cost.

3rd Prize – $2000

Standmat – 3d video animations to increase sales for companies wanting to sell to mining companies.

Other notable projects

Purorugby – Chile’s first online rugby store.

Maestroalaobra – A Chilean version of Angie’s List, a way to get handymen you can trust.

Melanie Stylo – Solo entrepreneur who makes custom made sheets and curtains. Her business supports her family and grew during the class.

Ludico – Online costume rental with offline store. Solo entrepreneur who is supporting her family with her business.

Rincón Sano – Food truck to sell healthy salads in Antofagasta to give people another option besides crappy fried food.

CleanSubZero – Machine that uses dry ice to clean mining heavy equipment.

Startup Chile Generation 8 Application Help

Category : Startup Chile
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Startup Chile is opening the eighth round of applications today, June 10th. This application period will run from June 10th until June 27th with the winners being announced August 29th. In the round seven application process 1577  startups from more than 57 countries applied for the right to come to Chile for $20m Chilean pesos (US$42,000). Chile invited 100 of the 1577 companies who applied and they will begin to arrive July 3rd.

Startup Chile has become more competitive as the number of applications has grown. Round seven had applications grow from 1421 in round six to 1577. More than 1700 companies will likely apply to Round 8. More than 600 companies have already gone through the program since the pilot round in 2010.

It’s a great program, especially for entrepreneurs who are bootstrapping or already have developed a product but need more time to figure out the correct business model for their business. It’s a perfect fit if you’re looking to target the South American market.

My company, Entrustet, was part of the pilot phase of Start-Up Chile and I’ve been in Chile since November 2010. I blogged extensively about my experiences in the program and in Chile, along with advice on how to get selected for Start-Up Chile. I tracked down the stats from the pilot round companies a year later, which was published on The Next Web. I also wrote Startup Chile 101, the book that will tell you everything you need to know about living, working and doing business in Chile.

Since the third round, I’ve helped startups review their applications and prepare them to get accepted into Startup Chile. Overall I’ve now reviewed, 35 applications for prospective Startup Chile teams and 20 have been accepted.

Round 3 – 6/9 66%
Round 4 – 3/4 75%
Round 5 – 3/6 50%
Round 6 – 3/6 50%
Round 7 – 5/10 50%

Overall: 20/35 57%

In rounds five through seven, 6.4% of applicants were accepted into the program and 50% of the applications I’ve reviewed have made it. Three companies had applied two times previously and were accepted after we worked together. Another team needed to completely redo their video and we worked together to make it happen. I thought two more of the teams that I worked with completely deserved to make it in this round.

I can help you craft an application that emphasizes the criteria that the judges are looking for, correct your grammar into perfect English and give you the tips you need to have the best chance at getting selected.

If you need help with your application, please contact me. Editing, writing, review, advice. I charge a small flat fee to review and edit your application, plus a larger success fee if you are selected for the program after I’ve helped you.

Want help? Got questions? Want a quote? Email me: nate at nathanlustig dot com or fill out my contact form.

Note: I WILL NOT write paid letters of recommendation.

Startup Chile Pilot Round Companies: Statistics After One Year

Category : Startup Chile
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Starting in late 2010, the Chilean government spent $880,000 ($40k/company) to initiate Startup Chile’s pilot round, bringing 22 startups comprised of 33 entrepreneurs to Santiago.  It’s been just over a year since the last company from the pilot round ended their time with the program.  Since then, 400 more startups have arrived over four more Startup Chile rounds.

So what happened to the pilot round companies? Did they leave Chile? Did they all fail? Did they create any jobs? And did they have any impact on the Chilean entrepreneurial ecosystem?  I got in contact my friends from the pilot round and asked them about their businesses today.  Here’s what I found:

The Data

  • 6 companies (27%) have at least cofounder living full time in Chile.
  • 10 companies (45%) have significant businesses still running in Chile.
  • 7 startups (32%) have raised a total of US$4,020,000 from VCs and angels
  • 16 startups (73%) are still bootstrapping full time, of which 5 (23%) are profitable.
  • Taken together 12 startups (55%) are either profitable or have raised significant money.
  • 2 startups (9%) are being run part time
  • 3 startups (14%) failed
  • 1 startup (5%) was acquired
  • Founders from 14 companies (64%) have returned to chile at least once or continue to live here
  • 19  companies (86%) still have business relationships in Chile
  • At least 16 jobs were created in Chile

Here’s a few company updates:

Aeternasol: George Cadena’s original solar energy company made significant progress, but could not find success in Chile. George decided to start another business and partnered with Juan Pablo Salas, a Chilean.  They now employ 5 Chileans and has built Studiosnaps, South America’s first open air photobooth company. They’ve gotten investment in Chile and intend to expand to other countries.

Cruisewise: The first company to arrive in Chile, they built a prototype and then raised money from both Bay Area and Chilean investors. They are in San Francisco, growing and generating revenue.

Piccsy: Piccsy aims to dethrone google as the king of image aggregation.  With over ~4 million visitors, 30 million pageviews per month and growing steadily, Piccsy is quickly gaining traction. They made big news for their innovative pitchdeck.

Entrustet (my company): The first Startup Chile company to be acquired. I returned to Chile to work as head off marketing at Welcu, a 500 startups company. Jesse is in NYC working at Appinions.

Jumpseller: Formerlly Vendder, Jumpseller makes it easy for small business to sell online. Based in Chile, they continue to grow all over South America and employee Chileans.

Popup Chinese: A profitable, quickly growing, online language learning platform based in Beijing.

Piehole: The founders have stayed in Chile and continue to work on Piehole, a profitbale voice over platform. They’ve also founded mineralrightsforsale.com.

Stagedom: Formerly Death Star Labs, Shahar’s company took alot of flack in the press while he was here. He ignored it all, built his product, raised money and launched Stagedom, a beautiful iphone app to discover music.

H2020: The founders returned to the US and are now providing support for organizations (mostly sustainability related) who want to use their technology for mobile surveying/crowdsourcing.  In April, H2020 received the NetExplo prize, which included going to Paris to speak about the project at UNESCO and have significant interest from UNESCO to continue working together.

Other pilot round startups to watch: Rocketrelief, Moviemouth, Exim Force, Assert ID, Knowledgestream.

Conclusions

You can draw your own conclusions from the data, but I think it’s clear that Chile’s initial investment of $880,000 has paid off.  The vast majority of startups are still in business and are having some amount of success. Companies have raised money and nearly all of the startups continue to have business relationships in Chile.  If you take this data and add in the fact that Startup Chile was the best public relations campaign possible for Chile, the program has been a win.  Although there hasn’t been a huge Facebook style success, these stats begin to confirm that Chile is getting its money’s worth.

Spanish report: Radiografía a la generación piloto de Start-Up Chile