Tag: startup chile

Punishing Failure, Stifling Innovation: How Culture Affects Who Goes into Entrepreneurship

Category : Entrepreneurship, Startup Chile
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I wrote a post last week about some of challenges facing Chilean would-be entrepreneurs because of the culture.  Overall, Chilean culture punishes failure, which stifles innovation.

It got me thinking and I realized that it seems to me that a fixed percentage of people in the world are entrepreneurial.  I’m not sure what the exact number is but if I had to guess, it’s probably around 10% and I’d be willing to bet that percentage is fairly static across the world.  I believe that these 10% have the skills, desire and entrepreneurial spirit to start a business and succeed.  10% of Americans, Saudis, Chileans, Spaniards and South Africans all have the desire to start businesses, so why do some places have lots of entrepreneurship and others don’t?

Why does the US have a higher percentage of entrepreneurs than Chile, Saudi Arabia or other places around the world.  And in the US why do Silicon Valley, NYC, Austin, Boulder and Boston have a higher percentage of entrepreneurs compared to Des Moines, Tallahassee and Phoenix?

I believe that certain cultural values free up the entrepreneurial 10% to actually start businesses and succeed.  For example, in the United States, we reward risk taking, business ownership and making money.  On average, we also love innovation, learning and trying new things.  We love rags to riches stories, even if they are only partly true.  If someone’s business fails, it’s seen as experience, not a black mark.  In the US, these values are stronger in San Francisco and Austin than in Cleveland and Memphis.

In other parts of the world, there are many different cultural pressures that stifle innovation: punishing failure, punishing innovation, closed culture.  Some places even look down on successful people.

In Silicon Valley, I bet 20% of the people are entrepreneurs in some way shape or form.  In Austin, maybe 8%.  In Chile it’s .01%.  I believe that all cultures start out with the same 10% who can start businesses, but some cultures push people who may not have started businesses to do it, while others push people who would have otherwise started a business to shy away.  The most important thing entrepreneurs, government and academics can do is to try to free the people who would start a business, but don’t because of cultural pressures.

I’ve seen it first hand in Madison.  When I was 19 and just starting with ExchangeHut, there were not many young entrepreneurs.  I only knew 4-5 students and recent grads who were starting businesses.  After JellyFish sold to Microsoft, Networked Insights started to have some success and young entrepreneurs like those in the Burrill Business Plan Competition started to get press in national publications and have some success, other people started to see that they too could start a business.  Capital Entrepreneurs has accelerated the process, along with all sorts of cool initiatives from the startup community like barcamp, forward tech festival, high tech happy hour and more.  I think Madison went from a 1% to a 3% city in the last five years.  We still have a long way to go, but by unlocking the pent up entrepreneurial talent, we’ve seen an explosion in entrepreneurship.  Just wait until we see what Madison looks like at 5%!

In Chile, I’d estimate that we’re at .1%: for every 1000 people who are entrepreneurs at heart, only 1 starts a business.  That’s 1/1000!  In Silicon Valley, it’s probably 200/1000, Austin 80/1000 and so on.

Part of Start-Up Chile‘s mission is to introduce entrepreneurs from all over the world into Chile’s culture to try to break the cultural pressures that punish failure and stifle innovation.  I believe that we should be focusing on the other 9.9% of Chileans who might start a business if they were not afraid of being punished for their failure.  If we can double the amount of entrepreneurs who start businesses, it will be a huge win for Chile.  I see similar parallels to Madison and the entrepreneurial community is starting to take shape.  People just need the entrepreneurial push!

What do you think?  Are entrepreneurs distributed equally across the world or are more entrepreneurs born in one country compared to another?  What can you do to help free up the rest of the entrepreneurs who are scared to make the leap?

Punishing Failure, Stifiling Innovation [Part 1]

Category : Startup Chile
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Ever since we’ve gotten to Santiago, we’ve heard from all sorts of people about Chile’s penchant for punishing failure.  Jesse wrote a really good post a few weeks ago about this topic called Punishing Failure and the Ramifications on Entrepreneurship and I wanted to add some more thoughts.

I met a 26 year old Chilean who graduated from one of the top universities in Chile with a degree in engineering.  He spoke great English and wanted to start a business.  He even had a good idea.  I asked him why he hadn’t started his business yet and he told me that he had a good job at a consulting firm and that he couldn’t risk failure because he would never be able to get another good job if his business failed, even if it failed because of factors outside of his control.

He told me his plan was to go back to the US to get his MBA and then come back to Chile to start his business.  He said that if he failed, he would still be able to get a job because he was so over qualified and would have better qualifications than his boss.

So, in order for this 26 year old to feel comfortable starting a business, he had to graduate from the best university in Chile, work at a top consulting firm, learn english, get an MBA from a top US university and then he could start a business.  He told me that if he started a business and failed, a potential employer would rather have a 22 year old recent grad with no experience, instead of his work and entrepreneurial experience.  Talk about overhead!

In the US, companies would love to hire someone who tried to start their own business out of college, even if they failed.  They would call it “real world experience” and employers would like that the potential hire was a “go getter.”  I’m confident that if I decide I want to get a job instead of doing startups, I could.  Here, it’s the opposite.  People believe that if a business fails, its because the owner was either corrupt, stupid or both.  People shun failures.

It’s not exactly the best environment for creating new businesses or innovation.  Many people here have good ideas, but they don’t believe it’s worth it to take the risk to start a business.  I also learned that making a ton of money is sort of looked down upon here.  Multiple people have told me that Chilean President Sebastián Piñera had to fight off attacks from the opposition that he was TOO successful.  Not that he was corrupt, but that he was too successful.

It’s a very difficult cultural difference for people who want to start businesses, but it’s an opportunity for Chileans who are willing to take risks and shun the cultural pressures to make money and be extremely successful.  There are so many opportunities to create amazing businesses here in Chile that people who can break free from the cultural pressures will be able to create some amazing businesses.  That’s part of the reason we are here:  Start-Up Chile was created to show Chileans that starting a business is an option, failure is ok and that Chile is a great place to start a business.  We’ll see what happens.

Part 2 in this series will have some thoughts about why some places have more entrepreneurs than others.

First Impressions from Santiago

Category : Startup Chile
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I’ve been in Santiago for the past five days for Startup Chile and finally had a chance to write down some initial impressions.  Jesse and I have been really busy getting our IDs, a bank account and searching for an apartment.  The Startup Chile program has helped us cut through all of the red tape that others might have to go through and it’s been super efficient so far.  Jesse and I have been walking all over the place, getting a feel for the city.  I’ve been really impressed with all of the other entrepreneurs in the program I’ve met so far.

It’s been 70-80 degrees and sunny every single day with low humidity.  The weather reminds me of Palo Alto so far.  Santiago is a huge city with about 6m residents.  It’s in a valley, so there are some problems with smog, but I haven’t had a problem yet.  There are a few days when the mountains are a bit obscured, but for whatever reason the smog doesn’t seem to get down into the valley and has not bothered my lungs.

Santiago sort of runs west to east and as a general rule, the farther east you get, the better the neighborhood.  We’ve only explored comúnas (districts) Providencia, Las Condes, Vitacura and a bit of Nuñoa and the downtown around our office.

Eastern Santiago very developed and clearly first world.  If it weren’t for everyone speaking Spanish, I could be in any other mid to large city in the US or Europe.  The center, where our office is located, is a little older and really busy, but still nice.  There’s people everywhere during the day.  It’s filled with shops, restaurants and businesses.  We’re not sure what it’s like at night, but people have told us it can get rough downtown.  There’s got to be at least 6-7 universities headlined by Universidad Católica and Universidad de Chile, so there’s lots of young people seemingly everywhere.  We haven’t checked out the Western side and everyone’s told us to stay away.

The metro is modern, efficient and cheap.  It costs about $1.25 to use it and you can get just about anywhere you want using it.  There’s wifi everywhere, probably more than in Madison.  There’s public wifi hotspots all over the place.  People eat dinner between 830-1030 and go out to bars/clubs at 12-1, which stay open until 6am.

Not many people speak much English, but they love it when we speak Spanish, even if it’s bad.  Our goto phrase has been estoy tratando de hablar español, pero hablo como un niño de cinco años, which means I’m trying to speak Spanish, but I speak like a five year old.  That usually gets a laugh and then we’re free to practice.  I can still understand pretty much everything people are saying, but I’m still struggling to speak quickly.  I can tell I’m already getting better though.

Everyone here looks younger than you’d expect and I have a feeling it’s because Santiago is a walking city, the weather is awesome and the food is really healthy.  Chilean food uses awesome ingredients, has correct, non American portion sizes, but is sort of bland.  We’ve had a bunch of chicken/rice, pork chop/mashed potatoes etc for main courses.  There are tons of Peruvian restaurants in Santiago and we’ve found that it’s the place to go for a good meal.  It’s like Chilean food, but with more spices.  I had some top notch ceviche last night.  If you’re in Madison, go to Inka Heritage to get a feel for some of the stuff we’ve been eating.

Chileans excel at making sandwiches.  They use really good, fresh bread, avocado, tomato, fresh wet cheeses, lime mayo and all sorts of fresh goodness.  If I wanted, I could survive on the diverse array of Chilean sandwiches.

The fresh fruit and veggies are awesome and cheap.  I bought medio kilo (1lb) of fresh strawberries for about $1.25 from a fruit stand and really flavorful avocados cost between $.10 and $.20.  It makes buying a much worse quality avocado for $1-$1.5 seem insane in the US.  I can’t wait to start cooking with these ingredients once we get an apartment.

I’m not a fan of fruit juice in the US, but the juice here is unreal, cheap and is sold everywhere.  So far, my favorite is frambuesa (raspberry), followed closely by frutilla (strawberry) and piña (pineapple).  It costs about $.50 for a really big glass.  The raspberry juice tastes like the fresh raspberries we used to get out of my grandma’s garden and put on top of schaum torte.  My family probably only gets this part, but you’ll have to take my word for it.

jugo de piña

Dominó is how fast food should be.  They are everywhere here and always busy.  They sell sandwiches and hotdogs, but use really fresh, good ingredients.  It’s still cheap and fast, but it doesn’t taste like fast food.  Dominó would do really well on any college campus in the US.  My favorite thing from Dominó so far is a hotdog with crushed avocado, tomato, cheese and a little mayo.

I’m much less hungry here than I was in the US.  Part of it is that it’s warm, so my body needs less food, but I think another part of it is that all of the food is very healthy and therefore more filling than in the US.  I bought an orange soda yesterday and there were only four ingredients: carbonated water, sugar (not high fructose corn syrup), orange juice and I forget the last one.  Even being here a week, I already feel healthier.

I’ll have more blog posts coming about the Startup Chile program and some of the interesting people we’ve met so far.  I promise my next post will have lots more pictures.  I had problems with my iPhone for a few days, so I’ll be sure to put more in next time.