Yesterday I watched a panel of LatAm entrepreneurs, advocates and venture capitalists discuss “what needs to happen for there to be more innovation and startups in LATAM?” through Google Hangout. The panelists were:
- Luis Alberto Moreno, President BID
- Marta Cruz, Director of NXTPLabs
- Gustavo Álvarez Moreno, UP Global LatAm
- Andrés Barreto, Founder Socialatom Ventures
- Wences Casares, Founder Xapo
- Daniel Gómez, Founder Solben
If you speak or understand spanish, I’ve embedded the 1 hr discussion below.
Though the question focuses on “what needs to happen”, I’ll respond with that I think needs to be overcome to see LatAm entrepreneurs take their ventures to a more prominent position in the world’s leading organizations.
Fear of failure and copycat syndrome
Though we may be living in the age of the entrepreneur, it doesn’t mean this generation of entrepreneurs isn’t afraid of failure. With that said, the problem with most of the activities that are happening in LatAm, but also across the world, is that most of the ideas that are being put on the table are “copies” of something that works elsewhere.
You don’t have to look too far to see this in action, every country is literally trying to replicate Silicon Valley. And most entrepreneurs are trying to replicate successful ideas that started in Silicon Valley in their own backyard.
Creating Uber, Instagram, AirBnB for Mexico is just a chance to cash in on the opportunity that nothing like it exists locally, but there isn’t a mindset to improve the concept in its entirety. Then there’s the obvious ideas to combat inefficiencies, which are quite useful, in existing models but are increments that you could predict with confidence.
True innovation makes competition irrelevant, so to see true innovation in LatAm we need to build new models that can be useful across the world, not just locally. The same applies for accelerators that replicate the Y Combinator. Most of these accelerators are funding ideas, not teams. Y Combinator funds teams, with the belief that they can help them make their idea better and more interesting; that’s their secret.
I was recently invited to be part of an innovation cluster in Tijuana, and one of the first things that I told the group was that I really push entrepreneurs to have a global point of view. So, for me entrepreneurs must not be afraid to start from scratch with the intent of building something that can be unique anywhere in the world. That requires a global perspective, but also a willingness to scratch our own itch.
Funding as the goal
There’s this idea that “funding eliminates all problems”. Actually, having funds is a problem onto itself if entrepreneurs are not disciplined about what they are setting out to do. Both entrepreneurs and venture capitalists must overcome the “FOMO (fear of missing out)” bias that is so pervasive not just in Silicon Valley; everywhere.
A trigger happy venture capitalist firm is highly motivated to put funds into the thing that is following the new thing with the intent of positioning it for an acquisition by bigger player; not to dominate a market that is being created. It’s the reason most venture capitalists still operate by the old rules of funding: money and a board seat.
This isn’t the only things entrepreneurs need anymore. What we need is real-time access to networks of talent, contacts and resources that can help us accelerate our strategy.
Bottom line: Short-term-ism bias is pervasive everywhere. That’s what needs to be overcome.