Demystifying Global Success Routes for LatAm Startups
In your opinion, how have Startups evolved over the years? What are some of the advantages of the current technological revolution?
Over the years, we have seen a massive evolution in the startup landscape worldwide. One point that has become increasingly common among startups is the number of young entrepreneurs. For instance, in Brazil 20 years ago, it was quite impossible to find someone willing to leave a regular university course to go into the startup business. Today, based on a small sampling, around 30 percent will definitely start a new venture after school, and another 20 percent would consider the possibility.
“Corporate governance with a safe space to work with an emphasis on purpose at work, incentives for the key talents, as well as stock options are important keys to startup success.”
One of the main reasons for this phenomenon is the new generation that grew up in a technological environment, but more importantly, their emphasis on seeking purpose at work. That being said, there are also more talented people leaving big companies migrating to startups. When we speak of the local market, entrepreneurs who once were trying to copy U.S./Europe models and adapt them to Brazil and LatAm are also creating disruptive models to influence the whole world.
With respect to the advantages of the current technological evolution, we see that people, employees, advisors, and investors are more accessible than they were due to the increase in interactions through digital avenues instead of physical ones. Online migration also enhanced access to data and information, besides bringing more business opportunities with the evolving behaviors of society. Digital transformation is helping everyone to contribute to a better society
What, according to you, are some of the challenges plaguing the Startups landscape, and how can they be effectively mitigated?
Some of the challenges faced by startups in Brazil are related to the macroeconomic factors blocking the country’s growth. In that sense, the legal difficulties faced by startups regarding the opening and daily management are much more complex than in the U.S. to diminish these problems and enhance the Brazilian ecosystem, the government should simplify the legal policies for startups, such as the red tape faced with accounting issues. Furthermore, the lack of infrastructure and ecosystem investments represents a constraint that is slowly getting better. However, the market is still incipient, with few VC players acting in the top tier of investments (Series C+ and Pre-IPO rounds). To mitigate this, there are multiple factors that would help, such as a better outlook to the Brazilian Macroeconomics, a simpler legal landscape, more players coming to the market, and a maturity of the whole ecosystem.
Which are a few technological trends influencing Startups today? What are some of the best practices businesses should adopt today to steer ahead of competitors?
A technological trend driving LatAm, particularly Brazil, is the usage of social media. As early adopters, we see that one in three Brazilians are using Tiktok and Facebook’s platforms, which are embedded in the daily basis of society. In that sense, we could mention the usage of Instagram and WhatsApp not only as social media platforms but also as a tool for SMBs to sell their products and enhance their clients’ reach. Besides, startups nowadays usually require an intense usage of software developers in order to develop their products. Therefore, despite the lack of devs in the market, many startups are emerging in order to solve this problem—from dev schools to low-code/no-code platforms. At last, we see that clients in several segments in LatAm have had bad customer service, which enabled companies such as Nubank, Quinto Andar, and Rappi/food to explore this opportunity and create products to serve clients adequately.
When we analyze some of the best startups, there is a pattern regarding the best practices they adopted in order to steer ahead of competitors. Corporate governance with a safe space to work with an emphasis on purpose at work, incentives for the key talents, as well as stock options are important keys to success. Despite that, being able to nourish a strong culture motivates employees and gives them a sense of what to work for. From a financial standpoint, being able to track down KPIs, balance sheets, and the financial statement shows the company where they are at and where they aim to reach. At last, we see that the creation of a Board of Directors along with experienced advisors might be the key to discussing and enhancing strategies.
Do you have any advice for industry veterans or budding entrepreneurs from the Startups space?
The main advice that I have are:
• Build a strong team and create incentive plans for key talents in the company. The team is the most precious asset. They can provide a competitive advantage among the other players. Build a team with a huge passion for excellence.
• Maintain a relationship with all the players, not only investors, once they might not invest at first, but it is good to keep relations for new rounds the company might need.
• Pay close attention to client and investor feedbacks. This advice will be able to enhance your product and strategies throughout the journey.
• Know your competitors and benchmarks well.
• Be customer-centric; that is the only way to retain the ones that keep your company running.
• Keep close attention to the company’s financials.