Matt KendallArgentina’s economy has been run through the mill over the last decade, but with the arrival of President Mauricio Macri, things appear to be on the up. Macri’s administration is on a mission to overhaul the restrictive regulatory and legislative hurdles preventing the country from reaching it’s full potential, but is his political strategy working, and what role do startups play in this economic master plan?
Following up on an interview from five years ago, we felt it was time to revisit some themes with Argentine startup guru, Vanesa Kolodziej, to see if the country’s apparent rise from the ashes was about to breathe new life into its already reputable startup ecosystem.
Nearshore Americas: In our last interview, you mentioned that the main obstacle for IT firms in Argentina was finding enough quality tech people. Five years on, what is the general mood among Argentinean IT entrepreneurs today?
Some remain a little concerned that the liberalization of the U.S. dollar in 2015 had settled at a price which is not competitive. The exchange rate currently stands at US$1.00 to 15 pesos. Most of the establishment believes it should be higher and much of the central planning was done according to that expectation. The inflation rate has reflected that. Entrepreneurs who sell their services abroad in dollars and pay salaries in pesos have seen their margins diminish very rapidly over the last year.
On the other hand, it is a lot easier to receive payments in Argentina. You no longer need to bend the law to bring dollars into the country or to take dollars out. That is a big help for tech and outsourcing companies and removes a lot of the friction of doing business.
President Macri has pledged to rebuild the Argentine economy. Do you think that is actually happening and are startups playing a part in his plan?
Absolutely. I do not support any political party in particular but I am pro-openness. Making it easier to do business was a must and his government is very pro-entrepreneurship. President Macri and his team are bringing an entrepreneurial mindset to the whole economy, also passing a law to make it easier to open a company and to make it easier for SMEs to handle their taxes and accounting. That law is being promoted by ASEA, the Association of Argentinean Entrepreneurs, and is modeled on similar laws promoted by their fellow associations in Chile and Mexico.
All these organizations are pushing to help entrepreneurs with the least interference from the government as possible. The government has embraced that point of view and that law is currently being discussed in Congress. The government is also creating incentives for accelerators and venture capital funds to open in Argentina. This is similar to what Chile has with Production Development Corporation (CORFO). The government is planning to provide matching funds for accelerators and venture capital funds, which is a first at a national level.
How have your own projects, such as BA accelerator, developed since the new administration took office?
When the previous government made it very hard to receive or send dollars internationally, we decided to move our BA Accelerator business to Chile, under the name Nazca Ventures. That made it a lot easier for us to become fund managers. I exited Nazca Ventures a couple of years ago and it was sold two years ago to a German fund.
Recently, I became general manager for all acceleration and venture capital incentives for Grupo Clarin, the biggest media conglomerate in Argentina. Clarin owns the main newspaper in Argentina, Clarin, the biggest ISP, Fibertel, the largest cable TV provider, Cablevision, and around 40 other companies. They have created an accelerator/corporate venture capital initiative that I am currently leading.
As a mentor, what were the most interesting projects you advised that eventually became a reality?
There have been so many. I am especially keen on female entrepreneurs, because there are very few, and projects which have a very special story behind the entrepreneurs. One example is a Chilean female entrepreneur, called Komal Dadlani, a biotech engineer, who began a company called Lab4U. She helps to transform an iPhone or an iPad into tools to teach chemistry, physics, and other hard sciences at school. She is one of the most amazing entrepreneurs I have worked with, driven, engaged and a real example for me. Her parents emigrated from India to Chile, she grew up in a totally different culture yet she is flourishing and making things happen from Chile to Silicon Valley. I have seen many stories like that.
There is also a husband and wife company in Argentina called Nubimetrics, which was invested in by MercadoLibre. They provide metrics for e-commerce across the MercadoLibre platform. The wife, Pamela, is the CTO and a force to be reckoned with. They are from Jujuy, one of the most remote provinces in the country.
I have over 5,000 hours of mentoring but I may only speak once or twice with each company as they usually approach me with very specific problems.
What are the most common questions and challenges you hear from companies during mentoring?
They usually ask about how to get money from investors but they often have bigger issues, which can be so big as to go unnoticed. This can be in terms of product design, narrowing their scope, team management. The real art of mentoring is to very rapidly nail down the few key problems entrepreneurs are having and not paying enough attention to. The amount of hours spent in mentoring pay off when you can speak with someone for five minutes and immediately realize the key problems in their company and teams.
I have seen many mistakes where things could have been done so much better. It always comes down to people, in terms of not having the right team or chemistry, not putting in enough effort or bad communication.
It’s not been easy to be an entrepreneur in Argentina; most of them were pushed to other countries like Chile or Mexico, but they are starting to come back. It is now a great time to be in Argentina; a lot is going to be happening here, a lot of talent is going to be needed and a lot of opportunities are going to become available in the coming months and years.
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