Not surprisingly, Silicon Valley entrepreneurs have had an important hand to play in the development of many Latin American technology and IT companies, and the trend is showing no signs of slowing down. The rapid pace of technological development and especially the rise of social media has led to a sea change in Latin American perspectives on entrepreneurship, according to Miguel Angel Casillas of SV Links. He makes the point that there has been a real change in cultural psyche in Mexico and throughout Latin America just over the last few years, and that “entrepreneurs in Latin America today are truly embracing the digital revolution and investing in new tech ventures at a record pace.”
Casillas also points out that while these businesses are charting their own path (including frequently offshoring work to technical talent back home), many are creating or taking advantage of connections with innovation hubs such as California’s Silicon Valley. “Up until recently, Latin American businesses were less well-connected to Silicon Valley and its resources compared to many businesses in India, China and Eastern Europe. But this is changing rapidly, and the result is a significant increase in investments in new startups. ”
This growth is nurtured by a burgeoning network of Latin American firms with strong relationships with the U.S. tech sector. Their relative geographic proximity gives Mexican, Brazilian, Chilean and other Latin American businesses an advantage. The goal of most other emerging regions is to build their own Silicon Valley, which is a decades-long project. Whereas startups in Latin America are working directly with Silicon Valley entrepreneurs and investors on an almost daily basis, benefitting from their experience and innovative practices in both the short- and long-term.
A Buenos Aires-based businessman named Ignacio Peña coined the term TechnoLatinas to describe the ongoing technology-based entrepreneurial movement happening in hotspots throughout Latin America. Not surprisingly, when you take a closer look at these TechnoLatina startups, a solid majority have had strong ground-floor relationships with Silicon Valley-based businesses or venture capitalists.
Tech Startup Facilitators
While many of the first-generation Latin American tech companies were home-grown projects bootstrapped by passionate, stubborn entrepreneurs with relatively little outside expertise, a good percentage of the startups we are seeing today are second and third generation startups who are much more wired into Silicon Valley, Boston, Austin, Seoul and other tech hubs. The founders of these companies already have working relationships with technical experts and venture capitalists in many cases, and those that don’t have numerous opportunities to establish ties through a number of Latin America-focused tech startup facilitator programs.
One well-known tech venture group Mexican.vc was recently acquired by Silicon Valley’s own 500 Startups and its founder, Dave McClure. Both organizations have a shared vision that the most exciting growth opportunities are found in web, mobile and internet startups in emerging markets.
Start-Up Chile is a business incubator program created by the Chilean Government that began with a pilot program in 2010. The idea is to attract early stage entrepreneurs to bootstrap their startups in Chile, taking advantage of the good business climate and inexpensive human capital. The program has a number of partnerships and other ties with the Silicon Valley tech industry. The ultimate goal of the program is “to convert Chile into the definitive innovation and entrepreneurial hub of Latin America.”
Other players in the Latin American seed capital arena for startups include NXTP Labs and 21212.
SV Links, founded in 2011, operates using a different model. They are a non-profit organization, not a venture capital firm. But founder Miguel Casillas is tech-industry veteran with a electronic Rolodex full of Silicon Valley connections, and he sees his role as a facilitator. SV Links runs a “Silicon Valley Immersion Program” almost a dozen times a year for Latin American businessmen and entrepreneurs.
This program is designed to give these folks access to the brightest minds and the best processes in their area of business, and give them a leg up in starting and growing their enterprise. Casillas points out that SV Links already has some success stories — immersion program participants have ended up as investors or management in Zozi.com, Rewards.to and Loki Studios. SV Links is developing plans to work with entrepreneurs from emerging countries outside of Latin America.