Let's learn from chile


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This slides is a short analysis of the things that we can learn from the Chilean experience in creating a Startup Ecosystem

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Let's learn from chile

  1. 1. Let’s learn from Chile How to Create a Startup Ecosystem Done by Abdullah Alshalabi Date: 3/9/2012 startupq8@gmail.com
  2. 2. ChileA brief about Chile Chile is considered the wealthiest and safest country in South America Chile has a diversified GDP, however natural resources such as Copper, Agriculture and fishery represent more than 30% of their national GDP Chile established a Cornfo to boost entrepreneurship more than 70 years ago, however the results were modest until Startup Chile is established 2 years ago Other international organizations helped to play a major role to increase the entrepreneurship activity such as EndeavorStartupq8@gmail.com 2
  3. 3. Chile – CORFO ChileEstablished: 1939Team:Board members: 6 (Chairmen is the Minister of Commerce)No. of Employees: 38Goal:Encourage entrepreneurship and innovation to improve productivity in Chile and it’sglobal position in competitivenessProgram description:Provide financing for startups and small businesses to start or grow their businessesthrough different types of tools and funds (both debt and equity).It also organize competitions and provide the winners with up to 70% funding.Competitions covers many sectors and varies from producing movies to energy projects.Results:- More than 16,000 transactions are guaranteed during the period from 1st of Jan to end of March 2012, helping mostly small businesses and farmers working in Agriculture sector- More than 40 different programs and competitions to boost technology and innovation in different fields such as business innovation competition, packaging competition and R&D competition .Startupq8@gmail.com 3
  4. 4. Chile – CORFO ChileAdvantages:• Helps to increase productivity and growth of small businesses• Helped in creating jobs• Bootstrap R&D and innovation activityChallenges:• Didn’t succeed in establishing multi billion companies that can expands globally and create a huge number of jobs• Most of the business benefiting from the program are small and family businesses. The owners of these type of businesses doesn’t have the vision to grow beyond his/her local region• The challenges mentioned above led to the creation of Startup ChileStartupq8@gmail.com 4
  5. 5. Chile – Startup ChileEstablished: 2010Team:Board members: 8 (4 global, 4 locals) (2 from Stanford University, 1 from HP)No. of Employees: 16Goal:To convert Chile into the definitive innovation and entrepreneurial hub of LatinAmerica by attracting the world’s best and brightest entrepreneurs to bootstrap theirstartups in Chile, and create the next US$1 billion company.Program description:Provide US$40,000 of equity-free seed capital, and a temporary 1-year visa to developtheir projects for six months, along with access to the most potent social and capitalnetworks in the country.Results:- 320 Startups benefited from the program until the end of 2011- 630 apx. Is the number of people that benefited from the program- Teams represent 36 countries around the world- Money spent on the startups = US$12.8M- Total funds raised by some of the startups = US$5M (outside investors)- More than 20% of startups in the program are local startupsStartupq8@gmail.com 5
  6. 6. Chile – Startup ChileAdvantages:• Encourage local Chilean people to become entrepreneurs• International teams are contributing to build a first class Startup eco-system• The increase attention from global entrepreneurs, media and investors was a wakeup call to all Chileans that they are capable to change the status quo and become the leading destination of innovation in South America• Attracted many speakers and brilliant minds around the world to help achieve the new Chilean dream• Attracted back some of the local talents that migrated to pursue their dreams on other parts of the worldChallenges:• Startups from abroad usually leave after they spend the 6 months required• The success of the program in recent years doesn’t guaranty success in future years if Chile doesn’t have a competitive advantage other than giving up money for freeStartupq8@gmail.com 6
  7. 7. Chile AnalysisWhat can we learn from Chile experience?The Good:- Even small programs with small budgets can have big impact in the entrepreneurship community- Having international teams helped to contribute in shaping a high quality startup ecosystemThe Bad: (Analysis by Steve Blank after visiting Chile late 2011)- Small Business versus Scalable Startup: there’s confusion in both the Government and Universities about the difference between small business entrepreneurship (startups designed to be family businesses,) scalable startup entrepreneurship (startups designed from day one to scale big inside Chile and then expand globally)- There is no focus in a specific field: Entrepreneurship and innovation in what field? Where will Chile establish technical and innovative leadership? Is the only way they will attract talent by paying entrepreneurs to come to the country? Or will students and entrepreneurs come to Chile because it is one of the best places in the world for innovation in certain specific industries (pick your favorite – alternative energy? materials science? food science?- Lack of connection with big enterprises- Lack of Venture Capital and Angel investorsStartupq8@gmail.com 7