What the Brazilian Startup Ecosystem Needs to Succeed
rudi.co
rudi.co
The irony is that only startups could save Brazil from this doomed scenario. And that is the reason why, until now, the ecosystem hadn't developed. But someday, this will be hacked.
Disclosure: I'm Brazilian and had my startup broken by Brazilian corrupcy.
Our request for a national program to fund startups was accepted, we had R$200,000 granted for 1 year of investment. But after that, they stoped answer our emails, and 6 months later, they announced that we and a dozen more startups were removed from the program, without explain why. The program is ruled by laws and we should have the money, but sue the government in Brazil is totally worthless. 5 years to win, 10 years to receive. As I said before, we have a very well planned system for the things to stay wrong.
> What would need to change for start-ups like yours to have a better chance?
Have more and more connected hackers to work around the issues. And the investors start to see on them the way out, not in the copycats.
Instead of simply copying US businesses Brazilians should innovate in markets that make sense for Brazil. Focus on local customers in services that can be expanded worldwide.
To me, simply trying to tie with U.S. businesses will cause Brazil to never develop a strong startup ecosystem as it is seem in countries like India and China.
Brazil is rather expensive and an extremely bureaucratic place to start a company in, so there is less competition when starting up. That is the only advantage of starting a business here, so doing one but focusing on the outside market before you validate a business model isn't optimal, you would be better off starting in the US instead.
Interesting point of view. Do you have any example about that in mind?
Brazil occupies the shameful 81th spot at the GEDI (Global Entrepreneurship & Development Index). It is behind way poor countries like Bolivia. What Brazil needs is a f*cking genocide, it is unbelievable that a country this blessed by nature can be screwed like this by his people.
By blessed I mean: no hurricanes, no earthquakes, no snow (meaning two crops a year), 80% of the worlds drinkable water, plenty of land, beautiful shores, the list goes on...
Brazil is doomed.
It's quite hard to get sucessful selling for people that can't buy.
It is not the reason for startups complaints, I think the scenario is chaotic because they don't have money/mentoring adequate for early stage startups. That is the reason they are always looking for some copy cats.
Another problem is the culture. People are not used to buy things online, but it is changing
What poor people don't have is a discritionary budget, they could use to buy stuff that a software startup is tipically able to sell.
And related, Brazil is quite big, so you can grow a company to a huge size only selling to the few richer brazilians. That's just much harder to accomplish than doing the same at a country like the US. That means that the normally 1 in 100 (or is it smaller) odds for a startup there will reduce a few orders of magnitude here.
A lot of the money committed to help startups is lost in the incubators. I "win" a competition where the 90% of the money was labeled as "consulting & support" and the cash left was to buy things they say I could buy.
I participate in others programs, where I move to the very last stages and drop because the situation is not that better. In this point, I consider a waste of time trying for any incubator here (for example: You need to sign a contract that say you MUST give 50% of all your time doing "incubator activities" as helpful as hear somebody explaining about internet marketing. Even for the king of support that could be nice, reduce the startup capacity to work by half is not great. And for 6 months or more?).
I try several routes, programs and contest. A lot of "yeah your idea is amazing! (not that much, but..)" but honestly look like without having US 100.000/Sales at the start none of the terms are a advantage for a starting startup.
Here are the challenges, similar to the ones other say in this thread and other:
- Not great tech education. However, good talent here but: - The talent available is spread in shitty jobs or is almost invisible. Like I say in https://news.ycombinator.com/item?id=7875627 some people are paid very badly, even for companies that could do better, and some people are insulated from the tech scene - The community was huge around MS, when it was strong here. Now, is very disjoint, or that is my impression - Not enough money liquity to hang around 3-8 months hacking. For example, I have my own apps but I need to stop working on them, do jobs for pay rent, and resume when I can. Because I'm independent at least I could try. People in full time jobs are out of luck if wanna build side projects
This is far harder that people in USA and other countries have, not impossible but this lead to:
- Get a cofounder is damm hard. I have a friend that I wish to have at my side, but he never get the nerve to drop from job (not that bad of a job). Others can't survive for more than 3 months. I have be independent this years mainly because my close family and myself is very relaxed & patient about money, and could live with less with not problem. But not everyone have the circumstances.
Probably some will say: Why not setup a nice side-project with monthly payments?
I have for more than 2 years looking how solve the problem of get money. Fastspring.com is the only that barely work for me, and Apple. In colombia, we are hit hard for all the drug traffic stuff (and some early crash about a pyramid scheme), so anything that could fly in seconds in USA is a wall here. For example, doing bitcoin here is like trying to buy radioactivity material. Is like banks hate anything that could help a startup..
Not even paypal work! You can't get money to the bank, you don't have stripe-like processors, the ones here are bizantine (and don't answer your mails or don't care for you). So the option is create a company in USA. And this is just one of several problems to overcome.
About investors:
Anyone that give you money, small or big, is your Boss. For live.
About get a loan:
We have https://www.datacredito.com.co, the "you have not pay bills, wall of shame". Who are there? Almost everyone!. For how long? How cares! So if a person is wealthy probably is ok, but the rest of us are toxic for get a loan (and must consider carefully wich one to get, so for example, with the intention of get a house is not good idea to default because your are dreaming of build a game!).
However at the bright side, I think the momentum is building. The situation is screaming of somebody smart enough to take advantage of the hunger of people in latin-america for build great things. I hope not miss this!
Most of the people don't have the "I want to be an entrepreneur" mentality. They are looking for well paid careers when choosing the field they want to graduate in. Creating a startup does not even cross their minds because they are not aware that it is a possibility.
They want stability... like working for the government. For the ones that want to be entrepreneurs, the mentality is either the mom and pop shop, where they will spend their lives on and never really make real money or the ones that happen to create big companies but stay in there forever as well.
VC's, Angels, investment, exit... a very low % of college students know what these are about.
I dare to say that Brazilians are not used to take risks... even the ones that are creating these copycats. Why do you think they are doing it this way? Less risk.
Disclosure: I am Brazilian and during my college days starting a company was not even talked about.
We you (and Rudi) are talking about is, specifically, tech companies. There you have a point.. college graduates are not familiar with the VC world and few talk about starting their own software company.
Taking risk in the US is different than in Brazil. The US has the LLC and bankruptcy laws, which shields the founders if it goes under. Brazil makes the people responsible for every financial commitment, and the bankruptcy laws are impossible to understand. If your company tanks, you personally go under too.
Disclosure: I'm also Brazilian and currently a co-founder at a São Paulo-based tech startup.
I think no large deal ever hapening outside of buscape and the second fact that most VC's got Nailed in the past 3 years paying high prices inthe ecommerce boom and are also writing off many of the investments is cooling the non existing startup scene.
That being said MSFT is opening an incubator in Rio.
Technical talent is there but the startup culture is not. And as you said most importantly an appetite for Risk.
Its like the us in the 90's
About equity: I don't see anything wrong in wanting a pay check. IMO equity is a plus a company can offer employees as a way to help hold talent - not salary substitute.
i find amazing/terrible that people think that a 2500 usd/mo salary for a senior guy is a lot.
My profile: Sr. Developer/Architect with 8+ years experience in Django. I have received (and turned down) offers in São Paulo for R$12.000/month (CLT), to what some people in my network said it would be "good, but not extraordinary". I've heard people saying they were making less, some saying were making more. One of them mentioned he was making R$20k/month CLT, but admittedly he was way out of the curve.
In the end, I moved to Berlin, a city that is less expensive than São Paulo and where you can get a €6000/month salary without much trouble, and freelance contracts in the €75-80/hour range.
But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
As parent said: But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
Entra em contato comigo, meu endereço é adelgado1313arrobagmailpontocom.
Curiously, the one making R$20k/month got the more "startupy" job. He is working at an advertising agency as the "Director of New Businesses in Digital Media". Basically he is in the EIR of an ad agency, creating new products, websites, generating tools and services with a team of 3-4 people that he needs to manage.
for me, it's preferable to work as a contactor to an american startup than work for a brazilian startup -- at least the american one knows how much i'm worth and will pay accordingly.
I am fairly active in the local Python community (we probably bumped into each other by now) and I think I can help you find the talent you need. Ping me.
By the way our SP space in located in central and we are looking to give space to python and other developers who want to workon startups and ideas.
my python skills are strong, but my django skills are somewhat rusty. i can learn it pretty fast thought.
just mail me at hi@alan.buzz
github and anything you think is relevant. We hire and seek talent based on the a new models and do not care about cv's and standard credentials. If you are on HN its a already a good start.
p.s. by "competitive" I mean experienced people that could be hired remotely at SF rates.
btw, i know a couple of guys that are interested in rails work here in SP if you need some help. you can contact me at fernando.takai at gmail.
There's the "how do you dare question our assuptions" culture, that's way too widespread. There's a disdain for any display of competence, and punishment of competent people. There's a huge focus on learning theories, with no care at all about empirism.
Brazilian education is completely fucked up.
This kind of relationship between founders and investors is very harmful and it is contributing to failure of brazilian startup scene.
Another point your post made very clear is the lack of entrepreneurs that already had success in tech startups. We have a lot of people pretending to be mentors, but none of them have any skills to do that. They never grown a business, or got to millions of users from zero. They just are assuming that they are mentors and are supported by the specialized media. Just impostors gaining money from lectures and classes.
And, unfortunately, I believe another problem we are facing is the culture. People are not open to use something new. Just few people are early adopter and it is a real problem for companies that need to achieve a critical mass to start running.