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Latin America is the most interesting market for startups outside North America

Latin America is the most interesting market for startups outside North America

Posted by Juan Gavasa on July 28, 2014

Torsten Kolind is the CEO and co-founder of YouNoodle, a startup created in San Francisco in 2010 that had, as an objective, helping other startups to get assessment, awards and business opportunities through an extensive net of investors, accelerators and assessors. This great net of talents hasn't been unseen by many multinationals, companies and governments that now require its services in order to build new startups ecosystems.

Kolind works directly in many Latin American countries, such as Chile (Startup Chile) and Peru, and as a consequence of this professional relationship, he has become one of the best - known referents of the region when it comes to the startups ecosystems.

He will also be one of the lecturers in the Latam Startups Conference, that will be held in Lima on September 26th and 27th. In this interview, YouNoodle's CEO describes in detail the moment companies are living, how Spanish speaking entrepreneurs are and his belief of a growth similar to the one Europe has experimented for five years.

Can you explain how the startups' map is in Latin America?

It's a difficult matter. There are many countries and the startups system is better in some countries than in others. From my point of view, the leaders in the region are Chile, Mexico, Colombia and Brazil. Argentina also has a great potential and strength but it's now facing serious problems of stability and it's hard to get investors with that scenario.

I have recently been to Santiago de Chile with the programme Startup Chile, where we participated in the selection process of new projects. They are doing their best to make a project that is simple so that entrepreneurs don't have to face bureaucracy issues. Things are being well done in Chile and they have known how to attract worldwide entrepreneurs.

Colombia is also very aggressive when it comes to the growth of its startups. Mexico has great opportunities as well, since it's close to North America and its capacity to make business in the area. It's a very big country and its people are well prepared, they have a great spirit for entrepreneurship.

And what about Peru?

Peru and its new Startup programme launched by its government is very similar to the one developed by Starups Chile but that's mainly directed for Peruvian entrepreneurs, unlike the Chilean which was open to the world.

We are also working with the Peruvian government. The country has great potential to develop a solid startup ecosystem and its situation is very similar to the one Chile had ten years ago. The conference that will be held in September will help spread the entrepreneurship message. But I also think the Government should inspire the young ones to manage the challenge of entrepreneurship as a possibility so they are able to develop their ideas. For this, a good formula is to contact those entrepreneurs who have been successful so they share their knowledge and ideas. The Government also has to create a legal framework to facilitate this.

Is there a different entrepreneur profile in every country?

We haven't studied that yet. I don't think I'm capable of defining what industry or what field is more important in each country yet. A study with the Top 1000 Latin American entrepreneurs will be presented in Lima's conference in September. We trust we will have it finished by then. We have already made a similar study about women entrepreneur in the world and we came to interesting conclusions: its is easier for North American women (than for men) to succeed in the field. However, for Latin American and European women it's harder to compete with men. In general, entrepreneur women in Latin America and Europe find more difficulties in their way.

What kind of projects are more important for Latin American startups?

There are many related to technology and mainly to digital portals. And I am convinced that this is because less capital is required in the development. It is easier and cheaper to build a web company and this is fantastic because it means democracy in the access of technology, which is very positive for the whole world.

What is the main difference when we compare the ecosystems in North America, Latin America and Europe?

It's very interesting because every continent has a different view of startups, which is conditioned by its culture, history, economy and traditions. North America is the land of entrepreneurs. The country was created by citizens who have founded their own companies. It's natural for them.

In Europe, the usual thing is to work for great companies or for the Government. They have been educated differently from Americans. There is yet another panorama in Latin America, where startups are more needed since they don't have the resources that America and Europe have. They have always had the need of creating jobs, which comes from their parents or uncles who had already created a a way to make money. The took risks because they weren't losing the money from big companies or a job for the Government: their small company was everything they had, their mean of survival - unlike Americans, who dreamed of great companies. I would say that in general Latin American people embrace the entrepreneur spirit, but for reasons of survival.

Do Latin American investors take risks with startups?

Investors dislike risks since the whole region presents many risks already, weather it is economy, Politics or corruption. Many are the obstacles for a startup already, so investors tend to run away from added risks. There is a tendency, on the other hand, to think in terms of the country and not in terms of the continent or region in general.

And is it true that entrepreneurs themselves tend to avoid risks until they receive an initial capital, whether they come from the government or investors?

This used to happen, it's true, but it is changing since developing prototypes is getting cheaper. In the ''tech sector'', for instance, it is now easy and accessible to create a prototype of an application. It gets harder when you have to make adaptations of those apps,and then, of course, attracting users that are interested in the product, which is particularly difficult. There are developers all over the world but in Latin America it's hard to find users with technical abilities to meet their creations.

What is the image North American investors have about Latin America?

It is a complex matter. The European startup ecosystem is more developed and stronger and yet, the North American investor open its eyes to it three or four years ago. They used to think that nothing successful could come from there. This has changed and now there are many innovative startups with immense success, such as Skype or Spotify. And I think this could be the situation in Latin America too. North American investors are starting to develop their interest for Latin America, and there are signs that something is changing.

What do you expect from Latam Startup conference?

Related to your previous question, Latin America is the biggest market outside North America when it comes to startups. It's very interesting and I couldn't think of a better opportunity to meet other entrepreneurs and all the other actors in the field: mentors, incubators, accelerators...

Could you define, in one headline, the Latin American startup ecosystem?

Strong but still immature

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