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Bureaucracy Mode On: Start-Up Chile Uncensored

They say that things people need to have more awareness about usually happens in 3’s and last week that was exactly the case for Chile’s startup and entrepreneur community. Unfortunately, it appears that after a year full of positive press and buzz, as we kick off the new year, Chile will be focused on doing a bit of ‘damage control’ more than anything.


Darth Vader Was Here

First, the week kicked off with a post on The Next Web about foreign investor Arnon Kohavi and his abrupt exit from Chile after just 6 months, citing a few of Chile’s monopolistic families who still run the country, at the top of his reasons for leaving. This in turn set off a lively discussion thread and a wave of posts, rebuttals, and opinion pieces.

Second, word got out that Octantis, the oldest incubator in Chile was closing, mas o menos. Who knows? It was all a little ‘fuzzy’. And for some reason I see them re-branding themselves as something else. I have some ideas but I will hold my opinions for now.

And third, Herval Freire (Hervalicious, jejeje) a Start-Up Chile (Chilean Government sponsored program for startups) participant from Brazil made a post about his 6 month stay in Chile working in the startup grind. Within 24 hours the post made first page of Hacker News. Unlike pretty much all of the Start-Up Chile participants before him, he did not sugar coat his experience (and he made the post before he left the country….how’s that for startup gangsta?)

Excerpts from Hervalicious’ Post….

The ACTUAL mission of Start-Up Chile is very clear (and I was kindly reminded of it a couple of times by the lead paper-tosser executive officer)….

The first, cold truth, is that there’s no VC money in Chile. And I mean no money at. All….

“Reimbursements” – the core of the Start-Up Chile “carrot on a stick” strategy – is a long, broken and biased process, specially devised by some devil from the high ranks of hell….

The Making of a Startup Jedi

From the earliest days of Start-Up Chile, in the name of innovation, disruption and progress (naturally), I have engaged in a few ‘colorful’ conversations with Startup Chile directors and teams alike.

My greatest challenge are some things said by their startup founders, which I believe put Chilean startups in an inferior space (case in point, second sidebar comment). I used to give them grief about this, but since I have started working with my fellow startup co-founder Carlos Leiva Burotto, his authentic Chilean charm and kindness has rubbed off on me a bit and in the early days he instilled in me our greater responsibility to the Chilean startup community at large.  So I have been working harder to give more value, education, exposure and support for Chilean startup founders. Not to mention, given that Carlos works a lot more hands on in and with the Start-Up Chile community, I have learned essentially not to take my frustration out on the people who have no direct control over how the organization is structured and governed.

I understand a lot of our differences have also been cultural ones. In terms of entrepreneurship in the U.S.A. you would never (and I mean never, ever, ever) hear a startup founder say they are seeking investment for their venture from the U.S. government. But in Chile, few believe their startup or company (or most things in this country can function and/or improve) without financial support and involvement from the Chilean government. Corfo, Chile’s leading economic development agency, is a government entity, and while the government can work to pass laws and develop protocols that facilitate the process of starting a business (which they have been doing), governments are not responsible for starting businesses. Hence the work of AndesBeat and working to build/train/educate a culture of bootstrapped startups and tech entrepreneurs that clearly understand where those boundaries are.

While many of the startups have expressed a positive response to the Start-Up Chile program, there are also a number of startup teams who have expressed their struggles within that structure and need to be supported, promoted and integrated into the larger Chilean startup ecosystem as well. And those are the ones we are especially trying to reach and better support. Realistically, it is a good thing for Chile when Start-Up Chile works/does well and startup founders and every organization connected to them has a good experience, they will hopefully reciprocate the experience for Chile and it is our responsibility among other organizations working in the space of entrepreneurship/innovation to work complimentary to them and fill in the gap for the long term and greater benefit of Chile.

The Chilean Empire Strikes Back

Alas, the way that I see it, perhaps biased since I am from Washington, DC (home to government and big business alike), is Start-Up Chile is a ‘necessary evil’. The government often works counter intuitive with the nature of startups/entrepreneurship. But given the culture and history here in Chile, it needs to be the pivot or bridge to launch the ecosystem. With the ‘government’ as the primary engine for economic growth, as more and more people (foreigners and Chileans alike) experience its inefficiencies, gain more education about what it means to be an entrepreneur or startup, along with gaining a deeper understanding of each others culture, disruption and innovation will surface from a few people who decide to stay the path and work to make things better, simpler and/or faster. Vamos Chile! It’s YOUR time.

Photo Credits: foolstopzanet