Start Up Chile: Can we create an entrepreneurial ecosystem in Chile?

“Five years ago, Start-Up Chile was born. Its mission – to literally transform the Chilean entrepreneurial ecosystem. It all began with a single question. What would happen if we could bring the best and brightest entrepreneurs from all around the world and insert them into the local ecosystem?” Would it create an entrepreneurial ecosystem in Chile?

While hanging out at El Centro De Emprendimiento Telefonica Open Future – one of Start-Up Chile’s co-working spaces in the trendy part of Santiago, and looking out at the multitude of entrepreneurs from all around the world, there is no question about it: Start-Up Chile is making a difference for these companies and the local economy.

Today, Start-Up Chile has accelerated 1,100 startups (about 300 per year) from 70 different countries, with about 35% of those entrepreneurs originating from Chile. 79% of those startups are still alive today, 1% have been sold and 20% have died. In addition to providing grants worth 30,000 USD to each team, a six-month mentoring period to jump start their businesses, and a kick-ass academic program, the best startups are also offered a spot on Demo Day where they have the opportunity to connect with investors in Latin America and the rest of the world.  

According to recent data released by Start-Up Chile, their startups are having a big impact on Chile’s economy. 32% of startups in Chile have been funded (outside of Start-Up Chile’s grant), amounting to 41,559,000 USD, and their top 5 most successful startups have valuations from 10,000,000 to 75,000,000 USD. These startups are also responsible for job creation in both Chile and abroad; 485 foreign jobs and 974 Chilean jobs have been created thanks to Start-Up generations 1 through 12. The community has also seen an increase in incubators and accelerators. And the Start-Up concept has spread to Brazil, Peru and elsewhere in Latin America.

“There’s still a lot of ground to cover,” says newly promoted, Director Rocio Fonseca. “The future looks awesome and we are continuing to improve Start-Up Chile.” Already, Start-Up Chile has offered new programs ranging in time frames to meet the needs of different types of startups and industries. “We are also working on improving our academic program and building an investor club to help catalyze an investor ecosystem within Chile. As we continue to improve our services for startups we are hoping to retain more and more foreign startups in Chile” (About 10% of foreign startups are choosing to stay in Chile).

According to Apple Co-Founder Steve Wozniak, “It’s the greatest program I’ve seen of this type in the world! I’m gonna recommend it to my own kids.”

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5 Reasons Why You Should Choose Start-Up Chile

1.   It goes without saying that the 30,000 USD grant provided by the Chilean government is a tempting treat for any startup looking to make a name for itself.

2.   You are surrounded by some of the most creative, and brightest entrepreneurs in the world. Companies have come from 70 different countries to be part of the program with about 35% of entrepreneurs originating from Chile. As my great-grandfather used to say, “A wise man learns from his experiences, but a super wise man learns from the experiences of others.” By being part of a huge and extremely diverse community of entrepreneurs, you can further your entrepreneurial learning by hanging out with and learning from other startup founders.

3.   They are serious about educating entrepreneurs. Not only do you get access to mentors, but they bring in tons of workshops and events so you can get your learn on. For example, each week they have a intensive pitch training workshop that’s popular with the program’s current entrepreneurs.

4.     El Centro De Emprendimiento Telefonica Open Future Co Working Space is a fun place to work and network. We had the opportunity to sneak in (shhh don’t tell anyone) and hang out with some of the entrepreneurs at Start-Up Chile’s headquarters in Santiago.

5.   Santiago is just plain awesome! Chile’s capital is nestled in a valley of mountains, only a couple of hours from amazing surf, hiking, wine and skiing. The city itself is a fun mixture of cute cafes, businesses and a fun bar scene. Santiago, Chile has been one of our favorite cities (we do play favorites) in South America! What are you waiting for?

UNITEC: "Each moment in your life adds up. It makes you who you are."

When BP – the owner of Castrol Products decided to pivot and change their Chilean business model to incorporate distributors, Carlos Herrera decided to take advantage of the opportunity and open his own Castrol Distribution. That’s when UNITEC was born. “Ultimately, it’s been a win-win for both BP/Castrol and UNITEC,” says Carlos. “We’ve been named one of Castrol’s top distributors worldwide for the past the past two years in a row.”

UNITEC focuses on selling Castrol products to engineers, with most of their clients in the mining (they hold an exclusive in the national mines), pulp and paper, steel, metal industry, and class industries among others. 

“A big reason why we are so successful is because we are super transparent when dealing with clients and we don’t stuff the pipeline. We focus on building long-term relationships instead of short term gains. It can be difficult sometimes but overall, I believe it is one of the reasons why we have been so successful at UNITEC.”

At the end of the day however, to lead and win in your industry Carlos reminds entrepreneurs to stay focused and to push, push, push. “Find your idea and follow it,” urges Carlos. “Select your top priority or two for the year and stick to it.” Once you have chosen your focus, Carlos says, “keep moving and don’t stop. If you stop… even for a moment, the competition will catch up.”

And, when things go wrong? "Everything happens for a reason. Every moment in your life and every learning opportunity you come across, adds up. It makes you who you are. It's connecting the dots," states Carlos, echoing a quote from Steve Job's Stanford Commencement Speech. 

“You can't connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.”  -Steve Jobs.

Equilab: The two greatest gifts an entrepreneur can have...

“When I first entered the family business, I was known as being a witch,” admits Angela Diaz of Equilab – A medical supplier based in Santiago, Chile. “I was horrible. I was afraid of the responsibility that I had and not having the strength to live up to my father’s expectations in running the company. I used to think that my only job was to have the most intelligent ideas for the company. And, when I didn’t always have ideas or when someone else had better ideas than mine, it affected me greatly.”

After leaving the company for a short time, Angela realized that, “it wasn’t my job to have the most intelligent ideas but to give space for intelligent people to have intelligent ideas. This shift in thinking completely altered things for me and the company.”

Equilab was founded 34 years ago by Angela’s father. Her father's story is truly a rags to riches tale. At age eight, he ran away from his aunt’s home where he was treated as a servant, and ended up living on the streets. “In the past, a lot of kids were living on the streets. It was a tough period in our country’s history.”

At age eighteen he decided it was time for a change and he joined the Chilean military. “It transformed his life and he studied at night while working during the day. After seven or eight years, he applied to university where he studied chemical engineering,” says Angela. After working in the science lab supplies industry for a few years in Venezuela, her father returned to Chile to start his own business.

“Equilab went from one employee to 150, and in 2013, we were bringing in 8,000 Million Chilean Pesos.” Today, things aren’t quite so rosy for Angela who took over the family business after her father passed away. Between 2013 and 2015, sales dropped 50%, the Chilean economy grew tumultuous under the current president (who took office in 2014), and to make matters worse Angela discovered that her CIO was lying to her regarding the company’s financials.

“In turned out that my CIO was only showing me the numbers I wanted to see and I trusted him completely and didn’t dig into the numbers myself.” After several months of running the company under false numbers, the situation grew out of hand, and in February of 2015, the CIO stepped forward and explained the real situation.

“It turned out we were going bankrupt and I had no idea.” After taking a second mortgage out on her home, cutting the staff down to 30 (from 90) and selling some of the lab facilities, things are looking a little bit more manageable. It’s been a really hard learning experience, but one Angela has clearly taken to heart.

When we asked her what the number one lesson she had learned over the years of adversity, Angela said: “at the end of the day we aren’t in the science lab equipment business, we are in the listening business. Our number one goal is to help solve our clients’ problems and to continually add value to their businesses. We have become listening machines! The two greatest gifts you can have as a person, entrepreneur and organization is:

1. The capability to always learn, learn, learn

2. The capability to continually listen, listen, listen

Angela repeated her top lesson several times throughout the interview, affirming to us that above everything, these were the two nuggets of wisdom we had to leave the interview with.

“Customers buy for their own reasons and they may not be the reasons you expect. As an entrepreneur, your job is to discover why they buy what they buy, and to continually listen to your clients and the market at large.”

Accion Emprendedora: Entrepreneurship and democracy are linked?

“When you promote entrepreneurship as a public policy in the developing world, you aren’t just promoting poverty elimination, you are promoting three core values fundamental to democracy,” explains Anibal Pinto, the founder of Accion Emprendedora, a nonprofit based in Santiago, Chile. “You promote freedom, individual responsibility and a space for creativity. There is no country where entrepreneurship spreads that democracy doesn’t also spread. They are LINKED. No question about it.”

Accion Emprendedora is a non-profit organization focused on improving Chilean society by supporting low-income entrepreneurs, specifically smaller enterprises. How does Accion Emprendedora accomplish their mission? By providing education, money and mentorship programs for low-income entrepreneurs and wanna-be entrepreneurs, they help build sustainable, small enterprises in Chile and ultimately work to alleviate poverty. So far Anibal states they’ve helped 4,000+ entrepreneurs in Chile, and with each entrepreneur employing about 1.7 people, Anibal is assured that they are making a difference in Chile’s local economy and society.

Accion Emprendedora started after Anibal volunteered and provided a class to low income entrepreneurs. “I was originally a lawyer and then spent several years in the financial services program. I was making a lot of money but wasn’t adding value to my life. I needed something new,” That’s when one of his friends recommended teaching a business class to low income entrepreneurs. “I realized that the hour I spent with these entrepreneurs was more valued here than my work as a lawyer.”

After four years of “marvelous loneliness” during the initial start up phase, Anibal received a 1 million USD grant in 2006. Since then, Anibal is proud to say that they are a self-sustaining organization, which brings in income through their consulting programs with larger companies.

“I don’t have a favorite entrepreneur,” admits Anibal when we asked. “But the first five entrepreneurs that joined our program are extremely special to me.” Three of those early entrepreneurs were bakers, one was a plumber and the last created children’s toys.  

“80% of the entrepreneurs that come to us already have a business and also, about 80% are women. They are typically entrepreneurs out of necessity – because there are few to no other options available to them.”

Perrot Logistics: "If you take care of the company, it will take care of you."

Perrot Logistics was founded in 1940 by Oscar Perrot as an ice transportation business. Since 1940, the company has continued to grow and is now one of the pioneering logistics and shipping companies in super stacker containers. Today, one of Perrot’s biggest customers is Nestle Chile.

“We provide all foreign trade logistics for Nestle Chile, while also providing other solutions like transportation of oversized cargo, onsite and route surveys, supervision on ground and more,” says Efrain Rodriguez, CIO of Perrot Logistics. Efrain is a former U.S Air Force Communications Analyst and the son-in-law of Mauricio Perrot, current CEO of Perrot Logistics.

“One of the biggest challenges we face,” says Efrain, “is trying to bring a sense of common ground to family members and employees who work for the company. We have to bring the generation gap closer and bring the passion of Mauricio to every employee and family member of Perrot Logistics.”

Mauricio has kept the family company together through thick and thin. “I started trucking when I was 17. I was hooked in the transportation industry from then on. It is all I know.” For Mauricio the company is a manifestation of his father, and he makes sure to keep the company strong.

Today, Perrot Logistics stands by three values which were passed down from Oscar Perrot:

1.     Delight your clients

2.    Take care of your people

3.   Make sure the business is profitable.

“If we continuously ensure that we are living by these three values, the company will take care of itself,” explains Efrain. “And, if you take care of the company, it will take care of you.”

Silentium: "We are crazy, that's why we are in business."

“At Silentium, one of our key goals is to to improve the overall health and quality of life for people by offering noise and vibration control to Chilean companies,” says Hector Fuentes CEO of Silentium. The company manufactures vibration and noise reduction products which greatly reduces the problems faced with hearing loss, noise pollution, and excessive vibrations (think earthquakes).

So, where did the idea come from? “We are crazy, that’s why we are in this business,” laughs Hector of himself and his fellow cofounder, Christopher Rooke. “We both studied acoustic engineering in university, but we didn’t really understand what kind of impact we would make by studying such a strange subject.”

That all changed when Hector and Christopher attended a noise control conference in Brazil during their university studies. “That’s when we saw what kind of an impact we could make on health through noise control.” Noise is a health problem which not only affects hearing loss, but also affects how you sleep and concentrate throughout the day.

The business conference had Hector and Christopher daydreaming on acoustic engineering and how they could help alleviate health problems related to noise control. After college, they both went to work for a company that made acoustic solutions in an "artistic way" but soon decided to try to form their own business.

“It was REALLY difficult to get started,” explains Christopher. “We had to convince people to believe in our engineering and had to convince people of the need for the products.” But, once they reeled in their first customer, prospects gained faith in our business. “Today the thing that makes us different from the competition is our experience. We design the technologies, products and solutions and that makes us an expert and trusted advisor on the subject of noise and vibration control.”

Aliservice: Do you have the right people on your bus?

Luis Alberto Yapur Nicholls started his first business with $5,000 USD and a credit card. The former Marriott director built his corporate catering company from 1988 to 2001, before selling the business to a large international group. Shortly afterwards, Luis founded Aliservice, his second business in the corporate catering industry. After only 10 years of being in business, Luis has built 7 distribution centers throughout Chile, owns 120 transportation vehicles, employs 4,200 people and averages 350,000 services a day.

“We have two different core concepts we cater to,” explains Luis. “Traditional or classic line of service, or a complete restaurant set up.”

Their customer segments include: the mining industry (Chile’s largest industry), health clinics, public hospitals, private schools and private businesses.

How has he managed to maintain such a large network of operations? “Without good people, this business doesn’t work,” explains Luis. “Two of my core challenges is to constantly be looking for good team members, and to then align our team with a common vision.”

Luis’ attitude echoes long time Business Guru’s Jim Collins’ thoughts on what makes a good company great. “You are a bus driver,” states Collins. “The bus, your company, is at a standstill, and it’s your job to get it going. You have to decide where you’re going, how you’re going to get there, and who is going with you.” However, “leaders of companies that go from good to great start not with ‘where’ but with ‘who’.” For both Jim Collins and Luis the thing that makes a good company great is to put the right people on the bus. 

What are some of the characteristics Luis looks for when adding employees to his bus? “Commitment, autonomy, capacity and independence,” says Luis. “We don’t need yes men, we need committed people that are empowered to make their own decisions.” Do you have the right people on your bus?

Athlytics: A new connection between coaches and athletes

When we first met Dan Reardon, a recent University of Pennsylvania graduate, we all couldn’t help but note how strange our meeting was. Here we were, three recent college graduates from Philadelphia, Pennsylvania, meeting for the first time at a café table in Santiago, Chile. 

Dan had come a long way from UPenn to give his fledgling start up, Athlytics, a shot thanks to Chile’s innovative government program: Start Up Chile. In return for living in Chile during the duration of the program and contributing back to the community, Dan was given a 30,000 USD grant (no equity) to help fund the business. What does Chile get out of the deal? The purpose of Start Up Chile is to ignite a spirit of entrepreneurship in Chile.

“A great benefit of Start Up Chile is that entrepreneurs receive six months of runway. We don’t have to show numbers to investors or anything like that. It really allows us to process the business model without any constraints.” At the end of the program, entrepreneurs pitch their product or service to a group of potential investors on Demo Day.

“Start Up Chile has given me the opportunity to best nurture my product and idea and best position myself for future growth.”

Dan’s start up - Athlytics is revolutionizing the way coaches and trainers communicate with their student athletes. Athlytics is an app that helps coaches and trainers work better with student athletes to improve their training programs, no matter their location (think summer break). 

Athletes can track fitness goals, communicate with coaches and trainers and manage their fitness programs with more control. “We are currently focused on providing the service to high school and university student athletes but may expand to personal trainers or physical therapists in the future.”

“Our differentiator is that we have superior user experience.” Dan saw that many fitness apps were either too complex with too many analytics and a high learning curve (these might be used by professional athletes), or too bare bones with not enough data given (think iHealth – Apple’s free fitness app on the iPhone). Athlytics sees itself in the middle, providing excellent software with high amounts of data in a simple, user-friendly platform.

Best Energy: Providing the energy of the future

“About 65% of homes in the center of Chile have limited or no access to hot water,” says Martin Vender Acevedo, CEO and Co-Founder of Best Energy, a B Corp start up in Santiago, Chile. “This year, we plan to tackle 3.3% of homes, installing solar panels in low income housing.” By installing solar panels, low-income communities are able to increase their overall health and gain extra cash through the sale of solar energy to the government. “The cool thing about being in this business is that we benefit the community in so many ways. At Best Energy, we measure the success of our company in the number of low-income housing installations, the amount of CO2 retained because of the use of solar energy over traditional means, and savings provided to low-income communities. We are truly making a difference.”

Today, Best Energy has installed solar panels on 3,000 houses with about 60-70% of their income coming from public housing. Each house saves 1 ton of CO2, and their revenue goals are directly linked to the tons of CO2 saved. By 2020, Best Energy hopes to have 50,000 clients, ultimately leading to 250,000 tons of CO2 retained and 65,500,000 USD in savings for low-income communities.

So if Best Energy is working with low-income communities, where exactly does the revenue come from? “The Chilean Government has incentive programs for low income communities which we utilize to create our installations,” explains Martin. For new houses, the government pays Best Energy to install the Project through developers. “These projects make up 60% of our revenues.” The rest of their revenues are from old houses in low-income communities. “For this type, the government pays us directly for each house we install a solar collector,” says Martin.

“My job as an entrepreneur and leader is to discuss the mission with my employees and customers. When my employees understand the impact each action makes on the community, it makes their jobs worthwhile,” says Martin. “They think I’m crazy because I don’t speak about money. For me, it’s all about the mission.” Martin grew up in a business-oriented family, and is an avid pilot and professional sailor. His B Corp score was 84 points in 2013 and scaled to 113 points during his recertification this year.

Co-Work LATAM: "It all started with a failure..."

It all started with one failure. A few years out of university with experience in the boutique investment-banking world, Sebastian O’Ryan got the entrepreneurial bug and launched a toy company in Chile with a couple partners. “We had huge success as a company, but in the end we had to shut the business down. We didn’t have the expertise or cash flow to run the business,” says Sebastian. “Looking back, we had made so many mistakes that were just so obvious.”

Sebastian and his partners decided to pass along their experiences, about both their failures and successes to the entrepreneurial community by creating co-work spaces. “If we can pass along our experiences to others, we can help them avoid the same mistakes we did, and in the end, develop their businesses more efficiently and successfully. That’s really cool.”

After four years, Sebastian now has six co-work spaces in Chile, Uruguay and Colombia. “We are currently opening the seventh and by the end of the year, we’d like to have a total of 10 co-work spaces up and running. At Co-Work LATAM, one of their defining principals is radical collaboration where you commit to helping your fellow co-workers while expecting nothing in return. “We have a 5 minute rule. When someone asks you for help, you have to agree to give him or her at least 5 minutes of your time. You never know where a connection or piece of advice will change the tables for a business. The 5 minute rule encourages the sharing of experiences.”

For Sebastian, one of the things that makes him happiest about the business is when he sees two people working together on a project that didn’t know one another previously. “We are making changes in people’s businesses and personal lives for the better.”

As Co-Work continues to expand, one of their biggest challenges is maintaining their culture throughout all locations, regardless of the country it’s located in. “I would love to have a co-work in each of the most important capitals around the world. That’s between 50 and 100 locations! By 2020, I hope we’ll be at 50 locations.”

At the end of the day, “if you think of all the risks an entrepreneur takes and analyze them, you wouldn’t be an entrepreneur. Entrepreneurs have to be “stupid enough” or “inspired enough” to ignore the risk and start their enterprise regardless of risk. But, at the end of the day if it wasn’t for these crazy, innovative entrepreneurs we wouldn’t be the same society we are today. They make the world of a difference.”