What’s most interesting about this new endeavor is that it is a mix of impressive entrepreneurs from Brazil, Argentina and Colombia that have decided to start their Latin American strategy from Colombia.  As I mentioned previously in a NYTimes article, the Brazilian Internet market is on fire and more and more US VC’s are investing in that country.  Nevertheless, witnessing the impressive launch tonight of BrandsBag confirms our confidence in Colombia as a country from which to launch Latin American-wide Internet initiatives and funding these initiatives through our new Micro VC fund,  Tayrona Ventures.

I had the chance to meet the leaders of BrandsBag such as Diego Rodriguez and Delio Epaminondas (with me in the photo on the left).  These are sharp business people who are extremely serious about transforming the shopping experience in the region and see Colombia as an excellent lauchpad to achieve this objective throughout Latin America.  The country boasts a growing middle class, internet penetration and ecommerce increasing at above 40% and a market with overpriced fashion items (sometimes more than 100% markup above prices in other countries).

As Marc Andreessen mentioned in a previous WSJ article, software is indeed eating up industry after industry as digital innovation takes hold. In countries such as Colombia, the potential is even greater since competition in markets such as retail is much less ferocious allowing incumbents to charge an arm and a leg.  These types of companies are ripe for disruption and make Colombia an ideal market to provide new (digital) offerings that can be incredibly profitable and still undercut the established players.  BrandsBag is betting big on Colombia and in the process has a chance to showcase the potential of this country as a profitable gateway/launchpad to the rest of Latin America.

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I really enjoyed the audience and found them incredibly receptive to my message about how social media (among other digital tools) is changing the way companies do business and the general business environment. This environment is great for startups and for accelerators such as the Founder Institute of which I am Director in Colombia. I call this whole phenomenon Digital Innovation and explained it at length during my presentation.

Today, I was gratified to read Diana Luque’s impressions of my speech and the message I was trying to get out there.  I also put my presentation slides on Slideshare and was amazed to see how popular the slide deck became.  It was great to see this because, as I wrote in a post on the day of the presentation, I had been working hard on that deck the night before and for the first time used my new corporate image and brand of TG Coach although the website is still under construction.  Among the points I made during the presentation, was the fact that the advertising agency industry is coming under attack as mentioned in an article yesterday in Adweek.  Finally, I was quite flabbergasted to get two separate emails from Slideshare informing me that my presentation was one of their hottest pieces of content on Twitter and Linkedin and am showing a shot of the homepage at that moment here.

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Carlos is an information/knowledge management freak (he studied this topic in Australia) and Andres Cifuentes is a successful entrepreneur focused don the Google Apps market.  They are building a strong team with a developer (Alex) and a designer (Gloria) working on the first version of the app.  Aside from this, they have been meeting with different users to get an understanding about how they’d organize their information from a conceptual perspective.  If you’d like to sign up for the beta you can sign up here.

Here’s my quick interview (in English) with Carlos:

Founder Institute Grad Thotz.net from Tropical Gringo on Vimeo.

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Additionally, last week, I had the opportunity to address a group of bankers at an event sponsored by the Bankers’ Association.  I was able to give them a perspective on where the startup action is in terms of the financial services vertical and was happy with the feedback and the interest from the industry in these topics.  I was accompanied by my Founder Institute Colombia team member, Juan Manuel Lopez as well by a co-founder of one of the Founder Institute graduating companies that is firing on all cylinders, financial product comparator site: Comparamejor.

Last but not least, I had tremendous pleasure of staying in some swanky accommodations in Cartagena and took advantage of this by smoking 4 of my favorite cigars during that two day period.  I’m sure hardly anyone kicks back like that, but to each his own.

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Also, thanks to them, countries such as Colombia, South America have a bridge to Silicon Valley.   This country isn’t on the map for many in the US, but the impact that this program is already having and will have on this country is difficult to describe.  Nothing else happening in this country on the start-up front (and there is quite a bit happening) has the potential to create as big of an impact.

One of the activities that I attended was a luncheon to honor the top contributors (mentors) at the institute.  I was looking forward to talking to one of the mentors, David Weekly, and his fund in Mexico. I had met Cesar Salazar, who handles the fund activities in Mexico, a few months back at SXSW.  Needless to say, I’m sure I’ll be talking with David.  Like so many who have had success in the digital start-up space, he’s a super open person.

In that vein, I had the good fortune to sit next to Jason Johnson who, among other things, has set up the Founder’s Den as a unique place for a select group of start-ups.  it was really interested to hear that he had traveled to Costa Rica (and enjoyed it immensely) and had actually had experience with programmers in that country.  I really enjoyed our conversation which touched into topics such as family, travel and start-ups.  While we spoke, something that could only happen in Silicon Valley was occurring in the background.  Another impressive dude, Phil Libin, CEO of Evernote, was walking around the room in robot form as he joined the event (and received a much deserved award) all the way from Spain.

Among the other activities that Adeo had lined up was the biggest (I think) Founder Showcase ever with excellent keynotes from Naval Ravikant and Mark Shuster.  At the event, a number of start-ups gave their pitches and the networking at the event was super productive. The general consensus seems to be that there is definitely a bubble that is about to burst.  Nevertheless, it might be wishful thinking, but it seems more like some isolated cases of overvaluations (Color, Twitter, some early stage deals, etc.) than a general bubble along the lines of what Ben Horowitz has eloquently (and with more gravitas than I could bring to the table) written about in his blog.

Well, next week, I’m off to the valley once again with some great meetings lined up.  This time I’ll be accompanied by my co-founders in an initiative to bring funding to some select start-ups in Latin America and, especially, those with operations in Colombia.

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It’s been about two months since the Founder Institute semester started here in Bogotá and it’s been so gratifying to see the impact that it’s been having on the local ecosystem.  It’s tough to put into words the different levels on which the Founder Institute is starting to transform things here. Something I’ve really enjoyed is the observing the founders as they realize that people like Adeo Ressi and Ranjith Kumaran and the local mentors (building this group has been one of the best things about the Founder Institute for me) are so incredibly accesible and fun to be around.  My impression of Colombia is that, in some respects, it’s quite a formal society, and, because of this, many expect people who have earned a certain level of success to build a wall around them.

I have to say that the interest in technology startups is accelerating at a rapid pace here in Colombia.  There are really big organizations and companies (some multinationals) who are interested in nurturing this environment.  Nonetheless, it’s the Colombian startups such as CO Internet (Platinum Sponsor) and the regional “Paypal” called Latin American Payments that understood how transformational the Founder Institute will be in this country and decided to sponsor this initiative in Colombia.  Between these sponsors and the local mentors, the energy and interest in giving back has been the common denominator in supporting this initiative and that characteristic is obviously present in people like Adeo and Ranjith.

While he was here, Ranjith was also able to stop by the Caracol Radio station for an interview.  The Founder Institute session was excellent and, along with local mentors Camilo Gomez and Christian Boelke, Ranjith was able to review a number of the ideas from the Colombia founders.  Ranjith was also able to talk about his new loyalty startup called PunchTab which recently closed a $850k funding round.  Aside from specifics, it helps local entrepreneurs to hear HOW Silicon Valley entrepreneurs even talk about different aspects of their business from customer acquisition to customer development.

Aside from the impact that these external mentors have on the local environment, it’s great to see the impact that Colombia has on these mentors.  If you listen to any of the interviews, Ranjith comment about the fact that he travels around the world and he quickly felt like Colombia is one of those places where he could spend quite a bit of time in the future.

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As the picture on the left shows, already on the way, I began meeting interesting people. In this case, it’s Kelvyn Santos, aka, Kashmir Hip Hop, an exec at a multinational ad agency in the Domincan Republic and a part time Hip Hop artist.

Thinking about the topic of startup investing in Latin America, if I take the position of devil’s advocate, it’s not hard to see the excellent opportunities for investing in basic things like infrastructure projects, natural resources (e.g., oil, gas, gold, coal, agriculture, etc.). Even real estate, I believe, continues to promise top notch medium and long term returns.

For regional and local investors, these types of investments have the advantage of familiarity and relatively well-known risk levels. Even in terms of size of returns, as a whole, these traditional investments will probably generate one and more probably two orders of magnitude of the total amounts than startups will generate.

Investing in Latin American startups, I believe, holds the greatest attraction for two types of investors: 1) those looking to allocate millions rather than hundreds of millions of dollars to investment funds and 2) those who understand the space well enough and who truly enjoy investing in innovation and are interested in putting their knowledge and expertise to work in emerging markets.

If I would continue to play devil’s advocate, I’d really have to find a way to convince potential investors that they should pass up opportunities to invest in the next opportunity with hundreds of millions of dollars or billions of dollars in value (Buscapé and Mercado Libre, respectively). Additionally, I’d have to come up with a reason not to look for companies who found quick and relatively lucrative exits, such as Clan Descuento and Three Melons or for the next OLX, Mentez and Vostu with large follow-on investments.

So I guess I’m answering my own question. In general, there are opportunities all across Latin America and, realistically, Colombia is getting into the game a bit late. Thus, I think the best way to look at this is to see the general Latin American landscape as a region with interesting opportunities with Colombia being a part of the whole.

So, instead of singling out Colombia as presenting more opportunities, I think it’s more relevant as part of the general Latin America startup story, which, in turn is part of the larger emerging market story. One only needs to look at the influence that funds such as Tencent and DST (both of which came from emerging markets) have in order to understand that powerhouse investment firms can come from other parts of the world besides the states.

The other day, I was talking about this with a reporter from a major US magazine who was curious about this phenomenon. That article should come out in about a month (I’ll keep you posted), but my thesis was that emerging market investments are sometimes worthy of Warren Buffet’s epithet of “moat” investments.

This is the reasoning that Buffet uses to justify investments in state furniture and jewelry stores. These franchises are firmly established in a geographical niche. First of all, they are hard to establish and, even more importantly, they are harder to topple. Similarly, emerging market firms such as Tencent and DST so thoroughly dominate their geographic markets (I’m talking of the startups that spawned the investment divisions), that they develop “moat” economics particularly in terms of steady and attractive margins.

In Latin America, I’d say two firms are great examples of this: 1) Buscape/Naspers and 2) Mercado Libre. If nothing else, those two firms, in addition to hedge funds and VCs already active in the region, provide valid exit options for startups.

Ok. That’s enough philosophizing (anyway the flight attendant is refusing to give me any more wine for inspiration). What do you think? What have a missed? How off the mark am I? Remember, I reserve the right to mention your comment and username during the panel.

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There are tons of presentations and I’m sure there will be some interesting ones, but I’m more interested in meeting people and talking with them, which is probably why the parties are so famous (for meeting and talking with counterparts).  I’m going to take my video and camera equipment and blog to my hearts content.  In part, to let others know how this experience is stacking up and, also, as a public note-taking exercise.

If you’ll be there in Austin this week, I’d certainly enjoy meeting you.  Please let me know either at @acolmenares or emailing me at alan [at] tropicalgringo [dot] com  We’ll see how things go.

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Although other countries are further along in building up their startup ecosystems, Colombia has some interesting raw talent that is open to getting guidance on how to grow and develop their startups and a dearth of quality accelerator programs.   It’s within this vacuum that the Founder Institute enters the scene.  I’ll be discussing this further at the SxSW Tech Summit on March 16th.   For now, I’d like to talk more about Adeo’s visit to Colombia.

First off, after talking with Adeo over the phone several times during the past months, it was really great meeting him in person.  As the below photos show, we were able to talk with a diverse group of people and had some fun at the same time.  We were able to meet with some applicants to the Founder Institute, the local mentors, a radio interviewer and some government officials.

For the most part, entrepreneurs have been slogging away without much interaction with Silicon Valley and that has left Colombia a bit behind in terms of development in digital startups (with a few exceptions).  Hence, it’s no surprise that a program, such as the Founder Institute’s, that guides founders and connects them with networks of mentors and investors, is generating so much interest.  In the process, getting a solid team of mentors and other players together for the program has done wonders to get this small group of players organized.

It certainly feels like some subtle though powerful things are happening that can create a big impact on this country.  Time will tell, but I’m pretty confident that things are going to get a whole lot more interesting down here.

Finally, as the below video shows, Adeo held one of his Ideation Workshops for about 70 potential and current applicants:

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Ricardo has a new company called Stwittergy which is developing a tool to help businesses better use Twitter to achieve business objectives.  He also has his own agency aptly named Social Media Dynamo.  Nevertheless, he’s not completely disconnected from his Latin American roots and is working with colleague and friend Fernando LaBastida in setting up the first Americas IT Forum the day before SxSW (next week) in Austin.

I was able to record a small portion of our chat and here it is:

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