Tropical Gringo

This Wednesday we had a great Tropical Gringo Show (in Spanish) with a super interactive audience and startup tips from Thomas, Brian and myself.  Also, we were transmitting a brand spank’n new higher resolution camera direct from the offices of VivaReal in Bogota.  We also touched on some news items as well as recommendations for marketing your startup.

Gabo Sarmiento asked a great question about Groupon, Compra3 and the whole group buying space in Latin America and we will be covering this in our next show.  Stop buy and watch us next Wednesday at 7:30pm (Colombia time).

Finally, if you’re interested in attending a great panel during SXSW in Austin on investing in Latin American startups, please vote for this by clicking on this sentence.

I’ve spent the last several months, exploring the state of Digital Innovation in Latin America.  Although I wouldn’t say that there are tons and tons of examples, what I would say is that there are some impressive companies.  The obvious examples are players such as Buscapé with their US $340 investment from Naspers and Mercado Libre, which had their IPO in the states a few years ago. As ComputerWorld recently published, Latin American Net Arena offers VC Opportunities.

Nevertheless, smaller companies such as VivaReal and Compra3 have achieved great success early on thanks to building world-class teams and executing very well.  Both of these companies, similar to Buscape and Mercado Libre, are focused primarily on Latin America though the potential to go global is being pursued by others.  Though I wouldn’t dissuade a company from targeting the global market, there is such a void at the moment in terms of interesting content and applications targeting the regions rapidly growing user base.

Indeed, Twitter just released some numbers, published also by TechCrunch, on user growth and Latin America is the fastest growing region.   Latin American culture is extremely social and this region has been shown to be heavy users of social media and mobile devices.  The end result is that the users exist for new applications and content, but, for the most part, they need to make due with a few local choices or hook up with the main players such as Facebook, Amazon, Twitter and others.

Also, in terms of taking advantage of the approximately 150 million Internet users in Latin America from a marketing perspective, it certainly seems as though most companies in the region are asleep at the wheel. There are certainly exceptions to this rule doing some pretty innovative things.  In fact, lately, Brazil has been in the news thanks to its growing economic leadership and even thanks to their recent interest in acquiring companies in the developed world.

Either way you cut it, there is a tremendous amount of opportunity in Latin America, which isn’t apparent yet to global investors and even people in the region.  There are some exceptions and these are growing.  Brazil, particularly, has been attracting angel investors such as New Yorker, Michael Nicklas, who has been quite active recently not only in terms of funding, but also, in promoting investment through speaking at conferences and his blog, Startupi.

As an example, I had the opportunity the other day to talk with another US investor interested in funding a company in Latin America in the digital space.  It was a great conversation as this investor is extremely sharp and am sure closes deals worth many millions every week.  Nevertheless, he was trying to rapidly come up to speed on the environment and the nuances of this market, which is not easy.  Some things don’t happen as quickly down here and some basic infrastructure (e.g., credit cards, e-commerce, etc.) are not well established, yet, the growth rates and early successes can not be denied.

I could quote many statistics showing that each country boasts growth rates in terms of users, time spent online, e-commerce and other areas of 40% and above.  Any of these statistics can quickly be found by doing a quick search.  However, this is more of a paradigm switch where more US and European investors need to wake up to the fact that they are ignoring a region with a dearth of content and applications, but with a user base that grows exponentially on a yearly basis.  Differentiating a company in Latin America is much, much easier and, for the most part, amounts to bringing world-class teams and execution to bear.

There’s no question that countries such as Brazil, Argentina, Chile and, to some degree, Mexico, are at a more advanced stage when it comes their start-up and investment ecosystems. Nevertheless, there are small pockets of world-class teams working away in countries such as Colombia and this will continue to grow.

It definitely feels like we’re at the beginning of something very big.  I am extremely confident that within three years Angel and VC investment in technology start-ups will have dramatically increased and two years after that Latin America will be home to at least ten powerhouses on a par with Buscape and Mercado Libre.

Last night, after knocking down a few too many glasses of wine (and some JD) with an old Argentine friend who was passing by, I got home and started chatting with someone I admire a lot, Yuri Gitahy.  Yuri created an excellent fund called Aceleradora in Brazil and he mentioned an article in TechCrunch about a study that found that VCs are looking for start-ups in emerging markets. As if that wasn’t enough, a few friends, like Andres Barreto, commented that one of these VCs, Dave McClure, was actually visiting Colombia at the moment (accompanied by writer Sarah Lacey).

This is, by no means, an isolated event.  As I mentioned in my previous post, the time is now to create quality start-ups in Latin America. In the next three years things are certainly going to accelerate.  That’s why , as I announced in another post, Thomas Floracks and I will be transmitting every Tuesday at 7:30pm the TropicalGringo Show.  Part of the show will include a segment where one or two start-ups will present to us (even an idea) and we will provide guidance about how develop it better.  I’ll leave you with this: more and more you’ll notice that there is no scarcity of resources (investment, etc.), but a scarcity of excellent teams hooking up and focusing on world-class digital innovation.

It’s been quite a week which, for myself and others such as Felipe DeConce (Chile) and Simon Olson (Brazil), marks an inflection point in the world of Latin American web start-ups. As I mentioned in the article published in VentureBeat and NYTimes.com, US web start-ups are starting to acquire Latin American web companies much earlier in their development process. For example, witness the recent actions by Groupon and Playdom in rapidly acquiring web companies in Latin America.

Also, I wanted to write said article because I’ve been observing the funding process of a few Latin American start-ups looking for funding in the states and I wanted to get something published on the Latin America web investment opportunities which start-ups could reference with international investors.  Although I wasn’t able to go too much into detail, I highlighted the fact that I feel Latin America offers what Warren Buffett looks for in investments which are defensible “moats” around great profit margins and growing competitive advantage.

Aditionally, VentureBeat published an article I wrote about Netactica, an Argentine web company offering end-to-end solutions to the online travel industry in Latin America.  Incredibly, yesterday, Google acquired ITA Software (relatively similar to Netactica in Latin America) in a demonstration that there is much value in these types of end-to-end solution providers in online travel.  According to a number of analysts, this acquisition changes the dynamics of the online travel booking and search market. Personally, I think that a player like Netactica has much to gain with this turn of events and, with the increasing interest on the part of international investors in Latin America, the company should benefit quite a bit.

As if this weren’t enough, I spoke last week with Fernando LaBastida and Ricardo Guerrero who have an excellent initiative with the organizers of SXSW in Austin (they live there) to include a panel on Latin America during  the next event in 2011.  Nevertheless, in order to make sure there is interest on the part of audience members, it’s important for people to suggest ideas for the panel.

I’m completely serious when I say that this week was a critical moment for the development of Latin American web start-ups.  You can be certain that investor interest will now start to accelerate at an amazingly fast pace.  Now, we need to find the most talented technical and non-technical people in the region so that these can focus on digital innovation.

In order to accelerate this, Thomas Floracks and myself are launching a weekly show (we haven’t decided the day and time, yet) so that, among other things, we can analyze one or two interesting initiatives during the show.  Note: for now, we’ll do it in Spanish, but will do a shorter recap show in English if there is interest. More details on this are coming soon.  It’s a good moment to launch this show because we need to elevate the conversation beyond comments like “look at my neat website” or “I’m going to sell xyz on the internet.”  It’s time for clear paths to profitability and solving real customer problems.

This post has a lot of news in a tiny space.  The first one, as the title specifies, is that Thomas Floracks, VivReal CTO, and I will be transmitting live from Campus Party Colombia this Saturday at 7:30pm CST (in Spanish).  Thomas and I are judges for an initiative that Andres Barreto and Juan David Vargas are running for lean start-ups.  Andres actually quickly interviewed us and asked us to give some tips to entrepreneurs in Latin America.

So, I haven’t totally figured out the mechanics behind the whole streaming thing, but I’m sure we’ll figure it out.

Live Streaming by Ustream.TV

Yesterday was an interesting day in “Startupland Latin America.” TechCrunch published an article about Groupon’s entry into this market by acquiring Chile’s ClanDescuento and Brazil’s ClubUrbano.  According to the article, the blogosphere is abuzz with the fact that ClanDescuento (humorously called SpamDescuento) built up its audience with a ton of spamming, which is a shame since companies such as Compra3 which I wrote about a while back, have been innovating in the space. The article also mentions a blogger called Mariano Amartino who has some interesting posts (note to myself: I need to explore more Latin American blogs).

Also, yesterday, VentureBeat published my article on a really interesting online travel company called Netactica.  This is what happens when you get two Argentineans together with an Aussie. You get some innovative and robust end-to-end technology to help Online Travel Agents (OTA) and others (such as the impressive guys at Mantaraya Travel) be successful in Latin America.

Mark my words. Digital Innovation is about to explode in Latin America.  There’s still a lot of evangelization to get accomplished in this region, but the list of future success stories will continue to grow from examples such as Buscapé and MercadoLibre to more and more companies getting outside funding.

A few weeks ago, I had the opportunity to give a speech about Digital Innovation in Latin America. It was a great experience and I appreciate Juan Correales’ invitation.  I gave the speech within the context of their annual entrepreneurial event. I was able to talk with some impressive students about their projects.

For me, it’s extremely gratifying to see so much interest in hearing about the possibilities today in terms of Digital Innovation.  Specifically, I try to evangelize the fact that people need to change their internal “chip” and understand that, in Latin America, they have the same access to gobs of information as well as having low-cost tools for creating new services and marketing these services.

Last Tuesday, we held the first AVC meetup in Bogota. We had a great turn out of successful entrepreneurs with customers in Latin America as well as in the states as well as a local investment fund. We were fortunate in that Javier Montenegro graciously allowed us the use of his company’s amazing offices at Studiocom.

We spoke of the great success stories such as MercadoLibre, Buscape with market valuations greater than $1 Billion and, in the case of Buscape, in the hundreds of millions.  Though Brazil, Argentina and Mexico have definitely taken the lead, there was agreement that Colombia has all the pieces to also become a force on the web.

The conversation was great and quite interactive.  According to the participants, there seemed to be quite a bit of consensus on two areas where the Colombian environment needs a bit of help in terms of entrepreneurship: 1) training and preparation of talent (e.g., technical and otherwise) and 2) guidance for entrepreneurs wanting to take their companies to the next level. Also, it seems that there is much interest in any initiatives in these areas as more than one participant was asking what was the “next step.”  More than a Meetup to discuss these topics, it felt as though the participants wanted to become part of a specific initiative.

Well, it’s been quite an active week. I had the good fortune to talk with Arturo and Omar from Emprende.la about the state of Digital Innovation in Latin America (according to moi). If you wish, you can listen to the podcast where I discuss my Incubator project and the fact that I’m still at the initial planning stage.  I also gave a radio presentation to a local station called RCN where I spoke about Digital Innovation in Latin America. I made this presentation utilizing the web platform called Pio.la.

Finally, one of the sharpest Venture Capitalists and Angel Investors in the business (according to moi), Fred Wilson, is promoting a global series of Meetups to talk about start-ups.  Please join me next week by clicking on the widget below so we can all meet in person and discuss the current start-up environment in Colombia and Latin America and what we can do to accelerate the creation and growth of innovative digital start-ups.   See ya next week!

A week and a half ago, I had the pleasure of judging a number of entrepreneurial initiatives for Microsoft’s Imagine Cup competition.  It was great to see how innovative and dedicated Colombia’s youth can be to creating great technology while helping out the needy.  As usually happens during these events, it is a truly enjoyable experience not only to meet these youths, but also to meet and get to know my fellow judges.

We debated the merits and weaknesses of the different competitors.  I had a favorite that tried to solve an important problem (poverty) by applying better information design.  Unfortunately, they had some snafus with their presentation and demo and I was unable to vote for them as the winner.  We ended up giving the final prize to a sharp group with an incredibly polished presentation and they will be traveling to Poland to represent Colombia.  I wish we could have had the winning team train the other team to be more polished and to finish off their software as I think it would have been an excellent presentation in Poland.  Nevertheless, I’m sure the winners will do a great job!

On behalf of myself and Gabriel, thanks to everyone who attended the first Online Marketing Colombia Meetup on Thursday!  We had a great turnout with 20 of us in attendance.  It was great meeting everyone and discussing how we can accelerate adoption of online media tools in Colombia.  Aside from thoroughly enjoying the vibrancy of the group, I was greatly impressed by the caliber of knowledgeable professionals and the excellent suggestions.

From the outset, the environment was loose and conducive to a productive conversation as well as truly enjoyable time. I felt that we all genuinely enjoyed each other’s company as the conversation had a mixture of serious discussion as well as humorous moments with spontaneous laughter.  Obviously, this is also an opinionated group (as it should be) and everyone won’t always be in agreement, but it was a great start.

Even though my choice of venue left a lot to be desired (quite noisy), we had a great time and were able to discuss a variety of topics.  There are a number of specifics with respect to areas for improvement in the Colombian market.  We were able to share a number of experiences where a gap needs to be filled in order to accelerate market adoption.  There were quite a few anecdotes that informed the group of experiences in different segments of the market.  Also, we identified a definite difference between the dynamics with larger companies (many of which engage with agencies) and the dynamics with small and medium businesses each with there unique challenges.

In terms of solutions, these revolve around two key components: 1) Needs on the part of potential customers (e.g., understanding of online marketing and the business benefits, confidence in local suppliers, etc.) and 2) Needs on the part of service providers (e.g., training, networking, certifications, etc.).  These challenges are solvable and we were in agreement that it behooves us to get together and develop solutions conjointly so that the market will grow in a healthy direction and create a multitude of opportunities for our customers as well as our companies.

It was important that we were able to combine the free flow of ideas and experiences with a concrete initiative (Social Media Week) so that we can start executing on needs we see in the market.  It was exciting to get feedback on the Social Media Week initiative and find the intense interest from the group and the fact that some members have already been talking to potential sponsors.  There was general agreement on the need for more of these types of events in order to evangelize online marketing to the market and most were extremely interested in being a part of such an initiative (whether it be SMW or another).

Finally, we agreed that we need to make this get-together an ongoing event.  The perception among the group was that, instead of an institutional body, we were uniting committed professionals dedicated to quality, execution and an open exchange of ideas. That kind of energy and interest is something we need to take advantage of and channel into well thought out solutions that will advance the market and allow us to have a good time in the process.

I couldn’t help taking advantage of being able to tell the story of my love story from Google’s perspective.

Well, I finally finished a pending article I needed to write and it just got published yesterday by VentureBeat.  It was an interesting topic related to a Santa Monica, California start-up called Sency, which offers a real-time search engine.  It was cool talking the CEO, Evan Britton, and hearing that he also launched a Spanish version of the site especially for the Latin American market.

There’s no doubt about it, this region has two really neat things going for it, among others: 1) There’s so much more room for growth in so many areas with special mention for anything related to online and mobile. 2) It’s a vibrant and very sociable environment to be in.  It really does boggle the mind how much opportunity there is down here and it certainly is good to be off the corporate “teet” and make a play towards tapping into that potential.

It is so cool to meet amazing entrepreneurs and innovative people down here at this time in the region’s development.  Digital Innovation is just starting to take off and the next years will certainly be exciting ones. What’s so stimulating about this time is that there is so much market education to get done and it really feels like the online community is getting together to find ways to accomplish this (educating the market).

Well, those are my thoughts. What are yours?

Innovación Digital en América Latina from Bogotech on Vimeo.

Man, what an amazing day.  A few hours ago, I got off the phone with a colleague from my first job out of college.  A guy I had last spoken with more than 20 years ago!  We were both Advanced Design engineers for a defense contractor called HRB-Singer straight out of college and were not at all into our jobs.  Incredibly enough, we both ended up focusing on online marketing.

Man, my life is so different right now than what it was then.  I was this young whipper snapper on the prowl and without any ties.  Who woulda thunk it.  Back then, working was a hobby since I wasn’t really putting so much effort into my tasks (I’m ashamed to say) and was just soaking up a ton of life experiences.  Gary (that’s his name) and I ended up getting a gig in California (we were based out of State College, PA) and we were loving life out there.  The company set us up with great cars and amazing apartments and we really enjoyed our time out there.  The only thing we weren’t too crazy about was the work we were doing (or not doing).

It seems that Gary, got into graphic design and become Creative Director for a number of interactive agencies and has been working as a consultant for some time and has made a nice home in Denver.  It really took me back today talking with him and remembering those times.  It really made me think about the journey I’ve had during the past 20 years when I lived for 5 years out there in California and then have spent the last 15 years here in Colombia.  Pretty wild.

Also, today I just got back from Cali where I gave a presentation on Cloud Computing at an event sponsored by Microsoft. It was interesting, but expect the events in Medellin (next week) and Bogota to be a bit more active.  Well, time to do some work and hit the hay.  I also had a great conversation this evening with an amazing online marketer who’s based here in Colombia, but who’s done amazing things in the US market. There’s some real talent down here.

It’s been a busy start of the year.  I’ve been contributing articles to a number of blogs and it’s been an extremely satisfiying experience.  Aside from meeting new people, it helps improve my writing (in English and in Spanish).  Among my posts is one dedicated to my thesis that a Twitter-Amazon alliance makes sense as well as a profile of a new social software startup in Argentina called JoinCube.  In Spanish, I wrote a number of posts for my friend, Jesus Hoyos’ blog and for PulsoSocial, a Latin American technology blog founded by the impressive Andres Barreto.

Unfortunately, this has effected the number of posts that I’ve uploaded to my own blog, but I plan on rectifying this.  Although I have been writing a lot (and working a lot), it hasn’t showed as much because of these endeavors.  Nevertheless, I am committed to posting more on this blog and alerting you on my Facebook fan page.

The coming year will certainly be interesting.  I believe that the economic environment will be even more challenging (and for an extended period of time); social media will continue to penetrate further into the web’s fabric and the mobile web will have a profound effect on the total web experience.  Basically, it’s a perfect storm of factors that will drive a lot of change not only into the web, but into our lives.  It’s a great time to be writing about digital innovation!

This week (and last), I’ve been running around like a chicken with its head cut off.  You wouldn’t know it, but I’ve been soooo ecstatic about having this blog because of the amazing people it’s allowed me to meet.  Nevertheless, it seems like everything has happened at once.  At the same time that I’ve had the most amazing interviews with excellent authors and CEO’s, I’ve been swamped with work from my day job.

On that last front, things are progressing nicely.  There are two key deals that are on a pretty good path and at least one of them should close in the next few weeks.  Building a company is no easy matter and doing it in Latin America has additional challenges.  Nevertheless, once positioned down here, there’s a lot of potential for building a great franchise.

By tonight, I’m going to be posting a ton of stuff and then I’ll settle into a regular posting calendar of every Monday and Thursday.  I’ve seen the stats of this blog going in the right direction (growing).  Neverhteless, I gotta admit, right now, I’m writing mainly for me in terms of getting ideas out of my system.  It does seem sometimes that you’re talking in the wilderness and aren’t sure that anybody’s listening.  It’s going to definitely be a ton more fun when I get more feedback, push back and other interactions that will help me learn a ton more.

I’m extremely exciting to launch my new blog, Tropical Gringo.  I’ve gotten a lot of feedback on the name some positive a few not so positive, but it’s too late.  I love the name.  I think it comes closest to expressing (in a name) what I am.

I moved to Latin America about 15 years ago. At the time, I was living in Cupertino, California and muddling through life working for a number of Silicon Valley companies such as SCO, NetManage and Madge Networks, but no really headed in any particular connection.  My personal life also wasn’t really where I thought it should be. (more…)