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WHY WE SHOULD STOP TALKING ABOUR Cloning Silicon Valley: 7 Points About Doing Business in Latin America

9/9/2015

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Every other day I bump into an article that proclaims, or at least predicts, where the next Silicon Valley will be. If you ask me, the answer is clear: nowhere. A business environment doesn't develop in a vacuum, but in a specific cultural and social context. Therefore trying to clone a specific business ecosystem within a completely different culture yields often silly results. I believe we all agree that building a Tour Eiffel replica did not suddenly transform a town where people go to drink and gamble into Paris.
That being said, it doesn't mean that Silicon Valley-inspired entrepreneurship is not capturing the passion and imagination of most cultures around the world. The key question here is: what kind of startup ecosystem can be created outside of Silicon Valley? The short answer: one that matches the motivation, values and belief system of the locals.

For that, however, we have to understand what are those values and beliefs. And this is where everybody gets stuck, because they think that reproducing what worked in California will create the same results anywhere else. True, it might work sometimes, like if you are McDonald's, although even they have to adapt their menus to avoid being rejected by cultures like France (where they sell croissants) and Colombia (where they sell arepas).
In other words, what is needed is a mindful -as opposed to one way bullhorn- approach to startup development. It is for this reason that Tappsi is far more popular in Latin America than Uber. Hailing a taxi is a whole different story on the streets of Colombia, Peru or Ecuador, and Tappsi has known how to create a business that speaks to the Latin American cultural/social values and realities.
While visiting Colombia this year I had the chance to meet several local entrepreneurs, gathered at the weekly networking lunch hosted by HubBOG. Renee Rojas is the CEO and Co-Founder of this Campus for Startups, aimed at creating an entrepreneurial ecosystem that suits the Colombian culture. Here are some of the entrepreneurs I met: 
- Yesido Redondo, CEO & Co-Founder of LivingCode.camp
- Dimitri Alejo, Co-founder of academical.co 
- Mihali Flandorffer, Founder of Yaxa.co 
- Luis Enrique Marino, Co-Founder of CloudGym.co
- Francisco Javier Bernal, Professor Emeritus of Political Sciences and founder of Toolfive.com
- Laura Camargo, Marketing Director of the social entrepreneurship platform Innpactia.com
- And finally, visiting all the way from Belgium, Carmelo Zaccone (digitalwallonia.be).
After the meeting I put together 7 key points about doing business in Latin America:
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1. In a business or work relationship, the emphasis is on the relationship, rather than the business task that needs to be accomplished. Your business will thrive if you are able to genuinely related to your Latin American partners.

2. "Community" seems to have a completely different meaning in Latin America. This becomes obvious when we take a look at the culture metric called Individualism: U.S.A 91-Colombia 13. What does that mean? Consider the following:

3. "Fast and big" are considered qualities mainly in the United States. Most Latin American entrepreneurs like to also have a life. Which, let's be honest, it's impossible if one adopts the Silicon Valley's startup pace.

4. Communication is indirect and highly contextual, and aimed at maintaining consensus and harmony. This is why you need to keep an eye on the idea of disruption, specifically when it applies to organizations.

5. Loyalty to the in-group is very important, maybe the most important. In organizations that is reflected in an exchange of "protection" for loyalty. Often people believe that their loyalty is, to a certain extent, more important than the ability to perfectly accomplish a task.

6. Failure is a big issue, being directly related to shame in most Latin American cultures. Advising people to "fail fast" is usually counterproductive.

7. Nepotism is accepted and expected. Also, status and age are respected and valued. 
Obviously, skills and expertise are important, but don't try to set up a rigid "meritocracy" system, which might actually be the biggest illusion of Silicon Valley (let's be honest here, from a pool of similar candidates, how many times did you get a job without being "recommended" by a relative, friend, or company insider?..)

I would like to hear more from entrepreneurs and venture capitalists who do/did business in Colombia or Latin America. What are your ideas and experiences with cloning the Silicon Valley startup ecosystem? Share them below!

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    Cosmin Gheorghe

    "You never draw out of the deep of yourself that which you want; you always draw that which you are."
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