While September may still feel pretty far off, it’s really just around the corner. And with it comes PulsoConf, the first annual event bringing Latin American entrepreneurs, investors and designers into contact with their regional and international peers.
Over the last couple of weeks, we’ve introduced you to a number of figures who will be featured speakers at PulsoConf in Bogotá. Today, it’s time for one of the PulsoConf ladies to take center stage – Bedy Yang.
A Brazilian Entrepreneurial Leader
Yang is the founder of Brazil Innovators, one of the most significant entrepreneurial communities in Latin America. A venture partner at 500 Startups, she is a central player in the regional entrepreneurial ecosystem, and her session will be a must-see at PulsoConf.
Given her background and involvement in the startup community both in Latin America and Silicon Valley, Yang is an excellent resource – especially when it comes to the Brazilian ecosystem, in which she plays a hugely integral role. She has lead Brazilian innovators and entrepreneurs for years, so she has a clear picture of the many facets of the country’s startup ecosystem in facilitating innovative businesses and solutions.
Yang points to the opportunity represented by the Brazilian market in its entirety as one of the main factors behind the country’s strong startup ecosystem. It has a growing middle class – 100 million people – with increasing buying power, and this influences everything, from education to healthcare. It makes an impact on the number of small- to mid-sized businesses in the country, too. Brazil boasts a solid education system, with universities and schools that are accessible to this growing middle class and that, most importantly, nurture budding talent.
Yang indicates geographical advantages as well. Business in Brazil is concentrated in the country’s southeast region, meaning that payments, logistics and basic infrastructure are already in place when the moment of customer acquisition arrives. The features of the Brazilian marketplace as a whole have brought momentum to its startup ecosystem.
Yang does recognize the challenges faced by those looking to get a company off the ground in Brazil. With many, including LAVCA, insisting that Chile is the best destination for VC’s in Latin America, one must consider whether Brazil can compete.
One major obstacle for companies looking to set up shop in Brazil is the country’s bureaucratic requirements, which are not at all easy to overcome. If it takes six months to open a company and five years for it to close, investors face limited options and are inclined to make small investments. Laws and regulations surrounding hiring costs, labor laws and taxation make those from outside hesitant to take on the Brazilian market.
While Yang insists that the ability to attract global talent isn’t the end-all, be-all of startup success, it is a factor for consideration. One of the reasons Chile’s ecosystem has proven such a bright spot in the region is that it does just that. Brazil must be more forward-thinking in the question of attracting investors and, most notably, talent.
A Few Pieces of Advice
For those bold enough to take the leap into Brazil and work through its complexities, Yang emphasizes the importance of finding the right partners for local operations. She explains that Brazil is a tightly-closed market, so that once the decision is made to attack, it is essential to work with people who are able to connect and build a business quickly. This advice doesn’t apply only to joint venture partnerships but also to relationships with various players, including lawyers, investors and other entrepreneurs. Building relationships with key professionals will help startups tap into the Brazilian market.
Likewise, Yang cautions entrepreneurs to tread with care when it comes to administrative and legal issues. Due diligence is vital in Brazil and throughout Latin America for all contracts and agreements. She also encourages business leaders to really flush out their financial plans and understand their financial statements to make sure all the numbers a company is based on are real and accurate. Companies need to hire a CFO who can provide a clear economic panorama and ensure a clean operation.
A Brazilian Bubble?
In closing, Yang touched on our inquiry as to the hypothetical Brazilian market bubble, which some insist is expanding and about to burst. Could Brazil’s momentum boil over and end up inflating costs? Yang doesn’t think so.
Brazil’s strength as a marketplace, for technology and overall, is real – there is a significant middle class with big buying power that can’t be ignored. Internet penetration is increasing hugely in Brazil and throughout Latin America, and actual opportunities for growth are alive and well. In other words, the fundamentals are there.
Are there adjustments to be made? Of course. There are investors out there who get so caught up in the excitement surrounding Brazil that they make huge investments without having any understanding of the market’s basics. But the buzz surrounding Brazil in general is by no means baseless.
Perhaps Brazil isn’t the promise land of technology entrepreneurship, but it’s not all that far off either. Its ecosystem, centered solution-based reasoning, is most definitely in motion. And with a population that is integrated through language, culture and media, Brazil represents a marketplace that is large enough for entrepreneurs to build traction and acquire customers. It also fosters a building community of serial entrepreneurs who, like Bedy, are essential for the Brazilian startup ecosystem’s process.