High-Impact Entrepreneurship

Join the global conversation

Entrepreneurs

Endeavor Greece Celebrates Two Years and 3,500+ Jobs Created By Its Entrepreneurs

Endeavor Greece released an infographic and video to highlight the office’s impact during its two year anniversary. The team supports some of the region’s top high-impact entrepreneurs who continue to drive sustainable job creation and contribute to […]

December 18th, 2014 — by admin

Read more

In the news

Endeavor’s U.S. Expansion Profiled in Entrepreneur Magazine

Endeavor was recently profiled in an article in Entrepreneur Magazine, highlighting the organization’s first U.S. office in Miami which opened its doors earlier in September 2013. The article discusses Endeavor’s vision for the U.S. and […]

November 15th, 2013 — by admin

Read more
Get RSS Feed

Bloomberg features Endeavor company Refinancia

This week Bloomberg ran an article about Refinancia, an Endeavor Colombia company that takes an unusual approach to debt collection. Founded by Endeavor Entrepreneur Kenneth Mendiwelson in 2005, the company sells custom financial products that facilitate repayments and ensure long-term customer relations.

“We provide a dignified product to someone who has been mistreated by the financial sector,” explains Kenneth in the piece. “Someone who falls into default is not a bad person.”

A Harvard Business School graduate and former McKinsey consultant who started Refinancia with a $4 million loan from friends and family, Kenneth is an ambitious but compassionate entrepreneur who seeks to counter the perception of debt-collectors banging on doors. His success is evident in his client base of more than 250,000 individuals and expansion of services into Peru and the Mexico.

Refinancia’s dollar figures are also impressive: The 510-employee company manages a total of 800,000 loans, with a face value of nearly $2 billion, from about 15 banks in Latin America. Kenneth expects revenues of $12 million this year and $21 million in 2012. He estimates that by 2015, 60 percent of revenue will come from debtors outside Colombia.

Kenneth also has a larger vision for his services. He hopes that Refinancia can cash in on goodwill and turn one-time defaulters into borrowers. His argument is that even a person who pays back a defaulted loan will find it difficult to escape a bad credit history when seeking to borrow again: “No one is going to give him new credit, but I can because Refinancia knows exactly how he thinks and how he has behaved in the past with the refinancing product we provided to him.”

Endeavor Entrepreneur Andres Alterini on building a global company in Argentina

Endeavor Entrepreneur Andres Alterini, CEO of Smowtion, recently sat down with the Latin America PE/VC Report to discuss building a global company from Argentina. This interview is reprinted from LAVCA (Latin American Venture Capital Association).

LAVCA: Give us the Smowtion elevator pitch.

Alterini: Smowtion is a leading technology company focused on developing products and support for advertising networks. We serve over 120,000 Web publishers worldwide with an audience of 270 million unique users, enabling them to remain independent by monetizing their online content. The Smowtion SSP Publishers Platform is available in eight languages and reaches more than 200 million users around the world each month. Smowtion today is not only an IT company, but also a leading ad network that has contributed to the evolution of online advertising.

LAVCA: How did you come up with your business idea?

Alterini: The idea for Smowtion was actually born out of Keegy.com, another company I started with my two partners [and Endeavor Entrepreneurs] (Santiago Pinto Escalier and Mariano Elizari). The final business model evolved after ten years of interacting with and interpreting the needs of the booming Internet advertising sector. After many attempts, we developed a clear understanding of what the market needed and how we could provide it.

LAVCA: Tell us a bit more about Keegy. What lessons did you learn that helped you start Smowtion?

Keegy was a news aggregator, like Google News but with blogs. It let you organize the content generated by users themselves by integrating it with information from news portals. Santiago, Mariano and I started it in 2007, and at the time these functions were still separate.

In that sense, Keegy represented a democratization tool in the dissemination of content and personalized information consumption patterns based on preferences, behavior, geographic location, etc.

Although the venture was a success in regards to number of visits (more than 4 million unique users for any month), it failed to become a solid source of income so we had to evolve quickly because the money we had to put into it was running out.

However, the experience provided us with a platform to create Smowtion, which aims to create a bridge between advertisers and the people who generate web content (page authors, not massive, niche blogs or social networks).

LAVCA: What sort of financing have you received thus far?

Alterini: To date, we haven’t received any institutional funding. We were originally financed with personal savings and family investment. Fortunately, we reached the breakeven point in our seventh month, enabling us to grow organically.

LAVCA: Are you planning to approach institutional investors in the future?

Alterini: We are always looking for strategic capital to enable us to continue our steady rate of exponential growth. However, during 2009/2010 we experienced a 400 percent growth rate, and we continue to grow organically without additional capital. Although it’s not necessary at this time to raise outside funding, we are always open to new experiences and lessons to learn from others, which is something VC investors offer.

LAVCA: Your biggest market segment is the U.S. and in fact, Smowtion is included on Facebook’s approved list of ad networks. What were the key factors that enabled you to penetrate such a competitive market?

Alterini: Our formula for success is to clearly identify our customer base and listen carefully to what they are saying. Having continuous feedback from them enables us to constantly modify our products and adapt quickly to changing needs. We’ve been able to interact with both big and small publishers, which is essential for the success of our business.

LAVCA: What is your most pressing strategic challenge right now?

Alterini: In the midst of rapid growth, our challenge is retaining the unique culture and spirit we’ve developed as a startup while introducing the best corporate practices that enable us to thrive in an increasingly competitive market.

LAVCA: How are you addressing this?

Alterini: As Endeavor Entrepreneurs, we have access to a network of mentors and leading experts in the area of strategic consulting. We are constantly connecting with them to learn from their experiences. To me, a successful example of how to deal with this challenge is Mark Zuckerberg and the transition he’s managed as Facebook has grown so quickly.

LAVCA: Who is your competition? What do you see as your competitive advantage?

Alterini: Our competitors are primarily other sell side platforms (SSPs), including Admeld (Google), Rubicon Project and Pubmatic. Smowtion’s advantage is its technology and human capital resources. Because of this, we are a global company even though the CEO and his team are based in Argentina.

LAVCA: Where do you want Smowtion to be five years from now?

Alterini: We will be billing more than 20 times what did last year; that would be revenues of $500,000 per employee. With a staff of over 200 employees and a solidly professional human resources structure, we will have a dynamic company culture that, while resembling the intellectual and creative atmosphere of a university, is based on the sound business practices of the digital world and global markets.

LAVCA: As an entrepreneur based in Argentina, can you give us your perspective on the current entrepreneurial community in the country? What changes would you like to see in order to strengthen the environment for start-ups in the country?

Alterini: The Argentine entrepreneurial culture is in its early stages. There is a need for increased training at all levels, a greater emphasis on risk taking and a better understanding of the financial instruments that will enable projects to be born and developed with funding structures that won’t fail before startups can grow and prosper.

Alan Patricof, VC superstar and Endeavor Global Advisory Board member, discusses the VC landscape in New York

Recently, Endeavor Global Advisory Board member Alan Patricof spoke with journalist Connie Loizos about the venture capital landscape in New York. The article below, “Alan Patricof: ‘You’ve Got to Be Realistic About the Marketplace‘”, is reprinted from pehub.com.

New York is getting awfully crowded these days. Accel has opened an office in the Big Apple this year. So has Canaan Partners, Matrix Partners, and, now, New Enterprise Associates, which already has a handful of investments in local startups and wants to demonstrate its “continued commitment to the area,” as NEA partner Tony Florence told VentureWire yesterday.

What do longtime New York-based VCs think of their enthusiastic new neighbors? Hoping to find out, I called Alan Patricof yesterday afternoon. After all, Patricof was among a small group of investors who had the scene to themselves in 2006, when he founded Greycroft Partners, an early-stage digital media-focused venture firm. It’s hard to remember now, but at the time, many big-league VCs still complained that nascent Web startups couldn’t move the needle enough.

That was just fine with Greycroft, which scored an early stake in the parent company of paidContent.org, for example, and the Huffington Post. The former sold for a reported $30 million to The Guardian Group in 2008 after raising just $3.3 million in Series A financing from Greycroft. Earlier this year, the Huffington Post sold to AOL for $315 million. It had raised just $37 million. (Greycroft — which has raised two funds totaling $205 million — participated in the juggernaut’s Series A and B rounds.)

What a difference five years have made, suggests Patricof, who spoke with me from Greycroft’s Madison Avenue offices. Our conversation, edited for length, follows.

How much harder is your business today, given how many firms have flocked to New York and how seemingly overheated it has grown?

Well, our business hasn’t become harder. Just the opposite is true; the concept I had when I started Greycroft has been confirmed in spades. What’s happened is the market is much harder. It’s getting increasingly hard to find companies at an A round with pre-money valuations of $10 million, [where the firm feels most comfortable]. I don’t want to say it’s irrational exuberance, but there’s certainly an excitement level that’s evolved over the last six to 12 months that’s created a level of interest around companies we focus on, and that’s influenced the expectations of young entrepreneurs.

How have you adjusted?

We’ve [funded companies with higher than] $10 million [pre-money valuations] in several cases. We’ve also reached earlier in the development cycle, making a series of seed investments at earlier stages and lower valuations.

Are you at all concerned that valuations are too high or that they won’t hold up?

How far will they spread and how long will it last? It’s a big unknown at this point, but we have to be realistic about valuations going in and exit valuations and not get carried away by the euphoria at the moment. The reality is that something like 95 percent of deals in the digital media world over the last seven or eight years have [sold] for less than $100 million. We certainly hope and expect that some of our companies will be valued at well over $100 million. We have three or four companies in our portfolio right now that are in excess of that number, and of course, Huffington Post sold for [roughly] $300 million. But we try to be realistic about the environment and where transactions are taking place.

Which deals did you participate in at a $10 million plus pre-money valuation, and which companies in your portfolio are worth multiple hundreds of millions of dollars in your view? I’m guessing Glam Media is one?

Pulse and Klout were both above $10 million pre-money valuation levels, but I believe both are the kinds of companies with exit potentials well in excess of $100 million if they continue on the trajectories they are on right now. [Pulse is a visual news reader for the iPad, iPhone and Android that raised $9 million from Greylock and Lerer Ventures last month. Klout, which measures social influence online, has raised $10 million; Greycroft participated in its $8.5 million Series B in January.]

As for [your other question], I won’t comment on specifics. You’ll have to take your own guesses, though to a certain extent, no one knows. Several companies have been in our portfolio for a while and have grown in terms of revenue. We’ll see if they go public or get acquired at large prices. None of us expected to see an exit from Huffington Post when we did, but conditions change and you have to go with the flow.

Speaking of which, have you had to slow your pace with the landscape shifting as it has?

Not at all. I just got out of a Monday partners meeting that started at 11 o’clock and ended at a quarter to five. It’s a very active time, and businesses have never looked better. I think we’ll do 12 full-size investments this year and three to six seed investments. So we’re full out.

So you don’t think there’s a bubble in New York, I take it.

I didn’t say that. I am concerned that pre-money valuations are growing, and that people are [looking at] the public valuations that are in the paper every day and…concluding that the world has changed dramatically. And I don’t think it really has. The companies that can potentially go public are a very limited subset of the overall venture market. VCs invest in a couple thousand new companies every year, and according to one study that I saw recently, only one percent of them grow to exceed $100 million [in valuation] companies. So what’s that? Twenty companies each year can be potentially eligible [for that club]. You’ve got to be realistic about the marketplace.

Five entrepreneurial tips from Michael Feuer, co-founder of OfficeMax

This article, “The Not-So-Secret Secrets To Making It Big: Five Surprisingly Doable Steps That Will Propel You To The Top,” is re-printed from youngupstarts.com. These insightful tips on effective leadership are provided by entrepreneur Michael Feuer, author of The Benevolent Dictator. He cofounded OfficeMax in 1988 starting with one store and $20,000 of his own money, a partner, and a small group of investors. As CEO, he grew it to more than 1,000 stores worldwide with annual sales topping $5 billion. He is also CEO of Max-Ventures, a venture capital and retail consulting firm, and cofounder and CEO of Max-Wellness, a comprehensive health and wellness retail chain that launched in 2010.

Have you ever said to yourself, How in the world did [insert name of powerful business executive] get to where he is? He’s not any smarter than I am! Well, chances are you’re right. That executive who made it big probably doesn’t have more powerful brain cells than you…but what he (or she!) probably does have are three non-glamorous but crucial qualities: focus, discipline, and follow-up.

These three qualities might not sound extraordinary, but they can truly set you apart. The truth is, there isn’t a simple magic bullet that will propel you straight to the top. Success in any endeavor, especially business, really comes down to specific character traits and habits. If you have those qualities, you’ll excel. And if you don’t, you probably won’t.

Before you ever craft a sales strategy or walk into a client meeting, whether or not you have a chance of success has already been decided by how you think about your work, what you have to do, and how you do it. Outcomes are shaped by your focus, discipline, and commitment to follow-up… or lack thereof. It’s important to remember that achievements are often less dependent on your technical know-how and more dependent on how you organize and think.

Read on to learn what these three qualities look like in practice, and how you can make them work for you:
Take good notes.

Taking notes in business is just as important as it was in your advanced economics class in college. Your brain isn’t always as powerful as you think it is, and having a written record of your boss’s project analysis or your colleague’s sales strategy can save you from having “oh darn” moments, and can set you apart from the pack and put you on a straighter path to success.

I’ll frequently dictate the notes from a meeting the second I walk out, or appoint someone to act as a scribe beforehand. I keep all of my past notes in a folder on my computer, and I also always make sure to jot down next steps. These habits ensure that nothing falls off the radar unintentionally, and that I always have a good idea of what needs to happen next. Oh — and I often shock new team members by writing the letters ‘FU’ and a date at the bottom of my notes. New people are always relieved when they learn that those letters aren’t a pejorative, but a shorthand I use as a reminder to ‘Follow Up’ by a specific date!

Do what you say you will, period.

In today’s dog-eat-dog environment, a person’s word isn’t always his or her bond. And that’s a shame. When you fail to follow through on promises and commitments, you imply that you lack discipline and — perhaps — shouldn’t be trusted with more important tasks and objectives. However, if you cultivate a reputation for being completely reliable, you’ll enjoy more responsibility and success as well as better business relationships.

I routinely tell my employees that I’m not their father and won’t babysit them, and that if they tell me they’re going to do something, they’d better make good on that assurance. I can’t afford to have people on the team who are undependable. However, I do provide alternatives by giving everyone three acceptable ‘outs’: They can tell me that they can’t finish on time, that they don’t want to do it my way because they have a better idea, or that they think their assignment isn’t worth the effort and can convince me why.

Give homework assignments.

A leader’s job is to make people think and discover alternatives. It’s a great way to determine who on your team you can rely on and who is capable of taking a project to the next level. You can afford to invest in developing someone who is interested in developing.

When I give assignments, I keep a running tally of what happened or changed from previous sessions on the same topic or project. No matter if you’re on the giving or receiving end of homework, remember that the way these assignments are handled is a great way to gauge attitude, commitment, potential, reliability, and whether or not someone is a player.

Scrap your iron-clad five-year plan.

Being able to work with focus and discipline is generally a good thing…unless you’re focusing on things that won’t help you or propel you forward! To help prevent this, Feuer recommends developing a short-term plan with a six- to nine-month outlook. This plan will help you get through the year. He also recommends creating a longer-term plan with a seventeen- to eighteen-month strategy. It will encompass the goals and benchmarks you need to achieve during this time period. Why have two plans instead of one? Well, the world is simply evolving too fast to rely on a one-size-fits-all five-year plan.

I’ve found that many organizations spend too much time thinking about what’s going to happen way down the road when all they’re doing is guessing. And when their predictions turn out to be inaccurate, they find out too late that they’ve been focusing their efforts on the wrong things. You must always be ready to modify your plans when necessary, change quickly, and deal with the unexpected. That’s what will make the difference between a company that might get by and one that is good or even great.

Use a rifle, not a shotgun.

When you fire a shotgun, your shot hits a wider area, but it lacks focused precision. In business, a shotgun approach gets the job done… but usually doesn’t yield outstanding results. Sure, you’ll hit something with a shotgun, but the price in doing so seldom provides the big payback. Yes, a rifle or laser-sharp approach will take more planning and forethought, but in the end you’ll probably save time and resources. It pays to identify exactly what needs to be done and then focus relentlessly on accomplishing those objectives.

Trying to cover a wider area and hoping that something resonates is inviting your efforts to fall short of the mark or even backfire. A laser-sharp strategy is much more practical, productive, and economical. So make sure that you’re ready, and that you aim well before you fire!”

When you take the time to focus, have discipline, and require follow-up, whether you’re a business owner, a manager, or an employee moving up the ladder, you’re creating a road map that documents what has to be accomplished and by when. Few things ever fall through the cracks when you follow this process. It is the most direct way I know to set yourself up for success!

Want to be an effective entrepreneur? Better have these relationship skills

This article was reprinted from youturn.com, a resource for intern candidates and young professionals running an entrepreneurial driven company or change-oriented non-profit. Author Martin Zwilling is CEO & Founder of Startup Professionals, Inc.

Starting and building a company is all about leadership – formulating an idea, building a unique plan based on vision and experience, and forging a path over and through all obstacles.

Yet the image of leadership in business is at an all-time low, according to national leadership experts, considering the political debacles, record business bankruptcies, and executive fraud cases.

If the country is to recover financially and politically, new leaders will have to emerge to fill the leadership deficit – new leaders who understand that leadership is a privilege, not an entitlement, according to executive coach Michael Schutzler, author of the book “Inspiring Excellence – A Path to Exceptional Leadership.”

Entrepreneurs are well positioned to become the new leaders, because they perceive problems as opportunities, and have the mental mindset to innovate and execute. They have the required passion, perseverance, and work ethic. What they don’t have by default are the skills required, or the relationships. These don’t come automatically with the CEO title.

Schutzler’s view of leadership is different than many academics and executive coaches, who feel that leadership is an innate character trait. He urges people to focus on developing a few key relationship skills, and I agree. Here are some key conclusions:

Leadership is a learned behavior, not a character trait. Good judgment, for example, is certainly a hallmark of exceptional leadership, but it isn’t something you are born with. “More than anything, good judgment comes from listening,” he says. It also comes from paying very close attention to every situation, and learning from it.

Listening is the most important skill for a leader. We need to pay attention to the words and actions of others while suspending judgment long enough to allow your intellect to catch up with your instincts. Why? Because as leaders, if we speak too soon, we shut off creation. We shut off contribution. We force the adoption of our ideas.

Communicating and storytelling. This is not a skill everyone is born with, but it’s a skill we can all develop. People on your team want to believe! They want to believe you know where we are going, or you will get us there even if you aren’t sure of the exact path at this moment. They want stories that compare what they are doing with others.

Acknowledging contribution. This is necessary to sustain motivation during the hard times. It’s not hard to do and doesn’t require a lot of effort or expensive gifts. A thank-you note or peer recognition is enough most of the time.

Negotiation is a practical skill for every leader. Negotiation is often misunderstood to be the domain of clever deal makers. It’s actually really simple. Make very clear requests for a promise. Understand exactly what the promise is – what is being done, when, and what the standard of excellence is, and then check up on the status to make it happen.

Too many leaders are focused on personal ambition. He believes that we need leaders who use power as a tool for inspiring others to create a better future, not as a tool for retaining their position or perks.

The middle four points are the essential skills for great leadership, inspiring excellence, and building a successful business. They are easily practiced, and serve as the foundation for successfully attracting talent, reaching consensus, making tough choices, and harnessing ambition.

In this fashion the general leadership deficit is really an “opportunity” for new aspiring entrepreneurs in business. So practice the leadership skills needed, and step in when you are ready. Now is your golden opportunity – let’s see how many of you are up to the challenge. We need you all.

TechCentral: Endeavor Entrepreneurs bring “big business software to the phone”

The following profile of Endeavor Entrepreneur Wilter du Toit is reprinted with permission from TechCentral (original article here). Wilter co-founded Virtual Mobile Technologies, a mobile enterprise application platform, with his brother Arno du Toit.

Virtual Mobile Technologies (VMT), a local technology company backed by empowerment group Mvelaphanda, has developed products for mobile devices that integrate seamlessly with enterprise software systems like SAP used by big business. But unlike most such applications, VMT says its solutions work on even old feature phones.

And the company is hoping to take the technology to emerging markets worldwide.

VMT says its solution will work on old, monochromatic, three-line-LCD-based cellphones, right up to the latest and greatest smartphones. This, it believes, gives it a big advantage in emerging markets over its rivals.

The company, founded in 2005 by brothers Arno and Wilter du Toit, wants to extend companies’ enterprise resource planning, enterprise relationship management, banking, inventory management and similar systems onto mobile devices.

Aside from offering platform-specific applications for high-end mobile devices such as smartphones and tablets, VMT also creates products that make use of a cellphone technology known as USSD, or “unstructured supplementary service data”, so even older devices can be used.

“Companies don’t have to choose which platform to use,” says Arno du Toit. “When something like Windows Phone 7 comes out, we ensure our products support it, so our solutions remain relevant. Our clients can continue reaching all devices without having to have a development team. It’s also a de-risking in terms of decision making: if a company decides to change devices there are no compatibility problems.”

Wilter du Toit says that this sort of flexibility is essential because the respective market share of the various mobile operating systems shifts all the time. His brother says VMT can adapt to the market as it changes while “managing security, versioning and enterprise integration”.

“Any enterprise service you’re running can now be extended to mobile,” says Wilter. “It’s difficult for companies, even internally, to dictate what devices employees can use.”

The company’s clients include Elizabeth Arden, Imbongi Capital, Zambian mobile banking services company MTZL, Salesforce.com and a handful of Indonesian partners offering VMT’s services in the region.

Wilter du Toit says the company’s support of cheaper and older phones is crucial to its strategy of expansion in emerging markets. “Those are the markets in which we’re most interested,” he says. “Our Indonesian presence is growing, and from there we want to move into other emerging markets.”

Arno du Toit says a number of companies focus on smartphone and tablet applications, and cover the shortfall by means of mobile Web solutions. He says many companies are unaware that they can also reach midrange devices with secure mobile applications.

“Our products can push payslips, leave requests, and other things that help mobilise HR departments,” says Arno du Toit. “We can assist mobile sales forces, streamline mobile workflows and task management, provide mobile access to customer relationship management and enterprise resource planning systems, and provide additional enterprise solutions based on an individual client.”

Wilter says many companies spend large amounts of money on enterprise software systems but don’t always see a return on their investment. “Mobility increases that return by allowing customers and clients to access it and by allowing staff to access information remotely that they would otherwise have to come into an office to get.”

In order to develop its products, VMT has created its own “mobile enterprise application platform” called Ramp. Ramp’s security is endorsed by the US federal technology agency, the National Institute of Standards and Technology, and developers interested in it can download it here.

“We’d like to be the mobile solutions standard for enterprises in emerging markets,” says Wilter du Toit. “This is a market with great potential and one that needs high-quality, secure mobile services.” — Craig Wilson, TechCentral

Endeavor firm Socialmetrix launches online TV series

Endeavor Entrepreneur Juan Damia can now add another position to his resume: talk show host. Damia and fellow Endeavor Entrepreneurs Gustavo Arjones and Martin Enriquez are cofounders of Argentinian firm Socialmetrix. The recently launched a monthly talk show style TV show called Socialmetrix TV, which will explore social media success stories, failures, and general industry issues.

Socialmetrix is an online platform that turns comments, tweets, and Internet chatter into a source of valuable marketing information. The firm’s proprietary technology can tell companies what is being said about them and their products. Socialmetrix has received much local and international attention, most recently garnering British media firm A&N Media’s first investment in Latin America.

In the first installment of Socialmetrix TV, below, the leaders of Movistar Argentina’s Social Media team discuss their experiences creating and running one of the most successful social media projects. Episodes are recorded in Spanish, have English and Portuguese subtitles. (Once the video starts playing, click on the CC button on the bottom right of the player to activate subtitles).

The company recently released its second episode with Florencia Pini of the Starcom MediaVest Group (also below).

For emerging market businesses, don’t just copy Silicon Valley — localize

This article, “Why Silicon Valley Can be Bad for Emerging Market Startups,” is reprinted from Memeburn.com, a site on web insights and analysis. The author, Keet Van Zyl, co-founded PoweredbyVC with the goal of building the VC industry in South Africa.

Launching a startup anywhere in the world is challenging, but launching one in an emerging market territory where there is often limited access to funding and a fragmented entrepreneurial ecosystem it is so much harder. One sure way to fail is to try and duplicate first world solutions for emerging market problems without tweaking them for the unique local conditions.

The Silicon Valley story is inspirational.

Its ability to launch globally competitive, world-changing internet startups is unsurpassed. It continues to be the leading hub for high-tech innovation and development and accounts for one-third of all of the venture capital investment in the United States. And yes – world-changing startups can launch from emerging markets as we are well aware of the much-publicised handful of success stories in our own countries.

The difference is that instead of building and supporting startups, we often measure emerging market startup success by their ability to sell technologies to Silicon Valley headquartered companies. In the last 10 years, more and more money has been flowing from Silicon Valley to the emerging world.

Building sustainable local businesses

There’s clearly good news and bad news for emerging market entrepreneurs in this new world order. In the one corner is the think-global-act-local view that gives an emerging market startup the incredible opportunity of forming an international strategic partnership to accelerate growth. In the opposite corner is the entrepreneurial outlook of building a long-term sustainable multinational business that is locally owned. It is sometimes difficult to pursue both these strategies simultaneously from an emerging market perspective.

In my experience analysing early-stage businesses, too often entrepreneurs only present a five-year business model as Plan B, in case the 18-month Plan A (selling their intellectual property to Google) fails. Building a world leading business that can make a sustainable impact on innovation, job creation and growth in the region is sometimes notably missing in the strategic thinking. The irony is that the best way to unlock value in the IP is to drive the vision and build a high-growth business around it. Traction is never a bad thing. And if someone wants to make you a staggering offer for the business 18 months down the track then so be it, but better yet: reject the offer and continue along the path of building a global business with headquarters on local soil.

Efficiency- vs. Innovation-driven Entrepreneurs

The latest Global Entrepreneurship Monitor (GEM) report highlights that emerging market economies are dominated by efficiency-driven entrepreneurs, where further development is accompanied by industrialisation, capital-intensive organizations and an increased reliance on economies of scale. These businesses are not easily fundable through traditional venture capital. But it does not mean they don’t try and access it…

Somewhere in the entrepreneurial subconscious the Silicon Valley myth is ingrained that if you are starting a new venture, you are per definition a startup, and therefore need to approach a venture capitalist. Often these entrepreneurs actually don’t know whether they even need the funding, or what it is needed for. Traditional VC tools, techniques and funding mechanisms are only geared for high-growth innovation-driven ventures.

As entrepreneurial activity advances into the innovation-driven phase, businesses are more knowledge intensive with expanding services that are scalable. The entrepreneurial landscape in the US, Western Europe and some Asian Pacific countries fall in this economic category, where the environment for launching a high-growth startup is clearly more favourable.

Retweetable tweets

There is a view among certain emerging market entrepreneurs that raising VC funding in Silicon Valley is all about having a good idea and a polished elevator pitch. It also helps to be a college dropout and if there is an empty garage somewhere that you can use as office space you are just about there. Once seed funding is raised, follow-on funding rounds are guaranteed and the VCs are lining up to introduce you to their networks to help you succeed. Movies like The Social Network do little to dispel this myth, but as with most things in life, the great stories get told (and only the good parts) while the less exciting stuff fall through the cracks. “Startup almost break even after 5yrs of bootstrapping and hard work while founders will earn market-related salaries soon” just does not make for a retweetable tweet.

Competitive advantage

Emerging markets need to focus on their own distinctive competencies to exploit the unique strengths of related-industry startup clusters and assist these ventures to achieve a competitive advantage. In short, focus on niches. If emerging markets want to be globally relevant in the startup world they need to create an environment where large sustainable businesses can be built up to create economic benefit to all stakeholders. Silicon Valley success stories should be used as inspiration, but emerging market entrepreneurs need to appreciate that reality is embedded in hard work behind a vision of building sustainable long-term businesses. A vision supported in Silicon Valley by a multifaceted network of interconnected stakeholders in the high-tech value chain. And this does not exist in emerging markets on that scale (yet).

eMBA Field Report: The emerging giant in Santiago

Chris Zefferys is an MBA student at the Thunderbird School of Management and is spending his summer as an eMBA working with Kibernum in Santiago, Chile.

I love the energy, passion and drive that developing markets such as Chile possess. In Chile, I’ve had the opportunity to work with Kibernum, which is an emerging giant. The company is a leading IT services provider that will celebrate its 20th anniversary this year. Endeavor Entrepreneur Mario Araya, Kibernum’s founder and CEO, is making the right steps to build a foundation for the transition to a domestic powerhouse and a global player.

As the emerging giant awakens, there’s a ton of work to be done and that’s truly the exciting part. I am working with the marketing team on corporate as well as global strategy. In a developing market the institutional voids that companies confront are all the more real. Those voids include capital, talent and product. Access to market research, for example, has proven challenging. What is required is an entrepreneurial spirit to seek out what is needed and piece together the story. Through the process I have met and listened to a variety of people and have gained a deeper appreciation for what my entrepreneur has accomplished.

Endeavor has definitely made an impact on Kibernum having provided eMBA interns over the last couple of years. The Endeavor Santiago team has been outstanding. Florence Martin and the entire group have made my experience incredible to say the least.

In closing, Santiago offers a bit of magic every day if you’re tuned in. Examples include a group of clowns walking down the street at night, a big, stray German Shepherd gleefully lounging in a cardboard box that was clearly too small for him, a band of young people banging pots and pans surprisingly in harmony, and waking up every morning to a view of the majestic Andes. As one great author said, “if you’re tired of London, you’re tired of life.” The same is true of Santiago and the surrounding beauty that Chile presents.

eMBA Field Report: Istanbul, East Meets West

Ashay Shah is an MBA student at INSEAD and is spending his summer as an eMBA working with Pozitron in Istanbul, Turkey.

I just completed two weeks at Pozitron, a mobile software company in Turkey. The INSEAD summer break only begins in the first week of July, so we have a bit of a late start compared to the US schools. Landed here smack in the middle of the hottest week of the summer, but the beautiful Bosphorus and the veritable buzz of this city makes you forget all about the heat.

The Endeavor Entrepreneurs, Fatih and Firat Isbecer, have been incredibly helpful and their generosity and attention towards all the company’s employees have clearly been a crucial factor in Pozitron’s successful journey so far. In many ways, my project here (to help find strategic and financial partnerships) has become much easier because of the company’s reputation!

Meanwhile, one of the most enlightening experiences for me has been learning about the Turks and their culture. Istanbul is geographically where the East meets the West, but what is more interesting is that it is culturally so as well. Doing business here requires a keen sense of local manners. And much the same as in India, every meeting here entails sipping 1-2 cups of tea or coffee (as it would be impolite to refuse), which means you are quite wired by the time you are done in the evening!

Overall, my experience so far has certainly exceeded (already high) expectations, and I hope it continues to do so. Skimming through other eMBA blog entries, clearly this is not a unique feeling.

Contact us

Press center

Community

Newsletter Sign Up