Chile Forum

admin wrote:Found it interesting today on bloomberg how a guy in charge of a VC group in New York talked about how NY was becoming the place to start-up small tech companies rather than CA. Sorry, Chile. You really really do not have the infrastructure to play ball in that club and likely never will. That is exactly the problem, everyone has a start-up program. Most are way ahead of Chile.

Let me do some back of the napkin calculations:
40,000 x 22 = 880,000 dollars spent on startups.
9 of the 22 are still here (sounds like some are here because they can not go anywhere else)
let's be generious and say that goverment resouces and money spent to give that money away, was like another 1 million dollars (knowing Chile, it was likely way more).
134 some jobs created or about $14,029 dollars spent per job.

Now the question is, how many of those were rather ho hum, bottom of the economic ladder sorts of jobs with no real skills acquired vs. real get your hands dirty programming or other IT jobs?

Why leave chile... sounds like they get free office space? even after there 6 months... cheap rent $300 per month a room to live... where can you get that in the USA?..... i argee they stay because its free, not because its good.....

It is a great place to live in santiago as a expat you feel special, you feel different... some of them will be staying because they feel they are king here....

i feel some of the start ups are bottem of the barrel... who knows....

anyway, seems like the chilean goverment is better at building flash offices than a good place to make startup.....

Why reinvet the wheel, chile needss to invest in chile!!!!!!!!!!! not in gringos, should get the news paper to do a thing on this!

FrankPintor wrote:Article about Start-Up Chile: http://www.bbc.co.uk/news/business-15887000

Thanks for sharing! Interesting article!

john wrote:

FrankPintor wrote:Article about Start-Up Chile: http://www.bbc.co.uk/news/business-15887000

Thanks for sharing! Interesting article!

Yes, I thought it was. Wasn't just the usual gushing blurb. The author seems to be based in Chile, I don't remember having read anything before by her, not sure what her perspective might be.

admin wrote:Let me do some back of the napkin calculations:
40,000 x 22 = 880,000 dollars spent on startups.
9 of the 22 are still here (sounds like some are here because they can not go anywhere else)
let's be generious and say that goverment resouces and money spent to give that money away, was like another 1 million dollars (knowing Chile, it was likely way more).
134 some jobs created or about $14,029 dollars spent per job.

Now the question is, how many of those were rather ho hum, bottom of the economic ladder sorts of jobs with no real skills acquired vs. real get your hands dirty programming or other IT jobs?

Your figures are probably in the ballpark. I don't have an exact comparison to hand, but I think in an international comparison they would probably be on the cheap side. Certainly the IDA in Ireland at times spent comparable sums per job, if not more, when they went out to attract investment. The SDA and WDA (?) won't be much different. And a 40% survival rate for a start-up incubator is not bad at all, even if you consider some of the people involved stick around because they can't get into the US. The US seems to be making things so difficult for foreign entrepreneurs that a ship moored outside territorial waters off California to house these entrepreneurs is considered a viable business concept these days The "why" doesn't matter, the fact of these people staying in Chile does.

To address the "bottom of the ladder" issue, that's where one usually starts. Ireland had no venture capitalists either in the 1970s. Its only assets were a big open market in Europe and a steady supply of graduates (not to be exaggerated either, the university system in the 70s and 80s in Ireland was not famous for reacting to the needs of industry, it took a radical reform to make it better... including subsidies and eventually free tuition ). Assembly plants were the start, probably not an option for Chile, they came and went, but it was the small supplier companies that generated the real job growth.

That NY and the East Coast of the US are good places to start hi-tech businesses is hardly news, just read "The Soul of a New Machine" to get a feel for how it was when Cupertino was a good place to grow oranges. But I don't see how it's relevant.

The way South America is evolving, Chile may find itself in a similar situation to Ireland and Scotland, I would say the long-term Chilean government thinkers are strategically right on here. Brazil is a huge market and becoming richer, and Chile is one of the few countries in South America at a similar level of economic development, as the takeover of TAM by LAN would suggest. Also, the major advantage Chile has, copper, is going away, the world doesn't need as much any more, and it will probably become more profitable to steal the stuff from existing infrastructure than dig it out of the ground in Chile. Chile will need to be a network of small companies collectively providing employment.

Tactically, though.... why are Start-Up Chile listening to gurus from Stanford? They should be talking to the people who have attracted industrial investment before, retired executives from the IDA and SDA for example. Now that would give the effort a much sharper focus.

.
Article on startup chile a few days ago in Biobiochile. More on the "take 6 free startup months and then find a way to excuse my failure."

Article in the language of the realm:


Inversionista se va de Chile tras sólo 6 meses: “A quienes controlan este país no les importa nadie”

A mediados de 2011, el inversionista y emprendedor israelí Arnon Kohavi desembarcó en Chile con el propósito de fundar un nuevo polo tecnológico. Estaba tan convencido del potencial de nuestro país que en ese entonces declaraba que “el próximo Skype, Facebook o MercadoLibre provendrá de Chile”.

http://www.biobiochile.cl/2011/12/25/in ... adie.shtml

In English: (ok, i didn't compare word for word, but think it's the same article)
http://thenextweb.com/la/2011/12/26/why ... -6-months/

Start-up Chile's response:
http://thenextweb.com/la/2011/12/27/sta ... departure/

and another mention:
http://www.sarahlacy.com/sarahlacy/2011 ... oney-.html

I think I predicted this outcome at avery early Point for start-up chile. Namely an exodus of tech savy people slamming chile on the way out. Get ready for the flood.

You see if some biz makes it, then it was the great idea and biz savy of the founders. For everone else chile is the obvious reason they failed.

The gov just bought millions of dollars in bad pr for chile, that real investors will be looking at on the internet long after start-up chile is cancelled in the budget.