Developing Entrepreneurship Regionally: Lessons from Latin America

Arturo Castellanos, PhD
Zicklin School of Business - Baruch College (CUNY)

November 21, 2016 (New York)

The Value of a Start Up Idea

Source: http://bit.ly/2g83htF

This implies there can be more than one

Thus, some can be "better" than others

Text

We can measure ideas by their value

How do we come up with (hopefully good) Ideas?

One idea/course of action...

1. Something you need but it does not exists.

2. Something exists but you think it should be done better.

Idea generation as a process!

Better is often relative. Check your assumptions.

The search for better is a continuous journey, not a destination. There's always tradeoffs.

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

Customer wants vs. Customer needs

The Nature of Choice and Happinness

Text

"The mind knows not what the tongue wants" --Howard Moskowitz:

  • Variability and horizontal Segmentation: The Perfect Pepsi vs. perfect pepsis

1924, "A Car for Every Purse and Purpose"

Text

Alfred Sloan's market segment strategy: "a car for every purse and purpose"
 

- Chevrolet at the low end of the market

- Cadillac at the high end.
 

Ford Motor Company - single segment (the low-end Model T), GM soon overtook Ford as the sales leader in the U.S. market.

The only constant is change: keep innovating

Text

Paradigm Shift (Kuhn, 1962)  where one conceptual world view is replaced by another.

  • E-commerce
  • Google's PageRank
  • Online Banking
  • Sharing Economy
  • Online Dating
  • Mobile Payments
  • Telemedicine/m-Health
  • Cloud Computing
  • MOOCs
  • Virtual Reality
  • Crowd-
    • sourcing
    • funding
  • Artificial Intelligence

How do YOU see the world?

Innovation and new paradigms emerging at a much faster pace

Paradigm: Radical Openness
Jason Silva TEDGlobal (2012)

[sic]

...it is impossible for Tesla to build electric cars fast enough to address the carbon crisis... Our true competition... [is] the enormous flood of gasoline cars pouring out of the world’s factories every day.

Technology leadership is not defined by patents, which history has repeatedly shown to be small protection indeed against a determined competitor, but rather by the ability of a company to attract and motivate the world’s most talented engineers. We believe that applying the open source philosophy to our patents will strengthen rather than diminish Tesla’s position in this regard.

Open Source Philosophy

“Nothing is more powerful than an idea whose time has come.” -- Victor Hugo

Open Innovation (Empower anyone to do things)

Refining Ideas: Frameworks and Methodologies

IDEO - Design Thinking - Human-Centered Design

Is the experimental group significantly different than the control group?

Latin America (LATAM)

Creating Hubs of Innovation

Some Perspective

In LATAM, More than half of people of working age population are between 15 and 35 years.

+9.7%

+7.4%

+5.8%

+4.3%

The Seedstars Index Methodology

  1. Culture: How prevalent is the entrepreneurial mindset in the country? How much is entrepreneurship and risk taking celebrated and promoted?

  2. Environment: How conducive is the legal, political and financial environment to build and grow companies in that country?

  3. Opportunity: How possible is it to grow and scale within local and foreign markets?

Challenges

Studies have found that income inequality is strongly correlated with levels of education [3]

References:
[1] https://worldfund.org/en/about-us/education-gap.html
[2] https://www.brookings.edu/project/brookings-global-ceres-economic-and-social-policy-in-latin-america-initiative/

[3] http://revista.drclas.harvard.edu/book/education-and-poverty-latin-america

[4] http://www.worldbank.org/en/news/infographic/2015/09/26/jovenes-america-latina-desafios-oportunidades

Latin American youth entering the labor force lack the skills necessary to find dignified work and participate in an increasingly competitive, information-rich and globalized economy [1]. Latin America's commodities-based, export-led, low productivity economic model will not be enough to advance to the next stage of development [2]

College enrollment was 44% in 2014, compared to the 70% average of OECD countries. [4]

Per capita spending on primary education in Latin America averages approximately 22% of U.S. levels [1].

Cultural roadblock: aversion to risk. There is a stigma surrounding failure.

Other factors: Political stability, Government policies and procedures, Credibility of laws, regulations, and policies, socio economic factors.

 

Transaction costs - cost of doing business is high because of the inefficient market conditions (e.g., fostering competition, intellectual property, improving infrastructure --ports, transport)

Skills: human capital, education, technical schools, financial assistance

Access to funding (e.g., grants, seed capital, venture capital)
Non-financial assistance

 

High inequality is correlated with social conflict, authoritarian cycles, populism, and economic crises (Smith 2005; Solimano 2006)

Opportunities

Large nearby markets (local population) and trade agreements

Large rural markets for social entrepreneurship

Natural resources

+9.7%

+7.4%

+5.8%

+4.3%

Technology penetration

Government Initiatives

Government Initiatives

Success Stories

"Startup Weekend Rio 2011, IBM SmartCamp Brazil 2011, Startup Farm Rio 2011, TNW Awards Brazil 2012, Spark Awards 2013 and LIDE Entrepreneurship Award 2013." (EasyTaxi.com). Valuation: +$1B

"An Argentine online marketplace dedicated to e-commerce and online auctions. eBay is the largest common stock owner in MercadoLibre"
 Market Cap: $6.98B (NASDAQ: MELI)

"Satellogic will democratize access to space-based services by dramatically reducing the barriers to obtain real-time satellite data, creating a new layer of world-wide awareness."

Social Entrepreneurship

Other Initiatives

Ashoka (Global)

Campus TEC, Guatemala (Local/Regional):

"El TEC tiene como meta ayudar a convertir a Guatemala en un “hub” de tecnología a nivel mundial para el 2020."

Source: Data from the The Global Competitiveness Report 2016–2017

Source: Data from the The Global Competitiveness Report 2016–2017

In a world of too many options and too little time, our obvious choice is to just ignore the ordinary stuff
--Seth Godin

Dream Big. Leap. Build the wings on your way down.

Thank You

Arturo Castellanos, PhD
Zicklin School of Business - Baruch College (CUNY)
E-mail: arturo.castellanos [ at ] baruch.cuny.edu

Linkedin: linkedin.com/in/arturocastellanos
Slides: w
ww.arturocastellanos.com

deck

By acast317

deck

  • 232
Loading comments...

More from acast317