

Why this investor abandoned setting up a startup fund in Chile - xiaomei
http://thenextweb.com/la/2011/12/26/why-this-investor-abandoned-setting-up-a-startup-fund-in-chile-after-just-6-months/

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vimes656
Measuring education quality of a country by how many nobel prizes came out is
like measuring the quality of car manufacturing of a country by checking how
many F1 championship winners came from that country.

I get really sad when I see education policies just to increase the output
nobel prize winners, no matter what. As if education and science where all
about winning prizes that are highly political.

------
pelle
St Lucia a small country in the Caribbean with 161k inhabitants has had 2
nobel price laureates.

<http://www.stlucianobellaureates.org/>

This is quite impressive, but is more representative of how good the British
system was at educating elites throughout the realm through their system of
excellent local grammar schools feeding into the UK university system.

This hasn't translated so much to entrepreneurial success yet. Entrepreneurs
in the Caribbean tend to come from the poorer less educated ranks or as
immigrants. The successful intellectuals become European style public
intellectuals or work in government.

Kingston Beta <http://kingstonbeta.com/> is trying to change this culture by
getting some of the extremely smart people in the Caribbean to focus on
startups. I hope the best for them.

What I'm trying to say here is that education is not the only thing needed.
Israel as he mentions has great universities, but it also has a completely
different mentality to the mentality found in the middle classes in Latin
America including Chile.

As a matter of fact many of the big success stories in China such as Wenzhou
is founded on pure entrepreneurial spirit and has nothing to do with
education:

[http://reason.com/archives/2011/11/15/chinas-black-market-
ci...](http://reason.com/archives/2011/11/15/chinas-black-market-
city/singlepage)

And that is exactly the point of Startup Chile. It is trying to change the
mentality not of Chilean startups themselves (they are already on the
program), but rather Chileans as a whole. The investors will come when the
successful startups emerge. And don't count on local investors.

Local investors who have made too much money easily in an unrelated field are
not good news. In Chile as he says it's from natural resources like copper.

We are fighting with this here in Miami as well. The local investors are not
sophisticated enough to deal with early stage tech startups, yet there is
plenty of money here. Much of the money made here was in real estate,
hospitality and banking. Most people in the local startup scene are not
looking for local money for that reason.

Morten Lund had a rant a few months ago in Danish
[http://lundxy.com/2011/08/i-have-to-get-it-our-in-danish-
sor...](http://lundxy.com/2011/08/i-have-to-get-it-our-in-danish-sorry/) about
the Danish investors. It's much for the same reason, but with a special
northern European twist. The Danish investment funds have virtually no former
entrepreneurs on their boards. They consist of CEO's of large companies, trade
union bosses and representatives from local government. All people used to
easy money who haven't got a clue about entrepreneurship. Which is pretty much
how you could describe the country as a whole.

------
ricardobeat
> _Do you know how many Brazilians have received a Nobel Prize? Zero._

Technically, one: <http://en.wikipedia.org/wiki/Peter_Medawar>

On superior education, Brazil wins slightly:
[http://www.topuniversities.com/university-rankings/latin-
ame...](http://www.topuniversities.com/university-rankings/latin-american-
university-rankings/2011). USP is also 100 positions ahead of Chile's PUC on
the 2011 world university rankings.

~~~
nandemo
Yeah, but only _technically_. His parents were foreign-born, he was a British
citizen, his university-level education happened in Oxford and apparently he
never worked in Brazil.

But Chile's two Nobel Prizes are for Literature, which is cool but not very
relevant to the author's point, so we're even.

In any case I'm not sure if even science Nobel prizes or top universities'
rankings are very relevant indicators regarding web startups. Germany and
Japan both have loads of Nobel prize winners and several excellent
universities, but we don't see startup hubs in those countries comparable to
Silicon Valley or even Israel (proportionally).

Well, if you were to assemble a small, elite team of programmers, arguably
you'd have better luck in Brazil, or possibly Argentina, than in Chile, based
on sheer numbers alone. On the other hand, I believe the average education in
Chile is much better: for instance, literacy rate is 96.5% compared to
Brazil's 90% (much less if we count functional literacy).

Overall, though, I believe Brazil probably is still the best place for
investing in startups in South America. See 500 Startups for instance:

<http://www.quora.com/Why-did-500-Startups-choose-Brazil> (I don't completely
agree with the top answer, which is a tad too generous to Brazil, but it is
instructive.)

[http://brazilventurecapital.blogspot.com/2011/09/dave-
mcclur...](http://brazilventurecapital.blogspot.com/2011/09/dave-
mcclures-500-startups-comes-to-sao.html)

~~~
justincormack
This article did not really mention that he found too few entrepreneurs, just
that he didnt get on with the investors. Community needs to be there first,
and investment cannot create it. Not sure that someone deciding they cant make
enough money is an indication of anything about the potential.

~~~
nandemo
Well, he did say this:

> Nothing will change without emphasis on science, and this is true all across
> Latin America – actually, Chile is even in better shape than other Latin
> American countries. Do you know how many Brazilians have received a Nobel
> Prize? Zero. Compare that with Israel, and you’ll see the difference:
> education.

But I agree with you, I don't think one investor giving up on Chile means
anything definitive about the country's potential.

------
Geekette
Yes, the Chilean entrepreneurial ecosystem has significant issues, but that is
not really an excuse for what appears to be uninformed expectations.

Some of the issues cited are obvious even from researching at a distance, so
it makes one wonder if he moved over without conducting basic research, just
trusting that the govt invitation would make it rain? Where on earth can you
expect to enter as a foreigner to raise a $40 million fund within 6 months
with NO solid connections within the community or with capital providers? In a
conservative environment to boot?

Now he says he wants to "help Chilean companies to invest in Asia" although he
couldn't get Chileans to invest in Chile? 0_o

Other sides of the debate that I came across: Sarah Lacy
[http://www.sarahlacy.com/sarahlacy/2011/12/attention-
world-d...](http://www.sarahlacy.com/sarahlacy/2011/12/attention-world-dont-
give-the-arnon-kohavis-your-money-.html)

Nathan Lustig [http://www.nathanlustig.com/2011/12/26/arnon-kohavi-
chilean-...](http://www.nathanlustig.com/2011/12/26/arnon-kohavi-chilean-
culture-and-the-chilean-startup-scene/)

Rich Yang [http://thenextweb.com/la/2011/12/27/start-up-chile-
entrepren...](http://thenextweb.com/la/2011/12/27/start-up-chile-entrepreneur-
responds-to-investors-departure/)

------
andrewcooke
the best way to have change is to make it, not wait for the rich. and i think
this is obvious (not just here in chile, but anywhere - there must be a dozen
posts on hn a day complaining about the complacency of those in charge of the
status quo). so it seems very odd to read: _the Chilean government would have
supported my fund, but I also wanted a commitment from the elite, and it
didn’t happen._

if you wait for the entrenched families here to change, you will be waiting a
long time.

~~~
mjwalshe
And if you piss them of to much you might end up dead

~~~
abalashov
Where do you come up with this crap? Do you know anything about Chile?

~~~
bruo
I live in Chile, i supported the punta de choros people struggle to stop an
energy plant there since mid 00's, since friends of mine work in that area.
All the place's economy is based on fishing, and the power plant will destroy
that.

I know they were raided, i know the SII visited a lot of people at 2am asking
for data. Some journalists from Canal 13 did a note about that but never got
broadcasted.

They learned that they aren't going to be on TV because they are less rich and
less powerful than people who wanted the plant. That knowledge made them to
ask for help to some actors and then, using internet, the campaign was made
public.

The sites chaopescao.cl and salvemospuntadechoros.org were asked by phone to
be removed and hosting company agree with that...

I created myself an account on hn just to tell you that this maybe is not a
common politics, but it still happening, specially away from santiago. You
don't have to belive me and say this is what happens in chile, but it will be
more than cool to keep your mind open to notice when this happens, and
confront it and make it public.

~~~
abalashov
I find that entirely believable. But do you really think that activists in the
US do not face similar problems, at least, when their actions threaten genuine
subversion of some end desired by the wealthy elite? In relative terms, I am
not given to believe that Chile is a particularly oppressive place.

~~~
whateverer
The you should see what we do to the Mapuche over here. Last week the Supreme
Court confirmed a sentence of three years of _probation_ for a cop who killed
a Mapuche activist. Their communities are violently raided with gunshots as a
matter of business, international media is harassed out of the region and the
national media doesn't cover squat.

------
waltersilva
Here in Brazil I know a lot of guys from Opus Dei. Some of them are in the
tech field (programmers, engineers, managers) and are very open minded and, if
not themselves entrepreneurs, entrepreneurship friendly.

------
jorgecastillo
This article was an excellent read, does anyone know of similar articles were
the startup scene in Mexico (if there is one?) is covered.

------
known
Arnon Kohavi nailed it in one sentence _a handful of monopolistic families
control the country, and won’t move._

