1058 startups from 75 countries went through the program of CORFO, who had access to mentors and important contacts to develop their projects, acceleration, a grant of 20 million pesos (about USD 33K), work visa for one year and access to the world’s largest entrepreneurial community. Thanks to this, the social impact of the program is bigger each year due to the hard work of entrepreneurs from all over the world.
Santiago, Chile on March 2015.- Start-Up Chile (SUP) is celebrating. In the fifth year of its existence, the entrepreneurship program celebrated its anniversary with over a thousand companies in its community.
To this day, 17930 startups, from 120 countries have applied to the program. Of those candidates, 1058 companies have been selected, with 2330 entrepreneurs from 75 countries.
The Social impact of the program continues growing every day. So far, there are in average three activities, workshops, mentoring, classes, etc, every day since Start-Up Chile was born, where more than 25% of them have been in other cities besides Santiago.
Global companies not only made an impact in the country when they share their experiences and expertise, but also when they hire Chileans to join their organizations. At this point, more than 1600 Chileans have been part of international companies, where about 10% were interns from different universities of the country.
The most represented countries during these five years are US with 21%, followed by Chile (20%), Argentina (8%), India (6%) and Brazil (4%). At the same time, the most represented industries are IT software companies (18%), e-commerce (17%), Social Media (9%) and Mobile Wireless (8%).
As a public policy, SUP has a social mission that seeks to change and improve the Chilean entrepreneurial culture. In addition to develop their projects, founders are also required to engage with the local ecosystem by doing activities that generate social impact. For this purpose, SUP invented an innovative scoring system, called Return Value Agenda (RVA), which measures the social impact that each entrepreneur generates when they approach the local community, by organizing keynotes, workshops, mentorships and events related to entrepreneurship and innovation. In this way the program can change the Chilean culture, demonstrating that entrepreneurs, from all over the world, are making innovative businesses and influencing locals with a richer entrepreneurial culture.
SUP has established many partnerships with local municipalities, entrepreneurial organizations, universities, companies, etc. This network allows Start-Up Chile founders to move rapidly within the local ecosystem and share their skills, knowledge and experience with Chileans. “I think it’s very important to address local problems by sharing our experience as entrepreneurs to children in schools. Motivating younger generations provides a future class of leaders and helps them become a part of the cultural change”, says Daniela one of the founders of Babytuto (Start-Up Chile Generation 9th). Finally, not only does RVA create a cultural change in Chile, but it also facilitates an easy insertion of startups constantly into the local ecosystem.
Last but not least, a study of the impact of Start-Up Chile, just came out from Stanford University. Mike Leatherbee (Ph.D.(c) Stanford University) and Chuck Eesley (Stanford University Dept. of Management Science and Engineering) wrote Boulevard of broken behaviors: Cognitive and Behavioral effects of Start-Up Chile. They explored “socio-psychological mechanisms to stimulate entrepreneurial ecosystems” in public policies, taken as an example Start-Up Chile. “After a long time studying, we found that as a result of a forced social interaction between two socio-geographically distant groups (foreign and Chilean entrepreneurs), Chilean entrepreneurs significantly improved behaviors needed to discover innovative opportunities. Moreover, Chileans learned new strategies to undertake. In addition, they established valuable contacts with those foreigners, who after six months in Chile returned to the innovation poles from where they came. That is, the Chilean participants improved their behaviors, learn new strategies and built valuable social networks. In summary, increased its potential capacity” wrote Leatherbee at El Mercurio newspaper.
Chile is full of entrepreneurs, but have always looked to build businesses at a local scale. However, after five years the program has shown that Chilean entrepreneurs are growing not only in numbers but are creating businesses at a global scale. “SUP transformed a group of science students from Universidad de Chile into global entrepreneurs and from a Chilean perspective that is extremely valuable. We entered with almost nothing to SUP and came out with an amazing MVP, users, a patent-pending technology. Six months after graduating from SUP, we got our second funding for 200K between a second CORFO funding and private investors” says Komal Dadlani, one of the founders of Lab4U, a mobile lab (Start-UP Chile generation 7th). Now more and more Chileans are entering the program. In 2011, 3 Chilean businesses were started, now, by this date, there are 45 Chilean businessesthat have gone through the program.
New ecosystem in Chile
Thanks to the startups that are coming to Santiago, SUP has become a leading player in positioning entrepreneurship in the public agenda. The arrival of other organizations such as Girls in Tech and Women 2.0 have also played a key role in changing the ecosystem in Chile. SUP was also responsible for the first Facebook hackathon in South America. The arrival of Evernote as a sponsor was also a landmark event. The Demo Days, Start-UP Chile was the first organization that
There has also been incredible growth in the number of local meetups and hackathons, including from well known organizations such as Startup Weekend and Startup Grind. Since SUP began, the entrepreneurs have organized more than 4.000 events, reaching more than 190.000 people from all over Chile. This growth and rapid transformation of the ecosystem would not have happened without Start-Up Chile taking a major step in creating a critical mass of entrepreneurs.
Today, the Chilean ecosystem is full of unique features. One example is that 17% of founders at SUP are women, a low percentage given the total, but still very high compared to other accelerators and incubators in Silicon Valley and in other parts of the world (See chart).
“How to invest”, is another factor that is changing in Chilean culture. SUP program alumni are creating funds to invest in other ventures, changing the status quo of traditional investments in Chile. Now startups are helping other startups to grow by venture funds. An example of this is Magma Ventures, founded by Nathan Lustig, Start-Up Chile alumnus. The numbers speak for themselves: SUP has invested nearly $30 million to develop entrepreneurship, while the capital raised post program reaches more than USD 100 million. “Chilean entrepreneurs today believe that they can develop a global business and that things can be done in a more flexible, dynamic and efficient way, like GoPlaceit, Babytuto, Biofilter, and many other Chilean startups”, says Sebastian Vidal, Executive Director of Start-Up Chile.
The support and consistency of the program has positioned Start-Up Chile as a model in Latin America and in many parts of the world, being emulated by several other countries. The World Bank has stepped in and begun supporting similar initiatives like Start-Up Jamaica. “Es similar pero no del todo… A pesar de las diferencias, el modelo chileno ha sido un gran inspirador” says Julian. J. Robinson, Minister of State in the Ministry of Science, Technology, Energy and Mining to the website Pulso Social. Also Brazil, Spain, Denmark and Malaysia are looking into the Chilean program. “SUP is successful in creating a unique ecosystem, different from the rest, where more countries are represented than in any other ecosystem in the world. This diverse profile of our entrepreneurs helps define the ecosystem”, says Sebastian Vidal, Executive Director of Start-Up Chile, speaking about the entrepreneurial environment in Chile.
Open to change
While the benefits and impact of SUP are helping to transform the Chilean culture, there are still many opportunities to be tackled.
According to The Global Entrepreneurship and Development Institute (GEDI) Chile is in the 15th place of the rank that measures the 3A’s” of development: entrepreneurial attitudes, aspirations, and activity of the most influential nations in the world. It is ranked above countries like Germany (18th) and top 1 in Latam (the closest is Colombia in the 25th place). Having said that, the first opportunity is to make the entrepreneurial ecosystem in Chile bigger, creating more links with global organizations and engaging the best startups in the region, and to continue working to make Chile the innovation hub of Latin America.
Different regions of Chile also are seeking a place within the entrepreneurial ecosystem, each with a different value proposition according to its regional strengths. That is why SUP is planning to gradually expand the program to other regions of the country to generate other ecosystems. “The new ecosystem will be very valuable to the country. If there are entrepreneurs who want to focus on development, it could be better to spend time in the regions. If they are entrepreneurs who want to sell and have meetings, Santiago is the best”, says the Co founder of Lab4U in regards to the program’s expansion to other regions besides Santiago´s metropolitan area
Retaining the best entrepreneurs and startups in Chile is always a challenge. SUP is considering ways to generate more incentives to stay in the country post program and provide a second phase of funding. “Creating the conditions to not only attract great talent, but also to encourage them to stay. This is our focus. Through greater access to capital funds we believe that this is possible”, says the Executive Director of SUP. That is why this year the program launched a follow on fund called Start-Up Chile SCALE, were Startups will receive up to 60 million Chilean pesos (around USD 100,000) to grow their businesses from Chile to the world.
Regarding the program, improving the acceleration experience is also an area of focus, especially in regards to mentoring. For the latter, SUP will work with companies and successful alumni, who can help the newer generations overcome common startup traps.
Beyond the changes, one thing is certain, Start-Up Chile is here to stay and grow. Chilean society has changed for good. But, there is still a lot of work to do to complete the transformation of Chile into a leading hub of innovation and entrepreneurship.