Four Steps To Building Real Entrepreneurship In Latin America: A Sobering Assessment From Vivek Wadhwa

By guest author Kirk Laughlin of Nearshore Americas

Vivek Wadhwa, currently a visiting scholar at UC Berkeley, gives Latin America poor grades. The problem with Latin America’s startup culture is it is afraid of risk, says Wadhwa, one of the nation’s experts on tech entrepreneurship and someone who has nearly perfected the art of business-appropriate bluntness.

Wadhwa, who is also a columnist at BusinessWeek and TechCruch and a professor at Duke University, has started to pay more attention to Latin America. Despite his tough criticism, there are reasons he’s starting to look southward. Wadhwa is passionate about nurturing startups, and he sees lots of potential in Latin America. But when we spoke to him recently, Wadhwa didn’t hold back in his critique of the region’s entrepreneurial environment. He shared a series of remarks that sounded quite similar to the observations made in this strongly worded analysis from former Costa Rican president, Oscar Arias.

Wadhwa has been one of several consultants Chile’s government leadership turned to in forming the increasingly well-known Start-up Chile program. Overall, Wadhwa believes the “desire is there” to build a formidable startup community, but that there “are lots of impediments.” We pulled out four of the top Wadhwa talking points from our interview with him:

1. The knowledge is there, but there is a fear of failure. Wadhwa observes that the community of professionals looking to build tech business in Latin America are just too worried that something will go wrong. So, they are often effectively paralyzed with doubt. “The Chileans and Brazilians, they take what they read on TechCrunch and take it far too seriously,” he says, emphasizing the need to explore, debate, and fumble around with ideas in a more liberalized way.

2. There is not community exchange. “The spirit of mentoring and giving is not as evolved as it should be,” says Wadhwa. “People are very secretive about what they’re doing.” Wadhwa contrasts this with what has been one  key hallmark of Silicon Valley’s rise. “The success of Silicon Valley is because of a spirit of openness and sharing.”

3. More foreign imports are needed. Wadhwa is a big advocate of bringing in fresh ideas and fresh talent from other markets to stimulate new approaches and ways of doing business. A core element of Start-up Chile is the drawing in of entrepreneurs from around the world, who receive a $40,000 stipend from the government to build their businesses in Chile.

4. Create sources of funding. Wadhwa points to a common weakness here by noting that many entrepreneurs in Latin America may have an innovative product or service, but there is a good chance it won’t see the light of day without appropriate funding. He points to Chile as a place where the concept of “building global products” needs to begin to take root, but in order to do that, more angels, VCs and other seed capital sources have to flourish.