from Hacker News

Why this investor abandoned setting up a startup fund in Chile

by xiaomei on 12/26/11, 5:17 AM with 20 comments

  • by vimes656 on 12/26/11, 11:01 AM

    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.

  • by pelle on 12/26/11, 3:31 PM

    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...

    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... 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.

  • by ricardobeat on 12/26/11, 6:39 AM

    > 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.... USP is also 100 positions ahead of Chile's PUC on the 2011 world university rankings.

  • by Geekette on 12/27/11, 4:21 PM

    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...

    Nathan Lustig http://www.nathanlustig.com/2011/12/26/arnon-kohavi-chilean-...

    Rich Yang http://thenextweb.com/la/2011/12/27/start-up-chile-entrepren...

  • by andrewcooke on 12/26/11, 11:59 AM

    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.

  • by waltersilva on 12/30/11, 3:51 PM

    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.

  • by jorgecastillo on 12/26/11, 9:51 AM

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

  • by known on 12/26/11, 2:29 PM

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