When we talk about capitalWe are not referring only to money, but to the synergy that can be generated between those who have money in search of an income and the needs that entrepreneurs have to bring their products and services to market. This synergy is often reflected in the ability of these new companies to generate jobs, innovation, create infrastructure and purchase the goods and supplies necessary to meet the needs of their customers.
The knowledge, or know how, refers to the human capital or talent required for the new business to take off. Typically, in a technology company, these talents come from non-traditional knowledge areas such as software developers or programmers, architects and user experience designers, and even digital marketers. Any worker who has the knowledge, attitude and motivation needed to deliver the value proposition designed by the new company to its clients is welcome.
And the third factor is the rebellion, which has at the center the idea of breaking with the status quo, and generating the famous disruption in the sector where the entrepreneurship is developed.
Analyzing this X-ray and observing which players are in Argentina, there is no doubt that this ecosystem has an excellent mix of the factors defined by Colin. The fact that, to date, there are already 11 Argentine unicorns is a confirmation.
The startups are those enterprises with high growth potential that are in their earliest stage of development. They are the center of this entrepreneurial ecosystem. The rise of technology companies was driven by investors who, driven by excess liquidity at a global level caused by the high monetary issuance of central banks in the context of the pandemic and in the face of the great potential for market growth, and availability of talents, in the Latin American region; They find it attractive to invest in ventures with the capacity to scale and satisfy the demand of their clients, in the region and in the world.
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Gentileza: Timov
Taking these three factors, which occur to a lesser or greater extent throughout Latin America, we can find certain combinations to consider or analyze for Argentina.
Capital + Knowledge. When capital meets talent in the absence of rebellion, innovation tends to focus on established companies, moving after two clear objectives: renew their products and improve the efficiency of their operations. As pointed out Clayton Christensen, an American academic and business consultant who developed the theory of “disruptive innovation”; this type of innovation destroys jobs and frees up capital that is then invested elsewhere. This often only fosters the income-generating economy, without stimulating economic and social growth.
Capital only. Countries and regions with almost unrestricted access to certain natural resources, such as oil in the Persian Gulf, or that have essential and coveted infrastructure, such as a canal in the case of Panama; They are a good example of for this type of economies based purely on rent seeking. Investments in these types of economies are usually dominated by real estate, natural resources and public services where knowing how to do is not rewarded and rebellion is often repressed. In these economies, lobbying is a fundamental component for development and the attack on innovation is commonplace.
Knowledge only. This case is quite simple to interpret. If there is talent, but there is not enough capital to invest or rebellion, then the way to create value is through the sale of the talent resource, or knowledge, to more developed economies. Such is the case of India, which developed this model for a long time. This type of economy, based on outsourcing, is characterized by extremely low margins that do not contribute significantly to economic development.
Knowledge + Rebellion. Playground. In such an economy, people can appear to be entrepreneurs when in reality they are more like children without the right (or the means) to grow up. Small-scale ideas and experiments just fade away. When the economy lacks capital, local rebels cannot move from idea to implementation. Everything remains a quasi-academic experiment, because in one way or another they were denied the necessary capital to implement it. In these types of economies, where research is trapped in the academic world, or the growth of new companies is impeded due to hostile regulations and lack of capital; innovation is financed mainly by the government, through research grants or subsidies. Few jobs are created (except those that administer government subsidies) and it does not create value on a large scale.
We could go on to enumerate combinations of this type and recognizable examples in the world of the different economies that are characterized by these conditions.
I would like to highlight one especially.
Capital + Knowledge + Rebellion. This combination, we can call it as the entrepreneurial economy. Silicon Valley is the most obvious and recognizable example. Originally, the capital came from the United States Department of Defense. Then the first private venture capital funds emerged. Today, it is common to see more traditional investors like Goldman Sachs injecting capital into these types of economies. Knowledge has been around since the late 1940s. Many of the leading business and technology schools are located in this region. And, rebellion, is a mentality that stands out compared to other regions of that country. Many rebels have gathered there, from early motorcycle clubs to artists, hippies, student leaders, gay activists and, of course, computer scientists. Silicon Valley is the by-product of those three ingredients that are mixed and that led this region to become the fifth economy in the world with a gross domestic product greater than 3 billion dollars; only behind the United States, China, Japan and Germany.
From this perspective, the most assimilable economic model for Argentina is definitely the latter. Its internal characteristics, its resources and talents, its trajectory creating successful global ventures, its culture and even its time zone; make Argentina a country with a high potential for entrepreneurial development in digital technologies.
What is the contribution of the bootcamp format to the Argentine entrepreneurial ecosystem?
An entrepreneurial ecosystem enables the creation of companies with greater potential to scale nationally, regionally or globally. Without an entrepreneurial ecosystem, we would not be able to transform rebellion into products that add value to society as a whole, and venture investors could not obtain higher returns than that offered by the traditional public capital market. As we saw earlier, the third ingredient for this formula is knowledge.
Knowledge in an entrepreneurial ecosystem comes from the experience of the people who make it up and from their training. The generation and training of talent, today, must be sought in areas hitherto unknown by traditional educational systems. It is there where learning methodologies such as bootcamp, that are in full swing in the region, can provide startup founders, and their teams, with the technical skills necessary for the development and delivery of their value propositions to the market.
The bootcamps deliver these skills intensively, in short periods of time, in which people can go from not knowing a particular technology, to developing at a practical level and allowing them to acquire, at the same time, the experience and knowledge necessary to deliver value in these nascent companies.
Co-founder of Le Wagon in Latin America.
