5 ms·

The Lure of Chilecon Valley

61 points by gphil 14y ago

tokenadult 14y ago
An interesting article about a project discussed from time to time here on Hacker News. It would be interesting to hear comments from HN participants in Chile about this paragraph from the article: "Another barrier to creating a vibrant start-up culture is Chile’s harsh bankruptcy regime, which makes it hard for those who fail to start afresh. Also, the economy is dominated by a few vast business empires and an extremely conservative bureaucracy. Ironically, this is threatening to stifle a peer-to-peer lending business that Mr Shea, Start-Up Chile’s founding father, recently launched."
- andrewcooke 14y ago
  the latter (large, often family-based businesses) is certainly true. also, earthquakes[ * ]. jeez. [ * ] http://earthquake.usgs.gov/earthquakes/eventpage/usb000d4jf#summary http://earthquake.usgs.gov/earthquakes/eventpage/usb000d4jf#...
  - funkaster 14y ago
    earthquakes are not a huge deal... unless you want to live in a coast city (and not because of the earthquake, but the tsunami), which you probably won't because most of the business are made in Santiago. Constructions regulations in Chile are very strict, and most of the buildings will have almost no impact even after an 8.0 earthquake like the one that happen a few years ago.
    - andrewcooke 14y ago
      it was a joke - a fairly strong one (the absolute magnitude was not so great, but it was pretty close) happened in santiago just as i was posting. [incidentally, i agree absolutely that this should not influence the choice of anyone to come here - at most, you will have an interesting story to tell someone when you go back home...]
- vpeters25 14y ago
  I grew up in Chile and although bankruptcy laws are harsh, labor laws are even harsher and unlikely to change given the political power of unions: Employers are mandated to give 30 days notice when laying off employees. They also have to pay 1 month per each year of employee service. (employee been there 9 years, you have to pay him monthly salary * 10 to let him go) This law is good for employee stability and help keeps salaries low (employees with several years of service are unlikely to quit and lose the accrued severance). However you cannot show up one morning, close the curtain and tell everybody "sorry, company ran out of money".
  - andrewcooke 14y ago
    in practice, if you employ a local as part of startup chile you will be hiring them as self-employed contractors (it's incredibly easy to be self-employed in chile). and the above does not apply. however, the above shows the kind of clout the richer classes have here. despite this being a question about conservative bureaucracies and super-rich family businesses, the unions somehow get blamed. i can remember my bosses complaining about "worker mobility" in the one chilean company i worked for - it suddenly wasn't an issue the day i resigned. [edit: one thing i think that startup chile companies should use to their advantage is the idea of an "american working culture". the chilean culture is to do very little for very long hours. in contrast, you should be able to sell something more like "we want you to work your fucking ass off, but only for 8 solid hours a day". at least for me, that would be a huge incentive. however i don't know if it works so well for young (just out of uni) chileans, who may not yet have the experience to see what a good deal it really is. chilean working hours are the second longest in the oecd, behind only s korea - http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL# http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL#. edit2: whoa that's changed! they are now in third place. curious. they were second earlier this year - http://www.acooke.org/cute/LongWorkin0.html http://www.acooke.org/cute/LongWorkin0.html exactly who to blame for this is unclear, at least to me. while i am not sympathetic to people who simply blame the unions in a country where the gini coefficient is so high (see above) there is clearly a problem. politics are very polarized - people may not understand that doesn't mean just communists, it also means raving fascists at the other end of the spectrum (if you speak spanish, peruse http://www.google.cl/search?q=chacarillas+1977 http://www.google.cl/search?q=chacarillas+1977 - if you dig around you'll find a list showing how many are now in positions of power). i hate to say it, but what the country really needs is some kind of tony blair who can find a populist middle ground that creates space for dialogue.]
- ChuckMcM 14y ago
  I wondered this too, I sometimes get a chance to talk to foreign representatives who are tasked with creating the '<your country here>' version of Silicon Valley. I've gotten it down to a few bullets: 1) A pool of risk tolerant capital. You need the capital to start the businesses, people pitch the money men for seed, series A - D, rounds. 2) A lack of regulation on competition. You need to understand that existing, powerfully connected, companies are going to get disrupted and you need to prevent them from killing off the startups. 3) A failure tolerant culture. You need to understand that Silicon Valley is awash in failures, they are everywhere, but they don't have the same sort of stigma they might elsewhere. This disassociation between personal failure and startup failure is key. Typically, the first challenge is that culturally the company sees failure as a problem for the individual "He failed at his business" which needs to morph into "One of the businesses he started (positive affirmation) didn't take off. (business failed, he didn't)" That is hard for a lot of people who have historically thought of businesses as things you put your whole life into. The next thing is pointing out to powerful people that their 'friends' will ask them to kill the very thing they are trying to start when it starts costing them money. To understand a successful startup you have to understand that if they are successful they start out by re-directing capital flow to (or through) them which funds their growth. I've used AirBnB a couple of times as a great example of this (although Uber works as well). Here is a startup which is growing by taking money that would have gone to Hotel chains, and instead putting it into the hands of these non-hoteliers. So the Hotels are going to be irritated and try to stop it, be prepared for that. The challenge is that the impression people start with is that 'Silicon Valley' is composed of startups which are always new "green field" businesses that bring great returns to modest investment. Not realistic at all.
- funkaster 14y ago
  There's also a cultural thing about this: failing is often looked as a bad thing in Chile (maybe South America). This is slowly changing, but we still need to inject the idea that failing is just part of the learning process. About the empires and monopolies, totally true. Also bureaucracy... although it's improving now (also slowly :P)
SkyMarshal 14y ago
That name doesn't quite work. Sounds more like a valley of con men in Chile, than the Chilean Silicon Valley.
- neutronicus 14y ago
  To me, it sounds like delicious culinary convention in a valley. Not a negative.
  - SkyMarshal 14y ago
    That was my second thought too. Either way, not exactly what was intended.
batgaijin 14y ago
Do you have to incorporate in Chile to participate in Startup Chile? Or do you only have to consider employing local people/making it your hq?
- andrewcooke 14y ago
  neither - http://startupchile.org/about/faqs/ http://startupchile.org/about/faqs/
djb_hackernews 14y ago
I am in Startup Chile as a technical cofounder. I found my team via a post on hackernews. I can answer questions, but the one thing that I don't think any other incubator program has is the diversity and community. Some of us had dinner last night, and at the table were at least 9 nationalities represented, which is totally normal in startup chile. And they all have a common passion of technology, business, and innovation. The program self organizes into topical groups, and all in the name of information sharing. I truly believe the success of the program hinges on this network. Santiago is safe, just like the rest of the country, and the economic development arm of the govt is very aggressive. I believe they are matching 50% of private funding for economic development, and it is common for startup chile graduates to get some of this funding if they decide to stay in Chile. (We were just awarded a grant to help internationalize and promote our business outside of Chiles borders, for instance) We met with a large well respected law firm yesterday to look into incorporating here, and they are also modelling the SV/NYC pro bono/deeply discounted rates for startups, which is great sign and definitely needed. Lots of opportunity down here for someone that wants to be part of an amazing community.
- partisan 14y ago
  Would you recommend the program for someone with a family? Do you see this much in your group?
  - djb_hackernews 14y ago
    My partner is married, and I know of several teams with spouses and children. Some have come with their entire families, some have not. It's certainly possible, a bit of an adventure for sure, and I feel like a lot of people with families live outside of Santiago (even though there are family friendly suburbs in city limits). You are free to live anywhere in Chile, including Easter Island. Though living in Santiago makes the monthly paperwork meetings easier.
JVIDEL 14y ago
I been checking StartupChile for a while but the one thing keeping me from applying is that many ex-alumni have complained about the lack of a proper investors network in Chile to provide growth capital once the program is over. Some have moved overseas or back home with their new companies, which is sort of the opposite of what this program is all about: creating a startup ecosystem in Chile Companies leaving the country after seed stage kinda defeats the purpose of it.
- nico 14y ago
  I don't know if the goals of StartupChile have changed, but the original goal of the program was to build a network in the global startup/venture community and connect Chile to the rest of the world, which I think they've done very well so far.
- nirvana 14y ago
  Startup Chile doesn't really care too much where you're located after the program. If you move to the states and raise a couple million bucks they will be pleased as punch and it looks good for them-- they consider it a success for themselves. The goal is to bring entrepreneurs to chile, and have them interact with chileans. And the program is very successful at that-- many of the companies hire chileans and everyone spends some time directly helping bootstrap entreprenurism in chile. For example, one of the things we did was help chileans work on their business ideas. A lot of the companies end up with deeper ties to chile. Some take on Chileans as co-founders, others as employees, and a minority, but a significant one, stay in chile after the program ends, even though you don't have to.
EliRivers 14y ago
"There was the founder of Kwelia.com, which makes software that helps landlords mint more money from their properties" Is that really the economist I'm reading? If even they're getting sick of the rentier class the revolution can't be far behind!
- pchristensen 14y ago
  "makes software that helps $BUSINESS_OWNERS mint more money from their $BUSINESS_ASSETS" Pretty much every B2B software can be described in the same sentence - what else would landlords do with their properties?
nirvana 14y ago
I'm in Chile as a cofounder on a team with multiple nationalities. This article, unlike most, focuses on the visa aspect and the fact that the USA is hostile to foreigners who want to start companies there. This is a huge point. Chile has relatively straightforward residency permit, and after getting your a 1 year permit extended once (eg: being there 2 years) they have a straightforward permanent residency process. For us, this is pretty appealing for after we leave the Startup Chile program. After all, we can't go back to either of our home countries because if we do the other half of the founding team will be considered "aliens" and have a very difficult process of getting residency and work permits, that would be ongoing-- and that's even assuming we can get permission. Chile is not perfect- there's a lot of bureaucracy, the business culture is often lackadaisical, and it is a first world country, so it is not like we're living in paradise on a discount (well, only a slight discount.) But they are happy to have us live and work here, and have a variety of programs to support starting businesses. In fact, I've heard that private investment is inhibited to some extent because here, when someone talks about getting financial support for a startup, everyone just assumes the government will pay for it.
- SimHacker 14y ago
  Hey, how can I contact you besides replying to one of your most recent posts? Apparently HN doesn't have a private mail system, so this is the only way I can reply after the discussion has been locked. You wrote a ridiculous ad-hominem attack to my post calling you on your bullshit a while ago, that I didn't see until now, and I'd like to follow up. http://news.ycombinator.com/item?id=4435852 http://news.ycombinator.com/item?id=4435852 You accused me of being stupid and not being able to support my claim, but of course I can: http://www.beststuff.com/audiovideo/connectedtv-turns-palm-handheld-into-tv-guide-and-remote-control.html http://www.beststuff.com/audiovideo/connectedtv-turns-palm-h... http://www.pencomputing.com/palm/Pen44/connectedTV.html http://www.pencomputing.com/palm/Pen44/connectedTV.html Do you really still believe Apple invented finger gestures? That's very naive -- you should do some research before calling people names.

61 points by gphil 14y ago

An interesting article about a project discussed from time to time here on Hacker News. It would be interesting to hear comments from HN participants in Chile about this paragraph from the article: "Another barrier to creating a vibrant start-up culture is Chile’s harsh bankruptcy regime, which makes it hard for those who fail to start afresh. Also, the economy is dominated by a few vast business empires and an extremely conservative bureaucracy. Ironically, this is threatening to stifle a peer-to-peer lending business that Mr Shea, Start-Up Chile’s founding father, recently launched."

andrewcooke 14y ago
the latter (large, often family-based businesses) is certainly true. also, earthquakes[ * ]. jeez. [ * ] http://earthquake.usgs.gov/earthquakes/eventpage/usb000d4jf#summary http://earthquake.usgs.gov/earthquakes/eventpage/usb000d4jf#...
- funkaster 14y ago
  earthquakes are not a huge deal... unless you want to live in a coast city (and not because of the earthquake, but the tsunami), which you probably won't because most of the business are made in Santiago. Constructions regulations in Chile are very strict, and most of the buildings will have almost no impact even after an 8.0 earthquake like the one that happen a few years ago.
  - andrewcooke 14y ago
    it was a joke - a fairly strong one (the absolute magnitude was not so great, but it was pretty close) happened in santiago just as i was posting. [incidentally, i agree absolutely that this should not influence the choice of anyone to come here - at most, you will have an interesting story to tell someone when you go back home...]
vpeters25 14y ago
I grew up in Chile and although bankruptcy laws are harsh, labor laws are even harsher and unlikely to change given the political power of unions: Employers are mandated to give 30 days notice when laying off employees. They also have to pay 1 month per each year of employee service. (employee been there 9 years, you have to pay him monthly salary * 10 to let him go) This law is good for employee stability and help keeps salaries low (employees with several years of service are unlikely to quit and lose the accrued severance). However you cannot show up one morning, close the curtain and tell everybody "sorry, company ran out of money".
- andrewcooke 14y ago
  in practice, if you employ a local as part of startup chile you will be hiring them as self-employed contractors (it's incredibly easy to be self-employed in chile). and the above does not apply. however, the above shows the kind of clout the richer classes have here. despite this being a question about conservative bureaucracies and super-rich family businesses, the unions somehow get blamed. i can remember my bosses complaining about "worker mobility" in the one chilean company i worked for - it suddenly wasn't an issue the day i resigned. [edit: one thing i think that startup chile companies should use to their advantage is the idea of an "american working culture". the chilean culture is to do very little for very long hours. in contrast, you should be able to sell something more like "we want you to work your fucking ass off, but only for 8 solid hours a day". at least for me, that would be a huge incentive. however i don't know if it works so well for young (just out of uni) chileans, who may not yet have the experience to see what a good deal it really is. chilean working hours are the second longest in the oecd, behind only s korea - http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL# http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL#. edit2: whoa that's changed! they are now in third place. curious. they were second earlier this year - http://www.acooke.org/cute/LongWorkin0.html http://www.acooke.org/cute/LongWorkin0.html exactly who to blame for this is unclear, at least to me. while i am not sympathetic to people who simply blame the unions in a country where the gini coefficient is so high (see above) there is clearly a problem. politics are very polarized - people may not understand that doesn't mean just communists, it also means raving fascists at the other end of the spectrum (if you speak spanish, peruse http://www.google.cl/search?q=chacarillas+1977 http://www.google.cl/search?q=chacarillas+1977 - if you dig around you'll find a list showing how many are now in positions of power). i hate to say it, but what the country really needs is some kind of tony blair who can find a populist middle ground that creates space for dialogue.]
ChuckMcM 14y ago
I wondered this too, I sometimes get a chance to talk to foreign representatives who are tasked with creating the '<your country here>' version of Silicon Valley. I've gotten it down to a few bullets: 1) A pool of risk tolerant capital. You need the capital to start the businesses, people pitch the money men for seed, series A - D, rounds. 2) A lack of regulation on competition. You need to understand that existing, powerfully connected, companies are going to get disrupted and you need to prevent them from killing off the startups. 3) A failure tolerant culture. You need to understand that Silicon Valley is awash in failures, they are everywhere, but they don't have the same sort of stigma they might elsewhere. This disassociation between personal failure and startup failure is key. Typically, the first challenge is that culturally the company sees failure as a problem for the individual "He failed at his business" which needs to morph into "One of the businesses he started (positive affirmation) didn't take off. (business failed, he didn't)" That is hard for a lot of people who have historically thought of businesses as things you put your whole life into. The next thing is pointing out to powerful people that their 'friends' will ask them to kill the very thing they are trying to start when it starts costing them money. To understand a successful startup you have to understand that if they are successful they start out by re-directing capital flow to (or through) them which funds their growth. I've used AirBnB a couple of times as a great example of this (although Uber works as well). Here is a startup which is growing by taking money that would have gone to Hotel chains, and instead putting it into the hands of these non-hoteliers. So the Hotels are going to be irritated and try to stop it, be prepared for that. The challenge is that the impression people start with is that 'Silicon Valley' is composed of startups which are always new "green field" businesses that bring great returns to modest investment. Not realistic at all.
funkaster 14y ago
There's also a cultural thing about this: failing is often looked as a bad thing in Chile (maybe South America). This is slowly changing, but we still need to inject the idea that failing is just part of the learning process. About the empires and monopolies, totally true. Also bureaucracy... although it's improving now (also slowly :P)

SkyMarshal 14y ago

That name doesn't quite work. Sounds more like a valley of con men in Chile, than the Chilean Silicon Valley.

neutronicus 14y ago
To me, it sounds like delicious culinary convention in a valley. Not a negative.
- SkyMarshal 14y ago
  That was my second thought too. Either way, not exactly what was intended.

batgaijin 14y ago

Do you have to incorporate in Chile to participate in Startup Chile? Or do you only have to consider employing local people/making it your hq?

andrewcooke 14y ago
neither - http://startupchile.org/about/faqs/ http://startupchile.org/about/faqs/

djb_hackernews 14y ago

I am in Startup Chile as a technical cofounder. I found my team via a post on hackernews. I can answer questions, but the one thing that I don't think any other incubator program has is the diversity and community. Some of us had dinner last night, and at the table were at least 9 nationalities represented, which is totally normal in startup chile. And they all have a common passion of technology, business, and innovation. The program self organizes into topical groups, and all in the name of information sharing. I truly believe the success of the program hinges on this network. Santiago is safe, just like the rest of the country, and the economic development arm of the govt is very aggressive. I believe they are matching 50% of private funding for economic development, and it is common for startup chile graduates to get some of this funding if they decide to stay in Chile. (We were just awarded a grant to help internationalize and promote our business outside of Chiles borders, for instance) We met with a large well respected law firm yesterday to look into incorporating here, and they are also modelling the SV/NYC pro bono/deeply discounted rates for startups, which is great sign and definitely needed. Lots of opportunity down here for someone that wants to be part of an amazing community.

partisan 14y ago
Would you recommend the program for someone with a family? Do you see this much in your group?
- djb_hackernews 14y ago
  My partner is married, and I know of several teams with spouses and children. Some have come with their entire families, some have not. It's certainly possible, a bit of an adventure for sure, and I feel like a lot of people with families live outside of Santiago (even though there are family friendly suburbs in city limits). You are free to live anywhere in Chile, including Easter Island. Though living in Santiago makes the monthly paperwork meetings easier.

JVIDEL 14y ago

I been checking StartupChile for a while but the one thing keeping me from applying is that many ex-alumni have complained about the lack of a proper investors network in Chile to provide growth capital once the program is over. Some have moved overseas or back home with their new companies, which is sort of the opposite of what this program is all about: creating a startup ecosystem in Chile Companies leaving the country after seed stage kinda defeats the purpose of it.

nico 14y ago
I don't know if the goals of StartupChile have changed, but the original goal of the program was to build a network in the global startup/venture community and connect Chile to the rest of the world, which I think they've done very well so far.
nirvana 14y ago
Startup Chile doesn't really care too much where you're located after the program. If you move to the states and raise a couple million bucks they will be pleased as punch and it looks good for them-- they consider it a success for themselves. The goal is to bring entrepreneurs to chile, and have them interact with chileans. And the program is very successful at that-- many of the companies hire chileans and everyone spends some time directly helping bootstrap entreprenurism in chile. For example, one of the things we did was help chileans work on their business ideas. A lot of the companies end up with deeper ties to chile. Some take on Chileans as co-founders, others as employees, and a minority, but a significant one, stay in chile after the program ends, even though you don't have to.

EliRivers 14y ago

"There was the founder of Kwelia.com, which makes software that helps landlords mint more money from their properties" Is that really the economist I'm reading? If even they're getting sick of the rentier class the revolution can't be far behind!

pchristensen 14y ago
"makes software that helps $BUSINESS_OWNERS mint more money from their $BUSINESS_ASSETS" Pretty much every B2B software can be described in the same sentence - what else would landlords do with their properties?

nirvana 14y ago

I'm in Chile as a cofounder on a team with multiple nationalities. This article, unlike most, focuses on the visa aspect and the fact that the USA is hostile to foreigners who want to start companies there. This is a huge point. Chile has relatively straightforward residency permit, and after getting your a 1 year permit extended once (eg: being there 2 years) they have a straightforward permanent residency process. For us, this is pretty appealing for after we leave the Startup Chile program. After all, we can't go back to either of our home countries because if we do the other half of the founding team will be considered "aliens" and have a very difficult process of getting residency and work permits, that would be ongoing-- and that's even assuming we can get permission. Chile is not perfect- there's a lot of bureaucracy, the business culture is often lackadaisical, and it is a first world country, so it is not like we're living in paradise on a discount (well, only a slight discount.) But they are happy to have us live and work here, and have a variety of programs to support starting businesses. In fact, I've heard that private investment is inhibited to some extent because here, when someone talks about getting financial support for a startup, everyone just assumes the government will pay for it.

SimHacker 14y ago
Hey, how can I contact you besides replying to one of your most recent posts? Apparently HN doesn't have a private mail system, so this is the only way I can reply after the discussion has been locked. You wrote a ridiculous ad-hominem attack to my post calling you on your bullshit a while ago, that I didn't see until now, and I'd like to follow up. http://news.ycombinator.com/item?id=4435852 http://news.ycombinator.com/item?id=4435852 You accused me of being stupid and not being able to support my claim, but of course I can: http://www.beststuff.com/audiovideo/connectedtv-turns-palm-handheld-into-tv-guide-and-remote-control.html http://www.beststuff.com/audiovideo/connectedtv-turns-palm-h... http://www.pencomputing.com/palm/Pen44/connectedTV.html http://www.pencomputing.com/palm/Pen44/connectedTV.html Do you really still believe Apple invented finger gestures? That's very naive -- you should do some research before calling people names.