I am a firm believer Brazilian start ups should focus internally, but be able to be scalable abroad. By being tied to the US market I think we fail to reach the potential our country has.
Instead of simply copying US businesses Brazilians should innovate in markets that make sense for Brazil. Focus on local customers in services that can be expanded worldwide.
To me, simply trying to tie with U.S. businesses will cause Brazil to never develop a strong startup ecosystem as it is seem in countries like India and China.
> Instead of simply copying US businesses Brazilians should innovate in markets that make sense for Brazil. Focus on local customers in services that can be expanded worldwide.
Interesting point of view. Do you have any example about that in mind?
Brazil is the worlds vice-champion at fiscal complexity (looses only to India). Few things invented here would make sense abroad.
Brazil occupies the shameful 81th spot at the GEDI (Global Entrepreneurship & Development Index). It is behind way poor countries like Bolivia. What Brazil needs is a f*cking genocide, it is unbelievable that a country this blessed by nature can be screwed like this by his people.
By blessed I mean: no hurricanes, no earthquakes, no snow (meaning two crops a year), 80% of the worlds drinkable water, plenty of land, beautiful shores, the list goes on...
I agree with you that startups in Brazil should focus on the internal market first. But Rudi also has a point that for many of the startups here, very few look past Brazil's borders, loosing relevance and being exposed to external competitors once they consolidated their markets outside.
Brazil is rather expensive and an extremely bureaucratic place to start a company in, so there is less competition when starting up. That is the only advantage of starting a business here, so doing one but focusing on the outside market before you validate a business model isn't optimal, you would be better off starting in the US instead.
Yet, brazilians have little money to spend, and are amost completely unable to invest (because of too hight cost of life, insecurity, and a thousand other factors).
It's quite hard to get sucessful selling for people that can't buy.
I am sorry, but I think brazilians buys things all the time, even the poor ones. They can buy term.
It is not the reason for startups complaints, I think the scenario is chaotic because they don't have money/mentoring adequate for early stage startups. That is the reason they are always looking for some copy cats.
Another problem is the culture. People are not used to buy things online, but it is changing
Yes, we buy things all the time, even the poor ones.
What poor people don't have is a discritionary budget, they could use to buy stuff that a software startup is tipically able to sell.
And related, Brazil is quite big, so you can grow a company to a huge size only selling to the few richer brazilians. That's just much harder to accomplish than doing the same at a country like the US. That means that the normally 1 in 100 (or is it smaller) odds for a startup there will reduce a few orders of magnitude here.
We (www.lalina.com.br) are a Brazil only startup and have had some success with a different model. Our head office is in NYC (better access to talent) and we just opened our office in SP. We are beauty only and a traditional business model. We discovered early on many of the points this article highlights and confirm confirm most of them. Talent is a huge problem in brazil and the startup culture is only in some small circles. Not to mention vc's are very unsophisticated and do not offer much value except for cash and what they read off investment blogs, granted there are a few exceptions.
That's interesting, thanks. Why do you think the talent pool is a huge problem? Is it about cost? Lacking of skills (if so, which ones are these, for instance)? The best people are already taken or...?
Cost is fairly cheap is more about security and vision. No one is really interested in equity just a pay check. Skill is also a problem we are actively trying to hire developers for the SP office but besides .net and php we have had no success finding python / django or some of the modern framework guys.
that's cool, thanks :) in case you think that disqualifies me, i didn't major. i am a college dropout (mechanical engineering), but i code since i was 13.
my python skills are strong, but my django skills are somewhat rusty. i can learn it pretty fast thought.
could you please drop an email from lalina.com.br
contacto?
github and anything you think is relevant. We hire and seek talent based on the a new models and do not care about cv's and standard credentials. If you are on HN its a already a good start.
It can make sense do grow the biz dev part of the business in the US while hiring the engineers in Brazil - this is what Waze did (replace Brazil with Israel) by the way. In Silicon Valley people refer to this kind of company structure as the "israeli model".
I'm a senior consultant (mostly rails) and I find much easier to find clients in the US (CA, NY) and Europe than locally. Local rails boutiques are charging $60/h and senior/experienced developers/architects have a hard time finding startups that could afford hiring "competitive" people.
p.s.
by "competitive" I mean experienced people that could be hired remotely at SF rates.
> but besides .net and php we have had no success finding python / django or some of the modern framework guys.
I am fairly active in the local Python community (we probably bumped into each other by now) and I think I can help you find the talent you need. Ping me.
That would be fantastic. and I would love to chat. Also our space in SP is fairly large and we are looking to give/ mentor early stage companies. No equity or anything just to do our part and catalyze the scene bit by bit.
Question is: are you guys willing to pay decent salary? I've seen this "can't find local work force" talk a lot, but most of them want local work force paying minimum wage (when comparing to other places in the world).
About equity: I don't see anything wrong in wanting a pay check. IMO equity is a plus a company can offer employees as a way to help hold talent - not salary substitute.
Can you please put a number on it? The "benefits, vacation, hardware" part does not mean much, because they are required by Brazilian labor law.
My profile: Sr. Developer/Architect with 8+ years experience in Django. I have received (and turned down) offers in São Paulo for R$12.000/month (CLT), to what some people in my network said it would be "good, but not extraordinary". I've heard people saying they were making less, some saying were making more. One of them mentioned he was making R$20k/month CLT, but admittedly he was way out of the curve.
In the end, I moved to Berlin, a city that is less expensive than São Paulo and where you can get a €6000/month salary without much trouble, and freelance contracts in the €75-80/hour range.
But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
Thanks for the numbers. Out of curiosity, out of those who said they were "making more", how many are working in startups? (and not in consulting, public sector, finance, etc)
No startup in the strict sense. On the other hand, the ones working on startups were not getting any equity - it was just that the salaries were lower. But there were a few guys doing Java stuff in BigCos whose salaries were below average. So it is not just a matter of "startup == low salary".
Curiously, the one making R$20k/month got the more "startupy" job. He is working at an advertising agency as the "Director of New Businesses in Digital Media". Basically he is in the EIR of an ad agency, creating new products, websites, generating tools and services with a team of 3-4 people that he needs to manage.
Wow, that's exactly my situation. Brazilian, 8+ years experience in diverse technologies, got frustrated with the lack of professionalism in Brazilian companies and moved to Berlin where I'm making around 5 times what I made in Rio de Janeiro, with the difference that Berlin is much cheaper to live in.
As parent said: But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
that's basically the biggest problem with the brazilian tech scene. people seem to think that developers are glorified typist so they pay really small salaries and then complain that the work is not good enough.
i find amazing/terrible that people think that a 2500 usd/mo salary for a senior guy is a lot.
funny -- about a year ago i was unemployed and trying to find python/django/twisted/tornado work -- the only one i found was offering me about ~3000 brl/month (no equity. which is quite insulting for someone that has worked with python for the past 7y) so i 100% gave up on trying to find work here in são paulo that paid reasonably well or even with some equity.
for me, it's preferable to work as a contactor to an american startup than work for a brazilian startup -- at least the american one knows how much i'm worth and will pay accordingly.
We saw this first hand. So many developers have been jammed and "slaved" with low salaries, managers who understand nothing about development/time ratios that make unreasonable requests that many people we have talked with are just scared to even move out of fear they will loose what they have... Ps if you are interested in full time work please drop us an email and say hi : kaya@lalina.com.br
Personally, i believe education is the biggest problem around here. Starting at early ages, and going all the way to college, learning, getting involved with what matters and working is just not so common here. I am a college dropout (dropped from mechanical engineering), but i code since i was 13. And i am yet to meet any graduate that loves and/or knows so much about theoretical computer science as i do. People just want a comfortable job, they don't want to, or don't feel like they can, have an impact in the world (of course there are exceptions).
I agree education is a big problem in Brazil. IMO, the main issue is this culture around not asking questions so it won't look like you don't know something. As a consequence, getting involved and going into depth to really learn something just isn't that much encouraged because it would require, well, asking many many questions!
There's the "how do you dare question our assuptions" culture, that's way too widespread. There's a disdain for any display of competence, and punishment of competent people. There's a huge focus on learning theories, with no care at all about empirism.
Brazil needs a change in culture in order for the startup ecosystem to succeed.
Most of the people don't have the "I want to be an entrepreneur" mentality. They are looking for well paid careers when choosing the field they want to graduate in. Creating a startup does not even cross their minds because they are not aware that it is a possibility.
They want stability... like working for the government.
For the ones that want to be entrepreneurs, the mentality is either the mom and pop shop, where they will spend their lives on and never really make real money or the ones that happen to create big companies but stay in there forever as well.
VC's, Angels, investment, exit... a very low % of college students know what these are about.
I dare to say that Brazilians are not used to take risks... even the ones that are creating these copycats. Why do you think they are doing it this way? Less risk.
Disclosure: I am Brazilian and during my college days starting a company was not even talked about.
fully agree this is the single largest cultural problem I have seen as a gringo running a brazil only startup. Hiring is a pain despite amazing packages, great benefits and working with cool people in a SF style setup.
I think no large deal ever hapening outside of buscape and the second fact that most VC's got Nailed in the past 3 years paying high prices inthe ecommerce boom and are also writing off many of the investments is cooling the non existing startup scene.
That being said MSFT is opening an incubator in Rio.
Technical talent is there but the startup culture is not. And as you said most importantly an appetite for Risk.
Mom and pop shops are a huge source of job creation everywhere, and there is nothing wrong with opening up a bakery or a gadget shop. I'm always impressed by the number of nail salons and 'padarias' opening up. Brazil has a lot of entrepreneurs. The franchise market grows at double digits.
We you (and Rudi) are talking about is, specifically, tech companies. There you have a point.. college graduates are not familiar with the VC world and few talk about starting their own software company.
Taking risk in the US is different than in Brazil. The US has the LLC and bankruptcy laws, which shields the founders if it goes under. Brazil makes the people responsible for every financial commitment, and the bankruptcy laws are impossible to understand. If your company tanks, you personally go under too.
Disclosure: I'm also Brazilian and currently a co-founder at a São Paulo-based tech startup.
All of this about Brazilian entrepreneurship and ecosystem is only a reflection of the real problem. Brazil's problem is corruption and extremely concentration of wealth, granted by a corrupt government, the same since always. We still have regions that are ruled by families that received lands in the 1600s. Everybody that has money in Brazil have tons of ways to get richer without risk, because the brazilian government prioritizes and secures this kind of development, hiring their companies to do infrastructure projects, for example. And that is why our tax system is complex, or bank system "secure" and we have full employment (with low skill jobs) for a long time. It's enough to keep people occupied and the system running.
The irony is that only startups could save Brazil from this doomed scenario. And that is the reason why, until now, the ecosystem hadn't developed. But someday, this will be hacked.
Disclosure: I'm Brazilian and had my startup broken by Brazilian corrupcy.
> Could you tell us more about how corruption broke your start-up?
Our request for a national program to fund startups was accepted, we had R$200,000 granted for 1 year of investment. But after that, they stoped answer our emails, and 6 months later, they announced that we and a dozen more startups were removed from the program, without explain why. The program is ruled by laws and we should have the money, but sue the government in Brazil is totally worthless. 5 years to win, 10 years to receive. As I said before, we have a very well planned system for the things to stay wrong.
> What would need to change for start-ups like yours to have a better chance?
Have more and more connected hackers to work around the issues. And the investors start to see on them the way out, not in the copycats.
In Brazil we have a lot of ways to make money without risk, so this is one of the problems we are facing to get funding and when we pass through this obstacle we have to give a lot of equity for the investors.
This kind of relationship between founders and investors is very harmful and it is contributing to failure of brazilian startup scene.
Another point your post made very clear is the lack of entrepreneurs that already had success in tech startups. We have a lot of people pretending to be mentors, but none of them have any skills to do that. They never grown a business, or got to millions of users from zero. They just are assuming that they are mentors and are supported by the specialized media. Just impostors gaining money from lectures and classes.
And, unfortunately, I believe another problem we are facing is the culture. People are not open to use something new. Just few people are early adopter and it is a real problem for companies that need to achieve a critical mass to start running.
All the comments here could apply to the situation in Colombia, and probably other countries in the region (and maybe Spain, for what I hear from devs from there).
A lot of the money committed to help startups is lost in the incubators. I "win" a competition where the 90% of the money was labeled as "consulting & support" and the cash left was to buy things they say I could buy.
I participate in others programs, where I move to the very last stages and drop because the situation is not that better. In this point, I consider a waste of time trying for any incubator here (for example: You need to sign a contract that say you MUST give 50% of all your time doing "incubator activities" as helpful as hear somebody explaining about internet marketing. Even for the king of support that could be nice, reduce the startup capacity to work by half is not great. And for 6 months or more?).
I try several routes, programs and contest. A lot of "yeah your idea is amazing! (not that much, but..)" but honestly look like without having US 100.000/Sales at the start none of the terms are a advantage for a starting startup.
Here are the challenges, similar to the ones other say in this thread and other:
- Not great tech education. However, good talent here but:
- The talent available is spread in shitty jobs or is almost invisible. Like I say in https://news.ycombinator.com/item?id=7875627 some people are paid very badly, even for companies that could do better, and some people are insulated from the tech scene
- The community was huge around MS, when it was strong here. Now, is very disjoint, or that is my impression
- Not enough money liquity to hang around 3-8 months hacking. For example, I have my own apps but I need to stop working on them, do jobs for pay rent, and resume when I can. Because I'm independent at least I could try. People in full time jobs are out of luck if wanna build side projects
This is far harder that people in USA and other countries have, not impossible but this lead to:
- Get a cofounder is damm hard. I have a friend that I wish to have at my side, but he never get the nerve to drop from job (not that bad of a job). Others can't survive for more than 3 months. I have be independent this years mainly because my close family and myself is very relaxed & patient about money, and could live with less with not problem. But not everyone have the circumstances.
Probably some will say: Why not setup a nice side-project with monthly payments?
I have for more than 2 years looking how solve the problem of get money. Fastspring.com is the only that barely work for me, and Apple. In colombia, we are hit hard for all the drug traffic stuff (and some early crash about a pyramid scheme), so anything that could fly in seconds in USA is a wall here. For example, doing bitcoin here is like trying to buy radioactivity material. Is like banks hate anything that could help a startup..
Not even paypal work! You can't get money to the bank, you don't have stripe-like processors, the ones here are bizantine (and don't answer your mails or don't care for you). So the option is create a company in USA. And this is just one of several problems to overcome.
About investors:
Anyone that give you money, small or big, is your Boss. For live.
About get a loan:
We have https://www.datacredito.com.co, the "you have not pay bills, wall of shame". Who are there? Almost everyone!. For how long? How cares! So if a person is wealthy probably is ok, but the rest of us are toxic for get a loan (and must consider carefully wich one to get, so for example, with the intention of get a house is not good idea to default because your are dreaming of build a game!).
However at the bright side, I think the momentum is building. The situation is screaming of somebody smart enough to...
47 comments
[ 3.7 ms ] story [ 97.2 ms ] threadInstead of simply copying US businesses Brazilians should innovate in markets that make sense for Brazil. Focus on local customers in services that can be expanded worldwide.
To me, simply trying to tie with U.S. businesses will cause Brazil to never develop a strong startup ecosystem as it is seem in countries like India and China.
Interesting point of view. Do you have any example about that in mind?
Brazil occupies the shameful 81th spot at the GEDI (Global Entrepreneurship & Development Index). It is behind way poor countries like Bolivia. What Brazil needs is a f*cking genocide, it is unbelievable that a country this blessed by nature can be screwed like this by his people.
By blessed I mean: no hurricanes, no earthquakes, no snow (meaning two crops a year), 80% of the worlds drinkable water, plenty of land, beautiful shores, the list goes on...
Brazil is doomed.
Brazil is rather expensive and an extremely bureaucratic place to start a company in, so there is less competition when starting up. That is the only advantage of starting a business here, so doing one but focusing on the outside market before you validate a business model isn't optimal, you would be better off starting in the US instead.
It's quite hard to get sucessful selling for people that can't buy.
It is not the reason for startups complaints, I think the scenario is chaotic because they don't have money/mentoring adequate for early stage startups. That is the reason they are always looking for some copy cats.
Another problem is the culture. People are not used to buy things online, but it is changing
What poor people don't have is a discritionary budget, they could use to buy stuff that a software startup is tipically able to sell.
And related, Brazil is quite big, so you can grow a company to a huge size only selling to the few richer brazilians. That's just much harder to accomplish than doing the same at a country like the US. That means that the normally 1 in 100 (or is it smaller) odds for a startup there will reduce a few orders of magnitude here.
Its like the us in the 90's
my python skills are strong, but my django skills are somewhat rusty. i can learn it pretty fast thought.
just mail me at hi@alan.buzz
github and anything you think is relevant. We hire and seek talent based on the a new models and do not care about cv's and standard credentials. If you are on HN its a already a good start.
By the way our SP space in located in central and we are looking to give space to python and other developers who want to workon startups and ideas.
p.s. by "competitive" I mean experienced people that could be hired remotely at SF rates.
btw, i know a couple of guys that are interested in rails work here in SP if you need some help. you can contact me at fernando.takai at gmail.
I am fairly active in the local Python community (we probably bumped into each other by now) and I think I can help you find the talent you need. Ping me.
About equity: I don't see anything wrong in wanting a pay check. IMO equity is a plus a company can offer employees as a way to help hold talent - not salary substitute.
My profile: Sr. Developer/Architect with 8+ years experience in Django. I have received (and turned down) offers in São Paulo for R$12.000/month (CLT), to what some people in my network said it would be "good, but not extraordinary". I've heard people saying they were making less, some saying were making more. One of them mentioned he was making R$20k/month CLT, but admittedly he was way out of the curve.
In the end, I moved to Berlin, a city that is less expensive than São Paulo and where you can get a €6000/month salary without much trouble, and freelance contracts in the €75-80/hour range.
But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
Curiously, the one making R$20k/month got the more "startupy" job. He is working at an advertising agency as the "Director of New Businesses in Digital Media". Basically he is in the EIR of an ad agency, creating new products, websites, generating tools and services with a team of 3-4 people that he needs to manage.
As parent said: But in short, tell me you are actually paying R$18.000/month and I will send you my CV.
Entra em contato comigo, meu endereço é adelgado1313arrobagmailpontocom.
i find amazing/terrible that people think that a 2500 usd/mo salary for a senior guy is a lot.
for me, it's preferable to work as a contactor to an american startup than work for a brazilian startup -- at least the american one knows how much i'm worth and will pay accordingly.
There's the "how do you dare question our assuptions" culture, that's way too widespread. There's a disdain for any display of competence, and punishment of competent people. There's a huge focus on learning theories, with no care at all about empirism.
Brazilian education is completely fucked up.
Most of the people don't have the "I want to be an entrepreneur" mentality. They are looking for well paid careers when choosing the field they want to graduate in. Creating a startup does not even cross their minds because they are not aware that it is a possibility.
They want stability... like working for the government. For the ones that want to be entrepreneurs, the mentality is either the mom and pop shop, where they will spend their lives on and never really make real money or the ones that happen to create big companies but stay in there forever as well.
VC's, Angels, investment, exit... a very low % of college students know what these are about.
I dare to say that Brazilians are not used to take risks... even the ones that are creating these copycats. Why do you think they are doing it this way? Less risk.
Disclosure: I am Brazilian and during my college days starting a company was not even talked about.
I think no large deal ever hapening outside of buscape and the second fact that most VC's got Nailed in the past 3 years paying high prices inthe ecommerce boom and are also writing off many of the investments is cooling the non existing startup scene.
That being said MSFT is opening an incubator in Rio.
Technical talent is there but the startup culture is not. And as you said most importantly an appetite for Risk.
We you (and Rudi) are talking about is, specifically, tech companies. There you have a point.. college graduates are not familiar with the VC world and few talk about starting their own software company.
Taking risk in the US is different than in Brazil. The US has the LLC and bankruptcy laws, which shields the founders if it goes under. Brazil makes the people responsible for every financial commitment, and the bankruptcy laws are impossible to understand. If your company tanks, you personally go under too.
Disclosure: I'm also Brazilian and currently a co-founder at a São Paulo-based tech startup.
The irony is that only startups could save Brazil from this doomed scenario. And that is the reason why, until now, the ecosystem hadn't developed. But someday, this will be hacked.
Disclosure: I'm Brazilian and had my startup broken by Brazilian corrupcy.
Our request for a national program to fund startups was accepted, we had R$200,000 granted for 1 year of investment. But after that, they stoped answer our emails, and 6 months later, they announced that we and a dozen more startups were removed from the program, without explain why. The program is ruled by laws and we should have the money, but sue the government in Brazil is totally worthless. 5 years to win, 10 years to receive. As I said before, we have a very well planned system for the things to stay wrong.
> What would need to change for start-ups like yours to have a better chance?
Have more and more connected hackers to work around the issues. And the investors start to see on them the way out, not in the copycats.
This kind of relationship between founders and investors is very harmful and it is contributing to failure of brazilian startup scene.
Another point your post made very clear is the lack of entrepreneurs that already had success in tech startups. We have a lot of people pretending to be mentors, but none of them have any skills to do that. They never grown a business, or got to millions of users from zero. They just are assuming that they are mentors and are supported by the specialized media. Just impostors gaining money from lectures and classes.
And, unfortunately, I believe another problem we are facing is the culture. People are not open to use something new. Just few people are early adopter and it is a real problem for companies that need to achieve a critical mass to start running.
A lot of the money committed to help startups is lost in the incubators. I "win" a competition where the 90% of the money was labeled as "consulting & support" and the cash left was to buy things they say I could buy.
I participate in others programs, where I move to the very last stages and drop because the situation is not that better. In this point, I consider a waste of time trying for any incubator here (for example: You need to sign a contract that say you MUST give 50% of all your time doing "incubator activities" as helpful as hear somebody explaining about internet marketing. Even for the king of support that could be nice, reduce the startup capacity to work by half is not great. And for 6 months or more?).
I try several routes, programs and contest. A lot of "yeah your idea is amazing! (not that much, but..)" but honestly look like without having US 100.000/Sales at the start none of the terms are a advantage for a starting startup.
Here are the challenges, similar to the ones other say in this thread and other:
- Not great tech education. However, good talent here but: - The talent available is spread in shitty jobs or is almost invisible. Like I say in https://news.ycombinator.com/item?id=7875627 some people are paid very badly, even for companies that could do better, and some people are insulated from the tech scene - The community was huge around MS, when it was strong here. Now, is very disjoint, or that is my impression - Not enough money liquity to hang around 3-8 months hacking. For example, I have my own apps but I need to stop working on them, do jobs for pay rent, and resume when I can. Because I'm independent at least I could try. People in full time jobs are out of luck if wanna build side projects
This is far harder that people in USA and other countries have, not impossible but this lead to:
- Get a cofounder is damm hard. I have a friend that I wish to have at my side, but he never get the nerve to drop from job (not that bad of a job). Others can't survive for more than 3 months. I have be independent this years mainly because my close family and myself is very relaxed & patient about money, and could live with less with not problem. But not everyone have the circumstances.
Probably some will say: Why not setup a nice side-project with monthly payments?
I have for more than 2 years looking how solve the problem of get money. Fastspring.com is the only that barely work for me, and Apple. In colombia, we are hit hard for all the drug traffic stuff (and some early crash about a pyramid scheme), so anything that could fly in seconds in USA is a wall here. For example, doing bitcoin here is like trying to buy radioactivity material. Is like banks hate anything that could help a startup..
Not even paypal work! You can't get money to the bank, you don't have stripe-like processors, the ones here are bizantine (and don't answer your mails or don't care for you). So the option is create a company in USA. And this is just one of several problems to overcome.
About investors:
Anyone that give you money, small or big, is your Boss. For live.
About get a loan:
We have https://www.datacredito.com.co, the "you have not pay bills, wall of shame". Who are there? Almost everyone!. For how long? How cares! So if a person is wealthy probably is ok, but the rest of us are toxic for get a loan (and must consider carefully wich one to get, so for example, with the intention of get a house is not good idea to default because your are dreaming of build a game!).
However at the bright side, I think the momentum is building. The situation is screaming of somebody smart enough to...