In a typical tech industry incubator space in the Palermo Soho district of Buenos Aires — laptops on communal tables, white dry erase boards, playfully bright paint — three Americans are building a sales site for Latin American travel deals.
Co-founders Scott Thompson and Scott Bird, as well as first employee Francesca Larson, don’t speak Spanish. Before arriving last year, only one of them had ever even visited South America. But in July of last year, they moved to Santiago, Chile to launch their business, Bungolow.com. Following an investment from an incubator in Buenos Aires, they moved to Argentina. They intend to stay until at least July, when the funding runs out.
These entrepreneurs are emblematic of a wave of foreigners who have chosen to build web businesses in South America instead of Silicon Valley. Some were attracted by the emergence of Brazil, some by the region’s laid-back lifestyle, and some by the growth in the Spanish language market. But an increasing number, like the Bungolow team, were attracted by Start-Up Chile, a Chilean government program that aims to turn Chile into the innovation hub of Latin America and, eventually, “to create a $1b company, and globalize the Chilean entrepreneurship culture.”
Start-Up Chile may someday do that, but right now it’s providing the region with another service: seeding all of South America with foreign entrepreneurs.
Launched in 2010, Start-Up Chile offers entrepreneurial teams $40,000, office space and work visas to entice them to spend six months building their companies in Santiago. Twenty-two teams from 14 countries participated in Start-Up Chile’s 2010 pilot program, and 330 applicants were winnowed to 87 participating overseas startups, including Bungolow, in 2011. The start-ups do not give up equity for the investment.
“We’d have never considered South America without this,” Bird said. “It’s so easy and straightforward in the U.S. Abroad, you’re talking about a whole new language and sets of rules.”
The program’s generosity not only attracted existing startups to move, but also enticed people to launch companies in order to take part. Thompson and Bird ginned up the idea for their company specifically for Start-Up Chile, when Bird’s brother emailed Bird an article about the program. “A lot of people ask, ‘What made you start your company?’ Start-Up Chile was the catalyst,” Thompson said.
The immediate benefits for Chile are clear. Eighty-seven start-ups moved to Santiago for six months. Each of them rented apartments, hired staff, and bought supplies. “Most of our money was spent in Chile,” Bird said. The government’s $40,000 investment also attracted tourists. . . (READ MORE)
By Ian Mount
Published at SmartPlant.com