Nathan Lustig

Start-Up Chile FAQ

Category : Startup Chile
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After our video in TechCrunch, I got a bunch of emails from entrepreneurs who were interested in applying to Start-Up Chile and wanted to know more about the program.  I decided to make a little FAQ for anyone who has questions about Start-Up Chile.  If you have any questions that I didn’t answer, put them in the comments and I’ll be sure to answer them.

Do people speak English?

Not really.  Most Chileans don’t speak much English, especially in stores, in taxis or restaurants.  People in the tech companies, top government officials and young, upper/middle class Chileans speak some English.

Do I need to speak Spanish to come to Chile?

No.  Most of the entrepreneurs in Start-Up Chile don’t speak much Spanish, or any at all and are doing just fine.  I would suggest taking some Spanish classes before you get here because your life will be much easier and more rewarding if you at least make an effort

How is the $40,000 grant distributed and what can I spend it on?

Currently, we spend our own money and then submit receipts.  We can pay ourselves whatever we want, but can only submit about $2,400 per month for reimbursement.  We can deduct our rent directly from the grant.  For everything else, we have to submit receipts and then the money will be transferred to our bank account.  We’re taking a salary and then submitting receipts for web hosting, travel, rent, ssl, employees and other costs.  We’re not allowed to submit receipts for alcohol or tips.  I’ve heard that they are trying to simplify the process, but it’s not too bad.

Where is the office?

Moneda 975, which is right in the center of Santiago, about three blocks from La Moneda, Chile’s version of the White House.  The office is very modern, open and has plenty of space for us to work.  The area around the office is very busy with lots of people, shops, restaurants and food stands.

What’s the cost of living?

Housing is between $350-$700 per person, depending on how nice of a place you want, how close to a metro stop you want to be and what part of the city.  Most of us live in Providencia, Las Condes, Bellas Artes because we want to be close to the Metro.  If you don’t mind walking or taking the bus, you can save a ton of money by checking out places farther away from the Metro.

Does the program help you connect with people?

Yes.  We’ve met many Chilean entrepreneurs, government officials and academics, along with interesting people from the US like Steve Blank and Vivek Wadwha.  We do weekly meetups every Thursday where all of the Startup Chile entrepreneurs get together and hang out with 30-50 locals.  It’s been a great way to make connections.  Even just saying you’re in startup chile has allowed many of the teams to get contacts with businesses or investors.

What is the local talent pool like?

I’m still not quite sure.  There seems to be some skilled tech people, but so far it’s been hard to find at least for us.  I know of at least 5 companies that have made successful hires since coming to Chile and we now have our own jobs portal where you can post jobs specifically for startup chile companies.

What is the weather like?

So far, 80s and sunny every day.  It’s dry, so it’s not too bad.  I’ll update this as we fully move into summer.

Is it safe?

Yes.  Santiago is a safe city, especially if you stay in the nicer areas.  Where we live in Providencia is completely safe and reminds me of parts of California.  Santiago is 1st world in infrastructure and lifestyle.

What’s the application process?

We filled out a 3-4 page form that required an executive summary, ideas about what we would spend the grant money on and information about why we wanted to come to Chile.  We submitted the app, then were interviewed by the startup chile team so that they could ask us any questions.  Next, they asked us a few more questions and then told us we were approved.  I believe there were close to 100 teams (maybe more) that applied and they picked 25.

What kinds of companies are they looking for?

Any smart founder who wants to develop their business.  Right now, most companies are IT related, but there are a few alternative energy projects.  I believe that Startup Chile would pick any smart, motivated founder and are not just looking for specific industries. Here’s some more questions I received and the responses I sent back:

Can you please let me know if you have found the program beneficial.  Has the incubation culture there and the ability to work with other startups helpful?

For me, it’s been great.  I really enjoy traveling and being in other parts of the world, so this was perfect for me.  The weather is nice, santiago is 1st world, modern, safe, efficient.  We’ve been connected to some of the best people in Chile, but there doesn’t seem to be that many people in the IT space here, so it’s going to be tough to find mentors/partners outside of the program.  It could be that I’m looking in the wrong place.

The office is really great: anytime you get 15-25 smart startup founders in the same room together, good things happen.  We’ve already partnered with one of the other startup chile teams and are doing a side project with another one as well. There seems to be a few VC/Angel funds here that are looking to invest in startup chile startups.

I was also wondering where the offices are located and how the funds must be spent?

The office is located moneda 975, Santiago (google map it, its right in the middle, right near la moneda, the Chilean white house).  The area around the office is very busy: lots of people walking around, street vendors.  The office itself is on the 12th floor of a government building and is really nice. Right now, we can take a salary of about 2.4k per month for living expenses (not including rent) and then you can spend your 40k on anything you want besides tips, alcohol and gambling.

You need a receipt to backup the big purchases.  You can pay overseas developers up to 2.4k per month without doing a “bid” but you can pay them whatever if you produce a document that shows that they are getting paid market rates.  Some of this info will change, as they’re trying to make it much more simple, no receipts and fewer restrictions on what to buy.

We are currently paying ourselves more than $2,400 per month from our own revenue or investment, do we have to take a pay cut to come to Chile?

No.  You can pay yourself whatever you want, but you can only submit $2,400 per month to be paid back by the grant.

Can you get around in Santiago without a car?

100% yes.  The metro is efficient, clean and fairly new and gets you wherever you want to go.  Taxis are plentiful and cheap and buses run all over the place.  I don’t think any startup chile entrepreneur has a car here.

Punishing Failure, Stifiling Innovation [Part 1]

Category : Startup Chile
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Ever since we’ve gotten to Santiago, we’ve heard from all sorts of people about Chile’s penchant for punishing failure.  Jesse wrote a really good post a few weeks ago about this topic called Punishing Failure and the Ramifications on Entrepreneurship and I wanted to add some more thoughts.

I met a 26 year old Chilean who graduated from one of the top universities in Chile with a degree in engineering.  He spoke great English and wanted to start a business.  He even had a good idea.  I asked him why he hadn’t started his business yet and he told me that he had a good job at a consulting firm and that he couldn’t risk failure because he would never be able to get another good job if his business failed, even if it failed because of factors outside of his control.

He told me his plan was to go back to the US to get his MBA and then come back to Chile to start his business.  He said that if he failed, he would still be able to get a job because he was so over qualified and would have better qualifications than his boss.

So, in order for this 26 year old to feel comfortable starting a business, he had to graduate from the best university in Chile, work at a top consulting firm, learn english, get an MBA from a top US university and then he could start a business.  He told me that if he started a business and failed, a potential employer would rather have a 22 year old recent grad with no experience, instead of his work and entrepreneurial experience.  Talk about overhead!

In the US, companies would love to hire someone who tried to start their own business out of college, even if they failed.  They would call it “real world experience” and employers would like that the potential hire was a “go getter.”  I’m confident that if I decide I want to get a job instead of doing startups, I could.  Here, it’s the opposite.  People believe that if a business fails, its because the owner was either corrupt, stupid or both.  People shun failures.

It’s not exactly the best environment for creating new businesses or innovation.  Many people here have good ideas, but they don’t believe it’s worth it to take the risk to start a business.  I also learned that making a ton of money is sort of looked down upon here.  Multiple people have told me that Chilean President Sebastián Piñera had to fight off attacks from the opposition that he was TOO successful.  Not that he was corrupt, but that he was too successful.

It’s a very difficult cultural difference for people who want to start businesses, but it’s an opportunity for Chileans who are willing to take risks and shun the cultural pressures to make money and be extremely successful.  There are so many opportunities to create amazing businesses here in Chile that people who can break free from the cultural pressures will be able to create some amazing businesses.  That’s part of the reason we are here:  Start-Up Chile was created to show Chileans that starting a business is an option, failure is ok and that Chile is a great place to start a business.  We’ll see what happens.

Part 2 in this series will have some thoughts about why some places have more entrepreneurs than others.

A Quick Trip to Viña del Mar

Category : Travel
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Viña del Mar is the closest beach to Santiago, so we decided to take a trip.  I went with a few of friends from Startup Chile, including Tiago (Portugal), Raj (UK), Hank (US) and Jesse.  We took the $5 bus through the hills and ended up in Viña about 1.5 hours later.  They played a movie with no sound, but with Spanish subtitles, so it was a good way to practice.

We got to Viña at about 2pm and walked around.  Viña is right next to Valpariaso, which used to be one of the most important shipping cities in the entire world.  After the Panama Canal was built, Valpo wasn’t as necessary anymore.  Our hostel was located about 4 blocks from the ocean, atop a huge hill.  We had great views of the city.

We walked all over Viña to get the lay of the land and found a cool boardwalk and a bunch of bars/restaurants.  Many of the restaurants were your typical tourist trap, but we found some good ones by asking out hostel owner which were good and worth going to.  We spent some time on the beach and then went out to a few bars.  It’s much cooler in Viña compared to Santiago, especially at night and we happened to be there during an extraordiarialy windy time, but it was still really fun.  We spent most of the day Sunday on the beach, then took the bus back to Santiago.

We were only there for about 36 hours, but it was great to get out of Santiago and go to the beach with some new friends.  We’ll be back over the next few weeks and I’ll write an in depth blog post about where to go, what to do and where to eat next time.  For now, here’s a few pictures:

Christmas (and Chanukah) in July

Category : Personal Thoughts, Startup Chile
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Its about 2 weeks before Christmas and Chanukah has come and gone, but it doesn’t feel like it at all.  I don’t want to sound like The Grinch, but so far, I really like it.  I missed having a good Chanukah meal with my family and I know I’ll miss Christmas dinner and hanging out with my family on Christmas morning (yea, I do both), but I’ve really enjoyed being removed from “the holiday season” in the US.

There’s three reasons why I think it doesn’t feel like the holiday season to me right now.  First, it’s 80 and sunny every single day in Santiago.  I’m used to it being 20 and snowy during Wisconsin’s December, so it’s quite the difference.  I just can’t picture it being Christmas time without the cold.  Second, there doesn’t seem to be as much Christmas music, advertising and products in stores compared to the US.  Yes, our grocery store has a Christmas display near the front of the store and there’s Christmas lights on Pedro de Valdivia (our street), but compared to home light displays, store displays and Christmas music in every store, it’s nothing.

Third and I think most important, Christmas is much less commercialized in Chile.  Only about 10% of  TV commercials are about buying things for Christmas, compared to seemingly 50% in the US.  I’m watching about the same amount of TV as I do at home, but it seems like I’m seeing way fewer Christmas commercials advocating buying all sorts of things.  It’s more low key here and seems to be more religious, not materialistic.  That’s not to say that people don’t give and get presents, but it seems way less than the in your face materialism that US Christmas has become.  There certainly weren’t people waiting outside stores at 3am to get the best sale price.  Nor are there slogans like “More Values, More Christmas” like in the US.

I really have grown to dislike many parts of the holiday season in the US, so it’s been a nice break to disconnect this year.  It bothers me to see so many commercials that equate buying things with happiness.  It’s one of the things that’s wrecking the US.  People have been conditioned to think that they need all sorts of things instead of the things that matter: people, experiences, knowledge.

What do you think?  Am I just a grinch?  Are you seeing more materialism in this year’s holiday season?