The end of Startup Chile


By Hugo Bernardo – 

“These things happened. They were glorious and they changed the world… and then we fucked up the endgame.” Charlie Wilson

Politicians tend to fuck up the endgame.

I am a graduate and big supporter of Startup Chile. For those who never heard of it, Startup Chile is a government-run program that offers startups a $40K grant (i.e. equity-free money) and a 1-year visa to develop their projects for 6 months in Chile. In return, they ask every founder to give back to the Chilean community through mentorship, workshops, lectures, etc.

When the program was born in 2010, it was absolutely novel, a “think outside the box” idea. Why would you give people money with no strings attached and then let them go? To make things more interesting, the first few rounds were open to foreign founders only. As you can see, this was not your typical government program. It was certainly not popular in Chile.

However, it was the right solution for the problem in hand:

How do you fix this?

It was a long shot but it worked as well as or better than you could expect in 4 years. How well? There is at least one copycat in every Latin American country and several more around the world. You know you’re doing something right when people start copying you. But this is just getting started. You don’t build a startup ecosystem in 4 years (ask people in Silicon Valley or in any city in the world who is trying to become Silicon Valley of somewhere).

So far, this is what I think Startup Chile accomplished:

And here is where politicians fuck up the endgame. This week, Eduardo Bitrán, executive VP of CORFO (the government agency that funds Startup Chile) gave an interview where he lined up the future of Startup Chile (interview in Spanish only).

My summary of his thoughts:

Eduardo Bitrán is not excited about the startup community, or that more people are willing to start their own business, or even that a bunch of foreign startups came to Chile and stayed. What he is excited about is BRAND. He owes that brand to the Startup Chile team, who has overdelivered with scarce resources and plenty of creativity, and is not mentioned in the interview.

The problem is that BRAND is not the endgame. The brand was a way to attract more people, create excitement about the program and the startup community as a whole, and ultimately to help grow the Chilean ecosystem. This new plan is fucked up:

The greatest quality of Startup Chile is that it’s trying to create the ideal environment for a startup community to grow, and then is letting the community decide how to grow. Instead of a controller, Startup Chile was setup to be an enabler, and that is apparently too hard for politicians to take. It reminds me of my times as a kid playing football on the streets – whoever owns the ball decides who plays, and how the game is played, otherwise the ball is gone, and the game is over. Politicians own the ball here.

I see a bleak future for Startup Chile, and most importantly, for the Chilean startup community. CORFO will keep the brand for now. But if they want to invest in mature businesses with healthy revenue that can immediately create jobs, they will destroy that brand, which is the only thing they care about. And then they will shut down Startup Chile, because the only thing they care about is not there anymore. I can only hope that the current dynamic is strong enough to keep the Chilean startup ecosystem growing stronger, and that the most dynamic people in that community (and there are a lot of great people) pick up the slack.

It was a good run Startup Chile…


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