Interview: Medellín Has Tech Talent – Colombia Now Needs a Support System for Startups to Scale
When Ben Casnocha came to Colombia last month, he was once again impressed. The Silicon Valley veteran and technology writer has been to the country several times now, and each time he leaves more encouraged than that last.
Casnocha, who founded Comcate and is the author of My Start-Up Life and The Alliance, was in Bogotá to speak at the WOBI “Be Beta” conference in the capital and share his outlook on the tech world with those in attendance. He also took the time to sit down with Finance Colombia to discuss the state of innovation in the country and how a shifting political landscape is affecting Silicon Valley.
Casnocha says that Medellín and Colombia in general has the tech talent. There are innovative software developers and entrepreneurs who have the vision for the future to craft good apps that help people solve problems.
But the supporting infrastructure remains thin. Those in Medellín who want to turn a great idea into a great business often hit a wall. There is lack of skills related to project management, product development, marketing, and other core functions that are necessary to go from having five people to having 500. Such concerns are not the sexy side of the startup world, but he believes they are vital to reaching the next level.
Fortunately, there are success stories coming out of Colombia. And these promising ventures are helping to show more venture capitalists — in Silicon Valley and beyond — that Colombia is a place to look for investment. That in turn should help develop the on-the-ground networks and infrastructure to improve the ability to scale, especially as more Colombian startups begin to develop a global, or at least regional, mind set.
To following is the conversation we had in Bogotá about this key issue and other issues currently affecting tech companies and hopeful entrepreneurs in Colombia.
Jared Wade: I know you’ve been to Colombia several times now dating back five or six years. What have you seen change over the time here?
Ben Casnocha: I think Colombia has a very bright future in terms of the basic demographics of the country and the basic economics. I think the peace deal with the FARC, if it holds, is very encouraging — to put that in the rearview mirror and focus on a future where you can spend less money fighting the civil war and more money investing in infrastructure.
But I’m always impressed by the Colombian people. They are very hard working, very entrepreneurial. So I’m extremely optimistic about what can be done here in the next few decades.
Jared Wade: In terms of tech, how do you see things? People like to say that Medellín can be the Silicon Valley of South America — and of course we hear this in Latin America about Guadalajara or even the startup scene in Chile. But how do you see Medllín overall as far as evolving into a place that can start to create some really Innovative and interesting companies and apps?
Ben Casnocha: I was at a conference a year ago in Medellín and the mayor was very charismatic. All these people had come together to talk about entrepreneurship in Medellín — people from all over the world at the Global Entrepreneurship Congress. I think there is a lot of engineering talent.
What tends to be missing in places like Mexico or Colombia is product management and marketing expertise. There are actually a lot of very good software developers, which is great to start a company. But to really scale a company — which is what Silicon Valley is really best at, like Facebook going from 20 people to 2,000 people — you need a bunch of other expertise around the table in addition to raw engineering talent.
So I think that’s where there is still work to be done in terms of the human capital in Colombia. Funding is important but it’s also just the skill set of knowing how to scale new businesses.
Jared Wade: How does Medellín, and just Colombia in general, start to establish more of that infrastructure and intellectual capacity?
Ben Casnocha: I think the key is to celebrate the people who are successful already. Make that a model both for other perspective entrepreneurs and for the media and for investors around the world.
We need more case studies of people who’ve been really successful here to inspire locals to start. And we need this also to update the stereotypes that other people outside of Colombia have about the country so that more investors abroad will come to Medellín and not think drugs — but think engineering, think talent, think entrepreneurship. This success is here. I think it’s as much of a marketing challenge as it is a reality challenge.
Jared Wade: On the funding side, is that one of the big aspects that is still lagging in terms of investors actually putting up money?
Ben Casnocha: I think there is a lack of capital. Most U.S. tech investors do not want to invest in Colombia. Because they don’t know it. It’s just foreign to them.
That’s changing. Companies like Rappi have raised tens of millions of dollars in U.S. venture capital (VC) from the very best firms in the world. That’s a hopeful sign that U.S. VCs will begin to invest more in Colombia.
But I think what U.S. investors look for the most are entrepreneurs that have a global vision — people that want to build a global business. Because the Colombian market, while large, is not large enough to sustain a venture-style business. So they want to identify an entrepreneur that wants to conquer Colombia, then Mexico, then Brazil, then Argentina to build a truly regional business. Those are the sorts of businesses that get investors excited.
Jared Wade: More broadly, just looking at the future of tech in general, where should people who want to make the next Uber or the next Rappi be looking?
Ben Casnocha: There are a bunch of different trends that are very exciting in technology today. The one that I’m most excited about personally a self-driving cars. Because people die every single day on the road because of drunk driving or because they’re texting and driving. Humans are terrible drivers in general, and I think we’ll look back at this period of time and ask how did we ever let humans drive killing machines so recklessly on the road.
So autonomous cars and autonomous car technology I think is going to change so many parts of the economy. In the U.S. alone there are a million people who drive trucks for a living. So they will all be out of work. But think about the productivity gains, even here in Bogotá where there is so much traffic. What if instead of sitting in the traffic, you could be getting work done?
And there’s a lot of technology that goes around autonomous vehicles and a lot of regulation. Like if I were a government official in Colombia, I would try to relax the restrictions and regulations around autonomous vehicles, as well as drones, to enable innovation to happen here from companies. That is often a barrier: For companies to try things. With smart legislation — and smart technology — I think Colombia could choose to be a leader in this category, for example.
Jared Wade: What other areas are intriguing right now to you?
Ben Casnocha: Other trends that are exciting are virtual reality, augmented reality. I think the mobile revolution still to play out. There are all the common trends that you read about.
I think for the entrepreneur here, it’s about picking something that you are personally passionate about. Because the journey is going to be hard so you better be excited about what you’re doing rather than just optimizing on the highest market potential.
Jared Wade: Is it frustrating for you — and another people in California and in these tech realms — to see all the rhetoric that comes from the politicians? It seems that they are always looking back 20 years ago toward retaining jobs as opposed to forward thinking.
Ben Casnocha: I was just chatting with someone here in Bogotá about the obsession that Trump, and a lot of politicians, have about the coal industry. “We must protect the jobs in the coal industry.”
The solar industry employs like 10 times the number of employees — and I don’t know that that is the exact stat — than there are in the coal sector. So why are we obsessed with coal workers having jobs? Well, because the current president in 70 years old and a lot of people who are older think back to an era when a lot of people worked in coal. Nobody works in coal anymore. The economy is changing.
So it is frustrating because we need to focus on the technologies of the future. Similarly it’s like taxis vs. Uber. I’m very intrigued by how Colombia regulates Uber. There are people who have livelihood driving taxis, and the question is do they have a God-given right to a job? Or, when Uber is obviously more convenient and much safer than taxis, can they be re-trained in a skill area where they can actually have a livelihood? Do you regulate the industry such that you prevent new entrants and shut down innovation like Uber to protect the taxi cartel?
I think those are difficult challenges. And I think politicians generally are way too focused on how to protect existing jobs rather than enabling a smooth transition to whatever the job of the future is. And there will be jobs of the future, especially as we have more leisure time.
Massage therapy didn’t exist 75 years ago. Who would have thought we would have time to take massages? All this leisure time we have, there are jobs surrounding that. So there will be plenty of jobs but there will be a transition from the old economy to the new economy.
Jared Wade: So do you see it as there’s almost two conversations going on: one in Washington and one in Silicon Valley? And you guys are all talking about different things?
Ben Casnocha: Yeah, generally Washington and Silicon Valley have been very far apart for a long time. Now, Google and Apple employ huge numbers of lobbyists today — but that’s only the last few years.
I think Silicon Valley now is realizing that government is regulating businesses. Governments are trying to regulate Airbnb in ways that are very destructive, I’d say, to human freedom and prosperity. Government is trying to regulate the internet with net neutrality legislation. There are a lot of things that the government can do that affects tech.
The tech industry has to wake up. And it’s not just Washington, D.C. It’s Brussels. The EU is fining U.S. tech companies an extraordinary amount of money for all sorts of antitrust accusations. Google has serious policy issues in Europe right now and is spending tons of money to try to deal with that. So tech is finally in the crosshairs or regulators — for better or for worse.
This interview has been edited for space and clarity.