By Natalia Martinez-Kalinina
As we often hear, Miami is a city uniquely poised to be a hemispheric hub. But despite being the transit isthmus that connects our hemisphere and representing a natural landing pad for companies growing from Latin America, we have historically fallen short of creating a sustained bridge for tangible and bidirectional engagement. Entrepreneurs from Latin America come half blindly and arrive without a fully nuanced understanding of our infrastructure, differences, logistical shortcuts, critical stakeholders. As such, the learning curve is often steeper and the adjustment period longer than it should be - and that is in part our fault.
Argentina has long been recognized as one of the primary entrepreneurial ecosystems in Latin America with regards to high potential entrepreneurs. In equal measure, however, it has also been plagued by political malaise, economic instability, unreliable institutional resources, and its own absence from global capital markets. Now, although the country is very much in a transitional period after the 2015 election and the myriad economic and legal changes underway, Argentine entrepreneurs can - for the first time in several decades - see a horizon in which the country’s public sector, institutions, markets, and workforce can truly dovetail to generate growth, investment, and innovation.
Miami has a ways to go before we can truly claim the title of regional epicenter, but figuring out how to support Argentina’s wave of growth and appetite for engagement represents a unique opportunity to add value to the region and truly deliver on our vision as a gateway.
As a first step to test these waters, a group of us came together to co-author a full day of programming within StartupWeekBuenosAires - the largest event of its kind in Latin America- specifically focused on how to engage with the U.S. ecosystem and market by way of Miami. Ahead of the full agenda being announced shortly, if you are interested in participating or learning more, please fill out this form.
Leading up to the event in December, we will be featuring interviews with a varied range of Argentine entrepreneurs and companies making their way to Miami. The first installment and inspiration for this series was an interview with Balloon Group. Below, we take a closer look at Wolox (pictured above), a growing software development company currently exploring its potential for expansion to the US from Buenos Aires, starting with a footprint in Miami. We spoke with Luciana Reznik, Wolox’s CEO (pictured here).
In 2011, Wolox was founded to innovate and help startups with all their product strategy and technological needs. With the lack of cutting edge tech solutions in Buenos Aires at the time, our goal was to bring high impact technology to the entrepreneurial ecosystem of South America. Concurrently, Buenos Aires was beginning to position itself as a major entrepreneurial city making for an ideal target market. After the great successes of the 90’s such as MercadoLibre, Despegar, and the first accelerators opening their doors, many new success stories continued to emerge. Like so, being an entrepreneur became an attractive career for many.
At this time, we were (all) finishing our degrees in computer engineering at The Buenos Aires Institute of Technology, a prestigious engineering university in Argentina. With other entrepreneurial experiences under our belt, an opportunity became clear to us: from a business standpoint, there were a larger number of individuals with good ideas and execution capabilities, than those with tech talent who could successfully carry out these ideas. This was our “aha” moment if every one of these individuals could be the CTO of a business venture, why not join together and become the CTOs of many business ventures?
Through the years, not only did we become experts in software development, but in all disciplines that influence the creation of top quality products as well as best practices when developing a startup. From the stage of conception to execution, researching the product market fit and implementing strategies to scale the business, Wolox is the team startups choose to partner with. Today, having worked with more than 80 startups has given us the know-how and key experiences to stand out within the industry which is invaluable to our clients.
Where do you see the growth and future of the company in the next years?
Today, we have around 100 employees and 100 products developed, with continual growth every day. We have managed to penetrate new markets in the USA and other countries in Latin America. Additionally, Wolox has established a team of exceptional individuals who discover innovative solutions to the challenges we are presented with while working ethically and professionally. Thanks to our ongoing positive recognition, larger companies have begun to use our services of design thinking to find solutions to their problems and/or establish innovation within their brands.
At Wolox, we have also been able to create a unique organizational culture that defines who we are and allows us to establish a challenging, flexible, innovative and respectful environment where our employees come to work motivated and happy. That is perhaps one of the biggest achievements and where we focus our energy every day to continue improving and not conform with what we have already achieved. Wolox is a company created by and for Millennials. A place which seeks to break with tradition, rife with challenge, and where rules are created to be broken in order for continual success.
In the coming years, we plan to continue the immense and rapid growth we have been experiencing up until now- opening new operating centers throughout the country as well as sales offices in various cities around the world. We will continue to train experts in the diverse cutting-edge technologies that emerge such as AR, VR, Internet of Things, among others, to be able to provide the best technological solutions to the problems we encounter within the market industry. In addition, we hope to become key leaders and influencers for the working culture we possess. We believe that we can transform problems into solutions and ideas into quality products, from Argentina to the rest of the world, managing to be positive and happy throughout the journey.
When did Wolox come to Miami, and why? What opportunities are you looking to find here? What risks may you come across? What is the evaluation and product release process in the United States?
As the next logical step in terms of company expansion, Wolox began its operations in Miami in January
of 2016. Our percentage of US clients is constantly growing and we want to continue this growth in the coming years, therefore, we believe opening offices in the United States is the rational next step for the company.
In Miami (and South Florida in general) we saw an interesting opportunity: an expanding entrepreneurial ecosystem, with tremendous support from various institutions and government funding to put Miami on the map of the entrepreneurial world. With the large Latino community many of the bigger enterprises or brands targeting the Latin American market have offices in Miami.
Our biggest challenge now is to manage a high volume of deal flow to maintain our operations during the period of growth of this entrepreneurial community, until it has fully consolidated. We do have to keep in mind we are in a new community and network, with a blank slate, where people still do not know us. We'll have to work hard to achieve a strong reputation and to position ourselves just as we have in Argentina.
Success stories like Magic Leap, Open English, Kairos, among many others have helped encourage and push the creation of tech startups. New co- working spaces are constantly opening their doors, making Miami an attractive spot for companies to set up shop. Miami is a city with immense multicultural and creative talent and a low cost of living. It really has all the key ingredients to make for the ideal entrepreneurial hub. Our goal now is to start generating and executing new startups and to bring capital to risky investments. Wolox arrived in Miami to help entrepreneurs pursue their ideas and build the entrepreneurial ecosystem just like we did in Buenos Aires 5 years ago.
From the perspective of the Latin American entrepreneur, what do you expect as a contribution from Miami?
Miami has access to a far greater pool of investors than we do in Latin America. A seed capital in Miami is at least us$ 500,000 whereas Latin Amércia it rarely exceeds us$ 50,000. On the other hand, it's very strategically located between Latin America and many other entrepreneurial hubs like New York, San Francisco, Boston, Austin, and Los Angeles, where many of our customers reside. Being closer provides an added value to our clients. Miami has many investment funds that focus on this type of enterprise and entrepreneurs of each country in Latin America that can help in this expansion.
As a Latin American entrepreneur, from day one we are constantly thinking globally as our native country itself is usually not a big enough market. Often times the market for our product is in the United States, making it very hard to measure the startup’s early stages from a distance. Even if the market we are appointing to is Latin Amércia as a whole (and not just a particular country) it is a lot easier to access those countries from the USA than from Argentina for example.
From this same perspective, what do you think Miami can do better to become a true "hub" in the region and support entrepreneurs who come here?
Often times, legal and accounting issues end up being a major roadblock when trying to focus one's energy on business. Visa issues/procedure, difficulty in the opening of bank accounts or being unable to access credit are just some of the disadvantages foreign entrepreneurs encounter. To overcome these difficulties, we must be in a privileged position within our country of origin to be able to access the necessary resources. This is something we consider a limitation in attracting top talent.
On the other hand, we must continue to focus on the education and the transmission of entrepreneurial culture. Some of the best practices when carrying out a startup such as energy and entrepreneurial execution speed (which are found in the most important hubs in the region), are built through education and example. Therefore, it is necessary for the successful entrepreneurs of Miami to stay in order to transmit their learnings and knowledge and channel their entrepreneurial spirit to help and motivate those who are just getting started. Of course, the active participation of organizations - both public and private -that help entrepreneurs to perform this work is a key factor to achieve development.
What is your view on the political and economic situation in Argentina at the moment? What perspective does this experience give you on the growth of Miami?
Argentina is in the process of rebuilding political and economic relations with the United States. They are putting a lot of effort in generating public policies which support entrepreneurs and are strengthening programs and incentives of exchange between the two countries.
For example, only for the year 2016 will the budget allocated to the co- state investment in enterprises by local accelerators, triple. Undoubtedly, this will have a huge impact on the amount of Argentine entrepreneurs who choose Miami as the next step in its expansion process.
It is also expected for there to be at least two new public-private angel investment funds formed, whom will seek to have an active participation from foreign funds. This presents itself as a very interesting opportunity for foreigners: entering the entrepreneurial ecosystem of Argentina with limited risks.
Finally, the Argentine peso is at an exceptionally competitive value for the US market. Making for a very appealing strategy to realize the commercial development of Argentine companies in the USA.
Organizations like Endeavor have talked a lot about the Argentine model (not just the shortcomings, but the great achievements and opportunities). What do you think Miami can learn from Argentina’s case?
I believe Argentines are very entrepreneurial in nature. Things in our country are never simple, predictable or easy. We have overcome several crises throughout our history and from day one we have to address the daily challenges we face in an innovative way. From this, one learns to find solutions to the problem effectively, efficiently, and while working collaboratively.
As entrepreneurs, we have the need to create enterprises with sustainable business models from the get-go, since the ability to raise capital is quite small. I see this as a major difference between the Argentine entrepreneur and the US entrepreneur. Here entrepreneurs sometimes do things thinking only of the next round of investment or how to improve the KPIs the investors are going to ask for, instead of focusing on making a profitable business. Perhaps in the coming years, this paradigm will begin to change if the access to capital becomes more difficult. Which we are beginning to see in some parts of the USA.
In Argentina, there is a very strong sense of community. Entrepreneurs share their experiences, they teach, and invest in and mentor those just getting started. This ‘multiplier effect” is essential for the growth of the entrepreneurial community anywhere around the world and is one of the values promoted strongly by Endeavor in Argentina. I believe this is something interesting and important to try and replicate in Miami. First, identify these stories of success and then take advantage of their transmission of knowledge that can render for following generations.
[This is part 2 of a series. Read part 1 here - Honey vs. Vinegar: How are we luring and keeping the companies we want in Miami?]
Natalia Martinez-Kalinina is the General Manager of CIC Miami and the Founder of Awesome Foundation MIAMI. If you are an Argentine company looking to expand to Miami or a Miami-based entrepreneur/investor looking to connect with the argentine ecosystem, please reach out to Natalia at email@example.com