@Champ - I completely agree with all of what you said and think you summed things up quite nicely.
A few tidbits:
This is obviously an exageration as plenty of people make money here.
- True, but I was preaching from the context of opportunity cost for myself (and a lot of people in the USA). I know people making money in SA, I just don't know very many people from the USA making money there...and as such I'm putting this in the "too hard" pile.
- South America is not a homogeneous region. Chile is pretty business friendly, Argentina is impossible, Brazil is somewhere in the middle.
Very true. But, the way it was explained to me was that you are best to either focus on Brazil, or find somewhere in the "everywhere else" of SA or Central America. The quote I received was "Brazil might as well be Hong Kong." And their economic might and advancements alone puts Brazil in a category where one should either commit to Brazil, or go elsewhere.
- The following thoughts are based on my experience in Brazil.
- Bureaucracy is stifling. This makes it especially hard for start-ups, but it also serves as a barrier to entry once you've established yourself.
Amen. And likewise true in many other countries in SA (and was my experience where I was focused).
- Nothing happens as fast as people think / say. Brazilians have a terrible habit of overpromising and saying what you want to hear. As an anecdote: I was in a meeting with some PE investors, they asked me a timeline, I said 2 years, they laughed and said "you're obviously not Brazilian. A Brazilian would have said 2 months".
Amen again. That was my experience and the reason for my "café, café con leche anyone?" comment about business dealings.
- Given the above, and fact that OP was only here for 2 years, it's easy to see why his venture didn't work out. He didn't put in the time necessary to make it happen.
Very true, and don't disagree. The big difference here is that I should have been more clear that this is from the vantage point of someone coming from the USA. I totally agree that I needed to stick it out, and think I would have eventually been successful. But, I didn't pull out just because of the burn rate and painfully slow it is to achieve progress. I finally took a step back and said "what if I'm successful, what is the payoff?" I then compared that payoff to what I could achieve in the USA.
It wasn't easy to decide to cut bait. Despite what they teach in business schools, walking away from "sunk cost" is easier said than done. And, I probably could've walked away from "sunk cost" just fine. What really hit home for me was when I objectively took a step back and tried to asses "what would be the outcome if I poured these same efforts and resources in the USA, what is the reward vs. the exact same in SA?" Doing the back of the envelope math made me think I had the wrong strategy.
But, who knows? I just know that in starting a business, 2 years is a good place to stop and reassess.
- Labor laws are a huge risk. Fucking ridiculous. It's frequently better to keep an unproductive employee on the payroll than to fire them.
This is the one that really hit home for me. For some reason I thought things would be more lax. I think the same goes for permitting and regulation...I thought it would be easier...not even close. I will re-use your description: "fucking ridiculous".
A few tidbits:
Quote: (09-26-2014 05:26 PM)anonymous123 Wrote:
My final assessment of how to make money in South America: You can't.
This is obviously an exageration as plenty of people make money here.
- True, but I was preaching from the context of opportunity cost for myself (and a lot of people in the USA). I know people making money in SA, I just don't know very many people from the USA making money there...and as such I'm putting this in the "too hard" pile.
- South America is not a homogeneous region. Chile is pretty business friendly, Argentina is impossible, Brazil is somewhere in the middle.
Very true. But, the way it was explained to me was that you are best to either focus on Brazil, or find somewhere in the "everywhere else" of SA or Central America. The quote I received was "Brazil might as well be Hong Kong." And their economic might and advancements alone puts Brazil in a category where one should either commit to Brazil, or go elsewhere.
- The following thoughts are based on my experience in Brazil.
- Bureaucracy is stifling. This makes it especially hard for start-ups, but it also serves as a barrier to entry once you've established yourself.
Amen. And likewise true in many other countries in SA (and was my experience where I was focused).
- Nothing happens as fast as people think / say. Brazilians have a terrible habit of overpromising and saying what you want to hear. As an anecdote: I was in a meeting with some PE investors, they asked me a timeline, I said 2 years, they laughed and said "you're obviously not Brazilian. A Brazilian would have said 2 months".
Amen again. That was my experience and the reason for my "café, café con leche anyone?" comment about business dealings.
- Given the above, and fact that OP was only here for 2 years, it's easy to see why his venture didn't work out. He didn't put in the time necessary to make it happen.
Very true, and don't disagree. The big difference here is that I should have been more clear that this is from the vantage point of someone coming from the USA. I totally agree that I needed to stick it out, and think I would have eventually been successful. But, I didn't pull out just because of the burn rate and painfully slow it is to achieve progress. I finally took a step back and said "what if I'm successful, what is the payoff?" I then compared that payoff to what I could achieve in the USA.
It wasn't easy to decide to cut bait. Despite what they teach in business schools, walking away from "sunk cost" is easier said than done. And, I probably could've walked away from "sunk cost" just fine. What really hit home for me was when I objectively took a step back and tried to asses "what would be the outcome if I poured these same efforts and resources in the USA, what is the reward vs. the exact same in SA?" Doing the back of the envelope math made me think I had the wrong strategy.
But, who knows? I just know that in starting a business, 2 years is a good place to stop and reassess.
- Labor laws are a huge risk. Fucking ridiculous. It's frequently better to keep an unproductive employee on the payroll than to fire them.
This is the one that really hit home for me. For some reason I thought things would be more lax. I think the same goes for permitting and regulation...I thought it would be easier...not even close. I will re-use your description: "fucking ridiculous".