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Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 7)

Posted on Thursday, Feb 6th 2014

Sramana Mitra: I just have one last set of questions before we retire. You are one of the few entrepreneurs I have interviewed who has roots in Latin America. We see entrepreneurial activity in the technology industry from Indian and Chinese entrepreneurs. Why has Latin America been slow on developing in the technology industry?

Andres Rodriguez: There are many more people in India and China, that’s one reason. As a whole, the education systems process many more people. In India, they all speak English ,which is a huge advantage when you’re coming here in the beginning. China is our best market today. It’s a bigger market than we are today. Chinese people come here, learn skills, go back, and become great entrepreneurs. In Latin America, the entrepreneurial model is different. It’s not necessarily one that’s well suited to the high-tech world.

My uncles were all entrepreneurs. They ran cement factories, media companies, and big industrial companies. The advice they gave me as I was leaving was, “Find something that everyone needs that you can make for less.” It’s a great piece of advice but it’s not your dreamy, high-tech, super advanced Jujitsu thing. In a way, we’re very good at very basic things that everyone wants. We come from a modest disposition. I cannot speak for other cultures but in our case, it’s definitely a culture of cement, beer, and commodities.

Sramana Mitra: Right now, there is a lot of entrepreneurship going on.

Andres Rodriguez: Yeah, there is. We have A123 here in Boston. It is a battery company started by another Venezuelan. That is a relatively boring, material science commodity that everyone needs. If you can only make a battery that’s a little better and a little cheaper, people will want it. That’s the mentality.

Sramana Mitra: One of the big flagship stories coming out of Latin America is, of course, e-commerce company Mercado Libre. It has been very successful. 

Andres Rodriguez: They are basically adaptations of concepts that have been created here. My uncles didn’t invent beer. They imported beer from Germany and then rebuilt and adjusted it. The idiosyncrasies of other cultures are very significant.

Sramana Mitra: If you look at e-commerce in India, there is actually no distribution system. There is no UPS or postal service that deliver. The e-commerce companies in India have to run their own courier services. Nobody’s going to do credit card payments. You actually have to do cash on delivery.

Andres Rodriguez: There are tons of entrepreneurs that come from Latin America and find me, one way or another. I try to point in the direction of local investors that may be able to help them. But the investors just don’t want to take the cultural risk. It’s too risky to invest abroad.

Sramana Mitra: That change is a very slow process. There is a very small seed capital and venture capital ecosystem that has developed in India. It is actually very small. There is a little bit actually developing in Latin America.

Andres Rodriguez: I don’t believe that’s the way to do it. The way to do it is to fund it from here. We have a ton of capital. There are only so many good entrepreneurs and the market is completely saturated. The problem is the investors don’t want to take the the cultural risk.

Sramana Mitra: The way the Indian industry has developed is with investors from here. Mayfield and Sequoia have set up India versions of their funds. They have setup India funds. They have put local people on the ground. The problem is those markets are not fast adaption markets. If you try to start a company in India or in Latin America, these companies are going to develop much more slowly and that model doesn’t work for venture capital model.

Andres Rodriguez: What I hear from investors in the area is that it’s a mixed experience right now for India in particular. Being an investor in your own turf is hard. When I look for investors, I don’t just look for American investors, I look for investors that have experience in storage, enterprise company, and fast models. There are so many things that you have to know to evaluate risk and opportunity in startups. The moment you change one of those parameters, and culture and countries involve a huge change in the parameters, you’re kind of flying blind.

Sramana Mitra: Great. It was a pleasure talking to you.

This segment is part 7 in the series : Building Fat Startups: Nasuni CEO Andres Rodriguez
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