Wow, 154 at once. That's impressive. I'm very interested to see how this turns out. With these kind of numbers you really might end up generating a startup hub. It's a comparatively cheap experiment, considering the upside if it works.
I was funded in the last round of ~80 startups. Experiencing it first hand I think they're well on way to creating a startup hub. The only thing holding them back is bureaucracy that comes with the government funding. This leaves many teams spending too much time worrying about the process rather than their startup.
Given our experience for the first two months with Start-Up Chile, I couldn't be more agreed with that. It's not directly competing with TS or YC and maybe startups like Heroku, Sendgrid, Airbnb and Dropbox are never going to come directly from there but at the end of the experiment, it's most likely that there will be hundreds of competitive / innovative startups took the sign of this.
This evening, I realized that if we get in, effectively Chile will have hired me for 6 months to come there and help local entrepreneurs, and is paying me less than a third what I'd make in any american city as a programmer. Really, its even less because the $40k would be shared with my 2 co-founders. I've been working at startups, and starting businesses for 20 years... I think they got me as a consultant cheap!
I really don't mind at all, of course. I think it is a great program and a great country. Many years ago I visited Santiago Chile on a vacation, and I couldn't help but feel like the culture was very "capitalist" at the time. Rather than the beggars you might find in many countries, the kids were selling coke or cigarettes, etc. The cabbie we met at the airport was efficient, dedicated, responsive, and ended up providing all the rides we needed the whole trip.
If there's any people who are primed for the transition to a vibrant entrepreneurial culture, I think they are it.
But, $40k for at least one entrepreneur to come and spend 6 months meeting with local entrepreneurs seems reasonable, and if any of the companies are successful, that's a big bonus.
I am currently participating in Startup Chile and I am very happy to be here.
It is important to note, however, that there are some things that have surprised many participants that I think should be made clearer.
This is not an accelerator program like Y Combinator or TechStars. There is less structure and support, for example no "Demo Day" to work towards. You also don't get a check made payable to your startup to relieve your short term cashflow concerns and allow you to focus completely on your product.
Startup Chile is more like what I imagine taking a government job as an "Entrepreneur in Residence" might be like. We earn points by actively working to give back to the community, each team is expected to earn a minimum number over the 6 months. In return we get fast tracked through the admin of moving to a new country (getting visas and social security numbers) and are given access to a $40K budget to reimburse most, but not all, of our expenses.
You should expect to spend a couple of days a month working through the (bureaucratic) government reimbursement process and organizing / participating in community activities.
A few notes on the reimbursement process:
1) You have to spend money on things before you can get it back, and have to pay off any payments made by credit card before you get reimbursed.
2) You will probably need to put in around $10K so you have cashflow allowing you to spend the $40K within the 6 months allowed.
3) There are lots of rules restricting what can and can't be reimbursed. You need to make sure you understand all the terms and conditions before you spend any cash.
4) There are limitations on some forms of spending, for example:
a) You will need to get 3 competing quotes before spending more than $5K.
b) You will need to ask permission in advance of booking travel / events and they won't be reimbursed until after you have taken the trip / attended the event.
5) You will only ever get 90% of what you spend reimbursed. So $44k = $40k.
6) The complexity of the system means that there are inconsistencies between startups on what gets reimbursed and what does not.
It saddens me to say this but you shouldn't expect to have your mind blown by the quality of the startups here. There's lots of talking and not enough shipping. Unless contacts in Latin America are critical to your business, Startup Chile will not accelerate your startup any more than other forms of cash.
tl;dr: Apply to Startup Chile for the experience of living in another country amongst a community of ambitious people from around the world. Bring lots of money with you.
I've talked extensively to a number of people that run Startup Chile. They are very interested in getting early startups that are too early to even go into an incubator. That was a conscious choice. So, it stands to reason that you're not going to be astounded by the quality of the startups.
Catalina, their director of HR/Culture is coming to Silicon Valley in two weeks to learn more about what Silicon Valley is, and does. I'm going to try and communicate what we think works at Hackers & Founders to help get startups ready for incubation / launch. We're trying to get her talking to a number of people that we think can be really helpful.
Anything that you think would really help down there? Ping me: jonathan@hackersandfounders.com
Success from a few will show how to ship. This is just another (but exciting) form of cultural learning. Looking forward to seeing how many generations it takes to grow a hub. If there's broadband in Patagonia I'll be moving soon!
suphappy - thanks for sharing your experience. Some of this was news to me. I wanted to kindly ask if it would it be possible to ask you a few other questions offline about your experience with the program. Any chance you could drop me a line at artsumo.com/about/contact?
One of the areas that they are least clear on in their FAQs, etc, is how you do the community outreach projects. What are some of the different things you can do to earn these points? Do all of them involve public speaking? (I'd rather meat with 40 chileans who want to do startups one on one than give a presentation in front of all 40 of them at once, for instance.)
How tied are you to Santiago? I've been to Santiago and it's a wonderful city, but I was wondering if locating in Valparaiso, or Vino del mar, or even Punta Arenas was viable? I know they want to support entrepreneurs across chile, so locating elsewhere is seemingly a valued goal, but I'm not sure how much of the program presumes you're in santiago. In fact, is it possible to earn your entrepreneur in residence points outside of santiago?
How difficult did you find the visa situation? What all did you need to do in advance of finding out if you got in? (I've heard that getting FBI's background check can take up to 4 months, but that it is only accepted by the chileans for 3 months after being issued. This means you could apply, not get it back from the FBI until after you should be in Chile... or get it far enough in advance to be sure you got it by the time you needed to be in chile, and have it come quickly and then be out of date....)
Have you learned spanish? It turns out I know a lot more spanish than I thought I did, but my memory is that not many chileans know english.
I see they have a nice new office. We tend to get an apartment and each live/work in a bedroom, and save on office expenses. How much of the program is tied towards being in the office every day, vs, working in the apartment? How are the nice/upscale apartments in santiago in comparison to the stipend you can pay for housing out of the reimbursement money? Is there an apartment building that is popular with startup chile businesses? Is doing a 6 month lease very difficult?
We've not got a lot of connections in latin america, is that really important to getting in, or is it more important to be a quality startup? I think we've got the quality startup thing nailed, hopefully, but our network of entrepreneurs is small, and very lacking south of central america.
Also, we really just started the company a month ago, but we're going to have a MVP out next month, and plan to do a launch in January-February timeframe. Will this make us too developed for Startup Chile? Or do you think that having giving them a product to talk up right off the bat would be good for our chances of being accepted? (Hopefully from our MVP, we'll even have some traction...)
I'm living in Viña del Mar with a collection of other Start-Up Chile teams. You need to return to Santiago for reimbursements but you'll earn points for moving out to a region.
Almost any project you can justify as being beneficial to the community will qualify for the points. If you meet with 40 chileans for one-to-one mentoring you'll likely exceed the minimum requirement with ease.
The visa gets fast tracked, most people got theirs within a month using a basic police check. You can't start the programme or arrive in Chile without the visa, and entering with a tourist visa is not an option.
I took a few Spanish lessons before arriving and really need to start doing more. It's not easy but you can just about get by with English.
The programme isn't tied to the office, it's an extra benefit if you want it. I mostly work from my apartment. The stipend is enough to get a good apartment in Santiago, you'll need to find a Spanish speaking friend to help you find a good value one. There are clusters of Start-Up Chile teams living in "aparthotels" that have very flexible short term leases.
We had no connections in Latin America before getting here. It's more important that you have a quality startup and your application meets the other criteria detailed in the process.
There are teams here at all stages, some had launched before arriving, don't worry about it.
With 150 startups, this is much more interesting. For less than the tax abatements to incentivize a single tire factory, they're getting hundreds of active entrepreneurs in their country. Who knows if it will work or not (I'm optimistic), but this is so hilariously cheap for a national program. I'm pretty sure it will work out better than advertising in the WSJ for a month or two.
I think the program could result in a little collaboration between locals and foreign startups short term, with the rub-off effect resulting in increased entrepreneurial activity by locals mid to long term.
Real question is whether the govt stays the course and fosters the right environment along the way, i.e. ensuring that the right tax/legal/political/social incentives are there to encourage Chilean entrepreneurs (the longterm target) to start and retain companies in Chile to boost its economical growth.
As evidence of the governments commitment in chile, consider this: They fund Venture Capital programs as well. As I understand it they have an existing program that provide funding to VCs as a forgivable loan. If the VC is successful they payoff the loan with reasonable interest. If the VC folds, the loan is forgiven.
I read they are also working on (or recently created) another program whereby the government provides funding for Venture Capital but participates as a financial partner in the returns, which, if successful, means the government would be able to put the returns into future VC funds without any further cost to the government.
I think the biggest problem is that the VCs don't have enough startups to invest in.
Are they? They don't take equity. In fact I am not sure there is a direct benefit to Chile at all. I assume it is a bet that some companies will stay, locals will develop support infrastructure / services and ultimately create an ecosystem that is Silicon Valley like.
The goal isn't to make money from equity. The goal is to jump-start a community there and maybe, if they're lucky, have a company be known as "that Chilean startup".
They're the government. They have something better than equity: they automatically take a seventeen percent share of every profit made by every company in Chile... not to mention personal income tax on every employee's salary.
Just one medium-successful company which decides to stay in Chile in the long term will easily wind up paying more than six million in taxes to the Chilean government.
Yeah, that too. I was thinking a ways out – if they can establish a community that occasionally springs up a sizable company, then they'll not only have the increased tax revenue, but will also be able to have multiple companies doing that.
Of course it's not like Chilean citizens won't see any of that money. The startup founders need places to sleep, to eat, hang out while they're not working, etc. I'd wager a substantial amount of that money will go right back into the Chilean economy.
It's actually a fantastic kind of stimulus (though on a very small scale obviously).
Plus we go to universities, mentor locals, hire people with above-local salary, organize events...
It definitely helps the local scene in many different ways!
That's a great move by the administrators of the scheme. Not because hiring locals is a problem (though it very well may be depending on what skillset you need and the language barrier) but because the bother of administrating such a scheme is a huge bother for the startups. They are right to put as few barriers in the way as possible.
In fact I am not sure there is a direct benefit to Chile at all. I assume it is a bet that some companies will stay, locals will develop support infrastructure / services and ultimately create an ecosystem that is Silicon Valley like.
They are trying to hack the economic culture of Chile. What better way to try to create a culture of startups, innovation and entrepreneurship than by creating a cultural exchange program, where they incent startups to come to Chile for 6 months. The startups bring with them ideas, initiative, an innovation oriented culture, and an understanding of things like customer service.
Not only that, but Latin America is a _huge untapped market for startups. Spanish is the 3rd most widely spoken language in the world (after Mandarin and English), and Latin American economies have been doing quite well in this global downturn. Chile has a stable government and a strong economy, and has a functional stock market.
Boot strapping a startup and technology culture in Chile is a _huge win.
As being from round one and already have been living in Santiago - Chile almost three months, I'll be more than happy to help/assist newly selected startups on settling down here. For those who consider applying to upcoming rounds are also welcomed.
I know someone who got selected and frequents HN (as I am sure there are a lot of people on HN who have friends who were selected). Congrats to the 154.
And to you, XXXXXXX. You will know who you are when you read this. The next step in your dream is now a reality!
My company (GooseChase Adventures) was selected for this round and we are pretty stoked, but the 6 month commitment is a concern for me on a sales front. Any companies that have already participated have any experiences about selling to North America from Chile? Fortunately it's the same timezone, but it is a long trip if I need to hop on a plane for a meeting.
If anyone has any questions on the application process or wants to discuss this offline, feel free to drop me a line: andrew@goosecha.se.
Damn, I'd had some hopes about going there, although it certainly would not have been easy with two kids in tow. I guess something like LiberWriter is not so exciting because it doesn't aspire to be the next big thing, but the fact that it already makes money seemed relevant. Oh well, que sera, sera (which is actually not used in Spanish, because the song title is based on the Italian che sara`, sara`).
We're planning to apply in the next round, but whether we get in or not, we're not staying in the USA.
Here's the reasons:
1) Working in other countries is cheaper than working in the USA.
2) I don't really need $40k to fund the startup. We have that in the bank. So, giving up %5-%10 of the company for $15k doesn't seem too attractive. Most programs are targeted at 20 year olds, rather than 40 year olds with 20 years of startup experience. (not to sound arrogant, I just think we're not what they are looking for.)
3) We've been nomadic for a couple years, first in the USA, then in europe. We have learned a lot by interacting with other cultures, and %60 of our current revenue comes from outside the USA. I like meeting potential customers and learning about their needs.
4) Inside wherever we're stating, we're effectively in America- we're on the same websites, etc. But each time we step outside our doors, suddenly we're in a foreign country. Makes our weekends off much more interesting and refreshing than they would be if we'd stayed in the USA.
1) Can you find good local talent on at least software but hopefully hardware as well (I have a consumer electronics idea)? (I speak Spanish at the intermediate level if that changes anything)
2) Are you required to live in Santiago either practically or by rules? Or could you live in Valpariso or Vina del Mar?
2) On the site they make clear you can live anywhere in the country you wish. In other articles about this it's mentioned that most live in Santiago, but I do recall reading that some companies are in Valpariso and Vina del Mar:
Can a startup succeed with a name that's most likely already swiped on every major social network platform, besides being a very well-known search platform?
I'd be really interested to hear from current or past Startup Chile participants as to the quality and style of the companies applying. Is it a really high bar like YC, or is it more along the lines of "if you're working on a credible startup, you're in" kind of thing?
Also, love to see any videos people made for their applications, or any feedback about the application process that they learned after being accepted.
Looking at the stats for the previous round, it was really interesting. IIRC, around 300 applied, ~150 or so of which were ruled out because they didn't qualify or didn't complete the application correctly, and 100 were chosen, or about %66 of the ones who weren't ruled out. This time around, twice as many applied but only %50 more were chosen.
One concern: I avoided the single founder issue by having two co-founders, but both of my co-founders are great partners, though not nearly as experienced with startups as I am.
When we applied for the beta round, the stated goals were having 10% of the companies raise a significant round of further funding or reach 100,000 USD annual revenues. As I understand it, the program blew past this criteria.
