Santiago has experience in Digital, Inbound and Growth Marketing. Prior to Polymath, he worked in several digital and media agencies leading an executing data-driven marketing strategies for companies in sectors like Technology, Health, Telecom and and Goverment. He's passionate about digital culture, blockchain edtech and future of work.

Marketing Manager

Santiago Pérez

The venture studio model keeps growing in the world and Latin America. It doesn’t come as a surprise for the venture capital ecosystem. Studios have been getting a lot of attention since <a href="https://www.idealab.com/">Idealab</a> first started to implement this model back in 1996It seems like the entire world has changed since then. Today there are around 560 Venture Studios in the world, according to<a href="http://gan-7000682.hs-sites.com/disrupting-venture-landscape-white-paper"> GSSN</a>.There are many ways to call this Asset Class. Some call themselves Startup Studios, Company Builders, Venture Capital Studios, Venture Builders, etc…The point is that we all share the particular goal of changing the game on how to build and scale companies from scratch. That’s something every <a href="https://polymathv.com/venture-studio-model">Venture Studio</a> can agree on, even when we all do it in different ways.That “way” of doing things is what we have synthesized in our methodological approach to company building. You can see the effects of the model by looking at how rapidly it has grown in the past few years.The growth rate goes up to 625% in the last seven years, getting to a point where there is at least one Venture Studio in each region of the world.Polymath is the <a href="https://polymathv.com/venture-studio-model">Venture Studio for Latin America</a>. In the last 9 years, we have focused our work on ideating, validating, and scaling companies to empower the middle-class of LATAM.As we enter a new era of entrepreneurship in Latin America with Venture Capital growing more than 2X during 2021, we keep focusing our efforts on using human-centered design to create technologies and business models that solve the biggest and more urgent problems of a segment that has been underserved by business: The middle-class.Latin America craves a social and economic boost. Real social and economic development will come from efficient and vibrant solutions designed to enable and empower the middle class.We believe the Venture Studio model is the right way to achieve that breaking-through moment in the ecosystem for the region, we are convinced it is.Here are 6 reasons to believe in the Venture Studio Model.<h2>1. Methodology goes first</h2>Over nine years building companies leveraging the Venture Studio Model has helped us to develop a methodology that reflects our founders, EIRs, and talent<a href="https://polymathv.com/polymath-ventures-lessons/"> learnings in the company building process.</a>We learned from our failures and successes and now we have a methodological approach to understanding a market’s needs and developing scalable digital solutions.Following this approach, we have explored over 200 business concepts which have led us to launch 11 companies into the market.<a href="https://docs.google.com/forms/d/1CvgwUDFveqf-PD3gD-4RTpnAy3qa2q2jwkVRkOeUc9Y/edit?usp=drive%5Fweb">Download our company building playbook to learn more about our process.</a><figure class="image image_resized" style="width:54.82%;"><img src="/uploads/Company_Building_8940e0f2a3.png"><figcaption>Company Building Methodology</figcaption></figure><h2>2. Talented and diverse teams across the Studio</h2>People are an important part of what we do. We wouldn’t be here if it wasn’t for talented, risk-taker and a little bit crazy individuals that share our view of purpose and transformation for the region.Having more than 500 collaborators across the group is also a great competitive advantage, giving us the diverse background necessary to address complex problems from different perspectives and areas of expertise.Our<a href="https://polymathv.com/the-road-to-building-a-winning-startup-culture/"> culture and way of working</a> allows structured learnings and encourages know-how transfer within the group and with external investors, not to count our alumni network, which is all around the globe and working across industries, normally maintaining contact with us.<h2>3. Proven track record</h2>It’s not the same to invest in first-time or even experienced entrepreneurs as it is to do it in a group of people that systematically create companies for a living.Up until now, we have 3 operating ventures that have reached Product-Market-Fit and 2 more on their way there. Creating a portfolio that has risen USD 45M from external investors.Building for emerging markets requires a completely different approach to company building and scaling. What we have achieved up until now is only the beginning of our learning journey.<h2>4. Partnership with great entrepreneurs</h2>A Venture Studio is meant to be a perfect co-founder to proven and successful entrepreneurs. This is one of the main differences we encounter when comparing our business model with accelerators or VCs.We are looking for the TOP entrepreneurial talent who are enthusiastic to transform the middle-class in Latin America.This is a matter of both purpose and skills, something that’s not easy to find, but it’s a formula that has proven to be a huge success for Venture Studios (and Polymath).All this provides an unmatched learning (and life) experience both for them, us and the people we are impacting.<h2>5. Strong leadership and advisory</h2>Our founders,<a href="https://www.linkedin.com/in/wenyi-cai-5a99876/"> Weny Cai</a> and<a href="https://www.linkedin.com/in/carlos-fern%C3%A1ndez-de-la-pradilla-a786711/?originalSubdomain=co"> Carlos Fernandez de la Pradilla</a> both come from strong business experience and are deeply committed to the purpose of transforming the region of LATAM.Over the years we have also created and strengthened a top<a href="https://polymathv.com/advisors-2/"> advisory board</a> composed of friends, investors, and business leaders internationally renowned.Combining that with the context of opportunity the region is going through right now and the methodological approach to business we have developed, we feel more confident to do the work and continue to grow our expertise as well as our connections to be more impactful and successful within our portfolio.<figure class="image image_resized" style="width:52.41%;"><img src="/uploads/Strong_Leadership_0a96e45a2d.png"><figcaption>Wenyi Cai and Carlos F. de la Pradilla &nbsp;</figcaption></figure><h2>6. Higher success rate.</h2>In general, the Venture Studio Model achieves better success rates than other similar approaches to entrepreneurship.For example Studios around the world are getting a 34% exit rate VS 21% for Accelerators and 19% for the average venture industry.But it doesn’t all come down to exit, we are giving higher investor returns too. The average in the venture industry is 21%, but when we look at studios it goes all up to 55%.Today, taking into account our seed investment we are offering up to 32% IRR over our portfolio in which 32 investors have already believed in, including international funds like<a href="https://www.bullpencap.com/"> Bullpen</a>,<a href="https://www.cendanacapital.com/"> Cendana</a>,<a href="https://fjlabs.com/"> FJ Labs</a>, and more.<h2>To summarize</h2><ul><li>Entrepreneurship is about risk.</li><li>The Venture Studio model aims to reduce that risk and maximize the learnings.</li><li>Studios make sense within the venture ecosystem. This model is even more relevant in emerging markets where uncertainty is higher and a deep understanding of context and people is necessary.</li><li>Polymath Ventures builds companies to address the problems of an emerging middle-class with huge opportunities for growth and innovation.</li></ul>&nbsp;

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6 reasons to believe in the Venture Studio Model

Latin America consistently ranks among the top developing country markets of motor vehicles, with 350 motor vehicles per 1,000 people in Brazil in 2019, compared to 200 in China in 2020. Bogota, with a population of just over 8 million, has a staggering 2.3 million motor vehicles. A large motor vehicle market also means a large market for <a href="https://autolab.com.co/">auto repair services</a>. <a href="https://polymathv.com/ventures/autolab/">Autolab</a>, a <a href="https://polymathv.com/">Polymath Ventures</a> company, is Latin America’s leading auto repair and parts platform is committed to achieving transparency, standardization, and convenience in the category.In this new blog post, we talked to <a href="https://co.linkedin.com/in/salvador-zepeda-67bab716">Salvador Zepeda</a>, also known as Chava, the co-founder, and CEO of <a href="https://polymathv.com/ventures/autolab/">Autolab</a>, – Mexican with a master’s degree from <a href="https://www.stanford.edu/">Stanford University</a> and passionate about entrepreneurship -, who has spent the past 6 years understanding how the category works, its needs and most importantly its potential.<figure class="image image_resized" style="width:52.91%;"><img src="/uploads/Salvador_Zepeda_Autolab_CEO_f30aa76037.jpeg"><figcaption>Salvador Zepeda, CEO &amp; Founder of Autolab</figcaption></figure><h2>The opportunity in Latin America</h2>The current auto repair market landscape in Latin America is highly fragmented. It is a $74 billion annual market, with an estimated 839,000 auto repair stores. 81% of them are small independent stores or small chains, and only 6% are dealerships.<figure class="image image_resized" style="width:29.26%;"><img src="/uploads/Auto_repair_market_07d0115b81.png"><figcaption>Auto repair market Latin America</figcaption></figure>Traditional dealership shops located at the top have little competition, and despite being able to offer original parts and high-quality service, they have rather high premiums. For the average independent repair store, the competition among them is highly homogeneous. In order to attract more customers, they must offer lower prices and a wider variety of services, resulting in lower quality of parts and repairs. In addition, these independent shops are known for their lack of transparency and low trust.Latin American countries are developing countries with rapidly growing car ownership, so the auto repair market has great potential. The industry’s acceleration is mainly driven by two factors; the healthy recovery of the auto market and the growing base of independent auto repair shops. The recovery of the auto market is directly connected to the reopening of cities and revamp of global economies; according to Statista, <a href="https://www.statista.com/statistics/200002">the global automobile sales</a> average is 70 million units per year. At the same time, users reluctant to buy new cars are shifting their buying behavior towards <a href="https://www.globenewswire.com/news-release/2021/06/23/2251774/0/en/Global-Automotive-Repair-and-Maintenance-Services-Market-to-Reach-678-4-Billion-by-2026.html">boosting the life and trade-in value of their vehicles</a>. Latin America is well-positioned to evolve this industry, due to the high concentration of owned cars.On the other hand, many of the independent shop owners in Latin America are also repair workers, who lack the awareness of marketing and innovation to boost their businesses to achieve incremental growth. Through design thinking and quantitative research, Zepeda and the Polymath team found that the biggest problem of the traditional auto repair model in Latin America is the mistrust and loss of efficiency caused by the information asymmetry between service providers and consumers.As the company moves forward, its leaders identified the opportunity around the specific target audience they are trying to impact. Dealerships seem to have strong resources to support their entry into the competition, but in fact, their target customers are not the same as Autolab. Most middle-class Latin American car owners only go to a dealership for maintenance during the warranty period. After their cars are out of warranty, they generally choose independent repairers with more affordable prices. For this reason, dealerships want Autolab to undertake the repair business after the warranty period. This could prevent the low-level service of individual repair shops from destroying the reputation of their products. In addition to dealerships, Autolab is also trying to cooperate with some errand platforms, which will undertake the transportation of cars between homes and repair shops to strengthen Autolab’s door-to-door service capability.<h2>What is Autolab?</h2>Autolab’s story starts in 2013 with the ideation process led by <a href="https://polymathv.com/about/">Polymath Ventures</a> around<a href="https://polymathv.com/seeds/labor-employment/"> labor in Colombia</a>. With a 30+ million person strong Colombian labor force, only about 50% of workers have formal jobs. About 5.3 million are informally employed, meaning without a legal employment contract, while 14.3% of the population is unemployed.At the time, the team realized that if the market was too small for employees to grow, they would just have to open the market up and make it bigger. Through a process of elimination and deep user testing, the team found that the auto repair business in Colombia was ripe for disruption through scale. The team prototyped “Autolab”, a full-service auto repair center that excelled in professionalism, and technical ability. And yes, they fixed a few cars.The company was officially launched in mid-August 2014 with 15 members. Three years later, its turnover exceeded $806K US and it had more than 70 employees. Today, Autolab has 50+ <a href="https://autolab.com.co/nuestras-sedes/">shops</a> in Colombia, with a presence in 13 cities. They recently launched their operation in <a href="https://autolab.mx/">Mexico with 2 shops</a>, and a B2B<a href="https://autolab.com.co/flotas/"> business</a> model in Colombia with the aim of transforming this segment through a disruptive tech solution and superior client service.Autolab has built a platform that unlocks incremental growth for independent auto repair shops while providing trustworthy and affordable solutions for car owners. Currently, there are over 500,000 independent auto repair shops in Latin America, most of them with limited growth opportunities due to a lack of knowledge in customer acquisition, client management and operations, and limited access to capital. Autolab is currently the largest chain of auto repair shops in Colombia with a distinctive business model designed to provide a best-in-class experience and dramatically improve the profitability of the shops in their network, up to a 700%+ increase in profit.For the car owners, Autolab designed a unique experience that solves their unattended needs and surpasses their expectations in service and transparency. Their service model includes a website and web app for instant quotation and notification of repair progress based on the shop inputs. To ensure the highest quality standards, their operation team monitors the overall evolution of each service from their control room.<figure class="image image-style-align-center image_resized" style="width:35.42%;"><img src="/uploads/Service_Selection_and_Quotation_d33d909bf2.png"><figcaption>&nbsp;Service Selection and Quotation</figcaption></figure><figure class="image image_resized" style="width:36.04%;"><img src="/uploads/Visualized_Vehicle_Health_Management_6f4923159a.png"><figcaption>Visualized Vehicle Health Management</figcaption></figure>Overall, Autolab achieves a four-way linkage in its platform business model. The consumer first checks off the required items, then get a quote, and chooses whether they want a pickup and delivery service, service at home or to go to the shop. After receiving the car from the owner, the Autolab shop network performs the repair work supported by the existing technology. For the spare parts, Autolab has built an affordable auto-parts procurement network to ensure the price is competitive and the delivery is timely. In addition to providing technical support and strategic direction, the company has set up a remote service center to handle both store issues and customer feedback, effectively facilitating the integration of the four major players on the platform.<figure class="image image_resized" style="width:50.79%;"><img src="/uploads/Autolab_business_mode_5c21ed9f3c.png"><figcaption>Autolab's Business Model</figcaption></figure><h2>What is next for Autolab?</h2>COVID-19 impacted all aspects of Latin American socioeconomics, but in Zepeda’s view, the pandemic brought more opportunities to Autolab’s business as well. The regular epidemic prevention measures require reducing the use of public transportation, which also means weakening economic activities and reducing new car sales. These all greatly increase the use of older vehicles, as well as the demand for auto repair. The pandemic also has a profound impact on consumer behavior. People are forced to bear the cost of adapting to the online business model and become more accustomed to using online services instead of in-store visits.As an Internet company, Autolab’s mature and efficient platform model not only ensures its “survival” in the post-pandemic era but also has a promising future for growth. The milestones achieved over the past 12 months reflect the massive opportunity for Autolab and the overall industry. From August 2020 to July 2021, Autolab grew its shop network by 7x and revenues and shop visits by 4x. To extend its operation and impact, Autolab continues its growth with a talented team of 80 people under the leadership of <a href="https://www.linkedin.com/in/salvador-zepeda-67bab716/">Salvador Zepeda</a> and <a href="https://www.linkedin.com/in/andrewhallman1/">Andrew Hallman</a>.In 2021 the team continued pushing for new goals, first, they launched the operation in Mexico with 2 shops. Also, under the leadership of Andrew, the team is now launching a B2B2 service for fleetsAutolab’s business DNA is essentially about creating value for users with data and technology, so the company is also considering refining and improving existing technologies and algorithms in the auto repair industry, to apply them to more scenarios, such as expectations for retail consumption.

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Autolab – a New Choice of Auto Repair for LatAm Middle Class

Social Commerce trend has grown dramatically in the past years, recent research has forecasted that e-sales will exceed <a href="https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/">$735 billion by 2023</a>. According to emarketer, retail e-commerce sales in Latin America grew <a href="https://www.emarketer.com/content/latin-america-ecommerce-forecast-2021">63.3% in 2020 to $104.60 billion.</a> <a href="https://elenas.co/">Elenas</a>, Latin America’s first Social Commerce Marketplace, is a good example of the rapid acceleration of the social commerce trend, which is powered by the virality of the marketing model and the establishment of existing social platforms.Social commerce is a new way of doing business, it is no longer about digitizing traditional channels or leveraging social media channels to increase traffic conversion. This new way of commerce enables new buying behaviors, where traditional stores, websites, or even apps are no longer the first destination for new customers. As this new model evolves and takes over Latin America, we talked to <a href="https://www.linkedin.com/in/zachoschin/">Zach Oschin</a>, Founder &amp; CEO of Elenas to learn about how they developed the concept and his vision of the rise of social commerce in the region.<figure class="image image_resized" style="width:48.93%;"><img src="/uploads/Zach_Oschin_Founder_Elenas_136db29cac.jpeg"><figcaption>Zach Oschin, Founder &amp; CEO - Elenas</figcaption></figure>&nbsp;<h2>Elenas: The Story</h2>In 2017, young American Zach Oschin moved to Colombia from South Africa, where he worked for a start-up company of e-commerce and logistics, to join Polymath Ventures in the research and design of new business models for the Latin American middle-class. He joined one of the <a href="https://polymathv.com/seed-company-design-process-explained">ideation processes</a> of the company, which at the time was researching working women in Latin America.Before founding Elenas, the team went through different iterations to actually understand the need and expectations of the segment. In the process, the team explored different solutions to get closer to working women, our core segment. These solutions led them to explore the after-school space, online psychological services, and the direct sales model. Ultimately, the core need of the segment was to generate extra income for their household, while securing high levels of productivity and efficiency.Elenas was launched in 2018 and by October of 2020, they raised a <a href="https://news.crunchbase.com/news/exclusive-elenas-lands-2m-seed-to-expand-commerce-platform-in-latin-america/">$2 million seed round</a> from <a href="https://www.crunchbase.com/organization/alpha4-ventures">Alpha4 Ventures</a>, <a href="https://www.linkedin.com/company/amador-holdings/">Amador Holdings</a>, <a href="https://www.crunchbase.com/organization/polymath-ventures">Polymath Ventures</a>, and <a href="https://www.crunchbase.com/organization/meesho">Meesho</a>. Then, in March 2021, it raised a <a href="https://techcrunch.com/2021/03/04/elenas-series-a/">$6 million A round.</a> Since its foundation, the team led by Zach has achieved remarkable milestones, proving the relevance of this new business model in Latin America and the impact it can generate in thousands of women, or ambassadors as they call them, looking to achieve social and economic growth.With a competitively attractive environment, Latin American e-commerce has developed rapidly during the COVID-19 epidemic. In 2020, the business of Elenas has increased by 25 times. In May 2021, Elenas expanded to Mexico.According to <a href="https://www.linkedin.com/in/shuang-bin-05a33125/">Shuang Bin</a>, Elenas’s consultant and expert in the China-Latam supply chain, Latin American e-commerce is still in its early stage, with a shortage of supply and monotonous business models. Amidst this opportunity, Elenas is choosing the social commerce alternative, which connects the suppliers with local communities, also enabling increased access in areas where some of these services have never landed.<h2>How to gain customers’ trust with social networks?</h2>In 2017, the team realized Colombia’s local e-commerce business was at a relatively early stage. Though there existed many e-commerce companies in Latin America, they only owned 0.5% of the market in many categories.Latin American is wealthier than other emerging markets, and the penetration of the Internet and smartphones is higher. According to Statista, in 2019,<a href="https://www.statista.com/statistics/218531/latin-american-smartphone-penetration-since-2008/"> smartphones accounted for 69 percent of all mobile connections in Latin America</a>, and the share is expected to increase to 80 percent by 2025. In the same time period, the share of the population in the region who has <a href="https://www.statista.com/statistics/218141/mobile-penetration-rate-in-latin-america-since-2007/">access to a mobile phone</a> will increase from 68 to 73 percent. So, if the overall behavior is healthy and the ecosystem is ready to foster new digital behaviors, why didn’t e-commerce rise?.In order to tackle this question, Zach and the team interviewed hundreds of Colombian citizens. Through the process, they found that lack of confidence was the first barrier, users preferred corner grocery stores over e-commerce platforms. Besides, selling happened via traditional direct channels, where people probably ordered products from magazines shared by friends. According to Zach, in China, daily necessities e-commerce has a 70% penetration rate, while in Latin America this number declined to about 50%. In Peru and Brazil, the rate is 25% and 17%, and the main reason is the direct selling tradition. The global No.1 direct sale company, <a href="https://www.google.com/aclk?sa=l&amp;ai=DChcSEwjHpqC27vLyAhUZisgKHWkQC60YABAAGgJxdQ&amp;sig=AOD64%5F0d32W1RrsvTYVVX%5F16akYxF9XHfg&amp;q&amp;nis=1&amp;adurl&amp;ved=2ahUKEwji%5FZS27vLyAhUrK7kGHXTnCvQQ0Qx6BAgDEAE">Natura</a>, is Brazilian. The key learning was that in Latin America, community culture has a strong foundation, social contact is crucial to unlocking trust, people want to share recommendations and exchange information about the product.At the time the direct sales model filled this gap, however, the model was not efficient and created unnecessary barriers to both the final customer and the seller. For example, direct sellers had to order products to their own places before pushing them to the customers, they spent time and took associated risks, in some cases they even had to pay upfront for the product before receiving the client’s payment.Precisely to disrupt these inefficiencies and to create an impactful channel for thousands of women in Latin America looking to increase their income, Elenas was born. This Social Commerce Marketplace has built a selling network of tens of thousands of ambassadors, over 90% of them are women, that are enabling their own digital businesses thanks to the extensive cooperation with both local factories and importers, which gives them access to more than 45k types of products.Elenas is leveraging the power of social connections to maintain the familiarity of the direct sales model, empowering ambassadors to sell to friends and family members. At the same time they are leveraging the most critical learnings of the traditional models to enhance the experience for both the ambassador (seller) and final customer through digital solutions and a growing network of local and international brands.<figure class="image image_resized" style="width:49.12%;"><img src="/uploads/Mujeres_Poderosas_2123093965.jpeg"><figcaption>Elenas Ambassadors</figcaption></figure><h2>Elenas mission to empower women in Latin America</h2>At the beginning, the core topic of the research was working women and the expectations put on “guerreras” (female warriors!), as they referred to themselves, as they worked to balance family, relationships, and career. And as the team learned since the launch of the venture, the impact of Elenas is directly related to the social and economic conditions of the countries in which it operates, especially regarding issues of gender equality.Today, most of its sellers or embajadoras are housewives and university students, and a large proportion of the sales comes from small cities and rural areas. Lizbeth, a young 24 years old woman, living in <a href="https://en.wikipedia.org/wiki/Duitama">Duitama</a>, sustains her household expenses thanks to Elenas. In December of 2020, she earned over $3,000 US, which allowed her to pay the maintenance of her car, grocery shopping and rent.Elenas enables the opportunity to earn extra income while working from home and reducing barriers and risks. According to Zach, some of the most successful ambassadors who work full-time in the platform can earn thousands of dollars per month, up to 10x more than in the traditional direct model. Also, the sales commissions can go from 10% up to 40% for the ambassadors, which gives them incremental opportunities to earn more.<figure class="image image_resized" style="width:54.16%;"><img src="/uploads/Elenas_7f20c3d65a.jpeg"><figcaption>Elenas enables women opportunities</figcaption></figure><h3>25x growth during the pandemic</h3>In 2020, the outbreak of COVID-19 changed the pace of Latin American e-commerce. At the beginning of the epidemic, Elenas faced several difficulties. With Chinese borders closed, many imported products could not arrive in Colombia. Then, the virus in Colombia cut the logistical network, so Elenas could not transport products from Bogotá to Medellín.However, when the Colombian logistics industry adapted to the epidemic, local e-commerce exploded just like in other regions around the world. In 2020, with the fastest sales growth, Latin America beat the Asian-Pacific region and became the champion of the e-commerce retail market. It has been estimated that <a href="https://oxfordbusinessgroup.com/news/how-covid-19-triggered-latin-american-e-commerce-boom">13M people across</a> Latin America made an online transaction for the first time last year.Elenas won from two different aspects. First, customers were looking for new shopping possibilities. They spent more time on the Internet and social media and hoped that products could be directly delivered home. Second, many were looking for a platform to earn money at home, which means more potential Embajadoras went to Elenas. Eventually, sales of Elenas increased 25x in 2020.In May 2021, Elenas landed in Mexico. As Polymath Ventures have learned in his extensive research, <a href="https://polymathv.com/push-pull-design-forces-in-colombia/">Latin American people share similar behaviors.</a> Generally speaking, due to lack of opportunities for female workers, women from small cities are looking for extra income, and they are used to traditional catalog sales. At the same time, the region is showing similar patterns of digital growth, presented in smartphone adoption and internet penetration.As Zach stated, “some of our top embajadoras receive more than 100 orders every month”. Today, 11M housewives are selling products via direct sales channels, said Zach, demands exist there, so we need to extend our scope and bring more people to Elenas.

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The rise of Social Commerce in Latin America

The opportunity to transform the direct sales category by combining existing trust-based relationships with the power of digital sharing and purchasing behaviors was the starting point for Zach Oschin, Thomas Harsch and the team at Polymath Ventures to develop the idea behind Elenas: the first social commerce start-up in Latin America.Elenas is disrupting the $26 billion USD direct sales market by connecting leading lifestyle brands with a massive network of ambassadors who can promote and sell those brands’ products over WhatsApp and social media. After one year the company has already enabled over 25.000 women across Colombia to build their own online store and earn an extra income for themselves and their families.The impact of this venture is directly related to the social and economic conditions of the countries in which it operates, especially regarding issues of gender equality. According to the Human Development Report for Latin America, “women dedicate at least 3 more hours to domestic tasks than men and between 1 to 4 hours less than men to business activities”, which reflects the complexities and potential obstacles for women to secure job and extra income opportunities which fulfill their families’ economic needs. These conditions provide a tremendous opportunity to develop and innovate on traditional business models in order to transform the work structures which constrain women today.Elenas represents a new opportunity for a massive population of women who need to generate an extra income or want more flexibility in their schedules but are restricted by this traditional job market and antiquated direct sales opportunities. The current model of selling products via catalog to friends and family forces them to take on economic risk as they buy products upfront and have to handle the tedious operations of delivering products and using a paper catalog to sell.<blockquote>“When the number of employed women increases, then economies grow. According to multiple studies executed the rise of women in the workforce or a reduction on the gender disparity, produces a faster economic growth”. – OCDE</blockquote>The impact behind Elenas’ operation enables a positive cycle of empowerment for ambassadors and brands that are part of the network. This new channel has enabled over 30 Colombian lifestyle brands to achieve 25% WoW sales growth during their first month on the platform; one of these brands is Dermanat, a Colombian cosmetics company from Colombia that has developed natural products for over 30 years. Elenas has also opened a distribution channel for international companies that are looking to expand their operations to Latin America such as W7 Cosmetics, an innovative and trendy cosmetics company from London that has developed an extensive range of high-quality cosmetics at an affordable price.For the ambassador network, they are currently earning 3-8x what they earn through traditional direct sales, while the top sellers are earning more than the Colombian minimum wage. For these women, the extra income represents a 20-50% additional income to their full-time salaries.<figure class="image image_resized" style="width:68.76%;"><img src="/uploads/Elenas_Business_Model_27b7491623.jpeg"><figcaption>Elenas Business Model</figcaption></figure><figure class="image"><img src="/uploads/Elenas-1.jpg" alt=""></figure>Elenas’ innovative business model has been featured by global media outlets such as TechCrunch, La FM, and Caracol and has been recognized by renowned organizations such as Georgetown University and CitiVentures. The Elenas team has grown to over 20 people and continues to evolve rapidly as the company’s message spreads around the country.Currently, the Elenas team is working to build out an even more extensive set of digital tools for its’ network of ambassadors so that they can earn more in less time. By using data collection and machine learning technologies the Elenas platform will provide even better recommendations to ambassadors and clients to better the browsing and purchasing experience.By the end of 2019, Elenas plans on extensively growing its base of ambassadors in Colombia and in the coming years it plans to expand the business to other markets in Latin America. If you are interested in learning more about how Elenas is disrupting this traditional category or want to join the growing team you can contact them by emailing <a href="/cdn-cgi/l/email-protection#cdbdbfa8bebe8da8a1a8a3acbee3a1ac">[email protected]</a>.

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Elenas breaks socioeconomic barriers with its innovative social commerce business

Chinese investors have a unique investment approachChinese management philosophy revolves around the idea that in any process, all components belong to a larger and complex system that, if properly assembled, can function in harmony. The difficulty lay in finding the right order or model to make each unit work in consonance, adding increasing value over time.Chinese tech investors’ systematic thinking has translated into an investment approach that stems beyond finding a good service or product and focusing on seeking businesses committed to building entire ecosystems that can tackle a wide variety of industries and leverage data to maintain business harmony.Chinese investors are redefining smart capital. They navigate through a tech ecosystem with companies like Alibaba or Tencent, whose market caps reach $488 and $456 billion respectively. China also hosts Ant Financial, the largest privately-held company, valued at $150 billion. As of 2018, <a href="https://www.techinasia.com/how-big-is-china-tech-industry-now-mid-2018">China has 10 times the number of mobile payment users as the U.S.</a> and <a href="https://www.techinasia.com/how-big-is-china-tech-industry-now-mid-2018">772 million consumers are on the internet. </a>Such a vast environment has given the Chinese investors the opportunity to hone their skills and offer entrepreneurs more than just capital, they can also provide perspective and strategic vision.<figure class="image image_resized" style="width:53.78%;"><img src="/uploads/alibaba_tencent_antfinancial_696a009167.png"><figcaption>About: Tencent and Alibaba market cap, Ant Financial valuation 2018.</figcaption></figure>Below we outline a few characteristics that make Chinese investors a unique and strong source of capital for entrepreneurs seeking high value-added capital partners.Chinese investors can provide a sustainable flow of capitalIn 2018, Chinese startups attracted more venture capital than the U.S. for the first time. Chinese investors also do not hesitate to invest large sums. Last year, <a href="http://www.chinadaily.com.cn/a/201902/01/WS5c53e434a3106c65c34e7cb2.html">Chinese venture investors committed $70.5 billion in technology investments</a>, focusing on artificial intelligence, fintech, e-commerce, and mobility. Remarkably, China also boasts three of the five largest IPOs globally.Chinese Venture Capital investors are not afraid of large ticket sizes when they find the right entrepreneur attacking a strong opportunity. In 2018, second-hand car trading platform <a href="https://www.souche.com/">Souche</a> raised a $578 million Series F round from prominent China-based investors like Primavera Capital Group, Morningside Capital and Linfeng Capital.Daily goods and e-commerce platform <a href="https://www.missfresh.cn/">MissFresh</a> is an example of a sustainable flow of capital in China. The tech company has consistently raised a round every six to eight months in the past three years, including a $450 million round in September of 2018 co-led by internet giant Tencent. Since 2017, the company was able to raise a total of $1.3 billion.<figure class="image image_resized" style="width:65.82%;"><img src="/uploads/funding_types_82b32eca84.png"><figcaption>About: MissFresh Rounds, CrunchBase_</figcaption></figure>In addition to traditional venture capital, the Chinese investor ecosystem includes many hyperactive corporate investors. Tech giants like Alibaba, Tencent, JD, and Baidu have launched venture funds to propel the tech ecosystem both locally and abroad. Alibaba, for instance, has participated in 184 known investment rounds both through their Entrepreneur Fund and corporate balance sheet investments and <a href="https://docs.preqin.com/reports/The-Year-of-the-Red-Unicorns-A-Preqin-and-INSEAD-Study-November-2018.pdf">Tencent has invested in 27 unicorns</a>. This type of investor can be especially value-adding for Latin American entrepreneurs seeking technological capabilities, high-skilled talent or operational leverage.Furthermore, the Chinese investor ecosystem is highly interconnected, gaining the attention of a small group of Chinese investors can cascade into direct access to the entire ecosystem – one great relationship can open massive investment opportunities for Latin American ventures.Chinese investors have a wide scope and strategic visionChinese investors understand a wide variety of industries due to their characteristic multi-sector investment approach. JD.com, for instance, operates across traditional retail, FinTech, e-commerce, and digital technology.An investor in a company like JD will have developed an understanding of 4 to 5 different sectors by investing in a single company. This type of experience makes Chinese investors well-rounded capable of understanding discrepancies across sectors and able to view opportunities to integrate platforms across them.Chinese investors can provide valuable insight into different ways a venture can grow horizontally across sectors, using technology and operational capabilities to build new features that can both give consumers access to better products and also become innovators in traditional industries.In addition, Chinese investors are continuously acquiring new knowledge thanks to an ecosystem that promotes significant knowledge-sharing. In-depth content about disruptive business models, entrepreneurs, and consumer dynamics are readily available and this knowledge is widely spread through different social and business media platforms. WeChat, with over 500,000 business channels, is just one of many examples of an information platform; ranging from generalist topics to very specific tech news and reports.A decade ago, China went through a similar transformation to what Latin America is facing today – a growing middle-class, changing consumer patterns and rapid technology adoption. Chinese investors who experienced this transformation gained insights that could be incredibly valuable in guiding Latin American entrepreneurs today.Chinese investors are committed to emerging marketsChinese venture capital investors have committed capital in at least 15 emerging markets and are some of the most active tech investors in international countries, an experience that has given them a global vision and a deep understanding of different market dynamics.In 2018, <a href="https://www.thehindubusinessline.com/companies/chinas-vc-investments-in-indian-start-ups-hit-56-billion-in-2018/article26612364.ece">Chinese venture capital investment in India reached $5.6 billion</a> and three of the biggest investors in India last year – Alibaba, Xiaomi, and Tencent – are corporate. These corporate giants bet on sectors such as consumer goods, logistics, retail or artificial intelligence not only due to India’s growth prospects but also increased supply chain exposure outside of China.Chinese investors are also prone to establishing alliances with key players in strategic markets as a way to ease into a new market and increase their probability of success. The Chinese have the sensibility to understand that local players have a wealth of knowledge and can help them understand local consumer behaviors. Chinese Investors are increasingly more inclined to learn from other economies and empower local entrepreneurs to build new and ground-breaking products.What comes nextDuring the beginning of the entrepreneurial journey, it is easy to feel directionless and counter-productive. Finding investors that empower entrepreneurs and help co-build a vision can give newcomers a clear purpose when navigating through the tech ecosystem.Latin American entrepreneurs can reach new horizons by partnering with experienced cross-border players such as Polymath Ventures, who can unlock insights, provide powerful competitive advantages and create powerful connections with other entrepreneurs, experienced advisors, and potential investors.<a href="https://polymathv.com/">Polymath Ventures</a> is committed to bridging China and Latin America’s tech ecosystems. To that end, we are organizing a Tech Expedition to Shanghai, Beijing, and Hangzhou to connect and exchange ideas with leading Chinese tech companies and top VC/PE firms. Attendees will be able to establish a foundation for future cross-border collaboration. If you are interested in hearing more, email <a href="/cdn-cgi/l/email-protection#05666d6c6b6445756a697c6864716d73606b71707760762b666a">[email protected]</a> to obtain more information.

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How Chinese Investors can become a growth engine in Latin America

CreditEase was founded in Beijing in 2006 by Ning Tang. The company started as the first P2P lending platform in China, seeking to bridge the massive credit gap that existed and help borrowers who were overlooked by large corporations – In 2017, China’s P2P industry reached 445 billion dollars worth of transactions.<figure class="image image_resized" style="width:32.07%;"><img src="/uploads/Credit_Ease_235b8a7930.png"><figcaption>Chinese Fintech ecosystem</figcaption></figure>In the early 2000s, China lived in a credit-tight environment, with most large banks confined by 20% capital reserve ratios and regulations that disincentivized commercial and consumer lending.When CreditEase was founded in 2006 the middle class was rapidly rising, 400 million Chinese were unbanked or under-banked and technology adoption was exploding, creating an opportunity for financial inclusion by using technology-driven business models. At the same time, many tech investors surfaced who were open to lending money through P2P platforms in exchange for 8% to 12% returns. These factors paved the way for P2P lending in China.Within this environment, CreditEase saw the opportunity to develop a lending marketplace that leveraged technology and also offered investors alternative ways to deploy capital. In 2008, just two years after it began operations, CreditEase launched Zhuyedai (“Loans to Help Business”) for SMEs, and in 2009 it created a P2P sub-platform Yinongdai to lend money to farmers. By 2012, it became the “No. 1 Inclusive Finance” company in China.In 2012, CreditEase made the strategic decision to take an ecosystem approach and branch out beyond P2P lending. The company’s use of big data provided a deep understanding of lenders and borrowers of various profiles, their needs and behavior patterns, giving them the insights they needed to expand into other verticals.CreditEase created a holding company (CreditEase Corp.) and established a number of financial services subsidiaries, one of which was an independent consumer financing arm called Yirendai – of which it holds an 84% ownership. This subsidiary became the front-facing brand in charge of P2P lending and opened up room for CreditEase Corp. to take on an ecosystem strategy.The decision to establish multiple brands gave CreditEase’s management the ability to view each of its subsidiaries as a separate business, establish focused growth roadmaps and acquire the talent specific to that operational unit. Furthermore, it significantly simplified decision-making as the company grew, allowing each brand to independently make its own decisions while keeping all learnings and data collection under Credit Corp’s umbrella.At the time Yirendai began operations, data-sharing practices between financial institutions were highly uncommon, so the company partnered with internet giant Baidu to access consumer data. The partnership allowed Yirendai to obtain in-depth information about consumer spending patterns and behaviors which they utilized to build credit risk models and better price borrowing rates.In 2015, Yirendai became the first P2P consumer lending company to IPO. When the company went public, Yirendai and CreditEase Corp. drafted a cooperation agreement that provides insight into the symbiosis between the holding company and its subsidiaries. <a href="https://www.sec.gov/Archives/edgar/data/1631761/000119312515378434/d852976df1.htm">The filing showed</a> that Yirendai acquires new users through CreditEase’s on-the-ground sales network, obtains loan collection support and technical assistance including network design, optimization, and management of all aspects of IT.Today, CreditEase operates across nine different financial industry verticals: P2P lending, credit systems, blockchain, wealth management, private equity, SME Lending, supply chain finance, insurtech, and enterprise solutions.<figure class="image"><img src="/uploads/Businesses-that-CreditEase-has-incorporated-since-2006.png" alt=""></figure>About: Businesses that CreditEase has incorporated since 2006The company has taken the same approach as it did in the early days, building subsidiaries in new segments and cross-pollinating data from each of these subsidiaries to reinforce and improve each of the business units.For instance, CreditEase created YiQiFin in 2016 to offer a multi-product, one-stop shop for SMEs, supporting them throughout their entire business cycle. Using a combination of Big Data, AI, finance cloud and other technologies, the company is able to perform in-depth analysis and research of different target groups and create a platform that can tailor reliable products for family-owned small enterprises – including investment, risk management, and financial management.From the start, CreditEase gathered data points from its P2P Finance Cloud platform. Data includes SME transaction history and capital turnover, the competitiveness of its offerings and even social ratings such a product reviews to discern inefficiencies in operations and the likelihood of default. This data allows CreditEase (and its subsidiaries) to accurately profile different consumer segments and customize their products effectively.<figure class="image"><img src="/uploads/CreditEases-Data-Flow.png" alt=""></figure>About: CreditEase’s Data FlowYiQiFin then built five core products to offer SMEs a holistic solution. YiQiRong and ShangChaoDai offer e-commerce businesses and off-line businesses financing and lending options, YiQi Wealth Management offers SME’s and their employees investment vehicles, Cash Compass serves as a cash-flow and budget operation manager and Fingerprints works as a cloud-based reimbursement tool. Each of these business units is independent, but all are designed to work together as complementary services. Data sharing guarantees that each subsidiary has a deep level of understanding of the needs of an SME business throughout the entire value chain.<figure class="image"><img src="/uploads/YiQiFin%E2%80%99s-business-coverage.png" alt=""></figure>About: YiQiFin’s business coverageIn a move that demonstrates a remarkable dedication to an ecosystem approach, CreditEase established <a href="http://www.experian.com.hk/combating-looming-trend-of-black-production-fraud-through-industry-wide-cooperation">Zhicheng A’Fu</a> in 2015, a risk control and data-sharing platform that allows other Fintech firms access to 10 years of data and “Fraud Net”, an advanced technology platform that combines social behavior and credit-building methodologies to analyze default likelihoods. This move demonstrates CreditEase founder Ning Tang’s commitment to an ecosystem view via data sharing.CreditEase is an example of what can be accomplished when a company takes an ecosystem approach with data collection and sharing at its core. China is proof that taking an ecosystem view and building a conglomerate of companies that tackle multiple problems under one umbrella is an incredibly successful blueprint. In Latin America, where fintech is still extremely fragmented and lack of trust prevails, we believe that it would be valuable for companies to rethink their businesses and build ecosystems that operate across the entire financial supply chain.<hr><a href="https://polymathv.com/china-latin-america-next-consequential-alliance/">Click here for more China Articles</a>

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CreditEase: how the largest fintech conglomerate in the world was built with an ecosystem strategy

A report developed by the Development Bank of Latin America (CAF) in 2018 shows the direct relationship between GDP per capita and the percentage of journeys taken by private car. As expected, when income rises individuals feel more inclined to find more comfortable ways to move, and private vehicles have historically offered exactly that.<figure class="image image_resized" style="width:61.27%;"><img src="/uploads/Logarithm_GDP_per_capita_2b3eefdf8b.png"></figure>However, there is also an inverse relationship between population density and private car ownership as shown by the graph below, also published by CAF. Research shows that this relationship is mainly attributed to the economies of scale that public transport and collaborative economies can achieve in high-density population areas. Latin America is amongst the most urbanized regions in the world, with 80% of the population living in large cities. It is expected that by 2025, 90% of the population will be urbanized, and with that, the population density will magnify.<figure class="image image_resized" style="width:57.52%;"><img src="/uploads/Population_density_5813cf9049.png"></figure><figure class="image"><img src="/uploads/Screen-Shot-2019-06-11-at-12.13.45.png" alt=""></figure>Additionally, urban mobility is expensive in the region. On average, Latin Americans spend <a href="http://scioteca.caf.com/bitstream/handle/123456789/1091/RED2017-Eng-8ene.pdf?sequence=12">around 19% of their monthly income on transportation</a>, whereas in the U.S. that number goes down to <a href="https://www.bls.gov/news.release/cesan.nr0.htm">13%</a> and it’s expected to be <a href="https://www.mckinsey.com/featured-insights/asia-pacific/meet-the-chinese-consumer-of-2020">14% in China</a> next year. Besides, <a href="http://scioteca.caf.com/bitstream/handle/123456789/1091/RED2017-Eng-8ene.pdf?sequence=12">more than 20% of Latin Americans</a> don’t have access to public transport located less than 10 minutes away from their place of residence. In informal residential areas, this distance increases significantly.These circumstances create an opportunity to take advantage of the highly fragmented and under-optimized mobility sector, and global ride-hailing giants like Uber and Didi Chuxing have taken notice. Latin America is already one of Uber’s most important markets, with <a href="https://www.forbes.com/sites/bizcarson/2018/09/19/where-uber-is-winning-the-world-and-where-it-has-lost/#3c14b1574d6e">Mexico being its third largest market worldwide.</a>The entry to Latin America of global new mobility giants has created an interesting opportunity for local startups. Latin America has unique market dynamics that local startups understand and know how to navigate. In the ride-hailing segment, for example, vehicle supply is a huge issue due to the low rates of car ownership in the region and restricted access to financing for potential drivers. Didi and Uber are partnering with Latin American startups who understand local dynamics, such as Kovi and <a href="https://www.taximo.co/">Taximo</a>, to help solve the vehicle supply issue.Additionally, global tech companies have learned that they can maximize the probability of finding the right product-market-fit by associating themselves with local players that are familiar with the market and its operational and cultural characteristics.Today, Didi Chuxing can use its Didi Cloud Platform and AI capabilities to optimize dispatch systems, plan routes and predict traffic hot spots in order to guarantee optimal supply and leverage learnings about transportation usage and behavior that local players like Taximo, ClickBus or Kovi have acquired throughout the years – to ultimately create more mobility options for the population in record times.In China, Didi Chuxing started as a platform that allowed users to hail a taxi from their phones and pay for the service using an online payment method. The company continued to develop alternative mobility options to ultimately become a one-stop shop for the different mobility needs of a single consumer – from minibus bookings to car rentals. This approach has not been tested yet in Latin America, but we believe there is a huge opportunity thanks to the fragmented nature of mobility in the region.<figure class="image image_resized" style="width:70.41%;"><img src="/uploads/evolution_didi_8ac7d6d287.png"></figure><figure class="image"><img src="/uploads/Screen-Shot-2019-06-13-at-09.41.20.png" alt=""></figure>Other micro-mobility companies like Mobike or Grin are also improving mobility options in Latin America and offsetting its poor infrastructure. These companies are leveraging access to smartphones in the region and an increasing population density to create alternative ways to quickly get from point A to B. These options are big contributors in reducing congestion and pollution levels.Better urban mobility improves the quality of life of the citizens of these cities by improving the quantity and quality of reachable job opportunities for individuals, facilitating the dissemination of ideas between areas that did not previously have a physical connection and creating savings for consumers. Higher accessibility results in a more dynamic economic environment and more importantly, a better lifestyle.We are seeing users leapfrog private vehicle ownership, preferring to use new mobility solutions, especially in highly dense and urbanized areas where driving a car usually does more harm than good.In future articles, we will explore the extent to which partnerships between local and international ride-sharing players can create new efficiencies in emerging markets and propel economic development in Latin America.<hr><a href="https://polymathv.com/thriving-fintech-ecosystem-driving-financial-inclusion-latin-america/">Click here for more Industry Insights by Polymath Ventures</a>

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The changing landscape of mobility in Latin America

<h3>Latin America’s biggest tech opportunity</h3>Life reboots at 7 am in the streets of Bogota and traffic builds up as work commuters frenetically flood the streets. The presence of technology is palpable in the streets of the Andean capital. “Rappitenderos” carrying orange backpacks swerve their motorcycles through the traffic jam, surged-price ride-sharing vehicles pick up pedestrians left and right, and electric scooters swiftly move through bike lines avoiding the chaos of the morning commute. Every interaction begins with an internet-enabled device, and that is now a norm in Colombia and across the entire Latin American region.A robust tech ecosystem is developing in LatAm, spearheaded by a group of visionary players. Venture capital investment grew from $500 million to $1.1 billion between 2016 and 2017 — and by the end of last year’s first quarter VC investment had already reached $700 million. Latin America’s increment in technology investment is just a glimpse of an evolving ecosystem, where entrepreneurs are re-thinking existing business models to capture new consumption preferences among a more ubiquitous middle class.Technological growth and the appearance of new startups has been possible due to increasing institutional support across the region. The creation of government-funded accelerators, changes in regulation and new initiatives to improve investment fund’s transparency have been the main facilitators. The Latin American tech ecosystem has now achieved a very consequential inflection point, and a key step forward will be to understand customer spending patterns and build data-driven businesses that can capitalize on the growing unmet needs of the middle-class.<blockquote>It is projected that by 2030, Latin America’s middle class will be represented by 400 million people (43% of the population), combined consumption of middle-income earners will amount to $5 trillion and smartphone penetration will reach 80%.</blockquote>These mind-boggling growth prospects were once the foundation of a now avant-guard Chinese economy. Fast growing consumption power of the internet-savvy middle class fueled Chinese tech businesses to innovate and scale up rapidly to capture the ever-changing demand. Concurrently, technology and data allowed businesses to significantly reduce cost of services and effectively offer a variety of personalized choices.As if entering a time machine, Latin America’s tech ecosystem and demography now resemble the booming tech environment that China capitalized on no more than a decade ago.<h3>China’s tech ecosystem revolution</h3>Walking around the streets of Shanghai one can immediately notice that life moves at a much faster pace, and that an invisible web connects every person on sight. In the early 2010’s**,**Chinese entrepreneurs and investors noticed that there was a big opportunity to capitalize on higher consumerism. As incomes rose, household spending budgets and daily consumption shifted away from mundane necessity spending into identity-driven discretionary purchases.Higher disposable incomes combined with high mobile penetration created the necessary foundations to develop a highly profitable lifestyle services sector in China. Business models began to focus on reaching customers’ new demands quickly, using agile iteration methods and big data. The Chinese sensibly analyzed customer feedback and identified business models that could capture larger wallet sizes and adapt to changes in price sensitivity.A company like Meituan-Dianping is a clear example of Chinese technology adapting to a rapidly growing middle class and capitalizing on new consumer habits. Meituan was founded in Beijing in 2010 by Wang Xing and started as a group-buying platform offering customers products and services at significantly reduced prices. In 2015 it acquired Dianping in order to expand its service offering towards the high-frequency service category, especially within the restaurant guide and food-delivery sectors. The company positioned itself as a lifestyle services platform, offering the middle-class a well-rounded and fulfilling experience. Today, anyone living in China can have immediate access to on-demand food delivery, hotel booking, movie ticketing, education, entertainment and payment services all in one place. Any platform that can offer that level of convenience and reliability will surely capture the hearts (and wallets) of consumers with a newly-found urge to spend more.In just 4 years, Meituan-Dianping was able to capture 62% of the on-demand food delivery market in China and become the leading platform in the O2O (online-to-offline) lifestyle services market. Meituan’s success can be attributed to its ability to identify and provide any product or service that is frequently used in a Chinese person’s daily life. However, its key differentiator revolves around the engaging consumer experience the user enjoys while using the platform. Meituan’s proactive attitude towards investing in artificial-intelligence, powered dispatch capabilities and smart-delivery features has made it one of the most reliable and customer-centric platforms in the region.Success stories like Meituan’s reflect the extent of opportunity that exists in emerging markets. Twenty years ago, China discovered that as the country experienced two-digit percentage growth in its middle-class, consumers started to seek convenient products that would enhance productivity or improve leisure time. The Chinese focused on ecosystem-building methodologies to consolidate value chains and reduce operational costs. In addition, customer engagement innovations arose in the digital space to boost growth and increase return customers — prioritizing a seamless customer journey through the best possible O2O experience.Chinese investors’ experience working with cross-sectional tech businesses is an under-appreciated source of practical knowledge that can benefit ripening tech ecosystems around the globe.<h3>China The Explorer, moving to new emerging tech markets</h3>As China’s lifestyle, e-commerce and other B2C sectors became increasingly saturated and middle-class growth prospects stalled, investors and tech companies started to look outwards. Although historically famous for its “Made in China” tagline at the beginning of the century, China now wants to market its “Designed in China” brand. If there is something that Chinese investors and entrepreneurs have learned is to bypass legacy business models and create new industries better suited to take advantage of available technologies and population needs. In fact, credit card payments and hardware payment devices never caught on in China. Instead, mobile payments became mainstream — resulting in a mobile payment market 50 times larger than that of the U.S.The logical next step for China was to tap into growing opportunities in other emerging countries, and use its expertise bridging technology and consumer experience to provide large middle-classes with virtually any lifestyle goods or services.The “Going Overseas” wave of the Chinese tech sector is already happening in the neighboring markets, like India.<blockquote>By 2016, half of India’s 1.2 billion population was represented by middle class citizens (defined by Mumbai University as household spending between $2 to $10 per capita a day) and 680 million people had mobile devices.</blockquote>With a large and growing middle class and increasing IT&amp;Mobile penetration, India had the foundations that Chinese tech investors and large startups had grown to understand very well.Indian lifestyle, e-commerce and marketplace industries have highly benefited from the participation of Chinese investors and large tech corporations. A large part of the benefit comes from China’s earned ability to holistically view emerging markets as an ecosystem made up of different moving pieces and capture new markets across all verticals.In 2017, tech giant Alibaba and large investor Ant Financial invested $680m in the Indian payment processing startup Paytm. The acquisition by these players made sense for two principal reasons: 1) it deemed an opportunity to support the growth of the leading online payments provider, and 2) it positioned both firms strategically to build an ecosystem around lifestyle services and capture India’s growing middle-class.Ant Financial investors (majority owners at Ali Pay) have frequented Paytm operations in India to establish information-sharing practices and further complement Paytm’s latest pivot to offer e-retail capabilities. The investment firm’s commitment to Paytm goes beyond capital and is in fact focused on developing operational synergies to build an ecosystem for the middle-class. Paytm is also entering the movie-ticketing space, hoping to become a one-stop shop for India’s leisure-seekers and a reliable platform for online payments across the country.China’s ecosystem-driven perspective has given investors and tech companies an upper-hand when building large businesses across sectors. That level of visibility when creating new business models can yield massive competitive advantages in large emerging regions; where developing top-bottom consumer infrastructures via technology have demonstrated successful results.<h3>A great partnership opportunity for Latin America</h3>Latin America has already achieved a crucial inflection point, with over half of its population being internet-connected through smartphones. When China’s 2.0 technological economy surfaced at the turn of 2010 and its BAT (Baidu, Alibaba, Tencent) companies emerged, the country’s mobile penetration was growing as fast as Latin America’s is today and the middle class represented a similar percentage of total population. BAT companies were able to capture larger market shares by taking on a user-targeted approach, gauging more customer feedback and quickly iterating through disruptive business models to ultimately offer products better suited to their users’ needs.Latin America resembles a similar ecosystem today. Forecasts estimate that the region’s middle class will represent 35% of total households by 2020. Like China in 2010, mobile penetration in Latin America is quickly growing and it’s expected to reach 70% next year — which means that around 463 million people will be connected through a smartphone device. As a result of enhanced connectivity and rising incomes, the region has enjoyed three to four-digit percentage deal-value growth in consumer sectors like e-commerce, marketplace, mobility or fintech. LatAm’s tech growth reflects consumers’ increasing demand for new products and services that are now seen as accessible and that are perceived to improve life’s quality standards.Latin America can greatly benefit from analyzing success and failure cases in China and using Chinese practical knowledge to leapfrog to new capabilities and efficiently grow new businesses for the middle class. While the technological ecosystem is quickly evolving in LatAm, the region still lacks the practical expertise that the Chinese have acquired through years of iteration and R+D. LatAm is not yet equipped with the peripheral vision that Chinese investors and tech companies have obtained from building companies that can capture market shares across the entire value chain. The Chinese have developed a sensitivity towards identifying and building business models that can solve a wide range of pain points through a one-stop shop and have relied on advanced data analytics to gain and lock-in their users’ loyalty.With a new wave of Latin American middle-class consumers emerging, tech players can seek competitive advantages by developing enduring business models focused on fair prices and convenience. Combining the entrepreneurial drive now present in LatAm with the ecosystem-building view pioneered by the Chinese, the region could quickly evolve into a self-sufficient and tech-oriented economy.Follow us on LinkedIn and Medium to stay updated on the latest news about technology in China and Latin America: https://www.linkedin.com/company/polymath-ventures/ | https://medium.com/the-new-allianceReach out to Jose Rodriguez with any inquiries or ideas: <a href="/cdn-cgi/l/email-protection">[email protected]</a>

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China-Latin America: the next most consequential alliance

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Polymath Ventures: Our culture

Trust might not be the first word that comes to mind when creating a Business Model. Although it should, especially in <a href="https://polymathv.com/library/articles/build-successful-startups-developing-countries" target="_blank" rel="noopener noreferrer">Emerging Markets such as Latin America.</a>The idea of building businesses around trust is certainly not new, but it has taken more and more value in the fast-changing environment in which we live and work today.There are many reasons why trust is becoming a core value for businesses and institutions alike. One of them is the expenditure of our public sphere, with the constant growth of the Internet and Social Media it seems like transparency is no longer an option, but a requirement.Many companies have seen their numbers sink despite having a proven and profitable business model, all because their credibility went down, so the people stopped trusting them which eventually led to economic impact.But, what is trust?For this particular piece, trust should be understood as the “ability to believe in whether someone is fair, honest or reliable.” This basically would mean to believe that someone won't act opportunistically or take advantage of her/his position to affect other people's interests.We would agree that ultimately, all companies should embrace this as one of their core ideas, as it even seems like an ethical commitment to provide value without affecting other people. But the fact is that trust does not end there, on the contrary, it just starts.Building upon trust does not only mean having this sort of ethical commitment to your consumers and employees, it’s also a claim of competence, which means that you will do your best to deliver on the promise you are making.Imagine how that level of commitment to your value proposition would affect the performance of your teams.That’s why trust can be a powerful thing to build around for every business, but it becomes even more important when we talk about Emerging Markets.Why is trust important to building businesses in emerging markets?As we have seen Trust is important for every company, no matter its location, to embrace and foster Trust as a priority in their everyday business. But when you build for an emerging market it definitely should be at your top one.But, why?Let’s take Latin America as an example (for obvious reasons), to understand the impact the lack of trust could have both in personal relationships and businesses according to research published by the Inter- American Development Bank (IDB).The following chart compares the behavior of trust levels in Latin America and the world between 1981 and 2020.<figure class="image image_resized" style="width:69.33%;"><img src="/uploads/Captura_de_pantalla_2022_03_01_134526_836f9895c5.png"><figcaption>Declining trust in Latin America - IDB</figcaption></figure>As you can see in the graph, the overall trust in Latin America’s countries dropped from 36% in the period between 1981-1985 to around 26% in 2020, a trend that differs from the rest of the world’s.An important view here is: The world has also seen a drop in Trusts levels during the period analyzed in the report, but it seems like in recent years this downward trend has slightly reversed, except for Latam.But, what does this have to do with Company Building? You would ask.It results that when interpersonal trust is low, so it is towards the private sector. Which in Emerging Markets can be attributed to a generalized lack of infrastructure, a high level of informality, and inequality.<figure class="image image_resized" style="width:68.73%;"><img src="/uploads/Captura_de_pantalla_2022_03_01_134735_bb865cbe4d.png"><figcaption>Trust levels by institution - Source: -IDB</figcaption></figure>As the graph shows, it’s not only interpersonal trust that’s low in Latin America, if we go down to Private Businesses we can see the mistrust in this category is almost the same as it is for Governments which you could intuit, is a very negative sign.And the negative impact does not even end there, as you can probably assume by this time already, the lack of trust in the region also affects other areas related to businesses and people such as productivity or level of income.<figure class="image image_resized" style="width:66.22%;"><img src="/uploads/Captura_de_pantalla_2022_03_01_135002_970a1a4f6c.png"><figcaption>Trust and Productivity - Source: IDB</figcaption></figure><figure class="image image_resized" style="width:65.53%;"><img src="/uploads/Captura_de_pantalla_2022_03_01_135046_3a0dc3bf69.png"><figcaption>Trust and Income- Source: &nbsp;IDB</figcaption></figure>Now, after all this data. Do you still think it’s a coincidence that countries with a higher level of trust, achieve better results both in productivity and income?We are going to leave you with that reflection before we move on to the part where we put our hands on and share with you some ideas on how we build companies upon trust, and some tools so you can start doing the same.How do we build from Trust?At Polymath Ventures, we build and scale human-centered companies to empower the middle-class of Latin America. We do it by following a proven process and methodology that has helped us to develop more than 100 business concepts during our 9 years of existence.So according to our experience, these are 5 things that you can do to constantly build and scale your business with a focus on trust.<ul><li>Start with why:</li></ul>This one seems like the obvious one, and we are sure you have heard it everywhere. But it’s still important to remind the power of purpose.In terms of Trust, this is a powerful tool to demonstrate that you have a clear idea of the change your company wants to make in the world, which is already a great way to connect with your consumers, collaborators, and even investors.Clearly define your why, communicate it and make it part of your everyday operations. We are sure it will not only increase Trust, but it will also enhance commitment and improve your relationship with every stakeholder.<ol><li>Put humans at the center:</li></ol>If you read before about what we do, this won't come as a surprise.Putting humans at the center of every process of company building makes sense because it helps you build something that a real person actually needs.But apart from that, if you base your strategy on continuously understanding what these real people are experiencing, the result will most likely be that they will trust more in your business, as you are not only solving a problem for them but also constantly asking about their perception and ideas.<ol><li>Deeply understand needs and behaviors:</li></ol>This point is highly associated with the last one, although it’s worth it to make an emphasis here.Building around a human-centered approach doesn’t only mean that you constantly talk to users and ask for their feedback. It goes waaay beyond that.In our experience, in order for you or your team to really understand what a problem is about, you should do more than only ask, you would probably have to go and live the experience yourself which implies a deep level of research and interaction with the real users.And remember: Users don’t usually know what they want, but they do know what they are going through, so go on and live it with them, rather than just hearing it.As it would seem obvious, this kind of commitment and closeness will certainly increase the Trust they put in you to help them make their lives easier.<ol><li>Create a 10x better solution:&nbsp;</li></ol>We live and breathe for this. Real disruption only comes from exponential solutions. How does this relate to trust?This is something that we would like you to answer yourself. Do your trust levels increase or decrease when someone solves a problem for you?Let’s imagine you have been working on a project for 2 weeks and haven't been able to finish it, then one of your peers comes and helps you figure it out in only a couple of hours.Would you go back and ask for his help again if you encounter a similar problem?We bet your answer was yes, and that is Trust exactly.<ol><li>Measure and iterate:</li></ol>Here comes the last one, but certainly not the least important.As your company or product grows and develops, a great way to maintain trust within key stakeholders is to keep improving, which leads us to one of our favorite verbs: Iterate.When people start noticing that you are all in for constant improvement they will increase their Trust in your intentions which, you guess, will positively impact both your growth and retention rates.—To wrap up, here’s a quote from Warren Buffet on the importance of trust.&nbsp;<blockquote>Trust is like the air we breathe – when it’s present, nobody really notices; when it’s absent, everybody notices.” &nbsp;Warren Buffett</blockquote>

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Trust: Key to building companies for Emerging Markets

You don't turn 10 years every day, especially if you are a Startup.&nbsp;Making it to the first year is hard enough. In fact, approximately 90% of Startups fail in year one. That's a milestone hard to reach.&nbsp;But for those who survive the first 365 days, the path doesn't become easier, on the contrary, the uphill is only beginning.So this is what happened: 10 years ago, Polymath Ventures was funded in Medellin, Colombia by Wenyi Cai, who got here after having great success as the COO of Milo.com in Silicon Valley.&nbsp;The first team was assembled in June 2012 with the idea of building companies to serve the middle-class in the region.<figure class="image image_resized" style="width:75%;"><img src="/uploads/Whats_App_Image_2022_06_03_at_5_29_29_PM_5ccebf91e4.jpeg"><figcaption>First Ideation Team - June 2012</figcaption></figure>&nbsp;The purpose that brought Wenyi to LatAm continues to be the same for Polymath today, even when the company has<a href="https://polymathv.com/about-us" target="_blank" rel="noopener noreferrer"> transformed and evolved in the last 10 years.&nbsp;</a>We don't have a specific day to point Polymath's funding, so we will commemorate this achievement for the whole month.&nbsp;&nbsp;<figure class="image"><img src="/uploads/infografia_aniversario_Mesa_de_trabajo_1_47a241bd4d.jpg"><figcaption>Polymath's history: From 2012 to 2022</figcaption></figure>&nbsp;Now that you all know the drill, let's dive into the specifics.&nbsp;Reaching the 10 years milestone is reason enough to celebrate, but we would like to do more than only just that.&nbsp;If you know us, you know we rarely stop at the surface. We like to go deep, ask uncomfortable questions and get hidden insights.&nbsp;And that's exactly the promise we are making to ourselves and you on this anniversary.&nbsp;We want to reflect and share the nuances of our path to build<a href="https://polymathv.com/ventures" target="_blank" rel="noopener noreferrer"> transformative companies for Latin America.&nbsp;</a>We have learned and failed a lot. We have fallen and bounced back from problems that we thought to be impossible. We have created successful businesses, and have closed some that didn't work out.&nbsp;This path has shown us the importance of having a scientific approach to everything we do, which is why we would like to share a formula that sums up what we believed has been instrumental to the success of Polymath and our Ventures.&nbsp;Before we go ahead and share the formula, we would like you to take a moment to recognize that there is no unique or correct way to approach company building.&nbsp;What has worked for us might not work for everyone, but we do believe we have unlocked some core ideas, processes, and ways of working to make our job easier and more impactful.&nbsp;So, here it goes, these are 4 things we believe are crucial when building startups that succeed.&nbsp;<figure class="image"><img src="/uploads/10_Aniversary_08_1_1_c228b6f081.jpg"></figure><h3>&nbsp;</h3><h3>The formula explained:&nbsp;</h3>After 10 years of building companies to empower the middle-class of Latin America, we have experienced the power of all these variables working together.&nbsp;Applying the formula is tricky but it can create significant change in the process of building and scaling a company from scratch.&nbsp;Here's a brief explanation of the formula. During June we will be sharing content and stories related to each of the variables so we can better illustrate the importance they have had in our journey.&nbsp;<h3>Anti-Fragility:&nbsp;</h3>Antifragility can be defined as the ability to confront and resist stress, difficulty, or uncertainty AND emerge better from it.&nbsp;The term was initially coined by Nassim Nicholas Taleb, author of Antifragility: Things that gain from disorder, and has been used in a variety of disciplines, from physics to business.&nbsp;The power of the concept for Business cannot be ignored.&nbsp;An Antifragile company is capable of thriving in uncertainty and getting stronger as it navigates difficulty. It differs from resilience in the idea of becoming better, rather than just resisting.&nbsp;You can certainly see the benefit of this ability in the journey of building a Startup and when you are building more than one at a time as we do at Polymath.&nbsp;We encourage Antifragility in everything that we do, starting with our people, which leads us to the next variable.&nbsp;<h3>Talent:</h3>Talent is probably the most valuable product in a company.&nbsp;We haven't yet seen a successful business that wasn't built upon the energy and talent of the people behind it.&nbsp;The best companies focus greatly on attracting and developing talent that matches both their culture and purpose.&nbsp;The thing is that there's no way around this. Without the right talent, a company simply cannot succeed.&nbsp;At Polymath we always put our people at the center, we make our work significant and challenging while providing with the right set of skills, culture, and mentors to make everyone the best at what they do.&nbsp;But not even the best team in the world could create great businesses if they don't have a clear understanding and connection with the higher purpose of a company. So let's dive into that.&nbsp;&nbsp;<h3>Purpose:</h3>Behind every great company, there's a great purpose.&nbsp;Having a higher purpose gives a company a reason to keep going when things go bad, and a reason to celebrate when they are working well.&nbsp;Everything about a business should be built around this ideal goal that it wants to achieve.&nbsp;At Polymath we always start with a clear why. For us, it's the middle-class of Latin America, everything that we do, every company that we create is focused on solving a problem for that specific demographic.&nbsp;Having a clear purpose is the best weapon you can use to face uncertainty. It gives the team a guiding light, a horizon to pursue, and a deeper idea to gather around.&nbsp;But it's not only about clarity, it's also about the satisfaction of achieving something that can impact the lives of hundreds of people. Something that guides your everyday work.But none of this could hold on together if you don't have a method that works. That's why at Polymath we have created a methodology for Company Building that has become the playbook we use to create companies from scratch, and that's the final component of our formula.&nbsp;<h3>Methodology:</h3>If there's one thing that makes us different from other entrepreneurship models is our methodology.A methodology can only be developed when you do things repeatedly, which allows you to learn and document insights of a specific process to be refined and improved in each iteration.&nbsp;Polymath has created a methodology that focuses on every stage of a company in the process of being created, from ideation to acceleration.&nbsp;We have been working on<a href="https://polymathv.com/company-building" target="_blank" rel="noopener noreferrer"> improving this methodology</a> from day one and will continue to do it as we create and scale more companies to reach our purpose.&nbsp;That's one of the main reasons why Venture Studios work. Is the process of repeating the journey of building companies from 0 to 1 that makes us unique.&nbsp;<h3>Final Thought&nbsp;</h3>Did anything resonate with you?&nbsp;If it did, stay tuned to our channels during June, because next, we are going to explore each variable of the formula from an actionable and real-life perspective.&nbsp;You are going to hear from the founders of our Ventures and our Teams, the experiences, challenges, and achievements they encounter every day, and how Polymath has helped them build companies and careers that are 10x better.&nbsp;Don't miss out! &nbsp;

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10 years building companies for Latin America 

Wenyi Cai is the Founder &amp; CEO of Polymath Ventures, a venture studio that builds digital platforms to empower the middle-class of Latin America. Prior to founding Polymath, Wenyi was an entrepreneur in Silicon Valley. As the COO of Milo.com, a consumer internet startup that sold to eBay in 2010, Wenyi led business development efforts with major technology companies like Microsoft and eBay and oversaw the product and engineering teams. Earlier in her career, Wenyi was a consultant with McKinsey &amp; Company in the Middle East, Africa, and South Asia. Preceding her business career, Wenyi helped build a quantitative trading hedge fund, and was a published researcher in applied physics. Wenyi graduated cum laude from Harvard College, and studied philosophy and physics. Wenyi was born in China and grew up between China and the United States.

Co-Founder & CEO 

Wenyi Cai 

Failure stories are at the core of the entrepreneurship and startup ecosystem.Failure is one of those things that we are taught to be afraid of since we are little kids.It’s something that you have to avoid: To fail.Then, as we grow up we face the inevitable truth, that is: It’s impossible to grow without failing.In entrepreneurship, it might be even more evident. To fail is to learn, and even if we want it or not, we all will have to fail a lot in our lives.The core of the matter of course is: How to get the most out of those failures?We talked to our Founder &amp; CEO, Wenyi Cai, to try to frame some ideas around the importance of recognizing, documenting and celebrating failures as a fundamental part of the journey of building transformative companies.<figure class="image image_resized" style="width:75%;"><img src="/uploads/Copy_of_Wenyi_005_d09a9f8073.jpg"><figcaption>Wenyi Cai - Founder &amp; CEO</figcaption></figure>Before funding Polymath, Wenyi spent some years in Silicon Valley as the COO of <a href="http://Milo.com">Milo.com</a>. What she remembers about the ecosystem there, is its focus on celebrating and getting as many insights out of failure.“What’s really insightful about failure is that you learn a lot through it” Wenyi Cai.That’s one of the things that makes Silicon Valley a hub for innovation and entrepreneurship. People are not afraid of failures, rather they are eager to make mistakes because they know how valuable that knowledge can be.There is this idea of entrepreneurs from Silicon Valley being an overnight success, but that's just B.S. Sucess for the majority of people doesn’t come as easy as we all see it from the outside.Usually, the kind of success that strikes, comes only after a process of repetitive failure and learning.Especially in entrepreneurship, as Wenyi says:<blockquote>“In order to create really breakthrough businesses and companies you have to learn how to learn better”.</blockquote>&nbsp;So let’s stop for a bit and really think about that phrase: “Learn how to learn better”.That’s when experience comes to play. Most breakthrough ideas and businesses come from insights that cannot be obtained in books. In order for a company to really understand the nuances of their business, the only thing they can do is to operate the business itself.Learning does not happen in steadiness, on the contrary, it happens in movement.That’s why if you are trying to create transformative companies, you will have to unlock access to knowledge and insights that other people couldn’t, and again, those are things you cannot read about because not everyone has access to them.The thing is that experiences can’t all be good. In fact, most of them might feel bad or at least uncomfortable, and when you start feeling that, you know you are on the right path to learning something new.<blockquote>“The real insights about a market, an industry o certain costumers comes through experience, and it’s really hard to make all those experiences, good experiences.Almost by definition in order to gain these differentiated insights you have to go through a lot of experiences and a lot of them are going to be failures or not entirely successful experiences”. Wenyi Cai</blockquote>&nbsp;That’s how having funded 2 or 3 companies before you “succeed” is not a sign of failure, rather it’s a sign of evolution, process, and a path filled with unique learning experiences.Silicon Valley’s culture rapidly embraced the idea of celebrating failures and that helped build a community with a mindset of falling and bouncing back as many times as it is necessary to achieve something extraordinary.<figure class="image image_resized" style="width:75%;"><img src="/uploads/Quotes_4959731b35.png"><figcaption>Celebrate Learnings&nbsp;</figcaption></figure>In Latin America that spirit is yet to be fully embraced, as the early ecosystem that it is, we are just starting to see these second or third-time founders, or even exceptional talent coming out of unicorns to capitalize on their learnings by building something themselves.The challenge from now on will be not only to celebrate and embrace failure but also to maximize the learnings we all take out of them. The success of the ecosystem depends on it.<blockquote>“One of the things that are really difficult is that if we don’t embrace failures and understand what are the best ways to come out of them and take the learnings, we are losing a lot of talent and we are losing a lot of access to those learnings as an entire ecosystem”. Wenyi Cai</blockquote><h2>&nbsp;</h2><h2>Being Antifragile</h2>There are many things that can contribute to a business’ failure. Some of them are exogenous, or things you have no control over. These could be the market you are trying to reach, the financial situation of the region or even the political state of a country.The best thing you can do about those things is to deeply understand and monitor them, so you can take more informed decisions about your business. But even if you closely analyze them every day, there are few things you can do to shift their behavior to your own good.On the other hand, you have the things you can control, these are related to how you build your team, the business model or features your product offers.<figure class="image image_resized" style="width:50%;"><img src="/uploads/Wenyi_s_Quote_e93ed71dee.png"><figcaption>The kind of issues that can kill a business</figcaption></figure>&nbsp;In our<a href="https://polymathv.com/library/articles/10-years-of-building-companies-for-latin-america" target="_blank" rel="noopener noreferrer"> 10 years path of building companies,</a> we have encountered many of these problems. Some of them have led us to pivot entire business models or even close some of our ventures. The fact is that no matter the final outcome, we have always found a way to learn from failure, and become better. That´s what we understand as being antifragile.Because of the way we build companies at Polymath and at the Venture Studio level, we are very intentional with our learning processes which have allowed us to concentrate our efforts on specific business models and solutions that we now know work better for the demographic (middle-class) and the region (Latin America).<h2>A real-life story</h2>Now that we have outlined the importance of failure in the process of building companies, let’s deep dive into a real-life story to better exemplify how we leverage our learnings.<figure class="image image_resized" style="width:75%;"><img src="/uploads/POST_TAXIMO_48b1c86bb0.jpg"><figcaption>Taximo, a business model for mobility in Latam</figcaption></figure>Taximo was one of the first Ventures we launched at Polymath. It was 2013 and technology-based companies in LATAM were just starting to rise, with very little or no money coming from Venture Capital at the time, it was a very challenging but fun ride.The initial business model aimed to help drivers who couldn’t own a car access lending options so they could work and make a living by using Taxis owned by other people, who at the same time needed drivers for their cars.In its history, Taximo evolved from a “simple” lending business model, to be more of a tech enabler for the Taxi market, focusing its efforts on developing solutions not only around connecting drivers and car owners but also becoming a Software + Data + Service Provider business model.After years of small successes and many iterations around the business model to drive more innovation and value to the specific industry, Taximo finally closed its operation in late 2019.Here are some reflections from Wenyi on Taximo’s learnings:One of the fundamental reasons why it didn’t work: It’s not that the taxi market is small, or that people don’t need loans or financial instruments to have that business, it’s more that we decided at some point to have an asset-light model in which we were kind of the software, credit assessment and collection.<figure class="image image_resized" style="width:75%;"><img src="/uploads/Asset_light_Vs_Asset_heavy_2573dd8187.png"><figcaption>Defining a business model: Asset heavy VS Asset light</figcaption></figure>The problem is that in Latin America there’s not a lot of depth in terms of financial institutions. Most of the formal banking sector doesn’t have as much competition as you have in other markets, but even below that, there are no specialist financial institutions even if they are not banks. It is a very shallow market in LatAm.So for Taximo at the time, there were only 3 big players for it to sell it in Spanish Latam, so the depth of the market wasn't there.That’s probably the most faithful decision that was made at some point and that was not correct. Alternatively, we could have chosen an asset-heavy model to underright the market and give these credits to taxi and uber drivers.It’s very important to understand what really were the most fundamental things that you didn't do right because there will always be things that are exogenous and things you can’t control and usually make everything go slower rather than fundamentally derail the ability to build that business.My reflection is that in Latin America if you want to be in the lending business you need to be asset-heavy because the depth of the niche financial institutions market isn’t there which is a completely different situation than other markets like the U.S.This example illustrates how some decisions like becoming asset-light, can have made all the sense at that specific time, and ultimately ended up not being the right decisions for the market.There are a lot of details that are recoverable mistakes, if you are a good founder and are able to pivot quickly, you can recover from many business decisions and even exogenous things happening.But there are some faithful choices that are harder to recover from, and maybe people are not so intellectually honest about that. We could just say “This didn’t work because of the market or the competition” Instead of reflecting on our own choices.<h2>A never-ending learning cycle</h2>Interesting, huh?The most interesting part of all this is of course how we have been able to capitalize on those learnings to continue to improve the way we scale our businesses.For example, all the learnings we had with Taximo’s journey were pivotal to the decision-making process of pivoting Aflore and Autolab to more tech-based companies, as well as to the building of Elenas.<figure class="image image_resized" style="width:75%;"><img src="/uploads/2021_rewind_619a1e268f.png"><figcaption>Cross Learning: From one Venture to the whole portfolio</figcaption></figure>If we hadn't experienced that failure with Taximo it would probably have taken us more time, money and energy to build the business models that we have now.The most interesting part of this happening inside a Venture Studio is how it can occur repeatedly and generate a compound effect that goes from one company to another. It’s cross and scalable learning, a difficult but necessary thing to entrepreneurship.About those learnings, these are some of Wenyi’s thoughts:“Over time we have crystalized these learnings by focusing on certain business models that we think work.Fintech lending, e-commerce platform, b2b2c services, there’s a lot underneath and we have developed a building thesis around those learnings.We now better understand what is the level of fragmentation you need to be seeing in a industry for these business models to work or what is the gross margin we can expect, etc…We have learned that for socially building for the middle-class you need to have a high gross margin in order for the effort to be really worth it.We spent a lot of time thinking what is the value that the business adds to the different players and if we don’t feel we are adding this 10x better value, then we think that you also don’t get the kind of exponential growth that is needed to make these businesses grow.<figure class="image image_resized" style="width:75%;"><img src="/uploads/Elenas_10_X_Better_Product_56a75fbd5f.png"><figcaption>Elenas: A 10X better model for Direct Sales&nbsp;</figcaption></figure>In LatAm is happening something similar to what happened in China in the 2010s, when funding and opportunities were going to a specific kind of founders that came from universities in the U.S or had experiences in certain kinds of companies like Goldman Sachs, McKinsey, Morgan Stanley and some of the likes.Then they realized that the more grounded founders, the ones that didn’t come from these places but rather have been working in the local sphere, were the ones building more scrappy and scalable companies, because they were closer to the ground, closer to the users and the channels and things like that.Both profiles bring a lot of value and if you can get a team that combines those actually have pretty good results, but it’s not always possible”.<h2>A message for the ecosystem</h2>Latin America’s ecosystem is still young, and there are many things to be learned and experimented in the region.We are excited by what’s coming and we believe there are many opportunities yet to be capitalized and that can radically change the way people live in Latam, especially those that have been neglected and underserved for years.We asked Wenyi for her advice to founders and professionals working in the ecosystem and summarized them in 4 crucial points:1- Recognize and celebrate failure: The first step to being antifragile is to be very intentional and reflective about the things we do and learn. If we want to build a more mature ecosystem, we shouldn’t only reflect on our own process, but also share it and celebrate our failures in public.Creating an open conversation about failure will help other founders to learn from our mistakes and encourage newcomers to take the leap and build their own companies.Wenyi’s words: “One of the interesting things about LatAm is that we all want it to grow but there are few conversations about failures. Do we learn from other people's failures and challenges in a healthy way? Or do we sneak behind the back of the people? Do we get jealous for other people's success? Or do we come all together to be helpful to each other and talk about lessons learned in an honest and healthy way. ”.2- Develop a Growth Mindset: Recognizing learnings and growth opportunities in everything that you do is a way of living, it goes back to how you think and confront life, that’s what makes it a mindset-level conversation.Here you would have to be transparent and make a growth mindset a requirement for your everyday actions. Also, it’s about sharing, because everything is about sharing.Wenyi’s words: “The successful founder has to be someone who has a growth mindset, and reflecting on your mistakes in a very thoughtful transparent manner and then being willing to share is one of the best ways to have that growth mindset”.3- Focus on healthy growth: One thing is fast-paced learning and other very different is throwing money at problems in order to move more nimbly.This has always made sense, but maybe it has even more value now as we see a possible economic recession developing in the world. Learning how to fail, while being mindful of the resources is also a must for a healthier ecosystem.Wenyi’s words: “There’s a lot of money going to businesses that haven’t generated that much value. Sometimes having that much money can make people not very discipline on the expending of money and how you can achieve growth not throwing money at it but rather finding real product-market fit”.4- Embrace your weirdness: People that build the best businesses and projects tend to have very specific and diverse ways of seeing the world, that’s what makes them ideal for innovation and disruption.You should be embracing that, and even making it part of your company’s culture, way of working, and day-to-day processes. Often times what makes us feel weird is also the thing that makes us stand out from the crowd.Wenyi’s words: “You kind of have to be a bit weird to be a founder. We are all weird in our own ways but you can be weird in ways that become the secret sauce behind the resilience and vibrance of a business”.

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Fail, learn, celebrate, repeat 

In recent years, Latin America (LATAM) has experienced an economic revival, and it's not expected to slow down any time soon. Latin American economies are estimated to increase to <a href="https://www.dlapiper.com/it/italy/insights/publications/2022/04/projects-global-insight-issue-5/economic-drivers-in-latin-america/">9.2 trillion USD by 2030</a>, placing LATAM at a more prominent position in the global market in the near future.&nbsp;Startup ecosystems are thriving with a new generation of entrepreneurs transforming the region into a promising business destination, thanks to progressive legislative reforms, subscriptions to international standards, and higher connectivity.New generation entrepreneurs in LATAM are creating tech startups with fresh and innovative ideas that center on fundamental challenges in diverse industries, including agriculture and education. Cities across the region are developing vibrant tech ecosystems that are restoring economic prosperity.Let’s dive deeper into why Latin American tech startups are driving regional economic growth.<h2>Tech startups are capitalizing on LATAM’s steady economic development and middle-class consumerism</h2>Despite LATAM being one of the regions worst affected by the pandemic, tech startups have been capitalizing on its <a href="https://polymathv.com/library/articles/latin-america-becoming-worlds-next-technology-mega-hub">solid economic foundation</a> and the consumer-ready middle class' insatiable need for digital connectivity. By providing innovative solutions to solve day-to-day problems, tech startups are ensuring they meet the recent significant changes in consumer habits.The Latin American market has become diverse and multicultural, with hundreds of opportunities for commercial expansion. Today, major countries, including Brazil, Argentina, and Colombia, hold <a href="https://statisticstimes.com/economy/south-american-countries-by-gdp.php#:~:text=Brazil%20is%20the%20largest%20economy,of%20the%20South%20American%20economy.">a significant 90% share</a> of the South American economy, and others like Mexico reached an all-time high of 1315.35 USD Billion in 2014. LATAM's middle-class is experiencing a reset and turning its focus on technology.<h2>Tech startups are taking advantage of LATAM’s growing mobile market</h2>Today, Latin America's middle-class is trading middle-market goods and services for quality, wellbeing, experience, and convenience. A recent survey found that Latin America's priorities have shifted towards education and technology. Smartphones and mobile devices have quickly become an essential part of Latin American society accounting for up to 70% of the web traffic generated in the region, with Brazil being one of the largest mobile phone markets.One startup that capitalized on the booming mobile technology market in the region was the Colombian on-demand delivery startup Rappi. By connecting businesses with delivery drivers, Rappi offers consumers the possibility to purchase any product or service in one place. This innovative tech company has been operating in nine Latin American countries since 2015 and is currently valued at <a href="https://labsnews.com/en/articles/business/how-colombian-startup-rappi-has-been-leading-the-way-in-latin-americas-new-technology-era/">USD $5.25 billion</a>.<h2>Digital technology startups are transforming Latin America’s agriculture</h2>Entrepreneurial talent in LATAM is creating digital technology startups that are transforming the economy by centering on industries in desperate need of change, such as agriculture. The agriculture industry is a critical contributor to the growth and trade in the region. Farmlands create jobs, raise incomes, and help reduce poverty. Therefore, many startups are utilizing digital technology resources to improve farmland productivity and eliminate logistical bottlenecks.<a href="https://www.frubana.com/">Frubana</a> is a perfect example of this as it is a “farm to restaurant” platform that cuts out the middleman in the food supply chain. Since its launch, it has aimed to generate better prices, discoveries, and transparency. The platform has successfully built trust between parties and improved logistics by facilitating the buying and selling of products between restaurants and small retailers across Latin America.<h2>EdTech startups are using digital technology to change education</h2>LATAM tech startups are also working hard towards improving education, which pushes the economy forward. In 2021, educational technology (EdTech) skyrocketed in Latin America, with 1,500 EdTech startups innovating education systems across the region. This recent boom in EdTech has led to better access to education, enriched learning experiences for primary school, high school, as well as college students, and improved student outcomes.Teaching students of all ages the new skills needed to thrive in a digital economy are at the center of most EdTech startups. <a href="https://platzi.com/inicio/?utm_source=google&amp;utm_medium=cpc&amp;utm_campaign=17452189124&amp;utm_adgroup=137947156776&amp;utm_content=602192954600&amp;gclid=Cj0KCQjwwJuVBhCAARIsAOPwGARzB1IFEVJGaI2iKezk3zMxkxzxQdn6X-yf5nbUVpQaWZKhoTuqMWIaAjzFEALw_wcB&amp;gclsrc=aw.ds">Platzi</a>, founded in 2011, is one of the largest online professional education platforms in LATAM. It has become the leading ed-tech platform in technology-focused courses, including basic programming, design, and marketing. Preparing students for careers in digital technologies is of utmost importance for Latin American EdTech startups since digitalization is one of the main drivers of global economic growth today.<h2>Fintech startups are Innovating LATAM’s finance industry</h2>In recent days, LATAM has become one of the hottest fintech markets in the world partly due to its lack of established advanced financial services. Poor financial services combined with high mobile app usage create the perfect environment for fintech startups to thrive. Fintech startup hubs such as <a href="https://blog.palenca.com/">Palenca</a> are innovating financial services while also collaborating with LATAM’s gig economy. With the rise of jobs within the gig economy, many informal workers that struggled during the pandemic are now turning to it in order to earn a daily profit.Nevertheless, the rise of the gig economy has also brought up some issues. Verifying prospects' work history and personal information has become much more difficult for employers. Palenca has solved this problem through API implementation. The company provides access to real-time employee data utilizing database integrations. Individuals can also leverage their gig payroll history and performance to apply for car loans, personal loans, and other credit products that require a background check. Everybody wins.Latin American tech startups are solving local challenges and creating global opportunities. The potential for digital transformation in the region's market is exponential. As long as tech startups continue to push innovation forward, LATAM's digital economy growth will thrive alongside the rest of the world.As pioneers of venture studios in Latin America, we are committed to strengthening the region's entrepreneurial ecosystem. Learn more about how we are building startups in developing economies <a href="https://polymathv.com/library">here</a>.&nbsp; &nbsp;

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5 Reasons Why Latin American Tech Startups Are Driving Economic Growth in the Region

Today, startups in Latin America are competing with large platform monopolies for a place in the region's emerging markets. Although LATAM's economy, like much of the developing world, faces many challenges, startups have plenty to be proud of. Entrepreneurs are putting in the work and creating business ventures that deliver results and make an impact in their communities. When building a business from the ground up, entrepreneurs often find themselves with countless decisions to make in order to create and grow companies that can solve real, complex world problems for their customers. Whether it’s looking for funding, mentorship, or an expert team to set things in motion, there’s always a lot to focus on in the startup world.<a href="https://drive.google.com/file/d/1NrlqUuwZhhJlplA9_1YgCY3q-zMcdvux/view">The GSSN 2022 Data Report</a> anticipates that in the following years, at least 580 new companies will be created, with an average of 23 per studio. The opportunity for growth is limitless, and there is an overwhelming need for the right ecosystem to develop and thrive.Accelerators and Venture Studios represent two very different business models that offer a host of strategic opportunities and benefits. While accelerators exist to speed up business growth, venture studios aim to create companies from scratch and use their in-house resources to build it up. Whether your entrepreneurial journey involves adhering to a business idea already in the works or bringing your own innovative ideas to the table, both Venture Studios and Accelerators can benefit and encourage your business venture to flourish.Let’s explore the differences between a Venture Studio and an Accelerator model, their goals, and the benefits they each offer to new and experienced entrepreneurs.<h2 style="text-align:justify;">Venture Studios</h2>In 2021, Latin America became one of the fastest-growing regions to take part in venture funding, investing an estimated <a href="https://news.crunchbase.com/startups/latin-america-venture-growth-startups-2021-monthly-recap/">$19.5 billion</a> in up-and-coming startups. Although Venture Studios have become increasingly popular, Latin America has yet to capitalize on the many benefits the Venture Studio model has to offer. With roughly <a href="http://gan-7000682.hs-sites.com/disrupting-venture-landscape-white-paper">560 venture studios across the globe</a>, there are but a handful of Studios in Latam, Polymath being one of the pioneers in the region's developing economy with a building thesis focused on creating companies that serve Latin America’s middle-class.But what differentiates venture studios from the other models?Some credit the success of Venture Studios to their unique attributes that directly benefit fresh entrepreneurial talent. The Venture or Startup Studio model is often the best choice for new and experienced entrepreneurs alike because its goal is to build a startup from the ground up. New ideas are explored and backed up by methodology, operational support, and funding that help launch scalable startups.&nbsp;By utilizing an in-house expert team, V<a href="https://polymathv.com/library/articles/6-reasons-venture-studio-mode?utm_source=Linkedin&amp;utm_medium=Linkedin&amp;utm_id=VentureStudio_2005">enture Studios</a> focus entirely on managing routine operations and making strategic decisions that will help kickstart and grow a new business. Startups are born, validated, developed, and accelerated all from within the studio, and although mentorship is an essential part of the Venture Studio model, there is a greater focus on achieving product-market-fit through operational support.Contrary to accelerators, where the application process can be rigorous and acceptance rates are often low, Venture Studios draw from the talent and skills of their in-house teams and center on designing companies through intensive research, the implementation of business thinking, and iteration. At <a href="https://polymathv.com/library/articles/venture-studio-model">Polymath</a>, the design process for each venture is of utmost importance. We make it our priority to assemble teams with talented, skilled, and experienced individuals committed to the needs and values of each startup. We are pioneers in applying human-centered design methodologies to build companies catered to LatAm’s middle-class.In regions such as LATAM, one of the biggest obstacles startups face is finding the capital to get their companies up and running. Venture Studios offer networking opportunities for founders to raise their rounds by introducing them to capital investors and assisting them in the creation of their financial terms. As a result, funding support is easily accessible to startups throughout their lifecycles.<h2 style="text-align:justify;">Accelerators</h2>Accelerators have one main goal – to help early-stage startups scale and get their product to market as quickly as possible. For them, mentorship and investor access to accelerate growth are pivotal.&nbsp;While venture studios create companies from very little, startups invited into accelerator programs usually have an established product even if they are not at a full product-market fit stage yet. As a result, accelerator programs can be valuable because their focus is to bring investors and startup founders together to facilitate fast innovation and venture success. The <a href="https://www.kenan-flagler.unc.edu/news/do-accelerators-really-work/">Silicon Valley-based Y Combinator</a>, founded in 2005, is the first and most famous accelerator in the startup world. Hundreds of other accelerators such as 500 Startups and Platanus Ventures have broken out in LATAM and across the globe following its success.One of the main advantages of joining an accelerator program is that they offer startups a structured expert mentorship program and professional support. This limits costly mistakes that can be detrimental to new LATAM businesses trying to scale up in the emerging economy. Working with experienced industry players can help new startup founders identify discrepancies in their team’s skillset, reducing the learning curve, and placing their startups at a higher advantage against competing companies.&nbsp;Additionally, accelerator programs are great at providing positive signaling for new businesses. Not all accelerator programs are created equal; however, going through a prestigious accelerator program can show potential investors that your startup has faced some critical hurdles and managed to overcome those.The Latin American emerging market can be tricky to navigate with political and economic risks that often present challenges for investors and entrepreneurs. For that reason, it is essential to find the right ecosystem and business model that will allow your startup to thrive. Whether you are looking to build from the ground up or scale your business quickly, it will depend on what your priorities are.As pioneers of venture studios in Latin America, we are committed to strengthening the region's entrepreneurial ecosystem. Learn more about how we are building startups in developing economies <a href="https://polymathv.com/library">here</a>.&nbsp; &nbsp;

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Venture Studios VS Accelerators 

The Difference Between a Venture Studio and an Accelerator

Branding as we knew is dead. And if you are a Startup, it was just never alive.Today's world moves too fast for your branding to be stable. If everything is moving why is not your branding doing the same?The days when an agency handed you a logo and a couple of slides explaining how to write a copy for your social media are over, and if you are getting that as a result of your branding strategy, stop now and ask for your money back.Besides, if you are an Early Stage Startup and think that branding is not for you; or that this is not the right time. It would be best if you also stopped, breathe and keep reading.Because every day is a good day to start building a brand.Maybe the day has come. Let’s see if we can convince you.<h2>Branding for Startups 101</h2>Change is in the nature of Startups, which is contrary to everything we have heard about branding.<figure class="image image_resized" style="width:71.76%;"><img src="/uploads/brand_blog_Mesa_de_trabajo_1_60042df143.jpg"><figcaption>Some iterations of Polymath's logo based on user feedback</figcaption></figure>Brands are supposed to be stable, to represent a promise, to mean something important for a specific group of people.But an early-stage startup can’t do that. “If I’m just building my product, how can I create a brand to represent it”.That’s exactly the trick. Most people still believe a brand should be something to work on only when a product is proven and validated, what they are missing is the power of using a brand to test and iterate the product itself.Let’s picture this:You have an MVP in which you have been working for a couple of months now. You tested it with real users in one-to-one meetings, to see their reactions and catch their feelings and behaviors when interacting with the functional prototype.Now you are ready to: (1) Find critical mass to effectively validate willingness to pay and (2) start pitching some early-stage and angel investors to see the viability of the funding for your solution.Well, good luck doing that without a brand.Just kidding, but seriously, both those processes can be done without a branding strategy, but they can also be improved and optimized by having one.Why?&nbsp;<blockquote>Because branding gives your product more than just a problem and a bunch of features to solve it. It gives you a speech, and identity, a symbol to condense the change you are trying to make in the world.</blockquote>&nbsp;Heads up: When we say a symbol we do not mean, by any chance, a logo.The logo is part of it, of course. But a symbol is more than just that, it’s a representation, a significance, a container filled with meaning and made of several ideas and promises that come all together in one abstraction.That’s a brand people! And that's what you should start building from day one because it will help you explain yourself better and really showcase the differentiation of your product both to users and investors.<figure class="image image_resized" style="width:79.69%;"><img src="/uploads/brand_blog_02_62ff5f3238.jpg"><figcaption>The evolution of Tani, its naming and logo</figcaption></figure>We are not asking you to have it all figured out from the beginning, on the contrary, we are saying you should use your branding as part of your testing strategy.When you are launching a product, you are not only interested in seeing if people can use it, but you also have to test how to get them to use it, and that's nothing more, nothing less than branding: The way you convince people that this is important for them.If you create a strong brand from the beginning, if you test it and let that brand flow with the changes of your product and company, you will also get a deeper understanding of what needs to be said, and how, to make your potential users give a chance to your product.Are you convinced yet?If not, let us share some numbers.<h2>Branding key statistics</h2><h4>74% of S&amp;P 100 companies have rebranded their business in the first seven years.</h4>The key message here: Don’t be afraid of change.Do not take it lightly either, but always prioritize your learnings over false stability.If you realize you made a mistake with any aspect of your brand, change it. Make as much A/B testing as necessary to ensure your new hypothesis is true, but in the end, just do it (see what we did there?)<h4>64% of consumers form brand loyalty because of shared values (<a href="https://hbr.org/2012/05/three-myths-about-customer-eng">Harvard Business Review</a>)</h4>Going back to your brand is not only your logo. The values and purpose that identify your company should be explicit in your branding strategy.Be vocal about what moves your product and make your actions speak louder than your words, sometimes values stay on the about page of your website when they should be a banner you carry everywhere.<h4>92% of marketers say authenticity is essential to their brands (<a href="https://www.businesswire.com/news/home/20190220005302/en/Stackla-Survey-Reveals-Disconnect-Content-Consumers-Marketers">Stackla</a>)</h4>Yes, and if you are a Startup, we believe there is no other option. If you are building with and for your users, you also should be able to present your company as it is, with its struggles and victories.People value companies that recognize themselves as humans (capable of making mistakes), that’s why everyone says you should humanize your brand because people are more inclined to connect with each other, rather than with cold distant entities.<h4>Consumers that emotionally connect with your brand have a 306% higher lifetime value. (<a href="https://hbr.org/2015/11/the-new-science-of-customer-emotions">Harvard Business Review</a>)</h4>Here’s when the money comes in. If you are an early-stage startup this kind of lifetime value will look amazing on your pitch deck, so it is important to start building that emotional connection from early on, because if you master it early, you are going to rock at it as you scale.<h4>It takes a consumer 5-7 impressions to recognize your brand (<a href="https://www.psychologicalscience.org/observer/how-many-seconds-to-a-first-impression">Phycological Science</a>)</h4>This is a reminder that branding is also a process that does not happen magically. It takes time, experimentation, and a lot of feedback to really crack into the details that make your users love your brand.Almost nothing in life happens overnight, if you are an entrepreneur you know it firsthand, so take your time to work on that branding, and give your company the possibility to reach your users as many times as possible.<h2>Next steps</h2>If you got all the way here we expect you are ready to take action.Building a brand for a company that’s just being born is scary and hard. You don’t want to make promises that you don’t know if you will be able to keep, and the work that needs to be done to build an impactful brand is usually more than founders can manage by themselves.We are preparing a guide to help you started. But, as we stated before, nothing happens overnight so we ask you to wait patiently and stay tuned to our social media channels so you can know when it’s ready.For now, we invite you to visit our <a href="https://polymathv.com/library">library</a> where you can find content related to <a href="https://polymathv.com/library/articles/how-cultural-fit-can-change-the-game-of-company-building">startups</a>, <a href="https://polymathv.com/library/articles/6-reasons-venture-studio-mode">company building</a>, <a href="https://polymathv.com/library/articles/navigating-venture-capital-in-emerging-markets">venture capital in Latin America</a> and more…

Santiago Pérez

Marketing Manager

Branding for Startups? Here's what you need to know

The Difference Between a Venture Studio and an Accelerator

5 Reasons Why Latin American Tech Startups Are Driving Economic Growth in the Region