What if you were paid $40,000 to travel to another country, get a 1-year visa, and work on your technology related business? That's exactly what Start-Up Chile - an initiative started in 2010 by the Chilean government - makes possible, offering grants to small teams of entrepreneurs to come work on their ideas in Santiago. It's all part of the country's bid to become "the Silicon Valley of South America," and today we chat with Kevin Kent, a Chicago entrepreneur who recently received a grant.
International Man: Can you tell us a little bit more about yourself?
Kevin Kent: Sure. I was born and raised just outside Chicago. I went to school at the University of Iowa and studied finance. After college, I went into accounting and then moved into a hedge fund firm in Chicago that managed a little over $20 billion in assets. I worked there for five years and then had a short stint at a private equity firm in Chicago as well.
After that, I decided to go out on my own and develop Pulse Socks, which is my start-up company. We're developing a baby monitor that monitors vital signs and will tell parents how their baby is breathing. We're hoping to have it ready somewhere in the next 12-16 months and right now we're here in Chile working on it.
IM: Why Chile?
KK: Right now, the Chilean government is trying to "up the entrepreneurial bar" here - to try to turn Santiago into the "Silicon Valley" of South America. They do this with a program called Start-Up Chile - they bring in talent from around the world - people who have experience starting businesses and people from other cultures who have different levels of risk tolerance, not the same kind of blocked-off mindset that many people down here have about failure and start-ups. (Back in the States, if you give something a shot and it fails, that's just something that happens and we're proud of you for giving it a try. It's definitely not the same mentality down here.)
The program offers $40,000 grants to teams of 1-4 people to start their businesses down here in Santiago, stay for six months, and work on their businesses. Actually, it's not a grant but rather a reimbursement. So you spend $6,000 on your business and then you have a reimbursement meeting, and then (hopefully) they reimburse you. That process is getting better, but it's been very difficult. With a government agency, there's a lot of hurdles to jump through and red tape. But in the end, you're getting $40,000 for free and they don't take any ownership in your business, so it's probably still worth your time.
If you just graduated college and have a great idea, but a lot of school loans and no money in the bank, it's an unbelievable opportunity to see another continent and get some free money to work on a business. You'll meet some really cool people and make some great contacts. If, on the other hand, you're a little further along in your business and you have established contacts and customers and you need to have access to them, it would be very difficult to come down here, base camp your business out of Santiago and then contact them via Skype. You don't get the same face-to-face contact.
IM: Do you get a 6-month Visa?
KK: The program is 6 months but they give us a one-year visa and residential ID cards, which are apparently tough to get if you're not in a program (e.g., if you're just an expat wanting to come down here and stay a year). It's kind of like a Social Security card mixed with a driver's license or state ID. However, if you stay past the six months you don't get all of the benefits, like access to their working space.
IM: What was the application process like and was it hard to get approved?
KK: The application process was pretty standard. "What is your product? What is your target market? How are you going to reach customers?" and so on. We had to make a short two-minute video about our product and ourselves so they could get a little taste of our personality.
In our particular group, they let in 150 teams out of, I think, 600-700 applications - so we were pleased about that. In the following round, two people we knew who had very solid ideas didn't get in, so the difficulty to get in is growing as the program gets more popular.
IM: Are they mostly looking for young start-ups in the technology field?
KK: We're actually a hardware start-up and definitely not the norm. The vast majority are web apps or web start-ups. I think it's just much easier to use that $40,000 doing a web application. In six months with that kind of capital, you can develop a lot of different ideas and business models. It's much more difficult to do with a hardware start-up.
IM: What's been your impression of the program and other teams so far?
KK: It runs the spectrum. When you have that many people coming down, you have extremely smart people that have graduated from Harvard, MIT, and London School of Economics ... and then you have people that have some pretty hokey ideas that I'm shocked got in.
We've got some really great people doing great things. For example, some teams have gotten venture capital funding out of Start-Up Chile. There's a team called GymPact that got something like 20,000 sign-ups their first week of launch, which then helped them get into Tech Stars Boston, a prestigious incubator, and that's going to help them a ton.
For the program itself, there have been some bumps in the road. They've definitely made improvements, but they have a ways to go until it's a smooth-sailing ship.
IM: What's been your impression of the local people? Has anything surprised you?
KK: Part of Start-Up Chile is meeting with locals here and helping them with their businesses. While we haven't met a ton, the ones we met did seem fairly ambitious. One woman we met was very impressive... She was working on a site for planning weddings and had a fair amount of active users and had put together partnerships with some very big local retail chains. We have various forms of this back home, but here it's very rare.
Besides that, there are just an unending amount of cultural differences from the States. One difficult problem is that we don't speak Spanish. We're from Chicago and went to South America and we don't speak the language. We've run into many difficulties communicating basic things. For instance, it took us two weeks to find sour cream at the grocery store. And even when we figured the words for it here, it didn't translate. We've run into a bunch of little hiccups like that.
Also, quite often I see lines outside the retail stores, and even small businesses, before they open, which to me is kind of crazy! We've kind of made a joke that back home if I owned a small retail business and we were opening at 10:00 (which a lot of the places down here do) and there was a line outside, the next morning I, as the store owner, would be there at 9:00. And if there was a line at 9:00, I'd get there at 8:00.
And even things like calling or emailing a store or salesman. Back home if there's money on the line you'll very likely hear back from them within a couple hours or by the end of business almost all the time. Down here, it's just not always like that. They have other things going on, maybe their family, and that takes precedence over getting that extra sale or getting a prompt reply. It's been frustrating, but it's just a different culture down here. Things tend to move slower down here and that's just the way it is, for better or worse.
IM: What do you miss most from the US?
KK: Everything! [laughing] A big thing is just familiarity, home, friends, and family. My entire family and all my network of friends from college are all in Chicago, so I miss that. I miss driving around the city in a car. The language thing is definitely a huge deal. If you go to a country for an extended period of time and you don't speak the language, it's such an awkward thing to walk down the street and not be able to communicate with anyone other than the person you're walking with.
We actually went home for Christmas and it was such a welcome thing. You could go up to anyone - be it at McDonald's or if you were calling someone on the phone to call customer service at Best Buy or something like that - you can do that. Down here that's not something we can do, so I definitely miss communicating with everyone.
IM: Anything else you want to add?
KK: Problems aside, I want to say that Chile is beautiful. We went to a couple towns that were 8- to 10-hour bus rides away that were just gorgeous. In one place we went on a "night star" tour where we went horseback riding for an hour and a guy gave you a tour of the stars, which was just unbelievable. We also went to Buenos Aires for a couple days, so there's a lot of stuff you can see within a very short flight from Santiago, which is great.
IM: If people want to learn more about your project, where can they go?
KK: You can find more information about our project at www.PulseSocks.com. And, if anyone wants to talk about Start-Up Chile - the good, the bad, and the ugly - or even needs help with their application, they are welcome to contact me. And if anyone is interested in investing in our company, I'd also be happy to discuss with them too.
IM: Perfect, thanks Kevin.