Without stepping into profound economic analysis, the Venezuelan crisis is clearly hostile in terms of business operations: laws, regulations and decrees put any local investment at risk, especially when it comes to opening a new business. The country risk is so high that it’s hard to imagine who could be so daring to establish a startup within such unfavorable conditions. The truth is that these ominous elements are in contrast to the growing activity of the Venezuelan startup ecosystem. The national enterprising segment, which was only focused on social matters three years ago, has adapted to the digital trend that establishes international standards, with valuable ideas that are generating employment sources and triggering important changes in the markets.

As a result of this new reality, initiated by Wayra accelerator, the sector has been diversified with the emergence of other incubators, such as HubCaracas, the reactivation science parks and the organization of events like Caracas Startup Weekend, Caracas Game Jam or Hackaton of smart cities that have enhanced the enterprising bandwidth.

As for Wayra accelerator, since 2012 it has received over 1,900 business ideas and successfully incubated 29 projects. More than half of these projects carry out active business operations and four startups have gone international, which supports the thesis that states “that crisis become opportunities to foster innovation and creativeness”, according to its director Gustavo Reyes.

The fact is that the number of unsolved problems opens new windows for entrepreneurship. “The digital transformation has an impact on industries, our lifestyle and the way we communicate; that’s where valuable ideas come up. There are markets and needs, as well as the absolute capacity of the country to produce talent aimed at enterprising”, Reyes explained.

He recalled that the teams that were initially boosted by Wayra were targeting E commerce. Nowadays, due to this digital adaptation, they are capable of developing applications, which speaks high of a maturity process that favors the generation of successful disruptive ideas.

A Change-Triggering Valuable Proposal

Mr. Reyes believes that the periods of crisis are like coins: they are double faced. In this sense, the accelerator recommends entrepreneurs to think big, count on a highly-qualified team to develop the idea and run field tests in the market so as to make the proper adjustments.

“Venezuelans are ambitious entrepreneurs, who look for opportunities to make their business grow. However, we have to take into account that there are many people that launch projects a response to specific needs, because of the prevailing situation in the country, but as long as that project stays in the personal sphere, without generating employment or significant changes in the society, it’s not labeled a startup”, he underscored.

Gustavo Reyes, Director of Wayra in Venezuela.

In this sense, the success of a startup, which has been launched in a country that is facing a crisis, depends on its value to solve a problem and the monetary sense or marketing feasibility must be defined, as well as the behavior of the target market, its differentiation and scalability, and the capability and commitment of the team in charge of the project.

Thanks to Wayra’s value proposal and its status as a laboratory for entrepreneurs, several of the boosted Venezuelan teams have caught the eye of foreign investors who have helped them internationalize their ideas. “Disenia (which presently operates in Chile, Mexico and Venezuela), Trix and trax, Tu motorizado and RingTu were also accelerated by Startups Chile and they are commercially active in that country, while Academia stands in Lima and PCAudi in Miami”, Mr. Reyes pointed out.

According to the accelerating company, the criteria to define business is related to the level of market attraction of entrepreneurs, in other words, the volume of customers that pay for the product or service; and the investment level. “And that’s exactly a key element to develop startups. We’ve had investors interested in Venezuelan startups, but the amount of money has been limited (less than a million dollars) because of the national crisis.”

There are two categories to classify startups: the first one has to do with the result of business to generate a startup, and the second is related to the talent. “Argentina, Chile, Brazil and Spain are ranked first in both cases. Venezuelan teams are also of high quality, but our reality doesn’t feature the business potential yet”, Mr. Reyes said.