In the Startup Ecosystem, the Great Value of Latin America is in its Diversity
Digital Media Zone belongs to the University of Ryerson of Toronto, and is one of the biggest Business and co-working spaces incubators for Canadian entrepreneurs. It has the first place in the country’s ranking and fifth in the world. Its main objective is to help startups succeed through a solid network of connections with customers, advisors, mentors, influencers and entrepreneurs.
Even though it is part of the structure of the Torontonian university, it is not only for students but it takes entrepreneurs and innovators of every age across Canada and the world. This knot of collaboration and learning system is an interesting experience of coexistence among every actor of the startup ecosystem. Created in 2010, Digital Media Zone has incubated since then more than 130 companies and generated more than 40 million dollars in funds for the development and creation of more than 1,200 jobs. In this interview Brendan Dellandrea, Director of Strategic Planning of DMZ, describes the Canadian ecosystem of entrepreneurs and the challenges they will face when reaching Latin America, a market they want to explore to broaden its horizons.
What is Digital Media Zone?
Digital Media Zone is a shared space of work and a business incubator for technological startups mainly. We have four offices in Yonge and Dundas (Toronto) with 70 technological companies linked in different fields such as commerce, health, financial technology or human resources. Most of our businesses are B2B (Business to Business) and B2C (Business to consumer). We are in Toronto but we have expanded our network internationally too. In that way, for example through an agreement with the Bombay Stock Exchange (India), every year we invite a growing number of international companies. This is the same that we want to experiment in Latin America. We want to explain who we are and what we can offer, we want to invite companies with growth potential and give them access to the same resources, mentorships and advise that any of the companies that work under our umbrella have.
What do you know about the startup ecosystem in Latin America?
When you compare Canada with the USA, one of the main differences is how easy Americans can access venture capital. In Canada we have to fight a lot to gain access to the same level, for a startup to get that seed capital and then continue with the next phases of investment. They don’t have the same access to capital as in the US, that’s why it is hard to begin their projects, without talking about the pressure entrepreneurs face to meet the expectations of investors. I understand those are the same problems most of the startups in Latin America face. I think we can help in a certain measure in giving them access to business consulting, experts, mentors, and other agents that are necessary in the incubating process and acceleration of a company. We call them “resident entrepreneurs”; by that we mean people that have been successful in creating their own companies and now work with us to give advice through their experiences to new entrepreneurs.
What is the specific characteristic of the Latin American map that most influences the entrepreneurial scene?
I think diversity is one of the most interesting aspects. Toronto is one of the most multicultural cities of the world and Digital Media Zone opens its doors to everybody, from members of Ryerson University to entrepreneurs of the community. Diversity means having different trajectories, backgrounds and abilities. This means people with different academic backgrounds. One thing we encourage is collaboration among people that wouldn’t usually work in the same project. And I think Latin America offers all of this thanks to their diversity. In the area you have several countries with similar characteristics but also with a lot of regional differences. Any opportunity of getting these innovators together in a context in which all these differences can be used is very positive because very innovative solutions come out of this.
Conferences such as the one in Santiago de Chile are a good example. It is about giving people the opportunity to meet people that they wouldn’t have otherwise. What happens when the circumstances help toward these encounters? Many business ideas can be identified, that you thought were unique but you find out someone in a different part of the continent has the same idea; this is the base for collaboration. Or it gives you a market validation, also very necessary. You can also identify how two people facing the same problem in a different way can learn from each other. When you find people in these situations the result is usually very beneficial.
Digital Media Zone offers a truly interesting experience of entrepreneurs, mentors and investors coexisting in the same space. How does that work out?
That’s right, one of the services DMZ offers is a co-working space and services of business information that fundamentally give access to advice, mentorships, etc. This allows the flow of communication and exchange among different actors of the ecosystem to become more fluent. Being a non-profit organization, we don’t operate with that seed capital but it is there where Ryerson University interferes. They have access to a fund that allows them to make investments. They look for companies that have great growth potential and high probability of benefit. The initial investments can reach the 80,000 CAD if they can participate in the company.
What differences do you see among the entrepreneurial ecosystems of the different Canadian provinces?
When you travel among provinces you can almost imagine they are different countries because of their sizes and landscapes. Ontario is huge and even among the same provinces you can see important differences. This means very different startup ecosystems. For example in Alberta a big majority is focused in the energy system, while in Toronto, being the financial capital of the country, you have more companies that focus in financial technology, B2B, telecommunications or IT. There are big differences but we are very well connected through conferences and organizations in which challenges entrepreneurs face, are talked about.