Startups in the Dominican Republic: A Growing Ecosystem
Hundreds of young entrepreneurs in the Dominican Republic have ideas to launch a startup, a temporary structure that looks for a business model, just as it’s defined by famous entrepreneur and academician Steve Blank. But the Dominican enterprising ecosystem is still going through a very primitive stage, without structures or investors willing to bet on young talents. The number of successful cases is very low. The motivation for startups was institutionally established in the Dominican Republic back in 2006 with the creation of enterprising centers at the universities. The “Startups weekend” has been held since 2012, totaling six editions to date.
Just like in other places, the lack of investment has been the first obstacle. The Ministry of Industry and Commerce has created a network of mentors for entrepreneurs. Other governmental institutions, such as the vice presidency of the Republic, have joined the private sector to sponsor events that foster entrepreneurship, but when it comes to developing the initiative there are no investors willing to make a risk investment.
The “Startups Weekend” has become the finest indicator of the entrepreneurship level among Dominican young talents.
Leonardo Jimenez, who presently chairs the company he launched as a startup, points outs that investors want their money back very soon and “the first thing they ask is when and how much are they going to make in terms of profits. They are worried about the fact that only one out of ten startups succeed and such business model is not profitable over the first months”, he underlines. The banks are not interested in funding this kind of projects because of the same reasons: there are no guarantees or fast return of the investment. Jorge Vargas, who has spent one year and three months managing a successful startup, mentions another deficiency: “The entrepreneurs don’t know how to express themselves, say the amount of money they need and generate money, in short, they need orientation.”
However, in spite of these difficulties, Jorge, who year in year out participates in the organization of the “Startups weekend”, underscores that tens of people go to his company on a daily basis and speak of their good ideas. Some 50 – 70 entrepreneurs attend the “Startups weekend” and nearly 15 projects are defined in each edition. There were almost a thousand new projects last year, although not all of them have made it.
It’s hard to quantify the number of entrepreneurs because of the absence of an institution to put them together, but the interest is measured by analyzing the interest level in events related to this matter and the strength of leadership. Pablo Ignacio Garcia is he executive director of “Enlaces”, a network of angel investors that support projects, which should at least have a minimum viable product and the first sales on the market.
The entrepreneurs are given mentorship, tax and legal consultancy, as well as means to generate contact networks during the incubation phase of their projects.
Mr. Garcia says that over the past months they have received an average of nine applications a month, which would total over 100 enterprising projects a year. He’s also aware of the support received and the limits. “Both the government and private sector back up Dominican startups in terms of activities to identify, put on the map and explore business ideas. But the support is deficient when it comes to formulating, carrying out and boosting the startup”, he admits.
THREE STARTUPS THAT HAVE SUCCEEDED IN THE DOMINICAN REPUBLIC
Kikaboni is a startup that manufactures healthy snacks with super food elements like Quinoa, Moringa and seeds of Chia, with high level of nutrients, like proteins and fibers, and low content of calories, sugar and fat. The idea was developed by brothers Gian Luis and Arturo Pereyra, 21 and 24 years old, as a result of their visit to a hotel where tourists look for a healthy lifestyle.
Gian Luis recalls that owner, a Canadian entrepreneur, used to give a branch of moringa to those guests visiting the hotel’s gym. They decided to do some research and they found out that Johns Hopkins University was studying a way to fight children malnutrition moringa, since 27 percent of its content is protein. Guided by their parents, who are entrepreneurs too, they began to produce healthy snacks in November 2012. Kikaboni has been awarded as Entrepreneurs of the Year, it’s exporting its product by means of Amazon and the sales are going up.
They describe themselves as a collaborative workspace to share ideas. The project provides physical space, desks, electricity, air-conditioned facilities, 24/7 access, internet service, events hall, dynamic atmosphere and a community willing to collaborate. The initiative is fostered by 4 cofounders: Jorge Vargas, Guillermo Sencion, Laura Alemany and Luz Gonzales. They were members of the organizing team of the second Startup Weekend and the idea came up “because the enterprising ecosystem was gaining momentum, but the initiatives were parallel, there was no physical space where entrepreneurs could meet”, cofounder Luz explains.
Coworking works by means of membership. Each member is given a key to the physical space, so they can have access depending on the kind of membership they have chosen. They hold workshops, networking activities and they manage business acceleration programs. There are 95 members to date.
AccountingLive is an invoicing and accounting system by means of the cloud and it targets small entrepreneurs in Latin America. The system responds to the growing interest of small entrepreneurs in using the cloud so as to make their business more efficient. “Specifically in the invoicing and accounting area, Latin American business lack of a robust solution since, due to the tax complexity in this market, the traditional US online invoicing and accounting systems don’t work” Maurice de Castro, director of AcountingLive, details.
The idea of AccountingLive was debated back in 2008, but the Latin American market of accounting software on the cloud wasn’t ready for such a proposal. Finally, the specialists began to develop the software in 2012 and it was launched in December 2013. AccountingLive presently has customers from around the world, but it’s mainly focused on Mexico, El Salvador, Guatemala, Honduras, Panama and the Dominican Republic. With this mechanism on the cloud, the companies no longer have to buy servers or make backup copies because everything is on the cloud. The Ministry of Industry and Commerce recently gave Maurice de Castro the Technological Enterprise Award for AccountingLive.