María Julia Bearzi, CEO, Fundación Endeavor, on the future of innovative entrepreneurshipIn what ways does Argentina offer opportunities for entrepreneurs?
MARÍA JULIA BEARZI: Argentina is a melting pot of cultures and nationalities. This open, trade-driven mentality has given the country a strong reputation as a greenhouse for innovative entrepreneurs. In addition, the economy’s size leads entrepreneurs to quickly internationalise their ideas and companies, in contrast to larger markets in the region, such as Brazil or Mexico, where that need may not be as immediate. These two elements, combined with the various economic and financial crises the country has gone through in past decades, have helped establish myriad entrepreneurs and spurred innovation in many sectors, ranging from IT to biotechnology and the agri-food industries.
Current needs lay not so much in increasing the number of entrepreneurs, but in changing the entrepreneurial mindset at all levels. We believe that a central element of this shift should come in the form of the multiplier effect, whereby successful companies provide guidance to small and medium-sized companies that have already asserted their positions in their relative niche markets.
What role does human capital play in the establishment and consolidation of a healthy entrepreneurial ecosystem?
BEARZI: Argentina’s education system and the human capital it produces definitely provides a competitive advantage for the entrepreneurial ecosystem, especially compared to its neighbours. Reform is needed is not so much in the education system and the skills it provides to the country’s labour force, but in an all-encompassing change to the entrepreneurial landscape of the country. Such a transformation in climate and mentality should be driven by well-established and successful companies that are willing to share their experiences.
Our primary task centres on the detection, selection and assistance of high-impact entrepreneurs, and their linkages with mature companies. We have the view that replicating the cycles demonstrated by companies that have already succeeded in their respective fields, coupled with the possibility – but not the obligation – of investing capital in high-impact companies, are the primary ingredients for establishing and consolidating a healthy entrepreneurial network.
Access to finance is an obstacle for young companies worldwide, so how can linkages with prospective investors be created or strengthened?
BEARZI: The process of linking high-impact companies with prospective venture-capital funds, accelerators, traditional banks or individual investors should certainly be strengthened in Argentina. An important aspect of our project is working as a catalyst for institutional funding, as institutional funding tends to stabilise and formalise the financing models of such companies. It also works to end the so-called triple-F channel – family, friends and fools – which is often the only available funding route for small, unknown companies.
The main obstacle to more and better funding lays in the way entrepreneurs interact with investors: the presentation of the idea, the establishment of a solid business plan, entrepreneurial and business knowledge, and the like. Argentina should promote a strong explanation of why investment should be channelled to new, innovative companies.
Which skills are prospective entrepreneurs currently lacking, and how can this be addressed?
BEARZI: Argentine entrepreneurs need viable business structures, not more inspiration. Ideas are plentiful; it’s the necessary frameworks to establish the company as a functioning and successful firm that are missing. We have, however, noted a shift towards the professionalisation of the entrepreneurial world. A gradual improvement in the entrepreneurial landscape will allow the multiplier effect to repeat successes throughout the whole country and at many different levels. Such repetition will make many entrepreneurs – whether in large cities or remote areas – aware of successful, innovative examples in Argentina, and they can adapt those models to their own needs and circumstances.
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