IT outsouring in Latin America has proven to be fertile training ground for a pair of startup-minded tech stars – who both have purposely tapped into the largest economy in the region (the United States) to launch their organizations. Their decision to go north, instead of launch their companies in Latin America, says a lot about the appetite of entrepreneurs to transverse international borders to pursue their fortunes and comparatively deeper pools of funding.
Crowdsourcing and Open Data, two relatively new forces that are rather abstract in terms of how they can be integrated into traditional business models and leveraged to create value, are technologies underpinning the startups created by Luis Enrique Corrales and Diego May.
Luis is working on a “hyper-localized” mobile application called Ourcast that crunches weather data from 20,000 sources across the country and its user base. “It is equivalent to having hundreds of weather stations within one city. When you login you are immediately presented with a two hour forecast, you have a set of icons to either report the weather anonymously or you can check-in to Facebook and post your location along with the weather,” remarked Luis. The series A round of venture capital was raised by Starfish Ventures out of Australia, the firm likes the idea of creatively disrupting the weather industry.
Riding the Open Data Movement
Diego May is CEO and co-founder of Junar, a company that has created a cloud based platform “for opening data to drive innovation, collaboration, and to meet legislative goals,” as stated by Junar. The open data movement is gaining steam with governments. The US government’s Data.gov is celebrating its three year anniversary; hundreds of citizens have built clever apps based on data sets released by the US government.
Junar is banking on the fact that foreign governments, universities, NGOs, companies, etc. want to open up data, but do not want to undergo the process of building proprietary systems to do so. Instead they can subscribe to Junar and have a proven end-to-end solution immediately.
“This is the third renaissance of the Internet. So much data is being created by universities, federal and local governments, companies, etc. and those organizations are not publishing portions of it in a way that brings them value,” exclaimed Diego.
“In my three and a half years at Avantica I was able to work for different companies and learn different methodologies, it was a rich experience. There is sort of a cross-pollination of know-how that that clients benefit from,” said Zuniga
At this point profiting from opening up data is somewhat ambiguous, but so seemed online retail at one point. Diego explained that there are innumerable ways data can be opened to bring a company value, something as simple as releasing facility location data a developer can take and integrate into an app can benefit a customer.
Entrepreneurs like Diego and Luis would find it much harder to realize their ventures if they were back home in their domestic markets. Access to capital and the lack of support for entrepreneurs are widespread barriers to growth for startups across the region.
“Latin America as a region is significantly behind in terms of technical entrepreneurship, the numbers are very small. It is a generational thing and it is progressing, just slowly. It takes more than teaching people about entrepreneurship, it takes capital,” stated Mario Chaves, CEO of Avantica, a nearshore software engineering services firm.
Carlos Zuniga a former Avantica employee now working at Google’s headquarters in Mountain View, California echoed similar sentiment.
“Developers (in Latam) need to see themselves as technology producers, not just coders. The shift has to be in the mind. They need to learn that they can go really big, it just requires the will to do it,” said Carlos.
Carlos went on to mention that there is also not as much participation in open source projects or user groups by developers in Costa Rica. He said there is less global awareness and developers could be more united.
No Talent Shortage
“There is incredible talent in Costa Rica, there are plenty of guys that would be snatched up in a second if they were in the US,” says Corrales. He explains that developers are inherently creative people that like to see results quickly irrespective of the society from which they originate.
The dynamic of having those types of people working on various projects from different clients as they are in an outsourced software engineering services firm gives them a range of experience akin to what consultants receive.
“In my three and a half years at Avantica I was able to work for different companies and learn different methodologies, it was a rich experience. There is sort of a cross-pollination of know-how that that clients benefit from,” said Zuniga.
The small subset of developers leaving behind good paying jobs to build startups will grow with US startup cultural hegemony permeating Latin America being a factor. Government support is on the rise (especially in Chile); it remains to be seen to what extent venture capital, angel networks, and perhaps even US companies with footholds in the region and deep pockets will play.