Last week I had the pleasure of giving a keynote in La Red Innova conference, speaking about mobile search and its impact on ecommerce. Red Innova is a technology and entrepreneurship conference held in Madrid for the third year. With over 1,300 registrants, about 30 speakers and 20 startups from Latin America competing on a €100K Euros prize, it’s one of the biggest entrepreneurship events of the year.
I won’t get into the details of the presentation on mobile search and its impact on ecommerce, but rather, I want to share my quick insights on the atmosphere in Spain, based on my own observations and the conversations I had with both speakers and conference attendees.
A few numbers about Spain
To put things in context, Spain has a population of 45.3 million people, a GDP of $1.47 trillion, representing 8% of the $17.96 trillion GDP of Europe in total.
About 80,000 companies register in Spain each year, ranking in the 11th place in the world for new company registration – which suggests high level of entrepreneurship. There are 2.43 million businesses registered in Spain, placing the country in the 8th place worldwide – not bad [source]
Spain is growing also in terms of online and mobile penetration, albeit slowly:
The VC market is less developed in Spain in comparison with its European neighbors, although recent reports claim that investment levels are back to pre-crisis volume. Spain ranks 20th in the world attractiveness ranking for VC/PE activity with 5.2 billion invested in 2010 and 1.13 billion invested in Q1 of 2011. [source]
Thoughts on the states of Latin American and Spanish Entrepreneurship
1) There’s a growing buzz around entrepreneurship – several people mentioned that in the past, students that graduated from college hurried to find a job in big company and in the case of Brazil also the government. The need for stability and the fear of losing income historically won over the urge for entrepreneurship. But that is now changing. More and more incubators are popping up, students are participating in business plan competitions, and actively look to get involved with startups. IE, the leading business school in the country has launched Venture LAB, an incubator program, Startup Bootcamp has kicked off its first Spanish version last week with 10 startups participating, and new co-creation/co-working offices are popping up. One example of the latter is Hub Madrid, which is currently hosting about 10 startups.
2) There’s a hunger for venture capital funding. Spain, Argentina and Brazil have relatively low levels of venture capital activities (Invest in Spain confirms this). Funding comes largely from angel investors and government grants. I see an opportunity in spotting innovation in these markets and globalizing their products and there’s also a gap in micro seed funding.
3) You don’t have to be in Silicon Valley to start a successful startup [or do you?]. Martin Varsavsky addressed this in depth at his talk in the Inspire conference two weeks ago. Silicon Valley definitely has its advantages – lots of dollars looking for startups, large companies, a startup ecosystem etc. However, there are also benefits for being in Europe – Hussein Kanji, Nick Halstead and others have answered this in the Quora question: Is Europe just for losers?
4) The concept of networking is new here. Social networks are popular in Spain (especially Twitter and Facebook) and people are very social and personable, but business networking is only starting to bloom in Spain. My recommendation to Spanish and Argentinean entrepreneurs is GET OUT THERE. Pitch your idea to anyone that would listen, make introductions, organize events and build a community. Having lived in San Francisco, I can see that we still have some ways to go, but recent events that I’ve attended including Tedx Oxford, Inspire and Red Innova, showed me that it’s starting to happen in Europe as well.
5) Copycats and small features versus disruptive innovation. Europe is often accused of just copying proven models from the US and localizing them in Europe. Maybe it’s a fear of failure, or risk aversion, but I think that Spanish entrepreneurs could shoot higher. The design talent is high – when will we see the first top 10 mobile apps coming out of Spain?
- Now is a great time to be an entrepreneur (or “Emprendedor”) in Spain.
- The HackFwd model has a lot of potential here: give entrepreneurial engineer a year of salary to startup a company. Support him with mentorship and a physical space – work on rapid iterations and product-market fit.
- There’s an opportunity for incubators/micro seed funds to support the market
- Spaniards should aim to create truly innovative solutions to expand beyond the Spanish market
My MacBook is running out of juice and I wanted to share these thoughts. I’d love to connect with Spanish and latin American Entrepreneurs who are currently working on what THEY CONSIDER as innovative solutions. Please drop a note through the VC Cafe contact form and I’ll get in touch.