Los Underdogs. Questioning the status quo of innovation in Latin America

Today we had our Morning Coffee with Bruna Paese, Founder of Iubi

Contxto – My fascination with Latin America started very early in my life.

It’s not a daily occurrence for a Brazilian girl to declare herself to be a Latina. There was a time in my teenage life when I hung a Chile-to-Mexico map on my wall to symbolize a goal I wanted to pursue: to buy a car and drive all along the length of that map.

It still is. Now, the wish is to take this trip in with a Tesla.

Back then, the dream was more about curiosity, appreciation, and, of course, like every good Latin American teenager: revolution.

I made sure to study and visit cities all around the continent, including Brazil, at every opportunity. I was trying to understand its history and to learn from its different people: how they live, eat, and make the most important decisions in their daily reality.

Yet, how the world perceives nosotros los latinoamericanos is also about a lack of understanding and an impression, which is not totally wrong but rather superficial and full of misconceptions and misunderstandings.

It’s all about access

The deeper truth takes a lot of empathy and time to grasp. We are much more than an exotic backyard to the United States, a lot more than a huge economy, more than a hub of complex political and social demands, of merely incredible producers of soap operas. Latin America is much more than you might think.

La calle. If you go out on the streets—before the pandemic which put almost all of the continent on lockdown—you can understand quite a lot about us.

Of course any generalization is a blind analysis. Life in El Salvador has completely different nuances to, say, Uruguay. Each place has its own way of generating access to resources, like labor or capital, and this access is not directly linked to one or two variables.

As in all geopolitical scenarios, it is imperative to understand politics, social, economic, cultural, and regional difficulties, from a contemporary and historical perspective.

However, we can find tons of similarities throughout the continent, and it is these which make me believe our essence is almost the same.

One must start by understanding the way that resources are divided within Latin America, the way we live, and what we produce, how corruption and bureaucracy allows the public and private sectors to make money.

Indeed, distribution in Latin America is strongly linked to a culture of taking advantage of others and misappropriation of what does not belong to us.

We shouldn’t forget that this stems from centuries of colonialism and backward thinking, imposing severe limitations on development and access.

Understanding our political and economic crises, as well as how we’ve managed them, opens a window to understanding why there is so much hunger in Latin America—not just the 42.5 million people deprived of food, but also a prevailing mentality to strive and survive. 

Something we have grasped clearly though, as clear as the Caribbean sea, is the fact that access is a privilege restricted to a small part of the population.

How do you define “access”? Simple questions like “Could I secure an investment?” or “Do I have basic sanitation?” delimit who does and who does not have different types of access.

Inequality is our most persistent challenge and the new economy, innovation, startups, and how we are disrupting old systems is the best way facing it.

Beyond adversity

There are many great stories that illustrate just how the startup ecosystem is shaking up regional disparities. 

For example, Colombia has some of the most creative people on the planet and they are standing out in the field of Artificial Intelligence (AI).

Let’s take a moment to acknowledge an important thing here: AI is not only about technology, it’s about how deep the technology can understand, question, and reproduce our world, helping us promote better access for everybody.

There’s a good reason why DeepLearning, one of the firms pushing the frontiers of AI, set up its first Latam branch in Medellín. 

AI is the perfect setting for creatives and non-conformists. More than ever, now that Covid-19 has challenged humanity’s way of life, creativity and adaptation are the keys to keep surviving and thriving.

A great example of making the best of a bad situation is Nubank in Brazil. The startup realized that one of the most valuable things we have in terras brasilis, is access to credit, which is expensive, in part due to banks’ extreme inefficiency. Nubank put two and two together and asked: Why not facilitate credit and be efficient?

It sounds simultaneously obvious and brilliant, and it is.

Creating from crisis

Indeed, Latin America isn’t new to crisis—or making the most of one. Take the exodus of excellent entrepreneurs and professionals in the region in recent years, giving us the opportunity to meet so many talented Venezuelans.

I have worked with great designers and very committed professionals who always impressed me with their capability to create access to a new life, constantly rebuilding themselves and moving forward. In Chile, it is common to get a Venezuelan Beat driver or one making amazing food on the street or creating their own company and space.  

Creativity can also be found in Brazil and Mexico, with their world-beating art and entertainment industries. The entertainment and cultural markets move a lot of money across the continent, whether through music, soap operas, the media, futbol, internet content and more. And what is entertainment if not a small portion of a person’s access to emotion and happiness?

Creativity can also be found in the black market. In Chile, it is extremely easy to buy illegal drugs through apps purportedly made for other means, like Grnder.

The success of illicit trade as a bulwark of the Latin American economy working within the most advanced technologies available, is a grim reminder of how the formal economy has not catered for most of the region’s population. 

Similarly, protests like the ones seen in Chile, Peru, Bolivia, Colombia, Puerto Rico are not because of spoiled millennials nor a plot by the infamous Latin American left, as many want to point out. It is mainly due to massive structural problems leading to mass political dissatisfaction.

Dig deeper and you’ll find that what is being questioned is; if one is to believe that everyone is entitled to the benefits that capitalism provides, why do only a few really have access to them?

Tricks of the trade

When I mention access to capital and resources, I mean everything:

How to finance a project/company, how to set up a company, the rules, taxes to be paid, support, how to issue a first invoice, how to gain market confidence, how to create opportunities, how to live in a dignified way, and how government bureaucracies and traditional structures can make you go crazy.

I took only days to open and set up a company in Chile, including a bank account, and I took eight months to have the same process completed in Brazil.

That’s another problem with nosotros, in order to have access to capital in any Latin American country, you need access to three important unofficial tricks:  

1) Who introduces you/Who you know

2) Where you come from is often more important than what you have done so far

3) What will generate benefits individually (in some cases in an illicit way)

That dynamic is not positive when it generates spaces for corruption and injustice. These hacks pull Latin America away from important social bulwarks, like liability, trust, and engagement. It also delays economic development.

This doesn’t happen because people are bad. I have worked all across Latin America and have seen that people truly want to buy into sustainable solutions and work ethically. But only few take the risk and almost no one wants to change the traditional process, even when things go slowly and do not work well.

“Never attribute to malice that which is adequately explained by stupidity”, as Hanlon’s razor well states.

Part of the inefficiency comes from corruption, yes. But the vast majority of limitations are due to the conflict with our lack of capability to create better solutions for people in a more efficient way.

In most cases, there is no intention to solve problems, and the most common “solution” is to paper over the cracks or just get rid of it. Postponing real solutions and creating much more complex and inefficient systems as a result. 

Now, more than ever, celerity and efficiency are necessary to recover and build a sustainable and better world for everyone after this pandemic ends.

It’s a great opportunity to innovate. Not only in the area of ​​infrastructure or generating more access to capital, but in every sector that exists. We can create better ecosystems that benefit everyone in an ethical and fair way.

Besides drama, we love innovation

Latin American’s professed love for innovation doesn’t actually mean they know how to innovate.

After years of trying to sell technology and innovation to corporations, I realized it was the most pointless exercise in existence. I describe the scene this way: 

People sit around a large circular table for a long meeting in order to really get down to some innovating.

“Should we implement blockchain?”

“I think we’d better invest in AI.”

“Yes, I agree, we are a data-driven company.”

All for them to, in the end, decide to classify a ton of data they have stored and go on to never touch it again. Of course, they consider it a good asset, even if it doesn’t generate any information—or value.

This tragedy is not the result of not knowing what to do with new products or services, but rather about inefficiency and the amount of technological catching up to be done. It is about the fear of change conflicting with the feeling of missing out on the maturity or evolution of technology.

“Perdón” for being so repetitive, but this whole problem stems from a lack of access. This time it is missing out on access to innovative solutions. 

There have been some steps in the right direction. Some Governments and private companies are committed to promoting innovation and encouraging efficiency and access to capital.

A perfect example that I had the pleasure to be part of is in Chile. Most of us know about innovation in Chile because of the recognized and international program StartUp-Chile, but the incentives and the program originate from a much larger and more important government agency named Corfo.

Corfo provides capital and determines the big challenges that the country needs to solve in infrastructure, health, food, as well as the types of sustainable solutions that are most urgently needed.

All these initiatives are a light in the end of the tunnel, but it’s not nearly close to all that is necessary to solve the years of inequality, oppression, and backwardness. 

The real entrepreneurs: social underdogs

So, how do we get a whole region out of this massive historical problem? Well, the answer may actually be exactly where the problems of inequality, oppression, and backwardness are most present. 

The big difference between entrepreneurs around the world and those from Latam is: Most are literally hungry.

Primarily, on the streets there is a huge amount of money circulating without real regulation, which can make part of this population invisible. In the recent coronavirus emergency, over 10 million individuals in Brazil asked for financial support but didn’t have a bank account.

On the streets is where the real need for solutions exists. And it is in the street that our next wave of disruption is needed and will hopefully come from.

The real entrepreneurs are the ones who wake up early and sleep late, no matter their circumstances, to keep the economy moving.

Latin America is proof that adversity can also create great people. Argentinian and Peruvian businesspeople fresh out of crisis are the most complete entrepreneurs I know.

We all still fight with that hunger in our bellies.

So, we have a lot in common, and as great underdogs, we have the unique advantage of having little to lose and a lot to gain. It is time to win.

Bruna Paese is a maker, consultant in innovation and sustainable business, Latam advocate, and Founder of Iubi—an AI-companion created to improve peoples’ health. Give her your feedback on Twitter or LinkedIn.