What is permanent ecosystem?

Startups in Latin America: What is the entrepreneurial ecosystem like in Mexico City?

• I've recently started a trip through Latin America trying to get a feel for the entrepreneurial ecosystems in the region. I started in Mexico City and have posted two of my four interviews there so far (http://www.catecosta.com/mexicos-entrepreneurial-ecosystem-interview-2-joshua-ford-analyst-of-entrepreneur-services-and-search-selection-endeavor-mexico/ and http://www.catecosta.com/mexicos-entrepreneurial-ecosystem-interview-1-jorge-madrigal-founder-ceo-aventura-capital-partners/). Both interviewees so far have said that they feel Mexicans lack role models and mentors and that there isn't a vibrant culture of entrepreneurship in Mexico. Is this true? If yes, what do you think can be done to help build such a culture and should those steps be taken?

• Answer:

  As an outsider who lives in Mexico City and keeps up on the scene, here are a few observations: - We need to define our terms here -- what I assume you're talking about is tech entrepreneurship (this is my interest as well).   If we're talking about general entrepreneurship, that's a different story.  There's really no shortage of entrepreneurial zeal in Mexico; Mexicans are a hardworking lot and you can see all sorts of entrepreneurship, from people selling things on the street to the ubiquitous abarrotes that are generally mom & pop shops.  However, most Mexicans that are in these businesses don't seem to consider themselves emprendedores.  They're just making a living. - With regard to tech entrepreneurship, most observers would agree that the community is pretty small.  It's largely geographically concentrated in Condesa & Roma and there are a very small number of people (right now) that are the standouts/thought leaders. - There is not a lot of venture capital.  There is more today than there was even a year ago, but investment is hard to come by for most tech startups, and follow-on rounds are even harder to find.  And there have only been a very few modest "exits" (i.e. sales of companies). - The level of business education of entrepreneurs varies wildly.  Some can be very sophisticated about their business model and matters like financing.  However, I've also seen numerous pitches where the entrepreneurs didn't know how to value their businesses and therefore couldn't possibly know how to get a good deal when an investor showed interest. - The ecosystem is growing fast, and business conditions in Mexico are also evolving quickly (for the better).  This is creating the possibility that certain aspects of the startup ecosystem (e.g. e-commerce) will begin to explode soon in a way they haven't up until now.  The Mexican middle class is growing quickly and as more people enter the middle class, online commerce will also expand. - One measure of how quickly the ecosystem is growing is Startup Weekend.  Last year Mexico had more Startup Weekend events than any country other than the United States.  Great companies don't come from Startup Weekend but it's a great educational opportunity and I think this is a good indicator of how the level of enthusiasm for technology entrepreneurship is growing. - Finally, Mexicans -- like most other parts of Latin America -- are social (in the online sense) at a rate that is significantly ahead of most other parts of the world on a per capita basis.  That means that any business that successfully uses social networks can leverage them at a higher level in Mexico than in, say, North America or Europe. For more of my views on Mexico, see this article: http://pandodaily.com/2013/02/26/mexico-in-2013-is-brazil-in-2008/