Going “Glocal”: The innovation ecosystem evolution of Puerto Rico that’s worth keeping an eye on
This one’s for all of you innovators, who may be interested in knowing this story
I’m talking about a project that was born in 2018 from what we were doing at Parallel18 and with which I’ve had the fortune to work during the past 12 months. The difference? This project has focused on companies that have not yet hit the market and that are 100% locals (boricua).
The impact that this program has had has been unthinkable and responds to a strategy of innovation and global entrepreneurship that translates into a successful local effort, something I call a “glocal” strategy. (Did you get it?)
To understand how it all started, we have to travel a little in time. READY?
Let’s go back to 2015, when I was invited by the government of Puerto Rico to the island with the task of replicating the efforts of Start-Up Chile, program with which I collaborated for 4 years. My answer to their request was, simple: it was impossible. I know, I know, you’re wondering why. It’s not that the world-renowned program isn’t replicable, nothing like that.
Here’s what happened: making such a risky and agressive decision required the programs models to respond to a specific need at a country level. I’m talking about models that can help solve their main challenges and could generate economic development, although it might sound like a niche at the beggining.
You see, I’m passionate about things that have to do with globalization. Specifically with encouraging the awareness that we live in a changing environment — by external factors — and how we adapt to those changes depends on each one of us: being able to have an adaptable mindset.
And so, the Start-Up Chile model had a clear objective on regards to that idea. Why? Because the Chilean entrepreneur lacked global vision and depended heavily on the lucrative — but exhaustible — natural resources industry and for the government that designed it, this was not sustainable over time.
In response to this, an aggressive program was implemented. Start-Up Chile attracted entrepreneurial talent from all over the world. All with the aim of, on one hand, generating that break in the mentality of the local entrepreneur and, on the other, placing Chile on the peak of the innovation and global entrepreneurship map.
Now, let’s go back to Puerto Rico. In this case, we worked on a design that was made up of certain success factors of the Chilean program.
FIRST, the concept of attracting international talent.
- All of the innovation and entrepreneurship indexes of local entrepreneurs increase significantly after interaction with entrepreneurs who come from more developed ecosystems. This according to a study by Stanford University, which was implemented at Start-Up Chile.
SECOND, the mix between an economic development policy and a private initiative, which we defined as startup growth metrics as well as a socio-cultural change.
In the Puerto Rico case the difference mainly lies in what the program is aiming to solve:
- The creation of a new knowledge economy, in response to a deeply depressed traditional economy.
- The promotion of a component of global acceleration to an ecosystem that had very interesting local pieces already developed. Mainly a robust techie community willing to collaborate and create businesses with the right support.
- The retention of local talent, whose optimistic figures report that 50% of the graduated engineers of Puerto Rico end up leaving the island.
- The repatriation of those who left, whose vast majority wants to return desperately to their country but do not find concrete and interesting opportunities to come back.
And… this is how Parallel18 was created. A program with a clear value proposition aimed at local and international entrepreneurs (mainly Latinos) who were already in the market and who aspire to grow in global markets such as the US.
How would it work?
- The program would attract up to 80 companies per year
- It would provide world-class technical support, as well as equity-free and equity-based financing
- Connection with clients that would lead to business
- Connections to investors
The short and mid term goal was clear: to look for one or several business success stories so this could generate more potential entrepreneurs in Puerto Rico, who would decide to create companies.
Let’s go back to half a year ago. After two years of launching the program and receiving more than 120 local and international companies, we saw impressive and clear signs of direct reactivation in three fundamental points:
- An angel investment ecosystem that already exceeds millions of dollars (You can see the figures in P18’s second Impact Report)
- A traditional industry that has proven to be able to work in specific businesses with startups and in investment
- TALENT. The program has managed to attract full-time and part-time jobs, service providers and interns.
NOTE: The latter is extremely IMPORTANT, because it directly translates into a change in the mindset of the workforce. Parallel18 is NOT defined as an employment policy but YES as an investment in the local talent.
Sounds successful, right? But just as we were seeing very clear signs of growth….. Hurricane María happened. We had the misfortune to live one of the most devastating natural disasters in Puerto Rico. HOWEVER, the aftermath of the hurricane marked a very important moment for the program, since in response to the event we decided to launch Pre18.
A program that will support local startups that have not yet reached the market (pre-revenue). How? With financing and mentoring for three months (12 weeks).
One of the reasons was to be able to give immediate support to those who were inventing them after the hurricane … but the most important was that we needed a concrete incentive to duplicate the local pipeline of companies.
- The project received more than 300 applications, a historical number for the island, and we ended up supporting 40 local startups, another number never seen before. (45% female led companies)
- 70% of the companies managed to reach the market successfully, in total during the three months they sold $500K and more than 150 people were hired.
I believe the success of this new program — as well as the reason why I wanted to share this with you (thank you for reaching the end) — is that in 2018 we went from a global attraction strategy to a local export strategy that was only possible because our experience and work with Parallel18.
Why? Because we use the same group of mentors with the same international vision, meaning the LOCAL Pre18 entrepreneurs were immediately exposed to an international experience leading them to start thinking globally from the very beginning.
The more I analize this “Glocal” experiment, the more I am convinced that the model has ALL the necesary ingredients to be replicated elsewhere. My best guess and suggestion is that, If a country or city is willing to, it’s extremely important to consider the above… include a global mindset approach even if you have a local focus at first.
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