In Rio, Starting a Business Is for Heroes

Sometimes I wonder if it isn’t time to leave the corporate world and open my own small business. A coffee shop, perhaps. A franchise, maybe. When I hear those stories, though, I give up.


I won’t even mention how the extreme taxes and bureaucracy make it so difficult for entrepreneurs in Brazil.

About the Government, I will just mention a quote by Flávio Augusto da Silva.

In one of his interviews, he tells the story about the new Stadium that Orlando City is building. He talks about how they negotiated with the local Government to establish a partnership for mutual benefit between the City, the State and the Club.

“In Florida, the Government really acts as a partner. Opposite of some countries, where it seems the Government works against businesses.”

The original interview, in Portuguese, can be listened here.


Education

The quality of education in Brazil lowers every day.

I am not talking about physics, chemistry or philosophy.

I mean reading well, writing well, and making simple math operations well. It is my belief that if these three are learnt well, a kid also develops the ability to learn. With those skills well matured, the kid can self-learn through books. The kid will be able to understand and assimilate what others tell and teach them. The kid will develop his or her smartness.

Even those basic skills are missing in people coming out of the educational system. Be it the abandoned public system, or the better private system.

Functional illiteracy in Brazilian adults is closing in on 30%. Those are the people who recognize letters and numbers, but will read a sentence and won’t understand its meaning and intention, for example.

In every international education rankings you check, Brazil is listed way down the list.

One of the outcomes can be seen in this other story: bad service all around.


Hiring Process

I used to work for a company that identified a problem. Employees were having a hard time writing e-mails in clear and correct Portuguese.

If the manager of a certain department writes a company-wide newsletter full of orthographic errors, it is embarrassing and the person loses some respect. If you e-mail a client and you write like a 5-year-old, your company lacks professionalism.

Human Resources took a decision. Every future candidate would have to write an essay about a certain topic. The text would be evaluated and a certain grade would have to be achieved. This filter was added even before technical interviews. It was the first step.

After three months, the company was not able to hire a single person, even though there were many opportunities available. All candidates failed.

This part of the process ended up being discarded.


Calculator

A friend of mine has a small shop, where he sells football-related toys.

Whenever I visit him, he advises me:

“Do you work on weekends?”
“Rarely.”
“Do they pay you for extra-time?”
“Yes.”
“Have they ever delayed a payment?”
“No.”
“Then stay on the corporate world as long as you can.”

He then tells me how he works Sunday-to-Sunday, 12 hours a day. Every time he needs to be outside the shop, he is desperate. He cannot trust his employees. Not because of their honesty, but because of their basic skills: communication, math, etc.

Find Manchester United. Photo: UNIFA

He told me one of his employees said he loved football and followed everything about it. He noticed right away that it wasn’t entirely true. However, he gave him a chance, taught him a lot. After 6 months, the guy still could not differentiate between Manchester City (blue) and Manchester United (red).

Another time, he told me how he was on the phone once and one of the employees was handling a sale. At that moment, he discovered the employee was not able to use a calculator.

According to him, increasing the salary to have access to better-qualified people will make the business unprofitable.

You see, he does not need a full-fledged salesman. He needs someone who can talk to the public politely and correctly, who is able to understand the products and identify the involved teams and who is able to use a calculator to do math. This is rare in Rio.


What Is the Change?

My wife was at the supermarket the other day.

“It’s $12.25,” said the cashier.

My wife handed out a $20 bill and gave her $2.25 in coins.

“Here, to help you out with the change.”

The woman froze. She had no idea how that could be helpful.

My wife tried to explain twice, and gave up. She took the $2.25 back and let the cashier provide the change for $20.


Three Thirds = Two Quarters and One Half

Tangram

Another friend made the switch recently. He opened a nice sandwich store in Copacabana.

I went there with two friends to try some sandwiches, know the place, and help him get traction in this initial period.

We ordered three different sandwiches and asked him to cut each of them in thirds. That way, each of us would try one third of each sandwich.

After a while he brought back one sandwich.

“I’ll be right back with the others. I just need to help the cook with the ‘cutting in thirds’ part.”

The sandwich was cut in two halves and one of the halves was cut in half.

We ended up with one half and two quarters.

Do you imagine having to teach an employee how to cut a rectangular sandwich in three equal parts? It’s no big deal, of course. But it is the kind of thing that you might assume that ‘everybody knows’ as it is ‘too obvious’.


The Adventures of a New York Businessman Trying to Make His Way in Rio

Check out this Bloomberg article to read the story of Sei Shiroma’s Calvary trying to set up his pizza shop in Rio.

After months untangling the web that is Brazilian bureaucracy and overall mess, the shop opens. He is relieved.

Beside his small restaurant there is a bar, owned by an old school Brazilian.

So, the restaurant became popular. It is often crowded and people wait outside for a seat. This has improved the frequency at the bar as well.

The bar has more variety and better prices on beers. So, people sitting at the restaurant’s sidewalk tables start fetching beers at the bar to drink at the restaurant. Up until this point, you might even agree that it could be considered ok.

However, according to Shiroma, the bar is sending waiters to take beer orders from people sitting at the restaurant tables.

I think this crosses the line a little bit, right?

News have shown that there have been arguments between the two owners, in front of the customers.

Hero of the Free Trade? Photo: Pedro Kirilos / Agencia O Globo

The bar owner slashed back saying he sells to whomever he wants.

What shocks me the most is that the customers have taken the bar’s side in this. This other article shows how people were manifesting on the Internet, exalting the bar’s owner as a “Hero of the Free Trade” and offending the restaurant owner.

I don’t doubt that most people find the bar’s owner a “smart” person.

Read more about the culture of taking advantage in everything and what is “Brazilian Smart” in this article.


Conclusion

In most of my articles, whenever thinking about the root-cause of most issues in Brazil, it ends up coming down to two things:

  • Education
  • Impunity
We gained some things. We lost some things.

Our schools and our parents are failing miserably in teaching kids how to communicate in written and oral form, how to do math, how to be clever when finding solutions for problems. Failing to teach them how to behave properly, how to differentiate right from wrong, how to be good citizens and how to live in community.

As a first step to transform education, I defend high investment in elementary schools. Those should have the best paid professionals in all public service. The focus should be in writing, reading and math. If those foundations are properly established, even if the kid has to quit studies in their teens due to the other issues of our society, the base will be there for self-learning and to be capable for most jobs.

My mother only went through elementary school, in the 1950's. She had to leave school after that to work, sewing. Guess what, she was quite capable to perform as a bank manager in her adulthood. She worked for most national banks and even was a manager of the local Lloyds Bank for a period. Nowadays, kids go through High School and can’t use a calculator.

Education is a combined process between school and parents. Both must be involved.

Education is a gateway for cultural change and society transformation.