Bolivian Startup Ecosystem: Seeds Waiting For Water

One month ago, my trip to look for the most promising startups of Latin America brought me to Bolivia. Apart from its diversity and beautiful landscapes, Bolivia is known as a country facing challenges such as poverty, racial tension or corruption. However, what people tend to forget is that because of all these constraints, Bolivia hosts a very creative and resilient population. Talented people, determined to move things forward, are creating innovative solutions to solve local challenges and boost the market. So what about the entrepreneurship and innovation ecosystem in the country of Api?

When compared with most of the Latin American countries, the Bolivian startup ecosystem is in its very early days. As its economy depends mainly of gas,oil and soja, the country is very vulnerable to price volatility. Entrepreneurship is therefore an interesting alternative to foster country’s growth and social stability. However, to build a strong and stable entrepreneurship environment, the country still faces a lot of challenges.

So what are the 3 main barriers to innovation in Bolivia?

1. Poverty, inequality & limited access to technology

Bolivia is one of the poorest country of South America. While Bolivia’s GDP of USD 33.2 billions is higher than the one of Paraguay, of USD 27.6 billions, its GDP per capita remains the lowest in the region (source: World Bank 2015). Therefore, poverty & inequality remain one of the main challenges when creating a better startup environment

Understandably, this is directly related to the access to technology and prohibitively high costs of mobile ownership. Half of the Bolivian population doesn’t have access to internet and smartphone penetration is only 20%, still below the regional average of 30% (Source: GSM 2015).

Nevertheless, we see more and more cases where access to technology can play crucial role in the society. A telling example of technology tackling a social issue is a mobile wallet Tigo Money that allows the customers of Tigo to make instant and safe payments through their mobile phone. Thanks to it, people without bank accounts or living far from ATMs can now have access to the finance system. Indeed, almost 70% of the transactions are carried out in the rural area of Bolivia, and so it improves people’s access to financial services of this predominantly unbanked community.

Definitely, providing affordable connectivity to the whole population would increase the number of businesses & job opportunities, which would eventually lead to an overall increase of the income per capita and better launchpad for startups.

2. Bureaucracy & corruption, the love of paper

As anyone involved in the startup scene knows, governments often play an important part in the whole development of the ecosystem. In Bolivia, the economy is still state driven and the current government policies are not necessarily supporting venture creation.

For example, Bolivia is the only country in Latin America that has no incubators or accelerators supported by the government. According to the World Bank, Bolivia is also ranked 178th in the world in terms of the ease of the cost of starting a business which is almost twice as high as in the rest of the region. While in Mexico, Chile and Brazil, you can set up a business practically for free and in less than a week, in Bolivia you would need at least 50 days. The lack of supportive public policies is one of the other main factors that hinder entrepreneurial activity. Unfortunately, as in many countries of Latin America, corruption is still very high. Moreover, Bolivia remains a very bureaucratic and traditional country in terms of doing business. As a matter of fact, every request or business agreement have to be submitted in printed exemplar with an official signature. The digital era hasn’t happened yet, so better to go there with your printer.

3. Lack of funding

Now, even if the two problems above could be resolved, one problem still remains — the limited access to funding.”Many entrepreneurs we met on the road told us that if you are an entrepreneur in Bolivia, you better be prepared to invest your own money. The few investors there are are still very risk-averse and traditional oriented, and there are no local VCs or business angel networks, with money coming mainly from abroad.

However, even if the state of entrepreneurship in Bolivia is still lagging behind, we should not underestimate its potential. Quick view on three interesting facts that highlight Bolivia’s potential to become a tech hub.

Why should we keep a close eye to the Bolivian’s ecosystem?

• According to the last GEM study, Bolivia is the 6th country with the highest rate of entrepreneurial activity. Surprisingly, Bolivian entrepreneurs consider to be more opportunity than per-necessity oriented.
• Even though Uber is still not present in Bolivia, the number of sharing applications & platform solution is increasing. Two local success cases could include Ultra Casas, our recent winner of Seedstars World Bolivia, who are developing a real estate application for individuals that want to sell or buy an new house. The app already counts with more than 11'000 registred users with 5'000 daily visits and Shake for help, an innovative version of the security alert button which allows the user to ask for help just by shaking his phone. Till today, the app has been download in more than 40 countries worldwide.
• Last but not least, we can already see the emergence of three promising hubs to support entrepreneurs, namely La Paz (cowork café, Elemental: for the future generation of tech entrepreneurs), Cochabamba (Hub7, cowork cafe) and Santa Cruz (Fundación Trabajo Empresa, Start cowork).

As the African proverb says: “If you want to go fast, go alone. If you want to go far, go together”. In the end, it’s always about people and how they can work together to achieve new things. Also in the case of Bolivia, it is a perfect fit. Even though the country is still not one of the top scenes of technology, some inspired and determined Bolivian entrepreneurs joined forces to create a better innovation ecosystem. As a matter of fact, let me introduce you the three rising teams that may change Bolivian’s lives and bring the county to the next level.

3 disruptive changemaker teams of Bolivia

Annelissie Arrazola & BoxBike team:

If you go to Santa Cruz, you should definitely contact Annelisse. She is THE person to convince you that you can run a business while having an impact on the society & respecting the environment.

Three years ago, Annelissie launched BoxBike, a social & ecological courier company. Today, Box Bike delivers more than 3,500 orders per month thanks to a team of 7 students. Boxbike is a very inspiring story of how you can achieve great results and doing the right things if you just want it badly enough.

My advice: Go on a bike tour with the incredible team of Boxbike, enjoy Santa Cruz sightseeing and arts. They have a batch of wonderful artists that will make me realize the creative potential of this population.

Daniella Garcia Moreno & Elemental Team:

If the country is still very male dominated, strong and talented women are starting to claim their rightful position within the society. Daniella is based in La Paz, and two years ago she realised that the school curriculum does not focus enough on technological skills. Because of this, she decided to create Elemental, a center of education in technology that teaches kids and adolescents basic technological skills to give them the tool to not only become adopters of technology, but actually creators. From robotics, to electricity passing by coding, the team of Elemental covers a wide range of topics with a methodology that is based on an innovative pedagogic approach.

Walter Méndez, René Salomón & the Fundación Trabajo Empresa:

And if you are back to Santa Cruz, you should stop at the Fundación Trabajo Empresa and ask for René & Walter, the chaperon of entrepreneurship in the country.

Currently teaching at the University UTEPSA, Walter has all the skills to be an excellent professor. After working for more than 10 years in the banking industry, he became exhausted by the capitalism and quantitative results orientation of this industry. Courageously, he decided to leave his comfortable position to start teaching entrepreneurship to young Bolivian students. When not at the University, you can meet Walter at various activities to promote entrepreneurship around the country or spending time with his family, trying to find the right work-life balance, an equilibrium that many entrepreneurs are looking for.

Walking with him to create a favorable innovation path, René Salomon is according to many people THE person to meet when talking of entrepreneurship. Catalyst of the development of high value entrepreneurship, René is sowing the seeds of entrepreneurship everywhere from Cochabamba, to the frontier of Brazil. He is the energy and innovation leader that the country needs to change its mentality and attitudes towards entrepreneurship.

René and Walter are definitely the experts to meet to understand the state of the ecosystem in Bolivia.

My advice: Visit them at the Fundacion on a Friday around 5:00pm, they will certainly bring you for a cuspe, one of the traditional beverage of Bolivia, that as innovation promises you a lot fun and disruption.

While Bolivia is still facing huge structural challenges stemming from poverty, bureaucracy, and lack of access to technology and financial resources, the Bolivian startup ecosystem still deserves closer attention. Strong leaders and innovative entrepreneurs who have traveled abroad in the US, Europe, and other Latin American countries like Chile, Brazil, and Argentina have derived inspiration from other startup ecosystems, and have returned to build a stronger entrepreneurship culture in Bolivia.

If you start looking around and dig more deeply into this ecosystem, you will realize that very talented seeds are planted, just waiting for the rain to come in order to germinate.