Experiencing Failure: My Journey After Grad School
by Luciano Colos
When I graduated from the MEng program 2 years ago, it was a dream come true for this small town guy from Patagonia. Before I came to Berkeley, I didn’t even know the word for entrepreneurship, but I already knew that was what I wanted to do.
I studied IEOR with a specialization in Financial Engineering. I took advantage of many opportunities to develop my entrepreneurial skills by attending several events, taking relevant courses, participating in the Big Ideas competition, and even starting my own project: a mobile solution to help Latin Americans with the management of their finances.
This was a project that meant a lot to me, because while I was studying in Berkeley, my friends in Argentina were dealing with 25% yearly inflation. They didn’t know what to do with their savings, and most of them simply lost capital year after year.
Starting my project at Berkeley was easy because there were no restrictions, no criticism, no fear of failure. The limits were those that you set for yourself, and I felt that anything was possible. This was a new paradigm for me.
In Argentina, I was used to people following traditional careers, and doing what was considered correct, with very little risk taking. At Berkeley, I was encouraged to take risks and taught that failure was an experience to learn from and even something to share.
After graduation I returned to Argentina to build my company. My plan was to assemble a team, develop the product, and raise funds, but the startup culture in South America is very different from the one in Silicon Valley. Fundraising rounds are much smaller here, with few startups actually getting funded. The VC industry is nascent, so startups mostly have to bootstrap. Also, South American investors are much more risk averse and look for proven business models over disruptive opportunities. The investment amounts are much smaller, but salaries and general expenses are much lower as well.
Not surprisingly, it was difficult to bring anyone onboard without capital. I found that employees wanted good salaries over attractive equity stake offers. So I applied to accelerators and was fortunate enough to get accepted by Startup Chile, a prestigious accelerator funded by the Chilean government. With some funding and office space, I got a talented team to commit full time to the project.
While in Chile, we developed our product, connected with local entrepreneurs and investors, and learned to run a startup together. I worked incredibly hard the past two years to build my company. We built an initial version of our product — a mobile app that allows you to invest in mutual funds — and tried to partner with banks and financial firms to resell their investment products. They were interested in our product, but government regulations and other legal roadblocks proved to be too risky for them.
In January, three months after having run out of money, I had to let the team go and put the project on pause. I was unable to raise more funds and had to accept the situation. When I started the project it was easy to talk about failure, but experiencing it was a different animal. It affected me deeply.
I had experienced failure before, but I had never invested so much of my time and energy into a cause that ultimately failed.
When I started two years ago, I knew I could survive for about half a year on some savings and bootstrapping. Looking back, there were so many unexpected challenges that I was able to overcome. I used what I had learned to adapt to the real situations I found myself in; I was able to develop a live prototype on a low budget; and I had actually been able to raise funds to last almost 2 years. I had the opportunity to work with great people while chasing after my dream, which gave me a deep sense of purpose.
Even though it didn’t work out in the end, there was a quiet peace in my heart, and that is not a small thing. This story may not have a happy ending, but that’s because we’ve only just begun.