“A unica, realamente, razão para empreender é impactar”
“The ONLY real reason to be an entrepreneur is to create impact”
In Spanish and Portuguese, there is not only a noun for entrepreneur (empre(e)ndedor) but a verb (empre(e)nder). To empre(e)nder in Latin countries and Brazil is a verb, meaning an action needs to occur. And according to this video, that action is creating impact.
‘Vai que Da’ is a new video developed by Endeavor Brazil that tells the story of six entrepreneurs in Brazil who are using their actions and entrepreneurial abilities to create scalable change. When we talk about the ‘new-era business,’ as we have for the last several months, this is what we are talking about.
The new-era business is hybrid between a social enterprise and traditional business, a combination between old-school principles and new-school technologies. It’s designed to help reinvent the way businesses create value for society and repurpose the actions of the individuals within the company, all the while earning a profit.
And a few of the entrepreneurs from this movie are leading by example. As a sample, here are two of those with innovative offerings who are profiled in the preview:
QMagico is a blended-learning platform for K – 12 that combines both online and offline learning, which according to many studies is the optimal way for kids to learn in today’s world. It is an innovative way of teaching that leverages the power of technology to deliver students a more individualized and interactive learning experience.
Entrepreneur Daniel Wjunski started Minha Vida (My Life) in 2004 with the goal to create a community of consumers linked together in an online health and well-being portal. By delivering informative content, health services and community tools, Minha Vida has become the top health and wellness portal in Brazil.
Their mission is to democratize information about health and well-being, thus making life better for the people. They have more than 10 million registered users and the founder was selected as Entrepreneur of the Year in the Emerging category in 2011.
The other entrepreneurs in the preview have developed different businesses to varying levels of innovation, with some being more impactful than others (Solidarium > We Do Logos). But the general theme of the series (yet to be released) is simple – to be an entrepreneur, your focus needs to be on creating an impact in your market.
The key is to start thinking about the purpose of the company and aligning the activities of the business BEFORE entering the market. Not running a business that churns out profits in whatever way it can and then starts to slice a few slivers off to donate to charity (ie. the North-American business model). Whether big or small, the business itself doesn’t need to be revolutionary or reinvent the wheel, but it should stand for something that benefits humanity if it is successfully executed.
For all-intensive purposes, the concept of what an entrepreneur SHOULD do has been lost in our (Western) society. Maybe that has something to do with the fact that we don’t have a verb in English for being an entrepreneur?
The action of being an entrepreneur should be defined and measured by the direct impact of the CORE business – and that’s the message in the ‘Vai que Da’ preview delivered by entrepreneur Horacio Poblete:
“The ONLY real reason to be an entrepreneur is to create impact”
And remember, we are not talking about charities or non-profits here, these are real businesses. They have a scalable business model, high-level teams behind them and are built using innovative business strategies. That’s what the New Era of Business is all about.
About a year ago, My Crowdfunding Study touched down on the beaches of Big, Bad Brazil. While the focus of the trip was clearly crowdfunding in South America, Brazil was full of many other surprises, including the emergence of a new generation of social enterprises. While we have written a little bit about one such enterprise, Solidarium, today we are going to go a step further and break down the impact-driven business model of another inspiring Brazilian social enterprise, ASTA Network.
In today’s world, impact is becoming the new currency for entrepreneurs. Sure there are still many that dream of becoming the next Mark Zuckerberg, going from zero to a billion in a few years, but there is another emerging crop whose focus is to change the course of humanity.
In Brazil, in particular, the need for impact-driven entrepreneurs is especially high, as social problems touch almost every level of the Brazilian society. While many people around the world have put Brazil on their radar because of its rapid rise in (GDP) growth, the real stories worth telling are happening on the ground thanks to a new generation entrepreneurs. One such story revolves around Alice Freitas and the creation of ASTA Networks, the first door-to-door network of products made by Brazilians from low-income communities.
What makes stories such as ASTA so exciting is that they are leading the charge towards a new era of business by creating enterprises that generate mass-scale social returns while still striving for profitability. The lines are starting to blur between social enterprises and businesses thanks to the development of impact-driven business models. So let’s dive into ASTA and look at how a simple marketplace created a decade ago has blossomed into a full-scale network across Brazil.
It started back in 2002 when the Founder Alice was 22 years of age. Her friend had returned from a trip to New Zealand and was encouraging her to go travelling with her. Alice felt restless and wanted to go, but needed a purpose for the trip – to make it feasible – so she brainstormed ideas for a social-focused project.
With a little creativity and ‘cara de pão’ persistence, the ReAlice project was launched in 2003. The portal was designed to allow the travelers to share the inspiring social projects they were seeing with other Brazilians. They travelled for a year and half through India, Thailand and Bangladesh and posted each story on the portal.
Upon returning, they were sick of travelling and wanted to do something more local. At that point, Alice encountered a cooperative of 30 women in Campo Grande and began to start selling their products in 2005. It was at that moment that they started to see the problem – women were not able to sell their products.
It was that realization that gave birth to the big idea behind ASTA – setup the first door-to-door direct sales network of inclusive products in Brazil. The market size of this problem was more than big enough to support a large-scale initiative:
25,000 cooperative groups producing artisanal products
more than 2 million people
67% have difficulty selling
The idea got its first formal backing from Fundação Avina, a leadership organization dedicated to social entrepreneurs, and the ASTA Network was officially born in 2007. What drove the idea was the notion that the network wouldn’t be about selling things from outside-in, but from inside-out.
Starting in 2008, ASTA had only seven resellers. But an initial surge from an ASTA Network member had every person calling five of their friends or family to get them involved in the idea, and suddenly ASTA was alive. When the first bag of products was sent out to be sold, it came back empty within a week.
In 2008, 7,000 Reais worth of sales were completed, while by 2011, ASTA generated 625,000 Reais (approximately $312,500 USD) in sales and had more than 200 resellers. As of this year, it was estimated that more than 50 cooperative groups were supported and almost 2,500 people impacted directly.
The question is, how does ASTA work and what’s the impact-driven business model?
The process starts when artisans arrive with the products in hand. Members of the ASTA Network then select the ones they like; all the products are top quality and beautifully designed (first-hand knowledge). From there, an ASTA member photographs the items and puts them in the ASTA catalogue. The ASTA catalogue is then shipped out to one of the ASTA resellers, who then shows the products to their friends and family. The reseller then places an order, which ASTA processes, packages and ships from one of its inventory centres. The percentage of sales are broken down as follows:
The beauty of ASTA products is that you know exactly where each product is made and where the money goes. The business model behind the company is quite simple, but because they are building a large network of artisans who produce high-quality, in-demand products, there is a lot of room for expansion and innovation. As the company continues to grow its network and presence, a whole new array of opportunities will open up. The real beauty is that a growing business model doesn’t just translate into increased bottom-line profitability, but increased impact.
ASTA has developed over the course of a decade thanks to the persistent and unrelenting efforts of Alice and her team, along with the support from organizations such as Avina and Aliança. In fact, during a conference last year in Brazil, Alice spoke of the paralleled development between ASTA and Solidarium, which were both incubated in some way through Aliança Empreendedora, an incredible organization based in Brazil’s South that focuses on sparking entrepreneurship in low-income communities.
Overall, the advent of the impact-driven business model is helping social enterprises reach self-sustainability and profitability without watering down their reach. Brazil, in particular, is a hotspot for a new breed of social entrepreneurs who are using impact, rather than Reais, as their metric for success. While it’s still early days, the sunny, beach-lined coasts of Brazil are a breeding ground for much more than soccer stars and bikini-clad women. Nevermind the World Cup or the Olympics, the real games have already begun.
Brazil – it’s a country that has captured the attention of many around the world, sometimes for good reasons, other times for not-so-good ones. No matter which way you slice it, however, the future is bright for the superpower in the South. Recently, I spent several weeks in big, bad Brazil, so I thought it would be fun to recount a little bit of what I saw, and talk about why I believe Brazil is the future frontier for companies of all shapes and sizes.
It isn’t until you are about to touch down on the ground of Garulhos international airport in Sao Paulo that Brazil really hits you. As your plane makes its descent into the urban megalopolis that is Sao Paulo, you begin to realize that you have probably never seen what you are about to see. Brazil is big, its bad, and its bold, and it doesn’t take you long to understand that there is much more to the country than what meets the eye.
For the past number of years, the majority of media attention in relation to Brazil has been about a rapidly growing economy, Carnaval and the 2014 World Cup. The moment you step out of your taxi into any one of Brazil’s many urban jungles, however, you begin to see that Brazil is really about its people, the culture and the story of its emergence as a nation, a story that is only beginning to be written now after decades in despair.
In the heart of Sao Paulo
The first thing that strikes you about Brazil, other than its size, is its vibrancy. The streets of Brazil are alive and there is an energy in the air like no other. An array of colours decorate the streets and numerous aromas fill the air, as the Brazilian people have awaken to the reality that their time has finally come to step into the spotlight.
Despite the energy and enthusiasm that greets you, there are also a few startling realities that don’t take long to identify. Poverty, traffic, and pollution, are a few of the more prominent issues, but it is the income disparity between rich and poor that is truly shocking.
All in all, the combination of different elements makes it quite a shock for the average Western foreigner making his/her first trip into the big Brazilian cities. But once the shock wears off, and you start to settle into the Brazilian culture, you begin to realize that there is something special going on in this country.
I arrived in Brazil in mid-January and spent a little over five weeks exploring various cities and parts of the country. The focus of my trip was the new crowdfunding trend (I wrote about my trip here at www.mycrowdfundingstudy.com), which began back in January of 2011 when Catarse (www.catarse.me) launched the first crowdfunding platform in Brazil. During my study, I had a chance to experience the culture, learn the language, and get a glimpse of what I believe will be one of the most exciting and robust markets for decades to come.
A year ago, I wrote a blog post titled, Brazil: An Emerging Hotbed for Entrepreneurs, discussing the reasons I believed Brazil would become a global hotspot for entrepreneurs. During my trip, I met a lot of entrepreneurs and had a chance to learn about both the culture of everyday Brazil and the business culture there. Just to simplify it, I am going to break down Brazil as I see it today, and where I see Brazil going in the future.
Culture – the Brazilian culture is open, inclusive and social. In general, the Brazilian people are extremely endearing and energetic, and they like to be a part of things. There is a going-out culture throughout Brazil, as Brazilians love to go out on the town, meet with friends and family, and spend time socializing. The hallmark of Brazilian culture is the receptiveness and eagerness of the people to experience new things and meet new people.
Business Environment – At the higher levels, Brazil’s business environment is characterized by corruption and greed. Many of Brazil’s wealthy fly around in helicopters and spare themselves no luxury while the majority of the population lives in absolute poverty. But amongst the middle-tier and the younger generation, a new business environment is being formed, one based on trust, collaboration and openness. The Brazilians are very globally minded and the majority of entrepreneurs and business professionals speak English. Their natural spirit of entrepreneurship makes them open to dealmaking, partnerships and new ideas.
The Market – Brazil has over 200 million people and the middle class is growing at a rapid pace. These middle class Brazilians want a lot of the same things that we have in North America (the i-Phone, Rayban sunglasses, etc.), but they pay a premium for them, in most cases 2-3 times the price we pay. The Brazilians are feeling the growth and are excited to spend their money on top-tier international brands. With such a large population, Brazil represents a huge opportunity for many new companies looking to expand into global markets.
Social Issues – Globally, Brazil ranks amongst the poorest in terms of many social indicators and income disparity. Many Brazilians live in abject poverty in favelas and have little or no social support. But Brazil is also growing a strong social entrepreneurship sector and is seen as a model in many regards for how to develop a strong social business sector in an emerging economy. Despite the large number of social issues, many Brazilians I met demonstrated an awareness of the problems and a desire to want to solve them, especially the younger generation.
Challenges – The biggest challenge with Brazil, in my opinion, is the language. Portguese is the language that you hear throughout the streets wherever you go, and there are many places in Brazil where very few people speak English. In Sao Paulo for example, many people working in prominent companies will speak both, but it would be difficult to navigate through Brazil with English alone. Portuguese is quite a difficult language to learn, but the Brazilians get excited when anyone makes an effort to learn even a few words.
The second major challenge is social issues. You see a lot of the direct affects of the social disparity simply by walking the streets of any major city; this disparity leads to crime and creates a palpable social tension; therefore, a foreigner needs to be careful and ensure that he/she is traveling with, or based on the advice of, local Brazilians.
Barriers to Entry – Brazil is notorious for its bureaucracy. The Brazil Cost, for example, is estimated to be about 5 months, and it refers to how long it takes to open a new business in Brazil. Then there are the visas, which anyone from North America needs to enter the country, even as a tourist. There are also a number of other smaller barriers that make it difficult for a foreigner to successfully enter Brazil. In general, with the language included, there are many barriers that make it difficult to enter Brazil.
The Future of Brazil
*Young Entrepreneurs*– the following video, O Sonho Brasiliero (the Brazilian Dream), highlights the emerging youth movement in Brazil. Lead by entrepreneurs and advocates for social reform, Brazil’s young generation is armed with the energy and enthusiasm to transform the nation into one that is much more equitable and efficient. What impressed me the most about Brazil’s young entrepreneurs was their sincere desire to change the system, rather than simply start something to be a part of the startup scene. I believe that these young entrepreneurs will redefine Brazil over the decades to come and shape the country into a global mecca for entrepreneurship.
Social Business – the combination of the fact that Brazil has a large number of social problems and there is a natural spirit of entrepreneurship amongst Brazilians, leads me to believe that the social business/entrepreneurship sector will become world class, and act as a beacon for other emerging economies looking to solve large-scale social problems.
An Abundance of Resources – Brazil has so many natural resources, from oil to fresh fruit, which so many people in the world will covet. Because so many of these resources still remain untapped, Brazil has the opportunity to become a leader in sustainable resource development in the decades to come and share its treasures with the world.
Overall, the best part of Brazil is that it’s fun, it’s alive and it’s open for business. Any company, big or small, that wants to expand its presence internationally needs to put Brazil on the radar and start researching strategies to enter the market. As Brazil is now officially one of my favorite places in the world, I will continue to research new opportunities and develop new connections. Feel free to drop me an email (joel at lumosforbusiness dot com) if you are interested in discussing more about Brazil.
I am currently in Buenos Aires, Argentina, at the beginning of a trip that will span over the period of one month to study the new phenomena of crowdfunding in South America. I will be spending the majority of the trip in Brazil, where I am fascinated by the action, so if you are interested in seeing how the trip unfolds you can follow my trip through my blog below:
Exactly one year ago I wrote a blog called, Brazil: A Hotbed for Entrepreneurs, where I looked at the factors leading to Brazil’s emergence as (what in my opinion will become) a mecca for entrepreneurs. Today, I want to share a video that highlights an equally exciting trend that will drive Brazil for generations to come, the explosion of Brazil’s young generation into the workforce.
The project, called O Sonho Brasileiro (The Brazilian Dream), is a research project conducted by a number of high-level institutions in Brazil that recognizes the massive potential and energy coming from Gen Y and the oldest members of Gen Z.
More to come on Brazil in the future … deixe um mensagem si vc é parte de isso novo geracão Brasileiro e falamos!
It’s no longer a secret. Brazil, which could only dream about its own potential in the 20th century, is no longer a could-be. They have arrived on the world stage and are ready to transform the global economy in profound ways over the coming decades. While resources and agriculture underpin this powerful economy, a rising tide of entrepreneurship is beginning to emerge. In this blog, we paint a picture of the entrepreneurial landscape and look at the opportunities that exist within the borders of this colourful nation.
Brazil has had a long history of unfulfilled dreams and ambitions. Locals believe Brazil is God’s country due to its bountiful resources and natural beauty, yet political and social issues have weighed it down since the country officially came into existence. But touch down on the runways of Sao Paulo, Brazil’s financial capital, and all this will be forgotten. Beyond being greeted by scorching heat and an amiable Brazilian or two, you will also get a first-hand encounter with the break-neck growth the country has achieved over the last decade.
The country’s transition began in 1995 under the leadership or Fernando Henrique Cardoso, who introduced a number of business-friendly polices and laid the groundwork for Brazil’s rapid expansion. Cardoso gave way to Lula in 2002, who furthered his policies and lead the way towards unprecedented growth. On the back of their resources, specifically deep-sea oil and gas, and agricultural sectors, Brazil has transformed itself from a country that needed IMF loans (in 1998) to a country that now makes them.
Brazil added a big feather to its cap in 2008 when it was given an investment-grade rating by international ratings agencies. Since that time, billions of dollars in foreign capital has poured into the country, adding fuel to the already red-hot fire. The other notable feather in the cap was a successful bid for 2016 Summer Olympics, which along with the 2014 World Cup, will be Brazil’s official coming out party.
The robust economic growth, stabilized currency, and influx of foreign capital have helped put Brazil on the world map; now the pieces are beginning to come together for the emergence of an entrepreneurial culture that could take Brazil to a whole new level. Many roadblocks still stand in the way of up-and-coming entrepreneurs, but the foundation is in place to build businesses that can transform the national and international landscape, both socially and economically.
When you consider that the population of Brazil is 200 million, you can immediately see the scope of the opportunity that presents itself to entrepreneurs. GDP per capita has risen from $1,000 per person in 1970 to $10,000 in 2008, giving once impoverished Brazilians an opportunity to live a much higher quality of life. While income disparity issues are a factor, more than half the population is now considered middle class. The rise in purchasing power, combined with the sheer number of consumers, create a market that is as ripe for innovation and entrepreneurship as the fruit they grow on their trees.
Despite Brazil’s recent surge in economic activity, there are still a number of inefficiencies that exist. These inefficiencies have created gaps in the market that are non-existent in first-world countries, gaps that need to be filled to ensure the continued progression of the country as a whole. To those who are able to capitalize on the opportunities, the payoff is potentially monumental.
Take Sack’s, a leading perfume e-commerce retailer that recently sold a 70% stake in its business to LMVH (Louis Vuitton). The company was started in 2000 by two entrepreneurs, one whose dad owned a store that sold some perfume. The duo put up a website and began e-retailing perfume and cosmetics, and immediately demand was so great that they had to import large quantities of these items to keep up. At the time it was sold in July 2010, the Company had over 830,000 customers and was one of top-three most visited sites in Brazil with over 4 million unique visits a month.
With so much capital pouring into Brazil and a wealth of opportunities, entrepreneurs are becoming the next hottest commodity after oil and gas. From venture capitalists who want to back the next Sack’s, to foreign companies looking to gain access to the untapped masses through M&A (mergers and acquisitions), the money is there and ready to deploy. Despite the enthusiasm, however, there are a number of roadblocks that stand in the way.
So what barriers exist in Brazil that prevent entrepreneurs from moving forward?
For starters there is the notorious “Brazil cost” that anyone starting a business has to deal with. It refers to the loads of documents, forms and regulations that need to be addressed before starting a business. It takes about 5 months on average to start a business in Brazil, one of the longest times in the world for a country of its stature.
While not very prevalent at the grassroots level, corruption is still present in the Brazilian business culture. Despite having improved immensely in recent years, it is still something that any business owner needs to be aware of when doing business in Brazil, especially in the upper echelons of the corporate world.
Another challenge is related to human capital, as finding a group of skilled, entrepreneurially minded individuals to build a team with is not as easy as it would be in other countries.
Finally, there are issues related to resources and infrastructure that would be uncommon for North American entrepreneurs. Despite Brazil’s growth, they are still emerging from decades of underdevelopment and consequently their technology and infrastructure are not on at the same level as a country like Canada. These issues reduce the efficiency of entrepreneurs and make it more difficult to achieve scalability.
To effectively launch a business in Brazil requires individuals who have the street smarts and business savvy to navigate through the myriad of hurdles. Fortunately for entrepreneurs, they have the support of government, universities and the business community to help them start out. According to one publication, “Brazil symbolizes the way continents of the South are ramping up efforts to nurture new businesses,” which can be seen numerous government programs, such as PRIME, which will give $65,000 to 10,000 startups over a four year period. Additionally, a number of incubators, many based out of universities, have been created to offer training and guidance to new companies in the tumultuous early stages. The incubation also extends into the social sphere, as places such as The Hub in Sao Paulo have sprung up to spur social innovation.
All in all, there are many signs that the pieces are coming together to help entrepreneurs get off the ground. There are no shortage of opportunities on the horizon in Brazil, so if you are sitting there wondering about whether or not it would be a worthwhile endeavor to start engaging with a few Brazilian entrepreneurs to learn more about what is going on, the answer is an emphatic yes!
Brazilian entrepreneurs are typically characterized as warm, hospitable and very internationally minded. The majority speak English fluently and are surprisingly keen to talk about the latest business book, great speech or software program to hit the market. Their openness and charm makes them easy to meet and engage with, which makes the process of building a network n Brazil a breeze compared to other countries.
Overall, a wealth of opportunities will emerge as an entrepreneurial culture begins to take root in Brazil. Despite the host of challenges, there is a new sense of confidence in the country that will help propel entrepreneurs over the hurdles and encourage them to take the risks necessary to develop a new breed of businesses that bring social, technological and economic innovation to Brazil’s approximately 200 million citizens. It will be fun to watch new developments unfold and see the country come into its own as an economic, cultural and entrepreneurial hotbed.
A large portion of research and facts in this blog were taken from Larry Rohter’s book “Brazil on the Rise.” Additional information was sourced from on the ground in Brazil. The blog was written to paint a broad-strokes portrait of the country’s entrepreneurship culture, and while every detail was researched to some degree, it is possible that some aspects are under, over or misstated. Feedback from any angle is welcomed.