BayBrazil 5.0 – Challenges and Progress in the XXI Century

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Margarise Correa and her excellent group successfully brought off the Fifth Annual BayBrazil Start Up Conference at the Google Campus in Mountain View on Friday, Sept. 16. Here is the link to the program and speakers. http://www.baybrazilconference.org/#new-page

Most new companies and organizations close their doors before reaching year 5 and Bay Brazil deserves kudos for this milestone. With this track record of success, BayBrazil has a bright future. Like the past conferences, attendance was in the hundreds with executives, decision makers, representatives of start-ups, venture capitalists, investment bankers, attorneys and business consultants from both Brazil and the USA.  There were many repeat attendees and there seemed to be an increased contingency of Brazilians flying to the Bay Area for the event.

An interesting thing about the start up culture is its optimism and vibrancy. So, I was not surprised to hear that Brazil was “bottoming out”, “improving”, reaching “critical mass” for new business growth and VC support. However there is also a bit of isolation and groupthink and it is a bit of stretch to learn that “Everyone in Brazil wants to be an entrepreneur” as one very optimistic speaker stated. In reality, people in Brazil still recognize that the best job is a state sinecure and surveys show that 85% of the secondary level students hope to work in the public sector. Obviously, this dependency on the state reduces the pool of entrepreneurs. Still Brazil is large and many want to create their own opportunities especially as people recognize the limitations and the restrictions of being tied to the government.

While working in a challenging environment, BayBrazil bridges and creates space for a blend of cultural contacts among established and new entrepreneurs with different backgrounds, challenges and stories. This alone makes the event worthwhile and fascinating. Innovative and smart Brazilians look to the examples in Silicon Valley and the valley reciprocates by attracting good thinkers and innovators who recognize that Brazil is too big to ignore.   Every year, the conference demonstrates that Facebook, Linked In, Uber, Snapchat, Alibaba, Instagram, Google and many, many other, large and small, are connected to Brazil for its size, growth, potential and human resources. Bay Brazil’s program was replete with executives and operators leading these companies not only in Brazil, but also in the USA and the rest of the world. In this sense, there truly is a bridge between Silicon Valley companies and start-ups in Sao Paulo, Rio, Belo Horizonte and other Brazilian places.   Face to face interaction at the congress offers opportunity and incentive to Brazilians and provides access to knowledge, capital and an environment favorable to new endeavors.

Brazil, in spite of the ongoing recession, continues to lead the venture capital market. According to the Latin American Venture Capital Association (LAVCA) there were 39 deals with outlays of 110 million in 2015. LAVCA’s Julie Ruvolo, as well as the other VC panelists, noted the main areas are: finance, online retail, logistics, health, agricultural and IT services. Certainly, there were Brazilian and international companies present at the conference in each of these areas.

In the context of Brazil’s recession of the last years, the seminar showcased two fantastic success stories: Beleza Natural and Wine.com.br. Both of these companies had their start in the mid-90’s and are great examples of resilience demonstrating strong growth to date in spite of the crisis and environment of malaise. Beleza Natural identified early on a niche market focusing on beauty services and products for women of African descent. Because of Brazil’s social hierarchy and the perceived benefits of “whitening”, Beleza Natural innovated by emphasizing how women of color can be themselves and is naturally beautiful by valuing their hair and styles without necessarily making concessions to the dominant cultural model. Beleza Natural focused on top level customer service for a clientele that is typically treated poorly in the traditional retail beauty and hair treatment sector  By rolling out the red carpet to black and brown women and by valuing the lower rings of Brazil’s consumption ladder, the company created and dominates a market other companies failed to see.

Wine.com.br also followed a counter intuitive plan by perceiving that wine had a totally elitist and very limited consumer group in Brazil. Spirits and beer represented until recently almost 99% of Brazil alcoholic beverage market. The owners of Wine believed that per capita consumption of wine could double and triple with the appropriate marketing emphasis and strategy. So the company popularized wine drinking by making the beverage accessible, fun and much less snobbish.

Wine.com.br cut out the middlemen by using the Internet to sell and then structured an innovative and tightly run technology driven logistics system. Beleza Natural also recognized the role of Internet and mobile phones with related apps in communicating its inviting and open business strategy to attract new middle class consumers of color. Both companies have sales of around 100 million US dollars per year and their revenues to continue to grow at a very healthy pace. Certainly these stories inspired the audience and gave heart to the possibilities and potentialities latent in the Brazilian market.

Rogerio Salume, the principal of Wine stated correctly regarding Brazil, “We are a crisis.” But his success, the achievements of Beleza Natural and the ongoing hard work of BayBrazil in promoting Brazil in Silicon Valley, California and beyond all show how good ideas and hard work can create and overcome. The stories presented at BayBrazil bode well for the future and confirm the vision that Magarise and BayBrazil have consistently promoted over the past 5 years.

 

 

 

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