The snowball effect is taking shape with tech start up communities. First, Silicon Valley, then other US cities such as New York, Seattle and LA followed suit before flourishing start-up scenes emerged all over the world. Now, you may or may not have heard the hype about Medellín, Colombia paving its way to be a contender, in not just Latin America, but worldwide, but expats have begun to settle in the city and set up their burgeoning businesses. But what is driving Colombians and foreigners alike to set up a start up in Medellín and is the ‘Latin American Silicon Valley’ hype well-deserved?
Paisas (Medellín locals) are known for their entrepreneurship in Colombia. When you consider the amount of investment and innovation to vastly improve the city, it’s clear why such an opinion prevails. Cable cars have been integrated into the Metro and electric escalators installed to dramatically decrease commute times for some of Medellín’s most isolated and disadvantaged communities. Then there’s the parque biblioteca scheme, urban complexes throughout the city with library facilities and outdoor areas, which aim to improve access to education, as well as sports facilities being constructed and developed with the prime example being the Atanasio Giradot sports complex, an impressive set of facilities encompassing most Olympic sports, open to the public. Another notable example of Medellín’s developments is Ruta N, a business and innovation center, which was recently established in 2009, focusing on entrepreneurship, technology and research. This recent surge of investment and entrepreneurial activity has attracted widespread media interest, as well as foreigners coming to settle in Medellín.
David Feldsott from Rockville, Maryland has moved to Medellín to launch his start up PanTrek Inc., an online search engine, providing comprehensive information about bus travel in Latin America. The PanTrek team is currently developing a beta program and aim to launch in July. Needing to base PanTrek in Latin America, due to the nature of the start up, David settled in Medellín “…after exploring all of my options, including a short 6 month stint living in Cuenca, Ecuador, I decided Medellin was the best place for me to set-up my startup for multiple reasons.” Professionally, not only does the city foster entrepreneurial spirit, but a growing interest in technology and programming, along with considerably lower living costs, especially when taking into account that of Silicon Valley and other US cities, make starting a business in Medellín very appealing. Outside of work life, Medellín is often noted for its high quality of living, thanks to its constant spring-like climate, culture and nightlife scene.
But like with starting a business anywhere in the world, setting up in Medellín has its own challenges – especially when it comes to starting a technology business. Surprisingly, despite the obvious interest in technology with widespread smartphone and social media use throughout, e-commerce makes up a negligible proportion of sales in Colombia and Colombian business practise tends to prefer face-to-face interaction over email correspondence – quite a significant obstacle when it comes to online business. And there’s the bureaucratic hurdles, which are frequently cited by expats as the biggest challenge launching a start up in Colombia. Visa processes are long, arduous and expensive, with requirements changing regularly for the Business Owner Visa (TP-7 Socio o Proprietario de Negocio) as well as needing to enlist the help of a lawyer to obtain the visa. There is still a way to go before Medellín’s start up community will really start to thrive.
That’s not to say the accolade of Medellín being the Latin American Silicon Valley is completely overrated, the foundations of a considerable start up hub are in place and it looks set to gain momentum. Co-working spaces are being opened, two angel investor networks have recently been launched to fulfill the growing demand for start-up investment and Colombia’s first “Ruby on Rails” bootcamp took place recently. Slowly but surely, advances are paving the way for tech starts on the rise in Medellín.
Whilst Medellín is far from competing with the likes of Silicon Valley at the moment, there is a gap in the market for those who fancy taking the plunge. Better get there soon, as David says, “Not a day goes by that I don’t meet a foreigner who has just arrived in Medellin looking for talented programmers to help build his or her tech startup idea.” The idea of Medellín being a leading technology competitor may not be a reality now, but Medellín could still vie for contention with Silicon Valley one day yet.