Three Tips to Boost Latin American StartupsBy Andrea Picardi | Mon, 06/13/2022 - 11:00
There are thousands of answers to the question of how to drive startup growth; some of the most popular answers are investors, business gurus, mentorships and business accelerators; however, only a few businesses prioritize the basics: create a people-centric product or service, surround yourself with strategic partners and never stop learning. When it comes to growing in an effervescent and competitive world as that of startups, the most valuable tool is minimalism, which in this context means prioritizing the basics.
Keep the customer at the center of the business.Startups are known for solving or improving social problems with creativity and innovation but as companies keep growing, this objective becomes misguided and entrepreneurs may believe that the best way to grow is to create new products and add new business ideas without first researching if those changes can solve a real problem in their target market. This phenomenon is known popularly as "wanting to run before learning to walk." A decision not to consider the business basics — the people — could result in the company's failure.
For example, it’s said that the fall of Blockbuster, one of the most popular movie and video game rental franchises worldwide in the 2000s, was the result of Netflix's rise but experts suggest that the crisis originated in Blockbuster's inability to listen to its customers, who developed new habits and gradually migrated to new digital entertainment options, and ignored the evolution of video devices.
Surround yourself with strategic partners.Financing is key for the creation, survival and expansion of companies. In this context, startups confront more challenges to finance their ideas compared to traditional ventures due to the high risks and uncertainty involved as well as the lack of programs to democratize financing in Latin America. McKinsey reveals that around 200 million SMEs in emerging economies do not have access to credit and formal financing. This shows us that thousands of large companies fail due to lack of access to credit.
Addressing the businesses' needs for smart financial alternatives that offer an easy way to access business loans, companies have focused on meeting these requirements through credit lines, banking products and transactions in different currencies, free of commissions and interest to help the economic sector and commercial growth.
These tools include both single-use corporate digital cards, for specific item or service purchases, and recurring-use digital cards for subscriptions management or monthly payments. This is in addition to access to a real-time expense panel that allows the company to organize any transaction type and amount.
Keep a growth mindset. One of the most important growth lessons for startups is constant learning, regardless of whether the startup is at a seed stage or is already a unicorn. The business world changes and evolves at the pace of technology — very fast — so it’s important for teams to remain on top of new consumer trends, reach out to business communities and constantly listen to what's new in innovation.
In fact, OECD reveals that learning and skill accumulation is a success factor for startups. Knowing when to re-route, stop or reach out to people who can offer mentorship and add expertise is a mindset that leaders must implement at the core of the company's culture.
With that in mind, surrounding yourself with strategic partners, maintaining a growth mindset and placing the customer at the center of operations are three key pillars for startups, SMEs and companies to continue growing quickly and securely in the region, always supported by innovative financial services to bridge the gap of business financial inclusion.