Start-Up Chile competes against other technology business incubators such as Y Combinator and TechStars, and should adopt some of their best practices to attract quality entrepreneurs. For instance, the most successful incubators differentiate themselves by writing articles that attract large audiences, and offer access to high quality mentors.
Demonstrating Leadership by Writing Articles
Y Combinator was founded by essayist Paul Graham, who has written on subjects such as What We Look For in Founders, The Future of Startup Funding, What Startups Are Really Like, and The Hardest Lessons for Startups to Learn. He compiled his best writing into the book, Hackers and Painters: Big Ideas from the Computer Age, that attracts the best people to his incubator. Similarly, TechStars founder Brad Feld published, Do More Faster: TechStars Lessons to Accelerate Your Startup. Chris Dixon, who started several companies and leads technology business incubator Founder Collective, compiled Startups, a collection of his blog posts for the last 3 years.
A story related well is so powerful that the reader quickly understands a strange new idea and motivates him to do something that the storyteller wants. Start-Up Chile should tell a good story that entices entrepreneurs to apply to the program and vividly express how the applicant can help Chile profit, and excite readers so that they repeat the story to their friends. Start-Up Chile will fail until it communicates a credible and exciting story to taxpayers, entrepreneurs, and investors. As actor and director Kenneth Albers says:
“A great story is like a well-crafted joke—deliciously brief, immediately memorable, eminently repeatable and virtually impossible to dismiss.”
Reaping Dividends from a Vivid Story
Fewer entrepreneurs will expend energy to apply for the grant in the absence of a good story, and the submitted applications will be of poorer quality because applicants will be ignorant of what Chile needs.
Start-Up Chile uses a video to entice entrepreneurs to apply for the program, but this resembles the superficiality of a brochure. It reminds me of the 90’s when banal websites were ubiquitous and the term “brochureware” was invented. An introductory video should entice entrepreneurs to learn more about Start-Up Chile and the country, and to investigate the deeper details of a story related in a white paper or essay. High quality entrepreneurs and investors will be enticed by a good story, and other technology business incubators that Chile competes against recognize that vivid stories are a key marketing element.
Entrepreneurs from the USA are very difficult to impress because technology markets are in an investment bubble and they have become accustomed to attracting substantial investment with no profits, little revenue, and little more than an idea. When Start-Up Chile was conceived 9 months ago, $40,000 seemed sufficient to attract quality experienced entrepreneurs, but $100,000 is necessary to persuade quality entrepreneurs to make a distant move.
Infusing Experienced Judgment from Successful Mentors
Entrepreneurs value highly the advice given by mentors, and investors accord higher value on businesses with quality mentors. Start-Up Chile must identify and recruit mentors prized by entrepreneurs, and that may require recruiting the manager of a successful technology business incubator in the USA or Europe, or a mentor of numerous successful startups who knows other talented mentors.
The mentoring program should teach participants how to relate a persuasive story to investors. Junar is the only one of 23 companies to impress investors, and the program will be successful only if 50% of the participants attract an average of a million dollars of capital. Start-Up Chile will not attract entrepreneurs who seek investment if past projects have failed, and instead will entice only those who want to enjoy a 6 month vacation in a scenic country with a good climate.
Silicon Valley has raised the stakes and Chile must fold the program, meet the stakes, or waste tax dollars on silly ideas like some technology business incubators. Governments are notoriously slow to react to changed market conditions. I hope they react quickly to the changing market rather than choosing the worst option.