Interview: Startups in Brazil — Now and the Future – Part One

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This is the first part of an interview with Rachel Horta, CEO at ZAHPEE, based in Belo Horizonte, Brazil. 

Elizabeth: Tell us your background and what led you started building companies?

Rachel: I believe this entrepreneur vein comes from my childhood. I’ve always been creative and enjoyed to create new things and pretended that I was working for a company. The funny thing is that I was always the owner! I graduated with a degree in Advertising and Publicity and since the beginning of college I tried to use my knowledge in the field and worked in several areas. I was a trainee in PR agencies and marketing departments and these experiences supported me in my professional career.

I’ve always been a curious person and especially interested in the way entrepreneurs brought up the ideas, how they managed to set their business and make it develop. Whenever I had the opportunity to deal with these businesses men, l noticed the sparkle in their eyes for having their own business and the brave way they put up with innovation and all the difficulties. Thus I decided to accept new challenges and created my first enterprise: a company specialized in marketing consulting and market intelligence. It was amazing! I found a huge pleasure in pursuing opportunities, motivating people around me and having the freedom to dictate the rules of my life. Nowhere near romance! I knew the path would be tough, but I couldn’t see myself anywhere else but here. And since then, I’ve never stopped being an entrepreneur.

After 2 years, I created my second business: a publicity company. Initially, my intention was to set a digital agency, but because of the time (2000’s) and the “internet bubble”, my three partners and I decided to implement a traditional full service agency. Unfortunately, this business didn’t work out. I was wrecked and only understood later how that failure had been my biggest gift.

Next, I created a consulting company and worked a few years as a freelancer. Nevertheless, as the dream of being an entrepreneur never left me, l decided to create a new business. In 2006, after a lot of research and two partners, I founded Digital Map, a company turned to digital research. Our aim was surveys inside digital platforms, besides developing presence strategies for several costumers, such as JWT, BBDO and UOL.

In 2008, still in Digital Map, I began a new project with seven computer science students and professor Ivan Moura Campos (co-founder of Akwan, company that was sold to Google).

The project pointed to Zahpee, a social Intelligence business company to develop monitoring platforms, engagement and data mining in social nets.

In 2010, I decided to walk away from Digital Map and maintained a partnership with Zahpee, even though I did not take part in the operation and the daily life of the company. During this period, I assumed the executive direction of a family business, “Pro-Create Reproductive Medicine”, which showed me a new world! I entered the company with the mission of implementing the company expansion project. After 3 years of hard work and a lot of stories to tell, 5 months ago I took on the position of CEO at Zaphee. The digital world is my passion! I got to the new position with a huge challenge: to replace Zahpee in the Brazilian market and develop innovative products, after the company had been away from the market for over a year because of a sale negotiation.

Elizabeth: What is the current status of the Brazilian startup environment and how has it changed in the past 10 years?

Rachel: Currently, the Brazilian startup Market is in huge expansion and receives investments in several areas.  We’ve got innovation initiatives such as the project “Startup Brazil”, a program created by the Science Ministry, Technology and Innovation (SMTI), which aims to support startups through mentors and investments in the initial phase so that later the company can succeed on its own. Furthermore, the Brazilian scene of this kind of business has its structure based mostly on angel investors, risk capital companies and output mechanisms.

However, it’s necessary to create a more competitive environment that may bring international business to Brazil, once it is a market with potential to create trades at global levels.

Being a Brazilian, for around 10 years the startup markets have found several challenges that arise from capital catchment problems, passing through tax laws and the Brazilian regulatory model. However, we notice that there has been a shift in the way entrepreneurs and the Brazilian governor think, once they look for solutions to soften the impact of the current limitations.

We can point out that there has been a change in perspective and way people look at startups in Brazil. What had been seen as an extremely risky business is now an opportunity to grow and create promising ventures. But we should not forget that there is still a long way to go before startups turn into a stable market in Brazil.

Elizabeth: If you are a North American-based company looking to do business in Brasil, what are the first few tasks you would you take to enter the market?

Rachel: In comparison to the American market, Brazil is crawling in terms of experience. The US has already done a good amount of testing and has had successful cases as well as innumerous mistakes. It creates a wide market difference and knowledge gap! Despite the fact that we are growing, we still need to improve the basic policies, infrastructure and formal capital for business.

This is the reason why the American investor who wants to establish business in Brazil will find a big potential market, but what needs to be worked on are skills. On the other hand, we can assure you that the Brazilian investor has a lot of will and is really creative. A big part of the specificity comes from the fact that we live in a country with a bit of controversial politics and economic background, leading us to develop winning skills to deal with crises and emergency situations. We are not afraid of change, on the contrary, it’s part of our culture.