The recent BayBrazil conference showed how Silicon Valley is changing its role in driving global innovation. It has moved up the opportunity stack. It now drives scale, and that requires a combination of very special skills and resources.
Innovative businesses can be started anywhere. Silicon Valley is not the only source of innovation -- and that is plainly true. This doesn't jeopardize the future of Silicon Valley because it now specializes in something more important.
Silicon Valley knows how to scale innovative businesses fast -- and the faster, the better. Online markets reward the first-to-scale company in each sector (not the first movers). There's little room for any others.
Scaling takes considerable amounts of risk capital, but more importantly, you need the best minds: in engineering, to ensure a global and flexible IT architecture and apps; in operations, to implement the best business practices; and in marketing and PR, which is a constant challenge reported by many overseas startups.
Silicon Valley is unique in that it has all these types of expertise in abundance in one place with abundant capital -- the recipe for creating great companies.
Silicon Valley is where founders from other countries can come to learn and use the people and its resources to grow their businesses beyond their imagination.
Fabricio Bloisi, founder and CEO of investment firm Movile, is a perfect example of this trend, and he was a keynote speaker at the BayBrazil conference (above). He came to Silicon Valley several years ago to learn from successful founders and investors and see what could be applied to his startup Movile, which focused on mobile messaging in Latin American markets.
Bloisi was a quick learner. He realized that all Brazilian startups were flawed -- including his own: they weren't thinking big enough. He pivoted Movile into an investment firm and started making acquisitions and investments.
"We do some things very well, but we fail at just as many other things," Bloisi said with humility and laughter because he has had huge success. And his comments reflect the local culture and Silicon Valley's attitude to failure: that it doesn't matter how many failures; what matters are the tiny number of successes which end up erasing all the failing investments.
Movile has made about 50 investments, and out of these has emerged a giant: iFood which dominates food delivery in Brazil. When Movile acquired iFood, it had just 28 employees. It now has more than 120,000 couriers delivering from over 50,000 restaurants. In November 2018, it announced $500 million in funding, making it the largest venture-funded business in Latin America.
Bloisi knows how to think big. He said that using AI, robotics, and other technologies, iFood will make meals cheaper to deliver and cheaper than to buy and cook at home. This will affect millions if not billions of people, which is Movile's corporate mission: To improve the lives of more than one billion people through the use of mobile technologies.
The conference speakers spoke about the opportunities for US businesses to expand in Brazil, but you have to accept that business deals are done differently and require patient relationship building and sometimes included family.
"Brazilians don't like to say, 'No' so you have to figure out how to move a deal towards a conclusion," said Ekechi Nwokah Founder and CEO of Mines, a financial services company, and one of the speakers.
Nwokah said that software engineering talent is hard to find in Brazil, so he keeps his engineering team in Silicon Valley. He says it is important to make sure the employees of your Brazilian operation don't feel like a step-child of a US-based business and that he works hard to make sure the culture is fair to everyone.
I spoke with one of the attendees, Hans Bukow, from nearby Pleasanton, who was born and raised in Brazil and invests in Brazilian startups. He says there are far more opportunities in Brazil than in Silicon Valley and the capital risks are lower.
"Here in the US you could easily have dozens of startup competitors, but in Brazil because of the lack of capital, the regulations and the costs of running a business, you might have just two or three competitors," said Bukow. Fluency in the language and culture of both Brazil and Silicon Valley provides Bukow with the ability to make the best of both worlds.
Bloisi and Bukow are almost poster-perfect representatives of the lucrative two-way opportunities for Brazil and Silicon Valley that the conference and the BayBrazil organization represents.
The afternoon keynote speaker was Peter Norvig, director of research at Google (above). He had little to say on the subject of Brazil but spoke openly about his work at Google, artificial intelligence, and answered all questions regardless of topic. Interestingly, he said that Google's culture changed significantly after the financial crash in 2008. He had to abide by a strict budget for the first time.
The BayBrazil conference was well attended, and it is a key event in the calendar for the 10,000-member BayBrazil organization — which is a superb example of how Silicon Valley's hugely diverse populations can organize and help their countries of origin share in the global opportunities of e-commerce and digital businesses.
BayBrazil was founded in 2010 by Margarise Correa, a former journalist and TV news anchor in Brazil. It is her irrepressible energy and drive that has resulted in the success of BayBrazil -- a network of thousands of innovators and investors helping to build companies such as iFood that could be the next generation of internet giants.
BayBrazil is not the largest of its ilk. The largest and oldest is TiE (The Indus Entrepreneurs) group, but it is a wonderful example of how smaller communities of investors, founders, and engineers can help each other leverage Silicon Valley's lessons and help countries build economies that have a share in the future.