The bubble was even more of a bubble in Argentina. In only the first six months of 2000 the country saw the creation of 300 dotcom businesses, according to a Prince & Cooke study at the time. Nearly half of Spanish-language Internet projects were started in Argentina or were promoted by an Argentine living abroad. Dozens of entrepreneurs emerged from the big bang, and promised to hasten the generational turnover of the country’s business class.
The burst of the bubble and, months later, of the economy knocked the entrepreneurs flat. One of the few left standing was Wenceslao Casares, who survived through selling Patagon.com, the first portal dedicated to providing financial services in Latin America, to Banco Santander Central Hispano in March 2000. After giving himself a year’s sabbatical to sail the world with his family, today Casares splits his time between Lemon Bank, the bank he founded in Brazil after investing US$25 million and through which he hopes to reach the 50 million non-banking Brazilians, and Meck Ltda., a firm through which he puts part of his money into backing energy, finance and technology projects. Andy Freire, founder of Officenet, the business that changed the distribution of office supplies in a large part of the region, today also follows different paths. He is CEO of the consulting firm Axialnet, and comments on his entrepreneurial experiences on the Spanish version of CNN. His ex-partner Santiago Bilinkis remains at Officenet following the purchase of the company by US company Staples. Bilinkis still manages to channel a good deal of adrenalin into other projects, such as premium brewery Otro Mundo Brewing Company.
Casares, Freire, and Bilinkis are only three examples of a generation that was born in the heat of the Internet, but who later changed direction. “The economic crisis and the change in relative prices after the crash of the convertibility system led to the emergence of leaders in areas that were previously dormant, such as agri-business, biotechnology, tourism and real estate,” says Alejandro Mashad, director of Endeavor Argentina, in Buenos Aires.
In Brazil too, the concentration of leaders that emerged from the information technology and telecommunications at the beginning of the decade is now looking at other sectors. “Civil construction today is one of the hottest markets,” says Paulo Veras, executive director of Endeavor Brazil, in Sao Paulo. “There is an entire generation of entrepreneurs in this sector that was hidden five years ago, and which has recently taken the lead on public offerings of companies such as Cyrela, Rossi Residencial, Gafisa and Tecnisa.” The novelty is that these new leaders are contributing innovation to that traditional sector. An example is Meyer Joseph Nigri, president of Tecnisa, a construction company that raised US$340 million through opening its capital in February 2006. He is a pioneer in Brazilian real estate sales via Internet and in serving the gay sector through adapting apartments in line with the needs of that niche market. The result? In 2005, the gay sector made up 12% of Tecnisa’s sales.
Also, thanks to economic stability and low interest rates, real estate is a source of new leaderships in Mexico. Elías Cababié, president of the developer Gicsa, and Eustaquio de Nicolás, head of Homex, the top Mexican firm in the sector traded on Wall Street, are two examples. With the construction of aluminum framed houses - more efficient than steel for mass housing - Homex built 43,000 homes in 2006, and invoiced some US$600 million in the first half of 2007, 20% more than for the same period in 2006. “Instead of the classic concept of people visiting the development site, we use much more proactive sales,” says Alan Castellanos, director general of finances and planning at Homex. “We train our staff to go to popular neighborhoods, and they show low-income individuals that they have the real possibility of owning a home for less than US$40,000 in six weeks.”
“In addition to real estate, new leaders are also rising in Mexican tourism, health and education, with the focus on the needs of the middle class,” says Fernando Fabre, Endeavor’s director general in that country. In Monterrey, specialized health services companies were created by entrepreneurs who detected the need to serve not only the city’s middle class, but also middle income sectors from the United States who could be attracted to Mexico in the search for cheaper services. One such entrepreneur is Ricardo Villarreal, founder of Imagen Dental, which is today the largest employer of dentists in Mexico. The firm was created in Monterrey a decade ago and is soon to expand to Ciudad Juárez, where one of every five health customers comes from the United States.
In, Chile, however, the changes are not so obvious. “The leadership styles are still very structured, focused on hierarchy, management supervision, authority and tough management,” says Alan Farcas, executive director of Endeavor Chile, in Santiago. However, associated with a relatively new industry such as salmon production, a group of leaders has emerged that is bringing change to management models. “Ours is a ‘gypsy industry;’ we have more than 90 production centers throughout the ocean, and this requires us to develop autonomous organizational structures, in which individual initiative plays an important role,” says Víctor Hugo Puchi, owner and president of AquaChile, the country’s largest salmon company. “We must innovate, because it is impossible to manage a production network like ours based on hierarchical or bureaucratic structures.”
In less than a decade, Latin America has seen a dramatic change in the areas from which new business leaders come. The long arms of Internet-related projects no longer embrace it all. The new winners in the Argentine economy, the rise of the middle class in Brazil and Mexico, and the explosion of the salmon industry in Chile are some of the factors of change. But this is only a snapshot. The movie continues.
