According to Wikipedia, “Ted Wang is a Silicon Valley lawyer who represents high profile startups and established technology companies such as Facebook, Path, Square, StumbleUpon, Twitter, Sonos and Dropbox. He is a partner at technology and life science focused law firm Fenwick & West and someone who Bloomberg identified as “one of Fenwick’s biggest draws,” in the 2011 article, “Why Techies Like to Friend Fenwick & West.” In 2013, he curated a new version of the Series Seed Documents on GitHub. The Series Seed Documents are publicly available model investment documents designed for smaller rounds of funding early in a company’s life cycle.”
Bottom line, if you have anything to do with tech startups, you should know who he is, whether you are in Silicon Valley or in Latin America.
Here is a short interview with Ted, who spent almost a full year living in Buenos Aires with his family, and became an active player in the local startup ecosystem. Enjoy!
1) How was your experience in Argentina?
“From a personal and family perspective it was fantastic but I’m sure your readers don’t want to see my travel photos. From a business perspective it was very interesting to learn about LatAm startup economy. I spent a lot of time with startups from Buenos Aires and noted many similarities to those in the Bay Area. If you walk into an office of a startup in Buenos Aires, you could just as well be in San Francisco; the desks are configured the same way and there’s a sense of controlled chaos that is common in startups. The entrepreneurs are passionate and mission driven and genuinely trying to create something.
On the other hand there are fundamental difference driven by the ecosystem including scarcer funding environment , a need for the startups to focus on revenue and profitability more quickly and a different culture regarding helping other companies. I also learned quite a bit about the Latin American market for technology in general (as opposed to just startups). The LatAm economy is changing rapidly and there are a real opportunities for tech companies in both the consumer and business to business sectors that this growth is creating.”
2) What do you think of the local startup ecosystem in Buenos Aires?
“In general I was quite favorably impressed with caliber of people and entrepreneurial culture. I think one factor is that in the US, doing a startup instead of working at a more established company isn’t seen to be as risky or crazy as it once was. You might even argue that in San Francisco it has become somewhat of a norm! In Buenos Aires, it is still rare enough that the people who are drawn to it are quite entrepreneurial and have a strong preference for a less hierarchical and more free flowing environment. Many of the technologists I met in Argentina were very capable. Some had worked at the top US tech companies and there is quite a lot of technological innovation in cutting edge areas such as Openstack, identity and satellite, imaging that is world class. I’m also impressed with how much LatAm companies are able to do with very little resources. This is a bit of a throwback to earlier Silicon Valley days of startups where teams were very scrappy and employees didn’t expect free sushi lunches.
On the negative side, there is less information about and access to best practices for companies that are trying to grow. In the Bay Area it is quite common gain insights from board members, advisors and employees who have come from other companies about ways to address common startup issues, such as how to scale an engineering organization. That information is not as readily available in Argentina. Of course, entrepreneurs can find classes and blogs online about all these areas, but that’s not the same as having someone with experience in one of these areas helping to apply those lessons to the problem at hand. This is particularly true for enterprise companies in go to market and sales.”
3) What needs to change in order to have more successful tech startups coming from Argentina?
“I think one of the keys to the success of the Bay Area startups is a culture of mutual cooperation. In general, people are willing to provide advice and guidance for young companies without asking for anything in return. I didn’t feel that attitude with the startups that I met. In fact, since I was just visiting and trying to help out, I felt that people were suspicious of me and felt that surely there was something that I wanted. Cultivating an attitude of assistance and information sharing would really help.
Another important need is more investment capital. The local ecosystem in Argentina doesn’t have sufficient capital to help growing startups expand. Many of the companies I’ve helped have had to go abroad to raise funds and that’s a very difficult task. Additionally, if new capital were to come into the ecosystem, it would be helpful if those investors were willing to be more focused on growth and less on near term profit and loss. While there are some outliers, the vast majority of successful startups in the states went through quite a bit of capital before they were able to show good economic fundamentals, but funding for a high growth but unclear revenue company seems very difficult. This in turn causes startups to pursue more cautious and slower growth approaches, which makes building a break out company truly difficult. Even in enterprise software, in today’s economy the SaaS model makes it difficult to get to cash flow profitability quickly and so the need is not just for capital, but for capital that understands this risk and is willing to make bets on growing companies that don’t have a near term road to economic self sufficiency.
Another critical element would be to have more participation from traditional industry to invest in technology and buy technology companies. Many LatAm industries have had the benefit of being shielded from competition for many years and have not materially innovated. These companies will be fundamentally challenged by the coming waves on innovation and it’s in their best interest to hedge their bets by purchasing from, investing in and acquiring technology companies.
From a cultural perspective, I also see an over emphasis on who people are connected to and what important people are involved with a particular venture. Fundamentally , despite the media reports, Silicon valley is a culture of hard work and constant improvement. The best companies tend to be built by people who spend lots of time building products and methodically and relentlessly improving them. It would be great to see more of that culture in Latin American startups. Lastly, it would be good to see some big exits. It’s quite difficult for entrepreneurs faced with good offers for $10 million acquisitions to turn them down because it’s life changing money for them, but these types of exits won’t attract the type of venture capital that is needed to make the ecosystem strong. Perhaps some secondary liquidity would help.”
4) Do you see yourself playing any role in “bridging the gap” between Latin America and Silicon Valley?
“I developed a strong affinity for my Latin American cousins and want to help make the ecosystem successful. My plan is to find a few companies to engage with deeply and get them to help spread the culture of collaboration and relentless self improvement that I mention above.”
5) Is it true that you became an “asado-addict” during your stay in Buenos Aires?
“Es la verdad. Desde me mude a Bs.As. engorde 5 kilos.” (sic)
Thanks Ted. It was great having you here, let’s keep building this bridge together.
This post was originally published on LatAm.VC