Business

A look into Chile’s startup ecosystem

In retrospective, my Chile trip was amazing. Despite it was tough to fly over 30 hours from Hong Kong and suffering from jet lag, the journey is totally worth it and I learnt a lot beyond classroom. The tour was full of insightful and informative talks, the start-up ecosystem, B-corp and the entrepreneurial spirit here have enlightened me.

My visit of Start-up Chile

The most attractive thing to me in Chile is the start-up ecosystem. During my trip, I learnt from the speakers that Santiago is the sixth largest Venture Capital (VC) center based on funds raised. It is a good starting point to do business in Latin America with proximity to Brazil, where is a large market. 82% values comes from Brazil and Argentina, make up more than 80% of the regional ecosystem. There are many successful startups stories, such as Mercado Libre, Despegar.com and Arch Daily, which either replicate successful business model from other countries or has an original innovation in the world. Despite the geographic isolation, Chilean startups, such as Lunna, Bluesmart, Poliglota, recorrido.cl and destacama.cl have a good global presence. I am convinced by the rise of Chilecon Valley thanks to government supports.

Chilecon Valley

One thing I am surprised is the talk about B-corp. I do agree with the concept about social impact and the idea about sustainability. Meanwhile, when I have a chance to ask question to the General Manager of a Venture Capital, he is a practitioner who has emphasis on making money as soon as possible and commercial quickly. He has an interesting opinion about B-corp by thinking that it is putting the cart before the horse and it is very difficult to balance both the “B” side of B-corp and the “corp” side of B-corp. I do agree with his answer since it aligns with my experience that it is not easy to have a sustainable business model.

Amazing city view

As a reflection, I noticed that the main cultural difference between Chile and Hong Kong is the entrepreneurial spirit among the citizens. In Hong Kong, the dream for most graduates is to look for a stable job with good salary and regular pay-check. In contrasts, 12% were entrepreneurs in Chile in 2008. In Hong Kong, the government has little support to boost the start-up scene, while Chile’s government do a lot in the start-up Chile programme with success rate 2 out of 10 companies. In Hong Kong, most of our GDP focus on financial service and real estate without diversification. In comparison, although the economy of Chile relies heavily in cooper, the government put a lot of effort to import start-ups in order to improve the quality of life of the people in the long term with diversification. The culture in Hong Kong is more risk-averse versus the culture of Chile is more about failure, by accepting failure is an option and fail fast is the way to learn.

My photo from Sky Costanera

I would like to do business here in Chile by applying the start-up Chile program with one year visa. After my project with Fundacion Mi Parque, I have an idea to start a company which specialise on technical consulting for non-profit organisation (NGO). Nowadays we get into a digital world with large demand to transform and disrupt traditional business by technology. However, due to lack of resources, a lot of the NGO may not have the privilege to have an IT department to build their website, mobile app or customer relationship management (CRM) tools. If I could get funding and support from the government and donations, then I would be able to help those NGO to have an online presence, thus empower them with technology to lower cost per donation and make a greater impact to make the world a better place for us. I think it would be a sustainable business model.

My photo at Santuario de la Inmaculada Concepcion

For me, one of the main reasons to study MBA is to seek an answer on how to balance technology and business. I always believe technology itself is just a tool, but not enough to solve problems. It requires a combination of project management and cross section with business execution ability in order to scale. Given the talk by one of the speakers, I learnt that Chile ranks 37 in export service with IT contribute to 28 of service export sector. Chile rank 7th of digitisation with best programmers in the world. I do see a great opportunity for me to start an IT consulting service in Chile and connecting to Hong Kong startup ecosystem. I have gained the benefit from different perspective from international experiences at Chile and continue to pursue my answer at half-way of MBA study.

Amazing view from Ski Portillo Chile

Leadership that gets results

Research found that six distinct leadership styles have a direct impact on the working atmosphere and financial results in terms of revenue growth and profitability. The six leadership styles include coercive, authoritative, affiliative, democratic, pacesetting and coaching. More importantly, it indicates that leaders with the best results do not rely on only one style, but depending on the business situation. To lead effective, manager should switch between different styles flexibly. All styles have a measurable effect on flexibility, sense of responsibility, level of standards, sense of accuracy of feedback, adaptedness of rewards, clarity people have about values and level of commitment to a common purpose.

First, coercive leaders demand immediate compliance. The top-down decision making is the least effective in most situation as it kills new ideas at early stage. The problem with this style is that the team may not able to act on their own initiatives with lost of their sense of ownership. However, this dominant power work best during turnaround as it can break failed business habits and change people to align new ways of working quickly in the same direction. For example, as one former Apple employee said about Steve Jobs, “When Steve was pissed off about something, it got fixed at pace I have never seen… people reacted that fast out of fear.

Second, authoritative leaders mobilize followers towards a vision. By making clear to people how their work fits into a larger vision for the organization, this is most effective style in most business situation. Followers understand why and what they do matters, thus maximizes commitment to common goals.. The standards that revolve around that vision is the singular criterion on the performance feedback. A quote from investor John Doerr, he likes to say “Classic entrepreneurs do more than anyone thinks possible with less than anyone thinks possible”. People also has freedom to innovate, experiment and take calculated risks. However, this approach fails when the team members are more experienced than the leader and regarding him as arrogant.

Third, affiliative leaders create emotional bond and harmony. It revolves around people by valuing individuals’ emotions more than tasks and goals. The leader manages by building strong emotional bonds and get the benefit from loyalty. It has a positive effect on communication as people like one another. They share ideas and inspiration, thus enable innovation and risk taking. The leader motivates by providing lots of positive feedback for recognition and rewards. They are also good at building a sense of belonging. This style should not be used alone as a focus on praise can allow poor performance to go uncorrected. People can also feel lost if there is a lack of constructive advice on how to improve.

Fourth, democratic leaders build consensus through participation. By spending time to reach decision collectively, leader builds trust, respect and commitment, thus drives up flexibility and responsibility. From my personal experience, the mobile app project I am in, we have a leader who is willing to listen to followers’ concerns in order to keep the morale high and realistic about what can be accomplished. The drawback of this approach is no consensus after wasting time in long meetings, result in people feeling confused and leaderless, and escalate conflicts during crisis. However, this approach work best with able employees can provide guidance and generate fresh ideas.

Fifth, pacesetting leaders expect excellent and self-direction. The leader sets extremely high performance standards and exemplifies them himself. He is obsessed with doing things better and faster, thus demanding more from poor performers. This style destroys the morale of employee by overwhelming demands of excellent. The leaders did not explain clearly with the guidelines, while people often guessing what the leader wants as well as not feeling being trusted to work in their own way. Research shows that when employees do not feel trusted by their manage, workplace productivity suffer. People feel no feedback was given and directionless when leader is not present without knowing how personal effort can fit into bigger picture. However, the approach works well when all employees are self-motivated and highly competent with little need of coordination.

Sixth, coaching leaders develop people for the future. They have employee identify their unique strengths and tie them to their personal and career aspirations. They encourage employees to establish long-term development goals and help them to achieve with a plan. This style would provide many instructions and delegate employee challenging assignments. Coaching brings positive effect on business performance result, flexibility, responsibility and commitment. This style works best when the employee are already aware of their weaknesses and would like to improve. On the contractionary, it does not work if the employee are resistant to change their way.

The most successful leaders lead by excelling in the art of a variety approaches. Studies have shown that the more styles a leader exhibits, the better. Leaders who have master four, especially authoritative, democratic and coaching, have very best business performance. And the most effective leadership switch flexible among the leadership styles. They are sensitive to the impact they are having on others and adjust their style to get the best results.

Few leaders have all six styles and even fewer know when and how to use them. The leader can build a team with members who employ styles she lacks. An alternative approach is to expand their own styles. Leaders must understand each emotional intelligence competencies and work hard towards increasing the quotient of them. Enhancing emotional intelligence is possible with practice.

With the research, leaders can get a clear picture of what it takes to lead effectively and how they can make that happen. Since the business environment is constantly changing, leaders must play the styles with the right ones at the right time and in the right measure in order to get results.

Evidence based management

Life is a series of decisions. From day to day business operations to critical decision for the future directions of a firm, managers are always demanded to make many decisions. It becomes more and more important for managers to know how to make good decisions. Imagine if you were the CEO of Amazon, what should you do to deal with the challenges from competitors? That is why you need to use evidence based management and get your own way of problem solving, so this approach enables managers to make rational, fact-based decisions, elevating conversations from preference and opinions to logic and insights.

Evidence based management is an emerging movement to use and analysed via multiple, high-quality experiments, and various other types of studies and has consistently yielded positive findings. These intervention is generally use of well-established facts with a high probability of effectiveness and low potential for harm.

Unfortunately, the challenge in the current business world is that many managers are not solving problems based on relevant evidence of best practices. Without measurable data, the success of any initiatives is based on nothing more that intuition and assumption. Numerous decisions are still driven by dogma and belief. They are not using creativity to make hypotheses and using innovation to solve problems. They are too afraid to try new ways, worry about failure and no original judgement. In that way, the situation is not going to change, plus the problems are not going to solve.

Nowadays, we live in a VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world with too much information. Managers and entrepreneurs should think in empiricism like Sherlock Holmes to make hypotheses, then test and proof if it is right. Treat your organization like an unfinished prototype and encourage trial and error experimentations by applying the scientific method. Evidence-based practice is the applied science that contains the cleverest ideas from the past 200 years.

The movement to pay attention to evidence-based practice began when medical researchers discovered a lot of suboptimal treatments were being given, even after there was data indicating they should not be given. For example. It took almost 40 years for medical doctors and nurses to start washing their hands before surgery. Meanwhile, recent research shows doctors wash their hands only about 1/3 of the amount they should and only about 15% of physicians decisions are evidence based. Simply asking people to act in certain way does not work either, but need to influence them using proven psychology theories in order to make an impact.

Another example is in professional baseball field which has many myths about who are the best players and how to build winning teams. The book, moneyball by Michael Lewis, on the other hand shows evidence based way for selecting players, while facing resistance to innovation in the sports industry. The general manager demonstrated the use of strategic thinking to win the game.

Similarly, the same behavior holds true in business world with lots of old myths dominated. Ideology is to blame for the persistence of the first-mover-advantage myth. However, empirical evidence shows that it is more important to get it right than get it first. Amazon is not the first online bookseller while Google is not the first search engine either. The first product does not necessary to be the best in order to launch, but only needs to be good enough for the users.

Other myth includes what factors are the most important for a firm success. In fact, 25% is innovation and new venture, while 10% from good leader and CEO. Based on survey, it shows that 17% with no goal versus 75% has specific goals leads to good performance. Therefore it is a good practice to set goals in management. Organisations would perform better if leaders knew and applied the best evidence.

Furthermore, it is a common myth from boss in the old days that criticism, complaining and condemnation could push the staffs harder and get a better result. On the contrary, performance drops from bad emotions. Criticism demotivates people which makes employee afraid to make mistake. Intuitively, there is a correlation between smiling and sales. If you do not rely on study, then you would probably make a campaign to ensure every employee smiles, but this could leads to counterproductive result since during a good sales, the employee could be too busy to smile. Also, there is little evidence that equity incentives of any kind, including stock options, enhance organizational performance.

In conclusion, it is time for managers to change how they think and act by trust of science. Collect good data to avoid unexamined ideologies. It matters to your company, as the best practices adds to the performance and trump the competition. Decision-makers could look to technology to improve the use of data and analytics, measuring outcomes could provides a clearer lens through which to evaluate practices currently in use. This evidence is an opportunity for empirical analysis of change and initiatives through fact and insight.

Evidence-based management

Life is a series of decisions. From day to day business operations to critical decision for the future directions of a firm, managers are always demanded to make many decisions. It becomes more and more important for managers to know how to make good decisions. Imagine if you were the CEO of Amazon, what should you do to deal with the challenges from competitors? That is why you need to use evidence-based management and get your own way of problem-solving, so this approach enables managers to make rational, fact-based decisions, elevating conversations from preference and opinions to logic and insights.

Evidence-based management is an emerging movement to use and analysed via multiple, high-quality experiments, and various other types of studies and has consistently yielded positive findings. This intervention generally uses well-established facts with a high probability of effectiveness and low potential for harm.

Unfortunately, the challenge in the current business world is that many managers are not solving problems based on relevant evidence of best practices. Without measurable data, the success of any initiatives is based on nothing more than intuition and assumption. Numerous decisions are still driven by dogma and belief. They are not using creativity to make hypotheses and using innovation to solve problems. They are too afraid to try new ways, worry about failure and no original judgement. In that way, the situation is not going to change, plus the problems are not going to solve.

Nowadays, we live in a VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world with too much information. Managers and entrepreneurs should think in empiricism like Sherlock Holmes to make hypotheses, then test and proof if it is right. Treat your organization as an unfinished prototype and encourage trial and error experimentations by applying the scientific method. Evidence-based practice is the applied science that contains the cleverest ideas from the past 200 years.

The movement to pay attention to evidence-based practice began when medical researchers discovered a lot of suboptimal treatments were being given, even after there was data indicating they should not be given. For example. It took almost 40 years for medical doctors and nurses to start washing their hands before surgery. Meanwhile, recent research shows doctors wash their hands only about 1/3 of the amount they should and only about 15% of physicians decisions are evidence-based. Simply asking people to act in a certain way does not work either, but need to influence them using proven psychology theories in order to make an impact.

Another example is in professional baseball field which has many myths about who are the best players and how to build winning teams. The book, Moneyball by Michael Lewis, on the other hand, shows the evidence-based way for selecting players, while facing resistance to innovation in the sports industry. The general manager demonstrated the use of strategic thinking to win the game.

Similarly, the same behaviour holds true in the business world with lots of old myths dominated. Ideology is to blame for the persistence of the first-mover-advantage myth. However, empirical evidence shows that it is more important to get it right than get it first. Amazon is not the first online bookseller while Google is not the first search engine either. The first product does not necessary to be the best in order to launch but only needs to be good enough for the users.

Other myth includes what factors are the most important for firm success. In fact, 25% is innovation and a new venture, while 10% from a good leader and CEO. Based on the survey, it shows that 17% with no goal versus 75% has specific goals leads to good performance. Therefore it is a good practice to set goals in management. Organisations would perform better if leaders knew and applied the best evidence.

Furthermore, it is a common myth from a boss in the old days that criticism, complaining and condemnation could push the staffs harder and get a better result. On the contrary, performance drops from bad emotions. Criticism demotivates people which makes employee afraid to make a mistake. Intuitively, there is a correlation between smiling and sales. If you do not rely on the study, then you would probably make a campaign to ensure every employee smiles, but this could lead to counterproductive result since, during a good sales, the employee could be too busy to smile. Also, there is little evidence that equity incentives of any kind, including stock options, enhance organizational performance.

In conclusion, it is time for managers to change how they think and act by trust of science. Collect good data to avoid unexamined ideologies. It matters to your company, as the best practices add to the performance and trump the competition. Decision-makers could look to technology to improve the use of data and analytics, measuring outcomes could provide a clearer lens through which to evaluate practices currently in use. This evidence is an opportunity for empirical analysis of change and initiatives through fact and insight.