This year’s South by Southwest or ‘SXSW’, one of the greatest music, film and emerging technologies festivals in the world, was conducted virtually for the first time in its 40 year history. Even so,  it’s interactive activities, like trade shows, speakers, parties, hackathons and startup acceleration workshops still were eye and mind pleasing. One of the showstopper panels was ‘Brazil’s Startup Scene: 15 Unicorns in Only 4 Years’ in which Pedro Waengertner, from ACE, pinpoints 5 pillars that are boosting the brazilian entrepreneurship ecosystem: complexity, regulatory environment, talent, culture and support institutions. With a self explanatory title, the panel is a mark that the brazilian innovation and technology ecosystems celebrate today.

But how can Brazil produce so many unicorns in such a short period of time? I have a guess, let’s see if you agree with me.

A lot has to do with exactly what was brought up in the panel: there are a lot of opportunities, the new ‘Marco Legal das Startups’ or Legal Framework for Startups legislation, shows how the legislators are adapting and supporting the development of brazilian technology, there is a support network pivoted by large companies, universities and netweaving institutions, and there are tons of investments being poured into Brazilian entrepreneurship and startups.

However, the reason behind Brazil’s ability to produce so many relevant technology solutions goes beyond all of that: it is all about culture and talent. Brazil is ahead of the game when the subject is globalization, due to its colonial history and waves of massive immigration in the 20th century. Besides, Brazilians have an innate cultural talent for problem solving, a cornerstone for developing successful digital products.

Disruption in Brazil

The first question that comes to our minds is, how did Brazil do it? And more: how is it still doing it? To Distrito, an innovation organization that connects large corporates to startups, there is still room for growth. Distrito’s CEO, Gustavo Gierun, bets that 17 new brazilian startups will become unicorns in the following years in various sectors, such as logistics, retail, B2B and B2C services.

Many attribute the success of these unicorns to international predecessors in the segment they act on. Brazil’s first unicorn, 99, provides similar services to that of North american tech company, Uber. Nubank is not the first neobank. Loggi and iFood, both being delivery startups, are also not pioneers in their sectors. This means that most of Brazil’s Unicorns, if not all, were inspired by startups that arose in the international sector, raising the question of what disruption really means.

There is a stigma that one is going to create nothing significant if one is just replicating a solution into a new environment. Sure, compared to global startups, this solution might not be a new market disruption. But relative to a specific environment, your solution is very likely to be a new market disruption. Take the 99 and Uber cases as examples. Compared to Uber, 99 used Uber’s core business model as inspiration, disqualifying 99 as being a new and disruptive startup on a global scale. However, when we take a look at how well 99 was able to access different cities by slightly adapting the business strategy, we can definitely classify 99 as being a disruptive solution relative to the market that they were reaching, which were smaller towns.

This reminds me of another panel in this year’s SXSW which is ‘How to disrupt Billion Dollar Industries’. In this panel, Jim McKelvey, author of ‘The Innovation Stack’ and Co-founder of Square, argues that you can definitely use other startups and ideias as models, look at other businesses and have great ideas as well. In fact, sometimes searching for an existing solution is the first step in solving most challenges. And with time you will eventually cross a path with unique problems that the human kind wasn’t able to solve yet. In this situation, it doesn’t make sense to search for an existing solution. When it comes down to this path, you are forced to adapt your solution into a new environment. And this is exactly how Brazilian entrepreneurs are doing it.

Globalization and diversity in the innovation scenario

Even though many brazilian unicorns were inspired by other international existing solutions, Brazilian solutions are in their own way unique, because of Brazil’s unique challenges. Also, Brazilians are more than prepared for this new innovation landscape, because they have experienced globalization prior to that of other countries and because they are problem solvers.

It isn’t breaking news that diversity is a key driver of innovation and is a critical component of success on a global scale. Fortunately for brazilians, their history allowed them to anticipate the consequences of globalization and become more prepared for a segment that itches for diversity.

But how are Brazilians prepared for innovation? A lot has to do with its history. Brazil experienced its first wave of globalization in the beginning of its colonial history when the Portuguese, Spanish and Dutch colonised territories for economic reasons and imported African slaves as its primary workforce in the mid 16th century. The second wave of globalization started around 1870 when until 1930, between 2 million and 3 million immigrants from Europe, Middle East and Asia settled in Brazil, driven by its expanding economy.

Even though theories about globalization started over 100 years ago, Brazil experiences it for over five centuries, since globalization is an interaction between economic and cultural factors, causing not only changes in the patterns of production and consumption, but also on the cross between spaces and borders, languages, dialects, cultures and civilizations1. With this we can say that Brazilians, in a way, anticipated the externalities of globalization, as it dealt with multicultural combinations and diversity for a long time. This historical mixture of cultures, patterns and tradition is what makes Brazil unique.

Additionally to having a hybrid culture that has incorporated different cultures into its own, Brazilians are great problem solvers. If you ever heard of the ‘jeitinho brasileiro’ you know that this expression is derived from ‘dar um jeito’ or ‘finding a way’ of getting things done.

‘Jeitinho’ is exactly what we want in a disruptive world: find solutions to our problems, or ‘finding a way’ to overcome our challenges. Because of its history of lack of resources and inequality, Brazilians have, for a long time, developed ways to navigate through scarcity, similar to that of many companies today. The thought process of finding a solution to a problem is rooted in brazilian culture and society, and this is what makes great entrepreneurs, designers and developers. I see ‘jeitinho’ as a resource of opportunity.

If one thinks there isn’t a way, call a Brazilian and he will find a way. As innovators, we want to use all of the possible resources we have at hand, as well as our networking and creativity to find the solution for the problems we encounter. And this is what makes Brazilians great problem solvers.

The ‘jeitinho’ brings me back to what Pedro from ACE said in his panel at the SXSW this year: crisis creates opportunity and opportunity craves for solutions.  This is true especially in the Digital Era we live in today, but now we have abundant ways to solve our problems. Our way forward is to dive deep into our challenges to ‘find a way’ of getting things done. And this is why brazilian startups are winning the innovation scenario. Because Brazilians add their own flavour in developing solutions.

Sources:

• ONO, Maristela. Design e cultura: sintonia essencial. Edição da Autora. 1ª Edição. Curitiba, 2006.
• GONZALÉZ, A. C. Juan. O que é a identidade dos povos? Causa Nacional, Boletim nº 4, 1997.
• MORAES, Dijon de. Análise do Design Brasileiro: entre mimese e mestiçagem. Editora Blucher. São Paulo. 2006.
• QUELUZ, Marilda Lopes Pinheiro. Questões Pontuais sobre Design e Identidade. In:____. Design & Identidade. Curitiba: Editora Peregrina. 2008. p-17-32.

References:

• SXSW 2021