Horacio Melo and I have been trying to organize a time to do this podcast for a few years and I'm excited to finally be able to share it. Once the Executive Director of Start-Up Chile, Horacio went on to build his own startup - just two months after becoming a Dad for the first time. Horacio knows what it takes to build a great company; after all, he watched and mentored over 1000 startups as they passed through Start-Up Chile. His solar energy company, Solarity, has raised three rounds of investment, starting with US$650K in their seed round, then adding a US$8M Series A and another $10M recently.
Horacio can speak to the difficulty of selling an innovative business idea to conservative corporates in Chile and Latin America, despite Chile being one of the best places in the world for solar energy. He also discusses his transition from corporate jobs to entrepreneurship, the importance of culture in building a sustainable startup, and what he learned as Executive Director of Start-Up Chile.
Not every entrepreneur knows that they wanted to be an entrepreneur, but Horacio deliberately searched for opportunities to build his own business at a young age. Despite spending the first seven years of his career in corporate settings, he always found ways to innovate. In his own words, he preferred to use other people’s money to make mistakes before launching his own startup.
Horacio learned lean startup methodology during his corporate career before he became the director of Start-Up Chile. Check out the rest of this episode to find out how Horacio learned to build a company long before he founded Solarity.
Chile is still a conservative society, despite having a reputation for being innovative. Many employees prefer to not take a risk than to speak up about a new idea and risk their reputations. Horacio had to face this reality when trying to sell Solarity’s unique solar power model to Chile’s largest corporations. Despite having one of Chile’s biggest, most-conservative organizations among his first clients, Horacio still struggles to create a more agile sales process for the company.
Solarity’s sales challenges have nothing to do with the quality of the product. Chilean corporate culture strongly curbs risk-taking behavior, meaning no one wants to stick their neck out for a new idea. Find out why Horacio thinks this pattern is just starting to change, and what that means for Chilean startups, in this episode of Crossing Borders.
The Cornershop acquisition sparked a controversial discussion about why the delivery startup had no Chilean investment. Yet Horacio’s experience with Chilean VC was different - for the better. He was able to raise US$650K from Chilean angels, and has had positive experiences with Chilean investors in his future rounds. The problem, according to Horacio (and I agree!), is the lack of exits in Chile to date. Exits lead to entrepreneurs who turn around to invest in the ecosystem, with founder-friendly deals and experience that leads to better investment outcomes.
Despite having worked for Start-Up Chile, Horacio shares similar frustration with CORFO as I do. Find out why Horacio thinks Chilean investors need to be made “uncomfortable” so they can have a more significant impact on the ecosystem by listening to this episode.
Horacio Melo has played a significant role in building up Chile’s entrepreneurial ecosystem through his tenure at Start-Up Chile, his success in raising funding for his startup and building a business around it. Check out his podcast to hear why corporates need to take more risk, why startups should pay attention to culture, and where Chile’s ecosystem is going next.
[1:29] - Nathan introduces Horacio
[2:28] - Why is Chile an interesting place for a solar energy company?
[3:54] - The first step after starting the business
[5:11] - Did you always know you wanted to be an entrepreneur?
[7:26] - The start of Horacio’s corporate career
[9:06] - Does working abroad help you start a business?
[11:07] - The decision to shift over to Start-Up Chile
[13:00] - Becoming the director of Start-Up Chile
[14:09] - What did you learn from evaluating so many startups?
[15:35] - Best and worst traits for an entrepreneur
[17:00] - Starting Solarity the day after leaving SUP Chile
[21:54] - Horacio’s craziest rejection story
[24:40] - Did the SODIMAC deal help with sales?
[28:53] - Cost of installation in Chile vs. US
[30:57] - Experience raising 650k with Chilean angels
[40:09] - How did you give returns to your angels through your Series A?
[42:32] - What’s next for Solarity?
[45:30] - Plans to expand out of Chile?
[48:02] - How Horacio builds culture at Solarity
[50:13] - Why culture is important
[51:49] - Horacio’s advice for himself before becoming an entrepreneur