How Polymath Ventures Creates Startups in Colombia

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Wenyi Cai is the Co-Founder and Managing Partner of Polymath Ventures, a Colombia-based business which designs and builds companies from scratch to serve the needs of the middle class in emerging markets.

Before launching Polymath Ventures, Wenyi was most recently the COO of Milo.com, a consumer internet startup that sold to eBay in 2010, where she led the day-to-day operations of business, product, and engineering teams.  

Prior to Milo, Wenyi was a consultant with McKinsey & Company in the Middle East, Africa, and South Asia, working primarily in telecommunications, banking, and innovation clusters.  She began her career in finance in NY and Washington DC.  Wenyi graduated cum laude from Harvard College, and studied philosophy and physics.

We spoke to Wenyi about why she moved from Silicon Valley to Bogotá; why Mexico is the next market for Polymath to crack; and the unsung heroes of the LATAM startup scene.

TNW: What led to your decision to move from the US to Colombia?

WC: Our goal at Polymath is to build innovative, scalable businesses in emerging markets focused on the middle class.  Thus, Latin America is a great market for us.  Within Latin America, Brazil, Mexico and Colombia are attractive for us because of the talent base there, which is what fundamentally drives and constrains our business. 

In addition, we were very impressed by Colombia’s fundamentals as a complex economy and the commitment of people to building the country. 

There are many intangibilities to entrepreneurship and optimism and commitment are enormously important.

Personally, I have lived and worked in many countries around the world, so it was not difficult to convince me to jump on a plane and dedicate to doing something I deeply believe in.

TNW: What has been the biggest challenge in relocating from Silicon Valley to Bogotá? What have you most enjoyed about the transition?

WC:

I actually love the discomfort of having to find your way, and I mean that both literally and figuratively.  It makes me feel alive.

Although I am quite American in my values and international otherwise, my food preferences are still very Chinese.  So I miss Asian food enormously.

TNW: There is so much buzz about Brazil at the moment. Why do you believe that Colombia is the next hot startup scene?

WC: I spent a lot of time studying innovation clusters in my time at McKinsey and afterwards, and I think that an ecosystem takes many decades to build, so I am not a strong believer in the fickleness of entrepreneurial buzz.  I think a country with great talent, a complex and open economy, supporting institutions and laws, and culture that celebrates independence, meritocracy and success will support a robust entrepreneurial ecosystem over time.  Colombia is moving in the right direction, but it will take time, as with all emerging markets.  Many of the investors going into Brazil are just doing so because of a fear of missing out; they do not understand emerging markets and are not deeply committed to the region, so when times get tough, they will leave as fast as they came in.  Value is built over time and Polymath is playing a long term game.

TNW: How does investing early stage in LATAM compare to investing in other emerging markets? 

WC: I think the dynamics are quite similar in most emerging markets for early stage investing. 

Capitalists have too much power and do not leave enough on the table for the entrepreneur.  Basically, there are very few real angel investors. 

People do not understand the returns and thus the risk profile.  If all the big businesses people have seen being built happened over decades, they will not believe that a company can grow exponentially.  This will take time to change and we are trying to do so.

TNW: Why did you choose Mexico as your next focus, after Colombia?

WC: Mexico is an amazing economy.  It has all the fundamentals of economic complexity, talent, and access to large internal and adjacent markets.  If it can gradually reform politically, it has the chance to be the first large middle-income country to move into higher income.

TNW: Roughly what percentage of entrepreneurs applying for the Polymath program are female founded? Are either of the two businesses which have been started female founded?

WC: Polymath’s process is quite unique in that we assemble the teams ourselves and co-create the business.  We are a company builder instead of a fund or incubator.

Diversity is very important for us because different points of view means you have a much better chance of solving a hard problem that many smart people have tried to before. 

Thus, gender diversity is key.  In our Seed teams, we always have both men and women.  It is harder to guarantee on the founding teams of the businesses.  For example, Táximo founders are all male, but the Juntos team is more mixed.

TNW: Historically, people see Latin America as a big market for copy cats, especially in ecommerce. Do you see much real innovation coming out of the Colombian startup scene? If not, why not? If yes, can you give us some examples?

WC: I think there is definitely innovation, but not out of the common startup channels, which are too dominated by small technology plays that are copycats either intentionally or unintentionally. 

I see many successful companies who are less celebrated in the startup ecosystem, but should be real role models. 

These are companies like Ecoflora (using the biodiversity of Colombia to produce unique biochemical compounds and products for various industries) and Refinancia (collecting loans on portfolios that the banks have written off).

TNW: What are the challenges faced by women looking to start their own businesses in Colombia? Are Colombian families and communities generally supportive of female entrepreneurs?

WC: Based on anecdotal numbers, it seems that there are way more male entrepreneurs.  I am not sure how it compares to other markets (both developed and developing), but not significantly better or worse is my superficial impressions.

TNW: How easy is it for entrepreneurs to find funding for their business in Colombia? How do most Colombian entrepreneurs fund their business?

WC: Finding local funding is hard.  It is still primarily friends and family.  The institutional venture industry is very nascent, and real angel investors are around but not organized.  This is a huge challenge for entrepreneurs.

TNW: What advice would you give entrepreneurs looking to break into the LATAM market?

WC:

The region is obviously exciting, but come if you believe in building long-term value.

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