What does it take to break the mold?

I recently read and interesting article about the impact that successful exits can create for innovation ecosystem of an entire region. In that case, the Middle East.

Breaking the Mold: Can the MENA Region Be a Leader in Inclusive Capital?

Fouders and employees of a sucessfully exited company become new founders and investors, starting a chain reaction of value and wealth creation. The article cites que example of PayPal in US and, to a lesser scale, Maktoob and Souq in the Middle East.

I wonder if the same is true for Latin America and I will try to find out if Guia Bolso, PicPay, Nu Bank, Loft, Quinto Andar and Viva Real are doing the same for the region.

(Uau… as a biotech scientist it is sad to realize that no biotech companies come to my mind. There are simply no relevant deals in this segment, even after covid)

The article notes, though, that the spiral of wealth remained restricted to the circle of founders and employees. It was exclusive, outside the reach of outsiders.

The authors of the article wished this spiral was more inclusive, reaching people outside the initial circle, because that is what could create regional, transformational, impact.

They ask the question “can we build ecosystems that are more resilient and that make systems that work for everyone and not just the few who had the privilege of being a part of a unicorn?” and reply with a list of 3 suggestions on how to make this capital more inclusive.

After reading the examples they give, a different question comes to my mind: why are all spirals exclusive? That is clearly the pattern.

I think the answer is in Noam Wasserman’s book ‘The Founder’s Dilemmas’, with dozens of stories of partnership conflicts. It is freaking hard to find the right partner to found a business and even though there is no right answer (thus, dilemmas), there seems to be better to do it with an ex-coworker.

I don’t see this weight put on relationship knowledge and trust going away anytime soon. And I don’t want to count on individuals acting altruistically for the benefit of the group to see the innovation ecosystem of my region flourishing.

And maybe I don’t need to. All (well, most) decision processes are balances of risk and benefits. And since I don’t believe that individuals don’t see the potential of investing outside their limited network, I think the question is: How do we incentivize individuals to take more relationship risk when it comes to business?

I believe the answer is in Nature Based Business Models. But that is a story for another time.