WhatsApp in Brazil

If your startup goal is to get funded, remember: When evaluating a venture, potential scalability and power to reach asymmetric markets worldwide are key factors. A product or service with focus on global necessities and a company structured to reach and sustain operations around the globe are milestones that magnify the value of your company.

I have been working with Scandinavian startups for the last two years and, with relative small domestic markets, internationalization is especially important here. They usually play safe though, and most times put all affords on growing towards a cultural equivalent neighbor. I understand, many are afraid of jumping in head first in culturally different markets but that can be the difference between a promising startup and a highly profitable company. The math is really simple: Even though it’s a great place to do business, most European countries are relatively small, technologically advanced, expensive and highly competitive in every aspect.

Ok, but what are your options then? The US startup ecosystem is extremely competitive, large Asian markets such as China, India and South Korea have immense amounts of investments on technology and are, together with Europe and USA, leading the way on disruptive technologies and services.

But… What about Latin America? Why European Startups almost never think of LATAM for their early-phase internationalization? Scandinavian startups are constantly hung up on moving to the next country near their borders, and that in my opinion is a big mistake.

Brazil and Mexico are the biggest powers in Latin America and there you may find a rich, less hostile environment to scale your business. Let’s take Brazil for example, today’s 8th economy in the world, a country with 200 million people (!), 180 million smartphones and the 5th online market, yet Brazil is almost always out of European startup’s radar.

Foreign Direct Investment in Brazil in 2016
Foreign Direct Investment in Brazil in 2016

Despite the fact of being one the biggest consumers market, investments in science and technology are shamefully low, making the country thirsty to acquire foreign solutions that make their lives easier, at work or at home.

That makes the giant South American a low risk, highly profitable market with real possibilities to scale fast. It might even be a self sufficient market if you make your way up to the top. Don’t take my word for it, there are many near inexplicably successful cases like WhatsApp messenger, which boomed in the country reaching 38 million active users, the second largest user base, followed by Mexico with 32 million users. The app is not popular in the US nor China, but it was sold to Facebook for 22 million USD in 2014.

WhatsApp.com is currently the 13th most visited website in Brazil. Visitors from Brazil correspond to 22% of the website's traffic.
WhatsApp.com is currently the 13th most visited website in Brazil with around 209 million visitors. This corresponds to 22% of the website’s traffic. Source: Similarweb

 

Another example is the social networking website “Orkut”,founded in California in 2004, in pre-Facebook era, owned and operated by Google Inc. The website was named after its creator, Google employee Orkut Büyükkökten. If you are not Brazilian (nor Indian) though, you probably never heard of it. During the first years, the United States had the largest user base, but by word of mouth various Brazilians began to join and inviting more friends, in a viral process driven by the blogosphere. Soon after, Brazil surpassed the U.S. in the number of users and Orkut started becoming heavily popular in Brazil. Americans then started leaving the service and switching to other similar sites such as MySpace and Friendster. From there Orkut growth was driven by Brazilian users.

In August 2008 Google announced that Orkut would be fully managed and operated in Brazil, by Google Brazil, in the city of Belo Horizonte.

The platform was the first social network open to everyone to register and became one of the most popular websites in Brazil. In June 2011, Alexa traffic ranked orkut.com.br 94th in the world. As of April 2010, 48.0% of Orkut’s users were from Brazil, followed by India with 39.2% and United States with 2.2%.

Orkut’s numbers decreased eventually with the domination of Facebook, until it was discontinued in 2014, but for many years it thrived there spectacularly and totally unexpected by Google.

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Juan Nader is Brazilian entrepreneur and business developer for Biassa. Currently residing in Odense, Denmark.

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