It was a motivational meeting, there is no doubt about it. That was the main atmosphere in the session of March 16 with María Benjumea, founder and president of Spain Startup, the organizing company of The South Summit. The main goal of the meeting organized by IE Alumni, was analyze the evolution in Spain’s entrepreneurial ecosystem, which shows a real alternative capable of transforming and dynamizing the country’s business structure. This, in addition to promoting the #IEWomen initiative.
For Benjumea, startups are key in this process of transformation. The relationship they must maintain with the companies is important, because thanks to that, there are business opportunities that arise from the reinvention process they have to face. Therefore, “we recommend associating with startups to attract new products and services, incorporating innovation to your company,” said María. For the startups, this partnership is powerful, because it allows for greater scalability; at the end of the day, it’s a win-win relationship.
A startup is, as Benjumea proposes it, “a newly-created company, an innovative one, aiming at fast growth, fast stabilization and a global conception.”
Looking at the Spanish environment
In Spain, it is no secret that entrepreneurship has grown and matured. Data from the Startup Ecosystem Overview report, prepared by the Mobile World Capital Barcelona foundation, states that the average investment by startups has tripled from 200 thousand euros in 2014 to 710 thousand in 2016. Moreover, if we add that in 2016 there were rounds of funding such as Cabify for 105 million €, Hawkers glasses for 50 million €, or Job & Talent for 37.3 million €; we can confirm that consolidation is taking over.
Despite a perception that entrepreneurship has stalled, María made clear this point with an anecdote: “I was recently in a cycle of entrepreneurship organized in a university, and when it was my turn to speak I asked who was about to start a business, I was impressed because 25% of the attendees were already thinking of it. This has nothing to do with a trend, nor with employment, it has to do with generating a virtuous circle.”
Entrepreneurship is a condition and an alternative that is finding its place in the business network. “It was said that it was a fashion product of the crisis. In the studies that we handle only 1% open their business by necessity, the rest is because they saw an opportunity or because they just want to do it,” said María.
IE: What do you think about the role of government in the development of startup?
MB: From Spain Startup we are making public entities aware of the importance of entrepreneurship to the economy. Last year, the President of the Spanish Government visited The South Summit, and could not believe what was happening there. This is why we must get them to notice us, especially institutions like IE, whose startups are well esteemed outside of Spain and among investors.
IE: Which are the biggest obstacles that entrepreneurs face?
MB: Having a great deal of resilience, especially when they don’t know where to go, or when they are facing the uncertainty of whether they really have a chance. It is necessary to move consistently, to overcome oneself, and to understand that the fight with ourselves is constant. Almost no one who has tried to open a business does not want to continue to do so.
MB: The tendency is to develop our career and consider ourselves as owners of the project, with less fear of failure. Of course, if it does not work, do not bother to keep it.
Relationships with investors
María pointed out that another main challenge that entrepreneurs face is funding, and according to data from the “Entrepreneurship Map” carried out by Spain Startup, most of the projects are implemented with personal resources (77%) or with family support (27%), and only 7% start with bank loans.
In this case, events such as the South Summit become a platform for entrepreneurs to get in contact with investors who are “looking for projects well thought out, supported by a qualified team, with a good business plan and an innovative proposal”, Benjumea emphasized.
IE: What are investors looking for?
MB: The first thing is to know that investment in Spain has grown considerably. There are initiatives we boost with the Government, as new funds are being created, and there is more international investment. Besides, it is important to believe that we are very good, and that in Spain we have a powerful ecosystem with amazing projects.
MB: You have to sell yourself, because the way to attract investors is by demonstrating that the project is worth it, and that there is a good team behind it. This and the way the project is addressed becomes the key in the decision-making process of the investor. They will seek to be innovative, but innovation does not always have to be technological, there will be issues related to technologies, but also some transversal ones that will not involve it.
Having said this, while the relationship with investors is vital for growth and permanence in the market, for María Benjumea, the key to a startup’s success lies in the people and how they create a project together. We must emphasize the importance of a solid and committed team which engages with the project and forms a gear pushing in the same direction.