This article was originally posted on LondonLovesBusiness as a summary of my UKTI tech mission to Brazil, researching the market for 23snaps and a local launch in the country. There I shared some of the opportunities, challenges and conclusions I drew from the trip and what international startups can expect when trying to bring their business to Brazil.
On the evening of 10 September, I found myself sitting with the founding members of 10 other UK tech start-ups at Heathrow’s Terminal 5 waiting for a flight to Sao Paulo, Brazil. Our companies ranged from social networks to content delivery networks to ecommerce solutions – but all had one thing in common. They had committed their limited time and resources to travel halfway around the globe to explore growth opportunities in one of the world’s fastest-growing markets. I represented 23snaps, a private social network for families, and hoped to learn more about the consumer appetite for our product and to find launch partners that would help us grow in the Latin American market.
There were shared pre-flight drinks and banter but also a sense of apprehension. Brazil is a tempting market for many businesses, with a consumer market growing exponentially in size, but the challenges that small companies face trying to enter the country act as a strong deterrent.
The 10-day trade mission, dubbed The Great Tech Expedition, was UKTI’s attempt to help one group of British tech start-ups overcome those challenges. The programme was also supported by the Mayor of London as part of the 2012 legacy efforts, as many of the companies participating on the trip hoped to pick up lucrative contracts related to Rio’s Olympic infrastructure and planning. The launch event included a meet-and-greet with Mayor Boris Johnson. It was an ambitious effort on the part of UKTI, but I returned to London with ambivalent feelings towards opportunities in the South American nation.
On the surface, the opportunities in Brazil are numerous. As the hosts of both the 2014 FIFA World Cup and the 2016 summer Olympic Games, the investment in infrastructure and need for goods and services can only increase.
Additionally, the Brazilian consumer market appears to be booming as well. Already the sixth largest economy in the world, over 75 million Brazilians are own smartphones. It’s ranked fifth in the world for number of internet users (over 90 million) and household spend has increased steadily over the last 10 years, including 2.5% growth from Q1 2013 to Q2 2013.
Brazilian companies can’t keep up with consumer demand, leaving room for international businesses to enter the market. Many of the participants on the UKTI trip were hoping to be first to market in their industry in this new, lucrative environment.
But for all of Brazil’s potential, there are significant challenges to foreign companies entering the market – as we discovered shortly after being ushered into the UK Consulate on our first morning in Sao Paulo. A series of seminars, organised by the UKTI and the Consulate’s Office, painted a more realistic picture that left some participants questioning the opportunity cost.
Brazil is still extremely protectionist of its own industry and companies. This manifests itself in significant tariffs on international goods and services. A Brazilian company paying for a service from an international company might expect to pay 40% on top in taxes. International companies looking to move profits out of Brazil into their home country can expect a similar (40%) tax rate on taking funds out of the country. Businesses also must hire a certain number of Brazilian employees for every foreign one and cannot have business operations in Brazil without a full time managing director located there who assumes full, personal responsibility for the company – one example of a complicated business legal system.
This can all be challenging for small companies with limited resources particularly because English is not widely spoken, even in technology or professional industries; a point felt strongly by our Tech Expedition as we attempted to explain advanced digital services in broken Portuguese, sign language and Powerpoint slides to attendees at the Rio Info conference. The conference was the region’s largest technology event and ostensibly the focal point around which UKTI had organised the trip.
Another intriguing point for the tech companies was Brazil’s lack of data protection laws. While the UK companies would of course be bound by EU data protection laws, their Brazilian competitors faced no such restrictions. Personal, medical, educational and online data can be bought, sold, resold and used for marketing purposes without any penalties – and consumers are uneducated about this so are not asking for change.
Finally, infrastructure in Brazil is still extremely dated, particularly outside the state of Sao Paulo which occupies only 3% of the country’s land mass, despite driving 60% of its economy. Across the country poor roads, transport and civil services mean that it can be expensive and difficult to transport goods, services or personnel.
As we learned about the tricky landscape we would need to navigate to begin business operations in Brazil, professional consultants’ cautions were balanced with the vibrant Brazilian world around us. In Sao Paulo, a never ending city of skyscrapers, even cabbies checked directions on their smartphones. In Rio, despite the sea of tents and corrugated metal boxes that made up the shanty town Favelas, the beaches and tourist attractions were packed with tens of thousands of local and international tourists, stimulating the economy.
The tech and start-up scene was booming, at least if the numerous government-backed start-up accelerators were to be believed. Cesar, a self-proclaimed “Brazilian IDEO” had supported 70 projects, funded nine business plans and helped three companies start generating revenue in the last year while Invest Sao Paulo had the backing of the local and federal governments to bring both Brazilian and international businesses into their accelerator program with up to $100,000 of investment – as long as they based themselves in Sao Paulo.
Brazil is a perfect market for 23snaps. It’s family-oriented, social, and there is a huge consumer appetite for new online services and networks. On top of that, there are almost 300 million people living in Brazil and consumer smart phone and internet access is exploding. But we can’t forget that Brazil is still a developing country and there are a couple of challenges we need to overcome, particularly related to financial operations, data protection and infrastructure in the country
Brazil was, for myself and many of The Great Tech Expedition participants, a conundrum – even more so for having visited. Local enthusiasm for the London companies, obvious consumer demands and a European-like attitude towards consumer products was, for many, enough to counter the numerous challenges and increasingly bleak outlook on Brazil from global economists. The final day in Rio, with the iconic Christ statue smiling benevolently down on the British entrepreneurs, was filled with optimistic discussion of a return trip, final signatures on contracts and the opportunities ahead. Yet by the time our plane landed, both the London drizzle and reality of operating in Brazil had cooled the group’s passions. Despite our, and UKTI’s best efforts and desires, there is still a long way to go before small British businesses are up and running effectively in the tempting, challenging and intriguing Brazilian market.
(This article was originally posted on LondonLovesBusiness on 09/10/13)
We got into Budapest mid-afternoon which offered some of my new friends and I the chance to walk around the city before our big night out. Although I had some misgivings coming into the city (I had heard such good things about Budapest but the route we took to our hostel show off some of the less attractive parts!) once we got onto the main road, and into the fashionable shopping streets, I began to understand why this city, situated on the Danube river with its stunning palace, parliament building and churches is world renowned.
The rain had caught up with us as well so after a damp self-guided tour, we went back to the hostel to change before the wonderful evening our guide had planned for us. As a group we walked to a local restaurant where a set menu of local specialties appeared like magic before us. Hungarian goulash (a far step above the Czech goulash I’d had days before) with its thick broth, spices and sausages started us off, followed by a cheesy and paprika-laden pasta and finally a crepe-like dessert loaded with rich dark chocolate and a hint of orange.
After our dinner, we all headed down to the Danube river where we would be taking a river cruise through Budapest. At night and in the rain the buildings sparkled, especially the main palace and parliament buildings which are particularly famous city sites. There was plenty of wine, beer and more vodka on board so after the cruise everyone was in a great mood despite the weather and looking forward to seeing more of the city the next day on a city bike tour. First, however, our guide took us to a local bar quite near our hostel which proved to be the perfect fun end to the evening.
The next morning we met up with a local bike tour company to see more of Budapest. Although it was still drizzling, I felt I could make it through any type of weather – that night we’d be going to the famous Budapest baths which use the boiling water from the thermal springs below the city. The water is so hot that it has to be significantly cooled before being added to any of the public baths. But first, I had the bike tour which took us through the main historic parts of the city.
Hungary, and Budapest in particular, seemed to have made the most effort of any country we visited to purge the memory of Soviet control. In Budapest, we were told, all of the Soviet statues and monuments had been moved to a statue park outside the city. However the older historical monuments and buildings were absolutely breathtaking, including the city palace, located in a park about a mile inland from the river, the old houses of the nobility that line the main road, and of course the palace and parliament buildings.
The palace itself was closed due to the annual Budapest Wine Festival (I didn’t have a chance to stop by, sadly!) but our bike tour took us to an outlook at the top of a big hill which offered an amazing view of the river, the Parliament, the Palace and the rest of the city. Looking on a map afterwards, I feel we didn’t really see a lot of the city of Budapest just based on the actual roads we biked, but some key stopping points gave us a great vantage to see the whole city from afar and allowed us time to focus on the most important and beautiful monuments in the city.
After a quick lunch, we again went our separate ways for an afternoon of shopping. Budapest’s main shopping streets featured a mix of touristy souvenir shops, high street and designer brands and local antiques – the last of which I found the most interesting. Mostly, however, I was just enjoying the chance to walk around and counting down the minutes before heading to the baths.
For the first time, the rain seemed to heighten the experience as we walked into the steaming, open-air Budapest bath complex. Three main pools of varying temperatures sat under the open sky, surrounded by baroque architecture while the surrounding buildings housed smaller baths, steam rooms, whirlpools, saunas and more. Although we tried to explore as much as possible, the cold air, the rain and the absolute bliss of the main hot bath made it hard to want to do much of anything except float in the hot water.
After what didn’t feel like nearly enough time, it was time to head back to the hostel where we had pizza waiting for our group. It was a bit of an impromptu pizza party and goodbye to Budapest and Hungary as the next morning we would be heading south into Croatia, the final country on our itinerary.
It was only a two hour drive in the morning between Krakow and Zacopane and although the temperature was dropping rapidly (there was a high of 10C expected in Zacopane that day), the weather seemed to have temporarily cleared. This was good news as Zacopane is known as a ski resort town in Poland and one of the highlights, according to our guide, was to either walk up or take the gondola up the small mountain to enjoy the views from the top.
Upon arriving in Zacopane, our guide once again gave us a quick tour of the town which consisted mostly one main pedestrian-only street which led past dozens of cute shops and cafes, through an open-air market and to the gondola up the hill. One of the local foods is a smoked cheese and its sold in beautifully moulded shapes – in fact they look more like wood carvings on their stands than like cheese!
Feeling the need for some exercise after all of our heavy meals, I convinced a group of my new friends to hike up with me, rather than take the gondola. To say it was a disaster would be an overstatement but it certainly wasn’t the easy afternoon walk we had hoped. The rain had made the path quite slippery and it was very steep – basically a 30 minute walk up a ski hill! By the time we reached the top, we were more than ready for lunch and had all agreed we’d be taking the gondola down. I opted for another plate of perogi to refuel and even allowed myself a bit of dessert – a delicious rich pastry, that tasted like a donut and was covered in cinnamon and sugar but was about the size and shape of a lampshade with rings of pastry in a spiral. Almost as nice as the taste was the temperature and the dessert warmed me enough to enjoy the stunning view to snowcapped mountains in the distance, and down to the little town of Zacopane below.
Later that afternoon, after we had all split off to do a bit of shopping on our own, the rain returned with a vengeance. While at first everyone on the trip was annoyed the bad weather had returned, just before dinner – as we were all walking to our restaurant – we realized what the rain had brought. Although we’d just received the wet weather, the temperature was low enough that the entire surrounding foothills received a heavy snow. The mountains which had been green around us before were now a stunning white and in the sunset, with the snowcapped hills all around, Zacopane was even more gorgeous than before.
But nature’s beauty was going to take a backseat as we headed into the local restaurant our guide had introduced only as “The Meat Palace.” If I thought my pork knuckle was a medieval feast, that was nothing to what was about to appear in front of us in Zacopane. A huge platter, bearing at least 14 different types of meat, arrived for every 8 people and even with 8 people per platter, we couldn’t finish the pork, lamb, fish, beef, veal and sausage before us. Weighing a good 5lbs more than we had when entering the restaurant, we made our way through the crisp night air back to the hostel.
The next morning saw us loading into the bus bright and early for the long day of driving ahead. We’d be leaving Poland, driving through Slovakia (where we wouldn’t actually be spending much time) and into Hungary and Budapest by mid-afternoon. Although all of the countries on the trip were areas under Soviet control, it was interesting to see the variations on how much or little reminders of communism had been expelled from the various towns. As we crossed the border into Slovakia, our guide pointed out the light posts, all of which still had loudspeakers attached, from which the Soviet national anthem was played daily, along with other announcements from Soviet leaders.
We passed too quickly through Slovakia, stopping only briefly for lunch where I had a tasty chicken noodle soup both to warm up and to eat lightly after our massive meal the night before. After lunch it was back in the bus and onwards into Hungary and Budapest.
It was a very early start (especially for the airplane party attendees who had partied until the wee hours of the morning) and quite a cold one. The day before, we had all grumbled about the chilly weather and the morning of our departure from Olomouc dawned not only freezing but rainy as well. The weather suited the tone of our next stop, as we were heading into Poland and spending most of the day at the Nazi concentration and death camps at Auschwitz before heading into Krakow in the late afternoon.
Auschwitz was one of the stops I had been most interested to visit on the trip. Most of the Second World War is so far removed from American daily life and understanding and the academic, textbook version of the war do little to bring it to life. In England, there seems to be much more cultural understanding of the damage that war caused and I imagined that understanding and the lingering scars would be even greater in the places where the war truly tore countries apart. The War itself aside, the atrocities committed by the Nazis on the Jewish and political enemies could never be truly realized in textbook coverage and I think it’s important for people to see and remember what occurred at places like Auschwitz. Clearly the local Polish people felt the same way – I was surprised to hear that Auschwitz opened as a monument and museum, complete with guided tours and reminders of what daily life had been like for those interned there, less than two years after Auschwitz was liberated by the Soviets. It was important to them that the scars stay fresh as a constant reminder of the terrors that occurred there.
It’s hard to describe the feeling of the place, even the small restaurant across the street where we grabbed some lunch before heading into the grounds of the camp had a subdued and eerie feel, which intensified greatly as we walked under the infamous iron gateway bearing the words, in German, “Work makes you free.” Our local tour guide gave an understated and non-dramatic commentary to accompany our walk through Auschwitz I and Auschwitz II-Birkenau that outlined the grim and in most cases fatal routine that awaited those brought to the camps.
I’m glad I’ve had the opportunity to see Auschwitz, although I don’t blame those on our tour who, having been before, opted not to visit again. The place is heavy, ghostly and a stark reminder of the absolute worst of human history. The War would be a reoccurring theme during our stay in Poland as the country had been one of the worst affected but nowhere was that affect more true than at Auschwitz.
The mood was somber as we climbed back on the bus and reminders of our tour of Auschwitz would stay with us for the rest of the trip but it didn’t take too long, and too many descriptions of the dinner options that awaited us in the Polish town of Krakow, to cheer everyone up and by late afternoon we had arrived in a cold and raining Krakow hostel to unpack our bags and head into town.
If I had thought that Olomouc was an attractive little town, Krakow put it to shame. Despite the rain and the cold, I walked into the town square that first evening and found myself, to my great surprise, thinking “I could live here!” (Don’t worry, I’m not about to pack up and move to Poland any time soon!) The town square was gorgeous, surrounding a covered market and museum and lined by little shops and cafes. The church on the square commanded the most attention, soaring high above the rest of the town with its unique towers, both of which were incredibly different from each other – one being a belltower and one a medieval watchtower.
There wasn’t much time to admire the view as we were cold, wet and in need of food. Stories of perogi (flour dumplings filled with meat, cheese, stewed cabbage or fruit), roasted pork knuckle tender enough to fall off the bone and rich local soups had tided us over through the long bus ride and now we were ready to dive in.
At a local restaurant, I tried the perogi which did wonders for filling, and warming, me up. After dinner, we braved the rain once more to head out to a local nightclub where the music was terrible, the people were friendly and the vodka came in a range of delicious flavours (the apple vodka and honey vodka were declared the winners, the cherry vodka a bit to medicinal and the buckwheat vodka more like rubbing alcohol than a beverage).
The next morning, despite the rain, about half the group headed into town for a bike tour of Krakow which would take us around the old city, where we were staying and had eaten the night before; over to the Jewish quarter; and finally to the old Jewish ghetto, a tiny area of land where Jews had been forced to live during Nazi occupation of Krakow. The mix of architecture, history, religion and learning from the middle ages, renaissance, industrial age and modern age all mixed together on our tour and through the town, and the rain even let up a bit to allow us to enjoy the bike ride which took us along the river. One of the highlights of the tour was the visit to Schindler’s Factory, a bright point in the terrible stories of atrocities committed against the Jewish people during the Second World War.
After our bike tour, a group of us stopped for lunch where I tried the baked cheese, a local sheeps cheese baked until soft, warm and gooey, and served with cranberries and cowberries; and the Zur Starpolski, a very rich rye flour soup with a creamy base and loaded with smoked bacon, sausage and boiled egg. It was warm-up food for the afternoon which I would spend wandering the streets of Krakow, enjoying the sights and window shopping through both the souvenirs, clothing, jewelry and occasional full sheepskin. I also made my way up to the stunning Krakow palace.
Everyone was tired and ready for a quiet night after our late night before and long day of touring the city so a small group of us went out for dinner where I managed to find the food highlight of my trip. Feeling adventurous, I ordered the roast pork knuckle. Unsure of what to expect, I waited eagerly while our waiter brought us the bread which was served with, instead of butter, a pot of spreadable lard. Moments later, a medieval feast was placed before me – a half kilo of meat, served in a wooden platter with a giant, sword-like knife, and massive wooden fork sticking out of the top. Not only did the meal look like something off a table from the 1300s but it was absolutely delicious, the pork roasted to perfection, covered in a sweet prune glaze, served with cranberries and horseradish sauce. I tried my best but couldn’t come close to finishing – or eating dessert despite our enthusiastic waiter plying us with samples of the apple cake and local bitter cheesecake. It was a meal to remember in a town to remember.
Full and very happy, our group managed to make it back to the hostel before an early night. The next morning we’d be driving to the Polish ski resort town of Zacopane where, we were promised, lay stunning alpine vistas, fresh air and, ominously, The Meat Palace.
It’s been a while since, well I posted anything, but especially since I took and wrote about another European adventure. It’s been a busy year with work, visits and plenty to do in London but on 2 September I dove head first into one of the most unique and adventurous trips I’ve taken to date. From Gatwick Airport in London, I flew to Prague, in the Czech Republic, where I would meet up with another Radical Travel group (this trip was under their Eastern Trekker tours, last year’s Greece trip was with their group Busabout, and I’ve also travelled with their Shamrocker tours to Ireland and Haggis Adventures to Wales. The experience has always been so great I just keep booking with their companies!). We would be taking a whirlwind tour of the highlights of Czech Republic, Poland, Hungary, Slovakia and Croatia in 9 days. Whew!
Despite an earlier than necessary arrival at Gatwick, I still ended up getting into Prague quite a bit later than I expected (due to travel delay caused by “EasyJet crew member deciding not to show up for work” according to our pilot. Real professionalism there!). Although my hostel for the first night was easy enough to find – and I ended up taking a cab anyway – this unfortunately meant I saw absolutely nothing of the city aside from the drive in and drive out the next morning. I’ve heard amazing things about Prague and so I’ll definitely make a point to travel back some day but at midnight all I wanted to do was get some rest before meeting the group the next morning.
An early start saw me and about 35 groggy Australians filing into our massive Eastern Trekker coach, in which we would spend a lot of time over the next nine days. The antipodean majority of the trip (I was the only American and there were two Canadians, we were later joined by a couple of Brits but everyone else was Aussie or Kiwi) seemed a bit overwhelming to me. I’m always impressed by the Aussie travel culture in which young people will travel through Europe, living in hostels and out of a backpack, for three, five, seven, twelve months at a time. Their stamina isn’t just limited to moving between major European destinations – they also manage a party spirit throughout. Regardless of my misgivings, I quickly found that I had some incredibly fun and friendly tripmates and, just as important, our fun, friendly and slightly goofy tour leader and driver who would be guiding us through the sights, parties, food, languages and border crossings of the five countries we would see on our trip.
We rolled out of Prague, and again the brief views made me wish I had more time, and onwards to Olomouc, a rural Czech town and our first stop for the night. However on the way we had a really special detour planned to the tiny town of Sedlec. There, in the middle ages, an abbot of the church had gone on a pilgrimage to the Holy Land, and had returned with a jar of dirt from Jerusalem which he spread on the grounds of his church. News of this drove thousands in the area to bury their loved ones there and as the timing corresponded with the Plague, this became a mass grave. When a new church was built in the 15th and 16th century, a new church was built on the site, the bones of the buried exhumed and piled in a corner in the church.
In 1870, an artist was commissioned to restack the bones – but he did more than that, using the human remains to design chandeliers, coats of arms, candle holders, alters and more – the entire church is filled with the bones of between 40,000 and 70,000 individuals who were buried in the original churchyard and unsurprisingly, the Sedlec Ossuary is known more commonly as the Church of Human Bones. Surprisingly, although the place was certainly macabre, the feel was not eerie or morbid but still retained the grandeur of a church and the tastefulness of a memorial. It was definitely one of the most unique sites I had ever seen and my trip had barely begun.
After Sedlec, we carried on into Olomouc where we’d be staying for the night. Olomouc is quite rural but home to the largest university in the Czech Republic so quite a student town. We had a walking tour of the town centre which, I would come to realise, was quite similar to a number of the other towns we’d be seeing with a central town square surrounding a main public building, and a spiderweb of streets leading out from the square. The walking tour was brief – it wasn’t a very big town – but despite the beautiful churches and residences, and the lovely town square where we even had time for a glass of wine in an open air café under the large clocktower, the main highlights of the evening were still to come.
We had been warned that a major part of our trip would focus around the local delicacies – and that in most of the places we were visiting these would be anything but delicate. Eastern European food conjures up images of hearty roasts, meaty stews, thick sausages and lots and lots of vodka. This image hits the mark (as our tour guide said gleefully when asked about vegetarian options, “oh, vegetarians have SO many options! You have baked potatoes, boiled potatoes, smashed potatoes, mashed potatoes, fried potatoes….”) and tonight was our first chance to experience this for ourselves. The Czech local menu was overwhelmingly meat heavy with options like chicken ala duck, sausage platters and more. I opted for the goulash, a delicious stew-like serving of boiled meat, onions, potatoes and spices, served with thick potato pancakes. After that and a few Czech beers I was feeling perfectly content with the world.
But instead of calling it a night after our wonderful dinner, our guide directed us instead to an outskirt of the city where, he warned, we should prepare for takeoff because it was time for the airplane party. This Eastern Trekker tradition involves a permanently grounded Soviet-era plane (which, the story goes, was gifted to the town of Olomouc for being good communists) that had been converted into a bar and nightclub. Although we were the only attendees at the airplane party (a good thing too – our group of nearly 40 was definitely hitting capacity) it was a great social first night, another unbelievably unique venue and an opportunity to sample some of that famous Eastern European vodka.
Although the party was clearly going to be raging until the early hours, I took the opportunity to head back to our hotel a bit earlier than that – the next day was going to be Poland and Auschwitz and with a new country ahead of us, I was going to be getting plenty of sleep to make the most of it.