Crisis-Resistant Startup Tips From Venezuela

Venezuela is one of the world’s toughest places to start a business. The nation finished 186 of 189 nations in this year’s World Bank Group Doing Business rankings, owed to its runaway inflation, record-breaking recession, mass shortages and corruption.

But that hasn’t stopped local entrepreneurs from founding growing companies. On the contrary, Venezuelans continue to launch promising businesses amid the country’s crisis, and Venezuela maintains one of the highest rates of entrepreneurship in the world.

I spoke to women of Caracas’ newly-minted startups to uncover three unexpected strategies for getting a business off the ground in even the most adverse of circumstances.


Introduce High-Value Substitutes

Crises prompt consumers to change habits, but they don’t necessarily choose products typically considered “inferior goods.”

Fabiana Casado’s opened her store Merei this year to offer healthy, locally-produced foods in downtown Caracas, a city where arepas and burgers rule. Casado saw an opportunity to introduce artisanal products into the market amid shortages of typical grocery list items. Her customers may come in to try almond milk during a dairy shortage, then come back as they develop a taste for nutritious, artisanal foods like yuca crackers and natural jams.

Carolina Gil of Mi Barranco also sees a growing health trend in Caracas, noting that people are getting more active during the day as crime rates extinguish the city’s nightlife. Mi Barranco offers customers direct delivery of fresh, raw products harvested from a family ranch–and the added benefit of skipping supermarket lines than can stretch around the block during shortages.

The bottom line: Introduce superior substitutes by finding creative, low-cost ways to add value for customers.


Double Down on Human Capital

Tough times often mean companies lay off workers and pull back staff benefits. Not in La Casa Bistró, says Valentina Semei, whose restaurant just celebrated its first birthday. Semei invests heavily in her staff of waiters, all of whom started with zero experience. Teaching staff everything, “even how to carry a tray,” allowed Semei to build a loyal team. Ongoing staff development and even personal leadership coaching keep morale high.

The approach allows Semei to combat turnover and absenteeism, two major challenges for growing businesses according to human capital researcher Prof. Carmen C. Torres. As a bonus, happy staff create a distinctive, warm environment for customers that lives up to the “La Casa” name.

The bottom line: Invest in human capital to reap dividends in staff and customer loyalty.


Harness Emerging Consumer Needs

Customer experience and personalization can suffer during recessions, as any air traveler can attest. But two Venezuelan startups are finding that people will pay a premium to fulfill needs that arise from a downturn.

Zoi Venezuela offers premium travel domestic adventures to Venezuelans who need a break from the country’s chaotic cities but can no longer afford vacations abroad. Head of CSR Helena Carpio tells me that few Venezuelans have experienced the country’s wonders, in part because the local tourism industry is fragmented and largely offline. Zoi Venezuela’s slick website and integration with local operators have allowed over 1000 customers to reach places from coral reefs to Angel Falls in the months since its founding.

Envia58, is an online platform that allows Venezuelans abroad to purchase unique gifts for hand delivery on loved ones’ special occasions. Co-founder Luisa Arnal says the exploding expat population has “a deep need to connect with loved ones back home.” She makes up the high costs of curating and hand-delivering gifts by charging reasonable prices in dollars.

The bottom line: Pay attention to emerging needs during a crisis, and find cost-effective ways to satisfy them.

Launching a company can be terrifying — especially in a tough economic environment. Aside from clever strategies, the most important thing these entrepreneurs share is their personal resilience.
As Gil explains, “the bet is that those who stay and create something during the crisis, will reap the benefits when it’s over. And we are staying.”

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