Doing Business, From Palo Alto to São Paulo

In April 2010, LinkedIn translated its Brazilian website into Portugese, and has since seen the country’s membership increase by 4 million, or 428 percent.

Now, said LinkedIn director of engineering Vincente Silveira, the Mountain View-based company is seeking both a Senior Recruiter and Marketing Manager for its São Paulo office, hoping to further infiltrate the growing market.

“There’s a record low unemployment of six percent in Brazil, and a huge demand for skilled workers, financial services, engineering and energy,” said Brazilian-born Silveira, adding that 2.7 million new jobs are expected to be created by the end of 2011.

Brazil’s economy has been souring in sectors such as social networking, health care, financial and energy sectors, and Silicon Valley companies are taking note. In September, Los Gatos-based Netflix as the first non-North American country to stream videos. In May, Palo Alto-based venture capital firm Venrock raised $6 million of Series A-funding for ADVANCE Medical Technologies, a company whose sole aim is to commercialize medical technologies in Brazil.

On Oct. 13, Silicon Valley Bank and San Jose-based BayBrazil hosted “Doing Business with Brazil,” focusing on the economic outlook and opportunities in country with the world’s eighth largest GDP. The growth, the Silicon Valley professionals who spoke said, is fueled by high export demands -- in part from other emerging economies such as China and Russia -- and a greater disposable income at the hands of the country’s expanding middle class.

“There’s an excitement and optimism about what’s going on,” said Fred Aslan, the Vice President of Venrock and founder of ADVANCE. The country has a completely different financial outlook than when he left 20 years ago to study at the Harvard Business School.

“Opportunities are flourishing in Brazil in all sectors,” said BayBrazil founder Margarise Correa after the event. “A healthy economy plus a growing middle-class equals an irresistible market.”

Still, there are some setbacks of making the plunge into Brazil, added Aslan. Due to large amounts of governmental red tape, it can take up to 150 days to open a business in Brazil. There are several agencies one must go through to get approval for a business, and there must be at least one employee that’s actually based in the country. That may partially explain why the World Bank ranked it 126 out of 183 countries in their 2012 Doing Business measurement.

There’s also a noticeable difference of culture. “It’s more formal there. In an email, people write, ‘Dear Fred, I would like to inform you...,’ and I write back, “Ok,” said Aslan,” eliciting laughter from the workshop, comprised of about 30 local professionals.

There’s also a very different attitude towards start-ups in Brazil, he cautioned. “Here, there’s a cool image of entrepreneurship,” he said. “There, there’s a better image of working for a multinational.”

Still, there have been a number of new websites in recent years, such as Mercado Livre and Lejas Americanas, said Renata S. Quintini, the Principal of angel investing firm of Felicis Ventures in Palo Alto. Her company recently made its first investment in Brazil through the website baby.com.br.

Currently, 23 million of the 70 million Brazilians that go online shop online, said Quintini, a Brazilian-born Stanford Business School graduate. Brazil’s total population is 193.7 million.

“The two hurdles are getting people online, and getting them to shop,” said Quintini.

Silicon Valley Bank hosted the “Doing Business with Brazil” event at its Santa Clara headquarters as “we want to educate ourselves about new markets,” said Senior Vice President Terrance Philips before the event. The bank has already made investments in technology, life sciences, and clean tech in countries such as India, China and the UK, and is now considering investing in Brazil.