MuccaShop Survives: How Startups Do in Brazil

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Most of the start-ups in Brazil are copycats of proven models in the US.

(PRWEB) June 11, 2012

Most of the news we read about start-ups are announcing their funding, the Series A, B or C funding round, or naming the VCs or Angel Investor backing them. MuccaShop is a Brazilian based start-up far away from this. Since its start, in July 2010, the founders have invested no more than 10,000 USD from their own pocket and no additional funding ever since. They started with 4 people, founders with different skills each, and two of them did not drop his current job until the company started generating revenue. Today, with 12 employees and making about 30,000 USD per month in commissions and lead generation to partners, one of the founders still keeps his job as IT consultant in a big international firm.

This is reality in the Brazilian internet market. Despite of being one of the biggest emerging markets and despite of some famous names beginning to show up in Brazil, like Niklas Zennstrom, founder of Skype, brazilian start-ups generally do not have anyone knocking on their door to offer money. Also despite the fact that Brazil is the fourth biggest internet market in the world, there is no Y Combinator, no VC's and Angel Investors are pretty rare.

Due to these facts, there is very little room for innovation or uncertainty. Start-ups in Brazil usually need to start generating revenue as soon as possible, which is not easy as we know, or they will die in less than a year. Most of the start-ups in Brazil are copycats of proven models in the US. Group buying websites have a perfect combination of characteristics for Brazilian entrepreneurs. It requires low investment, poor technology and if everything works fine it provides fast initial cash generation. This is why Groupon spawned about 2000 copycats in Brazil last year. Even with a good fit of characteristics, most of them are already dead by now.

MuccaShop went through this tough period and survived. Since the beginning, they are really focused in SEO, and now, with some profit in the bank, they are also investing in payed advertisment, but always baring in mind that every cent spent must return in the short term. Even with very little money they have done a lot. In less then two years they have launched MuccaShop, which is an e-commerce websites aggregator, Oferta do Dia which is a daily offer group discount inspired in Groupon but it looks more like Woot, and the latest Orelha de Livro, which is a books social network. All this with 10,000 USD and reinvestment of their own profit.

In fact, lack of resources drives creativity, hard working, focus in results, and also some cautiousness. Americans entrepreneurs should learn these bootstrapping skills with Brazilians that thrive in this tough market, but Brazilians should learn innovation with Americans as their market develops.

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