GUATEMALA CITY JOURNAL
A Silicon Valley Dream Grows in Guatemala, Despite the Risks
By Damien Cave
- Nov. 16, 2011
GUATEMALA CITY — Seventh floor: geeks, computer screens, embryonic businesses — including one offering digital monsters from artists who worked on “The Chronicles of Narnia” film series.
Fifth floor: Milkn’Cookies, a more established company with 50 employees and an online game that teaches children how to recycle.
All the floors combined? Guatemala’s attempt to create a local Silicon Valley.
For now, it is just a single brick building called Campus Tecnológico, with workspaces, programming classes and eco-friendly signs asking people to turn off lights in unused bathrooms. But the developers’ goal is to turn this five- or six-block area in the city’s center into an entrepreneurial campus, and a residential outpost for the hip, savvy, successful and young.
“For people here, it’s the same as in Silicon Valley,” said Juan Mini, Campus Tec’s founder, who returned to Guatemala after starting a successful Internet company in California called ZipRealty. “What matters is your brain.”
A zone for meritocracy — that alone would be an achievement in Guatemala. Since the first coffee boom that began around 1875, Guatemala’s economy has been defined by wild swings, cronyism and wide income disparities, with ethnic and class divisions that have mostly kept the poor poor and the rich rich.
The current era of drug-fueled violence has added another challenge. Indeed, for all its left coast breeziness, Campus Tec is still a place that must be protected with shotgun-toting guards and biometric keypads that require approved thumbprints for entry. Even Mr. Mini admits it is not exactly what venture capitalists from Palo Alto, Calif., like to see.
And yet, as an urban microprocessor — a catalyst for change — Campus Tec is showing signs of promise. After about a year of operation, neighbors say it is already stirring a small revival in a district called 4 Grados that has had its ups and downs.
A San Francisco-style apartment building a few blocks away, with glass-fronted lofts (built by Mr. Mini’s cousin), recently filled up, selling out faster than many expected.
Certainly the young people in skinny jeans and too-tight plaid button-downs walking around at lunchtime on a recent afternoon were a welcome sight for business owners like Patricia Laparra, 43.
The owner of a designer glasses boutique near Campus Tec’s main entrance, Ms. Laparra was one of many surprised by Campus Tec’s impact. October was her second best month for sales since opening seven years ago. After a time when she thought she would have to close, she now says she has no plans to leave.
“They’re geeks,” she said, referring to Campus Tec’s 375 inhabitants. “They care about style. They’re cool.”
Many of the companies inside, under exposed air ducts meant to signify Important Creative Work, were founded by Guatemalans with foreign experience. The motion graphics start-up on the seventh floor, BigoMo, consisted of two people: one, Pedro Méndez, 28, had worked in Spain; the other, Kristoffer Hormander, 25, recently returned from three years at Full Sail University outside Orlando, Fla.
Both said that they came back to Guatemala because they felt there were more opportunities for creativity, and less competition for business. One recent independent report, from The Global Entrepreneurship Monitor, found that the average cost to start a business in Guatemala is only $7,569, compared with $17,513 in Brazil and $39,670 in Costa Rica.
Technology in particular, Mr. Méndez said, offers a new path to success, a way for many young Guatemalans to overcome the usual social divides. “There’s a window of opportunity,” added his partner, Mr. Hormander.
Other company founders agreed. At Milkn’Cookies, Wendy Beatriz Ruiz Cofiño, 38, praised Campus Tec for showing that local entrepreneurs could come together, and grow. As the motto on her company chalkboard put it, in almost perfect English: “keeping together is a progress.”
And profits are not necessarily the only measure of success. Since the peace accords of 1996 ended decades of war in Guatemala, many entrepreneurs have been focusing on the union of technology and social policy, creating things like affordable water filters, or a program for distributing health information to cellphones.
Campus Tec has a taste of this as well. Tech4Mobile, a company on the other side of a grassy patio from Mr. Méndez and Mr. Hormander, recently built a computerized system to record votes in the Guatemalan Congress. Before the government installed the software, votes were rarely recorded.
María Mercedes Zaghi, the business development coordinator for Campus Tec, said that she hoped to recruit more companies with a similar focus. But for now, Campus Tec is full with a waiting list. That is partly why there are plans to add another building, with three times as much space.
“We need to make it bigger,” said Mr. Mini, who combines a family history in real estate with an M.B.A. from the University of California, Berkeley. “It needs critical mass.”
But to get to that point, a final element is needed: financing. Apparently the Silicon Valley concept still requires Silicon Valley money.
Mr. Mini acknowledged that this would be the next significant challenge. Guatemala, after all, is still a place where progress can be upended by risk.
Just a few years ago, the 4 Grados area experienced a different kind of boom, with restaurants offering wine and middle-class families flocking to the cobblestone streets. Then the drunks and drug dealers came, the restaurants closed and the customers disappeared, residents said. Can Campus Tec and its geeks break the pattern? Mr. Mini sounded cautiously optimistic.
“I honestly think a new Guatemala is being born right now,” he said. “But,” he added, “it’s going to take time.”