I was one of several members of Babson’s One-Year and Two-Year MBA programs who recently participated in the elective abroad titled Analyzing Business Opportunities in Latin America. The elective took us to Chile, where we were provided the fascinating opportunity to meet “Entrepreneurs” of all Kinds from South America. We visited a diverse set of businesses that ranged from large corporations to small start-ups.
The business visit that resonated most strongly with me was our visit to the Dolcedonne bakery, as it provided a sharp contrast to the rosy picture of Chilean entrepreneurship presented by Start-up Chile and the takeaways from our discussions with the Family Business Council and Green Glass.
Instead of the usual cheerleading, we heard about the problems facing small business owners who don’t have a family pedigree and aren’t well connected. The other business we visited had made it seem remarkably easy. We met with the owner of Dolcedonne, Ana Maria, who emotionally provided a less-than-flattering view of the ease with which new businesses can successfully be established in Chile. Many issues seem to arise from basic steps we sometimes take for granted in the US and the difficult task of navigating bureaucracy.
On one hand, her story was a rousing success worthy of Shark Tank. She created wonderful pastries that were in high demand and customers kept asking for more. She set up shop in her own home and provided free samples to target customers and began to generate repeat business with increasingly large orders. Despite public demand for the products she had introduced to the market, sales orders became difficult to fulfill when otherwise reputable customers missed payments. Credit is scarce and it can incredibly difficult to for some entrepreneurs to meet basic working capital requirements and the applications of those who aren’t well-connected are often ignored. The proprietor told us the story of her bank closing her account simply because of an overdraft. Calling customers and banks was fruitless because every contact would simply pass the buck to another.
Some might view Dolcedonne as a struggling business with a precarious future. It seems unlikely the company will ever become a multi-national household name or even open a factory. Ana Maria told us she doesn’t even like chocolate and that she created the business after her husband left and left her without the income required to send her children to college. Dolcedonne has found a way to overcome many of the oversized bumps in the road faced by Chilean start-ups, and Ana Maria proudly told us are enrolled and excelling in college. By that measure, Dolcedonne has achieved exactly what it set out to accomplish.