Entrepreneurs in Guatemala are crushing it - despite the odds.
Modern entrepreneurs are empowered with recently unimaginable technology, providing abundant opportunities with a few clicks and some spare change.
Meanwhile in Guatemala, where 75% of the population lives below the poverty line and in relative digital darkness, young entrepreneurs are diligently carving out a bright future.
Like basically everyone who reads this post, I’ve experienced much of the best tech that the modern world offers - and I love it.
Fintech makes finances easy, no-code tools make prototyping easy, social media keeps me learning, Notion keeps me organized, Zapier lets me automate just about anything - the list is a mile long.
For entrepreneurs and innovators, the empowerment granted by these tools also means the market is noisy, and saturated with startups clamoring for customers or recognition.
But Guatemala feels different.
Like the early days of TikTok, when new users could throw up random videos and become overnight superstars.
For context, I’ve been living here for the past 5 months on my yacht. That might sound pretty comfortable, and it is, but don’t mistake me for a retiree. My yacht is closer to a startup accelerator than a sailboat, with a steady stream of entrepreneurs, founders, and investors from around the world coming to live aboard (or nearby), to grind out visions, execute big dreams, or just get clarity.
From the comfortable deck of Artemis, nestled in a marina in the Rio Dulce river, with the privilege of a high-tech connection to the world facilitated by Starlink and our nice shiny Apple products, we often discuss how primitive things are here. There’s a lot of poverty, and none of the fancy apps and services that we’re used to in the developed world.
We were no longer ‘tech-bros’, but rather, ‘tech-gringos’, speculating on things we know nothing about (I love it when the locals call me gringo).
The solution: find local entrepreneurs → hang out → learn.
They aren’t hard to find, because for most, leveraging their entrepreneurial spirit is the only option they have to survive.
At least 25% of adults in Guatemala generate an income through having a business (probably more but it's hard to track). In fact, Guatemala has the second highest rate of early entrepreneurship in the world. You would think that would result in a booming economy, but surveys have shown that 97% of these entrepreneurs just don't have adequate infrastructure (+ knowledge, capital etc.) to promote and grow their business. As a result, they have a very small number (2.1%) of what's classed as high-impact and productive entrepreneurs, and a huge number of small-scale lifestyle-type entrepreneurs. In fact, only 40% of households have full access to the Internet! (More data here)
I learned a lot from a diverse group of encounters, from an Agri-Tech drone startup, to a lady who makes surprisingly good cheese. But I knew these short encounters weren’t so effective due to barriers such as language, culture, and trust.
To really get to know them, I had to get them to my startup yacht; an approach that turned out better than I imagined.
None of the entrepreneurs I invited had been on a yacht before, so they were eager to bring their partners to come and hang out. Several stayed overnight, and some even stayed for a few days. The majority of what I learned came through discussions using the text-to-voice feature of Google Translate while hanging out, cooking, or partying on the boat, sometimes until the early hours of the morning.
What I learned made my eyes bulge, but we don’t need to cover it all. To get to the punchline of this blog post, we only need to look at two cases.
Carlos - The community-appointed internet service provider
(name changed for privacy)
Picture this: It’s Christmas Eve, 2023 - Carlos and his girlfriend are starting to get into the festive spirit. Spanish Christmas music was playing on the yacht speakers, food and drink were scattered everywhere, and yacht selfies seemed to never end, as with awkward attempts to speak each other's language.
My curiosity can get a bit intense, so I focused on having fun and fostering good vibes.
Soon enough Clay asked: ¿En qué trabajas? (What do you do for work?)
As it turns out, Clay provided internet to 1000 households in rural areas of Guatemala and his business could not keep up with the constant flood of demand. Clay was glad to have so much demand, but at the same time, he seemed a bit disappointed to have no competition. Why? Because no one else was bringing the internet to the rural villages where he’s from.
I had a million questions - here’s a summary of key points:
Roughly 9 million people in Guatemala do not have internet access - mostly in rural areas. Even in the areas with some coverage, it’s slow, unreliable, and prohibitively expensive with limited data (max 10 gig pre-paid). Most rural areas have no coverage at all. I live in a densely populated tourist spot and can confirm that the only place with good enough internet to get work done is either on my boat, or in one of the bars and restaurants targeted at Wi-Fi hungry tourists.
During the Pandemic, there was a push to get more cell reception in Guatemala. Clay got a job as a contractor setting up cell phone towers and getting them connected. He’d learned how to do it from Youtube… Then the pandemic ended, and so did his gig.
When he got back to his remote agricultural village, like most rural areas in Guatemala, they still didn’t have internet. Not cool. So Clay bought some parts from Alibaba (large antennas etc.) and hacked together an internet connection. Other locals started asking if they could have the internet at their homes, which are spread out over the wide farming terrain. But they couldn’t afford the required hardware, so he worked out a plan to get them connected for €20 a month (he breaks even after about 6 months). I asked how many households could afford that price, and for better or worse, he replied that most would rather go without food than be disconnected...
Yeah, that was a tough one to swallow, but anyway, let's move on.
The photos he showed me of how they deliver the service blew my mind. They literally run network cables for 10km through the jungle out to primitive rural settlements, hang Wifi routers in trees, and then charge the monthly fee to switch it on.
To pay, his customers have to travel to the nearest village with a bank, pay in cash, take a photo of the receipt, and send the picture to Clay so he can manually enable their internet for the next month. Of course, as a tech-gringo, I had to ask why he doesn’t set up automatic payments on their credit/debit card? He said he would love to, but only about 3 out of every thousand people in the communities he serves have a bank card! (Jaw drop. Fintech solution anyone?)
Okay, what about promotion?
Tech-gringo to the rescue! I had an idea → “Set up your service in the town square of rural villages for free, then on the login page promote your internet service offer (+ other solutions)”! Again, Clay was way ahead. To scale his business into adjacent communities he set up free internet at local schools (12 so far!), the kids then tell their parents about it and he gets new customers.
Wait a minute - how many schools don’t have internet, I asked? Thousands, he replied.
I asked him what it would take to get his internet service to the next million people. That question made his own eyes bulge, and today he’s still working on the plan. The main challenge, as he puts it, is that it’s all very ‘personal’. You have to actually go to the communities and meet each household, there is a lot of manual labor and a lot of explaining/educating. But he’s working on different solutions and has lots of ideas. For example, he’s started setting up Starlink terminals and daisy-chaining routers together which makes things a lot quicker in the remote places. Oh, and to save you the hassle of shouting in the comments section, I realize that reselling is not allowed in the Starlink terms of service. In fact, I’m guessing he’s had to cut plenty of corners to get the internet to rural villages. But this guy has built a business that turns over €20k per month getting the internet to his people - and he learned how to do it on the internet…
So I say go for it.
Millions of Guatemalan kids should have access to the education and opportunities that Clay, and the rest of us, all benefit from every day.
Which brings us to the next case.
My next guests (on my startup yacht) were actually not from Guatemala. They travelled from Honduras which neighbors the Guatemalan border.
They were in their late 20s, had been together for less than a year, and met at the factory where they both worked making denim jeans. They were such a cute couple!
I was fascinated to learn about the factory, but they were very fixated on one theme: they wanted to “get free”.
I was glad to hear of their attempt to make that happen.
They saw a demand among young Hondurans for eco-friendly bathroom products, sourced some products from China, and started selling on Instagram. I’m talking super simple products like wooden toothbrushes. The products weren’t even branded, other than what they do on their Insta profile.
I was skeptical. There’s just way too much competition for those kinds of product these days, you can buy them anywhere.
Nope, sorry tech-gringo, wrong again.
Apparently in Honduras they barely have any competition, were getting daily organic sales from day one, and their paid ads were also working well.
“Really? What’s your customer acquisition cost?” I asked.
I was curious because in Western markets the best you can do for e-commerce is at least €10 (usually a lot more). Their average order value would barely cover the CAC, let alone the COGS! They had never heard of CAC, so we had to crunch some numbers, and it turned out to be less than €2! That’s how it was back in the ‘good old days’ when social media advertising first started!
Whoa. All I could say was “push those ads a LOT harder”.
I asked what ‘getting free’ would cost in terms of monthly income, we crunched a few more numbers, and just like that they could see their ticket to freedom.
Whether they make it with their eco-product attempt, or have to try again, I’m sure they’ll get there as long as they keep the dream alive.
These encounters showed me the determination and entrepreneurial ingenuity in this region. These founders are leveraging the numerous first-mover advantages that can be found in developing markets, and despite the challenges they face, they are finding ways to succeed at the intersection of tenacity and technology.
So when the next tech-gringos join me on my startup yacht and comment on the state of development here, I’ll be able to say: help out where you can, but they don’t need to be rescued.
They got this.
Hey, if you read this far, I hope you liked it! If there are any subjects you want me to write about, or if you have any questions or suggestions, write them in the comments section below or just send me a message!