Our startup is facing the third crisis in 2 years

Stefan Riedmann
4 min readApr 8, 2020

I’m a German co-founder and CTO in Argentina.

Who we are

It started two and a half years ago, when I was already living in Argentina for more than 3 years. I had been a developer since 10 years, working in industrial technology, and then for fin techs being employed in a local software factory. Unsatisfied and always looking for alternatives… by writing apps and trying to find business clients for individual software solutions, the change finally happened. A friend of mine — partner of a successful design agency — asked me during an asado (Argentinian barbecue) if I could imagine going independent in order to start a new project with them. In their line of work, they discovered an important market gap in available services and software solutions. They just needed a developer who can also invest into the project. The idea really convinced me, especially because they already had many clients that could be potential clients for our new business. So I broke all my personal rules about my engagement in Argentina, not to use up all my savings here for example, postponed the plans to return to Germany, and I went all-in.

Today I’m CTO and we are a great team of 14 people, we have the first clients and a software solution that we can be proud of. It’s young and far from perfect, but it already helps people to improve their processes and reduce errors and costs. But honestly, the way to real sustainability and return of investment is much longer than we anticipated. And the main obstacles on the way have not been not competing companies, a bad strategy or that we just messed it up. Here are the 3 crises we are going through.

From crisis to crisis

Argentina was always in some economical and financial trouble, but during the last years, it got hit by another big inflation. Since 2013, the exchange rate for a dollar went from 5 pesos to 80. But the biggest part of this inflation happened after we started up. It’s hard to imagine what inflation really means when you come from a country where you never saw a real increase of prices. Those who can work in export or services for companies abroad can compensate, sort of. But the majority of people and businesses really suffer. On one side, you just don’t have liquidity and on the other side, you can’t really plan anything in the future. And this is where companies tell startups like ours that the solution seems great, but at the moment they just can’t invest, neither in money nor in adapting their organisation to our new system. And when they tell you ‘perhaps in half a year’, that is pretty similar to never.

So what did we do? We pivoted, business wise but also geographically. We put focus on different kinds of companies in our neighbouring country Chile. We decided to invest in a full time employee taking care of sales and implementation, and to help in support. Chile was always known to be economically stronger and more stable, and open for modernisation. It started very promisingly. Until…

Until the Chilean people decided to go on the streets to fight against social injustice and poverty. We all have complete empathy with them, and we supported their case. But with the resulting lock down and the inflation in Chile, clients started to cancel deals that were almost closed. And the situation is still not over. We’ve all been waiting to see what will happen with the new elections in Chile, so the situation hopefully goes back to normal. But at that moment the next disaster happened.

Covid19 pandemic and social lock down.

Again we got cancellations of deals. My partner had even found a VC that we need desperately. But he, worrying about his own businesses because of the lock down, also had to postpone (or cancel?) his investment in our startup.

Keeping up the spirit

So here we are, having everybody working from home — which is a big challenge on its own. Development wise not that much, but sales meetings and implementations, that’s another story. I try not to go crazy with all the stories coming in from all over the world, about infection rates and deaths. But being a father, and having my parents and the rest of the family far away, that’s tough. We have to cut down costs and hope the situation improves soon. So we don’t have to fire anyone, and so the company survives.

I’m just telling myself that we have to look forward, but this also means to anticipate and take consequences. I believe that keeping up the good work, life will bring good things. But this doesn’t mean to just sit back and wait for it to happen. We have to be in charge, accept the reality, and adapt to the situation.

If we can learn anything from this, it’s that we have to grow up. Take responsibility not just for ourselves, but for the planet and our children. We have to see the big picture, and take care of every detail at the same time. We have to be open to new things, and learn to live with our fears.

--

--