Note to instructors: creative entrepreneurship at iconstruye: a pan Andean e-procurement market maker.

Introduction

Iconstruye describes the entrepreneurial processes that surround the founding of a business-to-business procurement portal within the Chilean construction industry. The case aims to illustrate the role of creativity within the entrepreneurship process, focusing upon the issues and challenges the founders faced as their concept evolved toward reality. The case asks students to decide upon a growth strategy once the company has achieved its initial goal of positive cash flow.

Key Issues and Discussion Points

The case focuses upon the founders of a software company, iconstruye, located in Chile, South America. It looks at how the founders developed creative solutions to a variety of problems encountered as they built their business. The problems are typical of those encountered by many start-ups regardless of location, such as the need for funding. However, for the iconstruye team, the ability to identify a solution is more complex due to the geographic context.

Key issues and points for class discussion include:

1. What are the similarities and differences associated with starting a venture in South America as opposed to North America?

2. Did the fact that Correa remained employed during the writing of the business plan jeopardize iconstruye's potential for success?

3. Was the iconstruye group correct in its decision to partner with the Chilean Chamber of Construction?

4. Following the success of the software at Chile Compra, what other potential markets exist for the procurement software?

5. Should the company limit its expansion to Spanish-speaking countries in South America, or should they expand into the potentially more lucrative markets of North America and Europe?

Potential Audience and Uses

This case can be employed in an entrepreneurship course at the undergraduate or graduate levels, and would be particularly useful within the context of entrepreneurship relating to software development. A particular challenge to iconstruye was to persuade a tradition-bound construction industry to undertake dramatic changes in its procurement methods. As such, it provides an opportunity to discuss how a new company can pioneer a market when adoption of its product requires significant change by its customers. For instructors interested in international entrepreneurship, this case focuses upon the issues surrounding the start-up and growth phases of new ventures in South America, as well as such ventures' consideration of international and intercultural expansion.

Suggested Teaching Approach

The class discussion can be commenced with a consideration of the similarities and differences associated with starting a venture in South America as opposed to North America. This allows students a wide range of issues to draw from, including access to venture capital, access to markets, nature of the markets, product distribution, and regulatory practices, as well as national issues such as the stability of government and its currency, export restrictions, costs of labor, etc. Having developed a comparative analysis of South and North America as locations for starting businesses, the particulars of Chile can then be considered.

The class can then be asked to consider whether founders need to leave their employment to ensure maximum focus on the embryonic phase of their new venture and the writing of its business plan. Instructors may ask students to take the role of Juan Correa: Would they have remained employed, or was it sufficient for German Errazuriz to develop the plan during the day while the entire team brainstormed and planned during after-work sessions?

The discussion of the business planning process can be then turned to the business plan competition sponsored by the Chilean Chamber of Construction. Commencing with a discussion of the role of the Chamber, the class can be asked to discuss the overall importance of iconstruye's business plan with respect to the team's winning the competition. The class discussion can then turn to the similarities and differences between the role of the Chamber and a traditional private equity or venture capital firm. This can lead to a lively discussion of the issues surrounding the obtaining of funding in countries where there is only a limited history of venture capital.

The decision to partner with the Chamber of Construction can then be discussed. For example students can be asked: Were there any funding or partnering alternatives? Would it have been realistic for the team to seek funding from an Asian, European, or North American source, or was the Chamber's value to iconstruye greater than its mere financial backing? Issues of trust, stability, networking, and credibility can be raised at this point. The class discussion can then address this question: Having successfully delivered a product for the construction industry, what benefits, apart from the financial ones, did iconstruye gain from its software being used in the Chile Compra contract? This allows the class to consider issues such as having a scaleable system that could be used across multiple industries.

Now the class arrives at the decision point for the case. Following the success of the software at Chile Compra, what other potential markets exist for the procurement software? Three options are presented in the case: (1) expand the use of iconstruye's software in the Chilean government; (2) bid for contracts in other Latin American markets; or (3) explore opportunities beyond the Spanish-speaking countries of South America, venturing into the potentially more lucrative markets of North America and Europe. If desired, the class can be split into three groups, each to advocate one option. Following the presentation, discussion, and critique of the options, the instructor can ask students to recommend a potential future direction for the company. This exercise lends itself to the use of various decision-making methods, including dialectical inquiry and devil's advocacy.

Role of the Authors

The first author, Dr. Robert Plant, was a visiting professor at Universidad Gabriela Mistral in Santiago de Chile performing research upon the role of creativity within the context of entrepreneurial ventures and the nature of entrepreneurship processes in countries with limited or no venture capital markets. Iconstruye was deemed an excellent teaching vehicle following discussions with Juan Correa, its CEO, when Mr. Correa was visiting the first author as an aspect of his Eisenhower Fellowship in the United States. Upon visiting Chile, the second author, Mr. Carlos Valle, a bilingual research associate at Gabriela Mistral, was recruited to help give the case increased context and ensure the materials were correctly interpreted. Dr. Plant and Mr. Valle performed a semi-structured interview in Santiago at the corporate headquarters of iconstruye. The initial interview was followed up by e-mail correspondence with members of the company and through telephone conversations with Mr. Correa. The second author, Ms. Susan Wills, a research student at the University of Miami, assisted in the transcription processes, the editing and refinement of the case study as well as of the teaching notes, which were developed by the first author.

Please send correspondence to: Robert Plant, tel.: 305-284-1963: e-mail: rplant@miami.edu

Robert Plant is an associate professor in the Department of Computer Information Systems of the School of Business Administration at the University of Miami, Coral Gables, Florida.

Susan Wills is a lecturer in the Department of Management of the School of Business Administration at the University of Miami, Coral Gables, Florida.

Carlos Valle is a lecturer at the Universidad Gabriela Mistral, Santiago de Chile, Chile.