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strategy and business
 / Spring 2012 / Issue 66(originally published by Booz & Company)


Linda Rottenberg’s High-Impact Endeavor

Endeavor’s board agreed that potential countries for their program should have a base level of high-potential entrepreneurs, a cadre of successful business leaders who would support Endeavor’s mission, a strong academic system, and political stability. “We look at countries transitioning from international aid to international investment,” Rottenberg says. “It’s about spotlighting the countries as well as the entrepreneurs. Our model actually isn’t right for countries at the most basic level of development.”

The selection of entrepreneurs would be based on six essential characteristics: entrepreneurial initiative; potential for changing or improving their industry; ability to generate substantial revenue, wages, and jobs; integrity; role model potential; and “fit” with Endeavor. Once selected, these entrepreneurs would gain access to a targeted set of support services: strategic consulting, a customized 18-month assessment plan, access to mentors, on-site fellows from top business schools, entrée to venture capital road shows, and personalized introductions to investors.

Entrepreneurs would ultimately be required to donate both time and money — in the form of either a percentage of equity or incremental profits — to those following in their footsteps. It was this virtuous circle, Rottenberg believed, that would create the ripple effects needed for ongoing innovation.

Models of Empreendedorismo

In January 1998, Endeavor opened its first country office in Chile; that August, an Argentine office followed. The Chilean office proved to be a false start — a lack of local buy-in forced it to close its doors until it could garner the necessary support to successfully relaunch, which it did in 2002 — but Endeavor Argentina flourished. Its first batch of entrepreneurs included Andy Freire and Santiago Bilinkis, the then 24-year-old founders of Officenet, a company aimed at revolutionizing Latin America’s fragmented and inefficient office supply industry.

Neither Freire nor Bilinkis had access to capital, and the sole investor willing to give them money had demanded 100 percent ownership of the company. Whereas entrepreneurs in a more developed market would have turned down the Faustian bargain, Freire and Bilinkis felt resigned to accept it: In a country without a culture of venture capital or local role models, they saw no other option. They forged ahead and built up the company, but they knew they lacked the resources that would be necessary to expand — in addition to lacking even the smallest stake in their own company.

Endeavor’s involvement quickly changed that. The organization’s network of venture capitalists helped Freire and Bilinkis renegotiate their ownership terms to 35 percent equity participation. In addition, Endeavor’s roster of mentors helped the two strengthen their finance, growth, and leadership models and connected them with a Brazilian private equity firm. Officenet expanded into Brazil, and soon became the largest and fastest-growing office supply business in Latin America — also becoming an example of what is possible for other entrepreneurs in developing nations.

It is exactly this “role model effect” that Rottenberg argues has been critically absent in emerging markets. “Access to capital is important, but it’s not the ultimate barrier,” she says. “Entrepreneurs in these countries lack that sense of, ‘Hey, if he did it, I can do it, too.’” Endeavor’s network of entrepreneurs provides that sense of possibility, she believes.

In fact, Rottenberg says, around 15 percent of Endeavor’s entrepreneurs are chosen precisely because they are considered “surefire successes.… We want to signify that we are results-oriented,” she says. “We expect our entrepreneurs to generate hundreds, if not thousands, of jobs and millions of dollars in revenue, and our top 10 percent to be the next $100 million companies. We make no bones about that. You’ve got to have real success stories if you want to inspire others.” Another 20 percent of the organization’s sponsored entrepreneurs are “fast learners” — intelligent businesspeople who have interesting ideas, but lack management experience and require intensive mentoring.

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  1. Thomas Friedman, The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, 2005): Bestseller that describes the context of globalization in which Endeavor emerged, including an account of Rottenberg’s work.
  2. C.K. Prahalad and Stuart L. Hart, “The Fortune at the Bottom of the Pyramid,” s+b, First Quarter 2002: Seminal article by the late globalization expert and management thinker on business opportunities in the developing world.
  3. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000): A classic analysis of the cultural and institutional impediments to entrepreneurship in the developing world.
  4. Endeavor’s website: Features case studies, statistics, a blog, and more.
  5. For more thought leadership on this topic, see the s+b website at:
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