Cultural Learnings of Uruguay for Make Benefit Glorious Nation of America – Episode 2: Cars

Uruguayans do not replace their cars every three years as is common practice with many Americans. By looking at the traffic passing by, it is clear that the cars in this country live long, difficult lives. It is common to see cars from the 30's and 40's still out on the road. They are often held together with many coats of bondo, rust, lots of paint, and wire. Somehow though, the talented mechanics of Uruguay keep these vehicles still functioning long after they were intended to be trashed. The negative side to this is there are many cars on the road that are downright unsafe. Pollution control is minimal and a thick smog covers the roads during rush hour.

It always brings a smile to my face when I see a Festiva pass by. A Festiva was my first car and in my weak moments I dream of owning one again. At least now I know where I can get one in good condition.

For Those with Perspective, a Time to Invest

Each day as I pick up my New York Times Digest (the only English option) for perusing while I enjoy breakfast the headlines are more and more alarming. A sample of what greets me as I am getting ready to face my day:

“Global Fears of a Recession Grow Stronger” Oct 7, 2008
“Economic Struggles Dominate Debate” Oct 8, 2008
“Stocks Fall Again Despite Fed Moves to Reduce Turmoil” Oct 8, 2008
“Sell-off Continues as Investors See a Deep Recession” Oct 10, 2008
“Keeping an Eye on Crime as Economy Sinks” Oct 10, 2008

It is interesting to see the global economic meltdown from the perspective of a small, third world country in a remote corner of the map (from the perspective of a North American). While Americans are worried about not being able to afford a new car, being forced to eat out a few days less per week, or having to retire a few years later, Uruguayans have much more basic concerns.

The last economic slowdown here in 2002 is still referred to as the “Crisis” and I knew about it within days of arriving in this country. For many people here the Crisis result in living in a shack without the basic facilities, they scrounge materials out of dumpsters to sell, and their previous way of live evaporated. Retirement, car ownership, and eating out are luxuries that are out of not only their reach but perhaps also the reach of their children. Many people were pushed out of the economy and work by begging, washing windshields at stoplights, or by crime.

A scavenger looking for materials to recycle outside of my hotel

I do not mean to marginalize the pain being suffered in the first world. It is very real, especially if you lose your job or see your savings vanish. What I mean to point out is that the maxim “The US catches a cold and the world catches a flu” contains much truth and the impact is thunderously felt in places like Uruguay.

I did find some interesting quotes from Warren Buffet that I do think give some good perspective to the current troubles. As Warren Buffet recently detailed a key maxim in his outlook: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.

"Most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense," Buffett said.

Buffet stressed that he could not predict how the market would ride out its roller-coaster days in the short-term. But he said "what is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."

As pointed out in the New York Times, “the four most dangerous words for investors are: this time is different”.

A Mate of my Own

Folks, a quick announcement that I have reached stage two of being an official Uruguayan. I have procured my very own Mate bowl and now sit enjoying Yerba as I work. Many people I work with have a Mate (pronounced Maa-tae) bowl sitting next to their computer and they carry it around with them as they go about their jobs. I will post a separate entry on Yerba Mate for my readers not in the know. For now, just know that it is the national drink of Uruguay and is consumed 6 to 1 over coffee.

“You’ve been with all the Professors, and they’ve all liked your looks”

Tonight we had the pleasure of attending a lecture at the Universidad ORT in Montevideo by Dr. Harry Yuklea. Dr. Yuklea is the Director of the Center of Entrepreneurship at the Hebrew University in Jerusalem. His passion, career, and area of research are in fostering entrepreneurship. He usually works in the US or Israel, two countries with rich, lively entrepreneurial instincts. He focuses much of his effort in lower socio-economic communities that often need encouragement to unleash the entrepreneurship that often is most vibrant in people with no other attractive options. His lecture was great, and it made me feel good about the work that I am doing here.

He flew 28 hours because he is working with some local academics on fostering entrepreneurship here in Uruguay. Uruguayans are naturally risk averse and the economy suffers from a lack of innovation and new business. There were about 50 people in attendance, and I got the feeling that they were the who’s who of the effort to bring a culture change in Montevideo. You can feel and see the potential.

Dr. Yuklea talked quite a bit about the experiences of Finland and Ireland. They were both countries that were not entrepreneurial but that made major changes in the support and resources provided. In ten years their economies have been completely overhauled and they are a model for the world. Dr. Yuklea spoke of Uruguay having that potential. In ten years…that is all it took in Ireland.

He spoke of three components increasing the number of entrepreneurs by supporting them. They are research, teaching, and outreach. I found outreach really interesting as it is focused on reaching out to the young people and those in lower socio-economic groups. Suddenly it occurred to me that the poor in Uruguay could be the source of the flood of entrepreneurs that will transform the country. The poor are one natural resource this country is far from being short of.

After the lecture there was a cocktail hour and suddenly I was connected to the social pipeline of the Montevideo entrepreneurial support community. There were people from Endeavor, a venture capital group looking to invest money from a large US firm, and students interested in taking a turn in starting something of their own. We spoke with Dr. Yuklea for quite a while and he was gracious, interesting, and very supportive of the work we are doing. The Dean of the school and the Director of the MBA program asked us Fellows to present our projects to their MBA entrepreneurship class. I am going to work to set something up later in our visit so we have more material to go over.

It is easy in a country like this to be pessimistic. There is hope though and a thriving group of people working very hard towards what looks like a far away dream right now.

The eagle has landed

I have finally arrived in Montevideo tired and thirsty, but in good spirits. I managed to sleep on the plane and my luggage all got here in good shape (sign of relief!). The plane landed at Aeropeurto Nacional de Carracaso and I braced myself for what I might find. Did the toilet swirl in the opposite direction (yes), was the sky still blue (more grey than blue), and how was I going to manage to get to my hotel not knowing any words in Spanish other than hello and good morning. No matter how creative you are, it is pretty much impossible to communicate with just those three words.

The airport was a bit different. It was painted battleship grey and actually reminded me of the naval ships I used to see in the Philadelphia Naval Yard as a kid. We climbed down a staircase right onto the runway and were whisked by bus to the terminal. A short wait to get through customs and I was in.

The company that I will be working with down here was nice enough to send a driver to pick me up. I was relieved to see him waiting for me with a Laboratorios Clausen sign. A short 30 minute ride along the beautiful Rambla and he deposited me to my room.

I am staying at the Sheraton Montevideo Hotel in the Punta Carretas neighborhood. It is a very nice part of the city bordered by miles of beaches and populated by many stores and restaurants. The hotel is connected to the largest shopping mall in Uruguay which I am told is expensive but very convenient.

I was given a fantastic room in the Sheraton. It is a corner room overlooking the ocean. As I wake up in the morning I can watch the sun rise over the water. It is beautiful and I feel very lucky. The room is just what you would expect from a Sheraton in the US – comfortable bed, high speed internet, good desk to work on, comfortable recliner in the corner. I even have 40 channels on my TV, three of which are in English.