Mexico’s Zapopan Launches Challenge to Encourage Startups

The government of Zapopan, the biggest municipality of the Guadalajara metropolitan area, is allocating 50 million pesos ($4 million US) to a program promoting entrepreneurship among young people. The Reto Zapopan, or Zapopan Challenge, will provide funding, training and technical support for the most innovative local startups.

It is a project conceived, developed and coordinated by and for entrepreneurs.

“This program, which is unique in Mexico, will boost the most innovative projects and reward young entrepreneurs with full support in funding, training, mentoring and facilities,” said Zapopan Mayor Hector Robles as he launched the program before assorted business leaders last month.

Zapopan, which attracted $1.3 billion US in private investment in 2011, is the most prominent municipality in Guadalajara in terms of commercial activity. Eager to continue fueling economic growth and the creation of new enterprises, the municipal government established Reto Zapopan as a means of strengthening the local economy by helping young entrepreneurs start and/or accelerate their business ideas.

Reducing Risk for Startups

“We need entrepreneurs to take risks,” Robles said, describing those with the self-belief, the vision and the determination to succeed as “heroes.”

“Only five percent of new businesses will survive the first year and of those, one percent will survive the next three years,” Robles added, noting that the risk of investing in businesses aided by Reto Zapopan would be 50 percent less than normal, due to the support provided by the municipal government.

“It is not easy to start a business, it takes guts, knowledge of processes and seed capital,” said Francisco Beckmann, president of the Guadalajara Chamber of Commerce, before imploring locals youth to take advantage of such opportunities.

Entry Details

To participate, all fledgling entrepreneurs need is an innovative idea and a basic business plan. The only requirement for entrants is that their intended company be established in – or create benefit for – the municipality of Zapopan.

Entrants can sign up as individuals or groups. Foreign students based in Zapopan can participate in the project, but no one employed by the municipal government is allowed to enter. The business projects can be from any industry or sector with a focus on innovation.

Once entrants sign up online, Reto Zapopan will provide tools to aid them in putting together their business plan, which should contain graphs, images and other relevant information, and must be uploaded before the registration deadline of June 15.

Any entrants who do not have access to a computer are welcome to go to the Reto Zapopan offices (Plaza Concentro Local F-65, Avenida Vallarta 6503) and make use of the facilities there.

Big Benefits for Startups

The benefits of participation include guaranteed online feedback from business experts and academics, plus the chance to gain support from incubation and acceleration programs, universities, entrepreneurs, private equity investors, and government support programs. Entrants need not worry about disclosing their business ideas, as anyone who reviews or evaluates the projects will have signed a confidentiality agreement.

The organizers expect 400 to 500 projects to take part, with the best 30 or 40 chosen to take part in the second stage. Reto Zapopan will reward the projects with a high potential for growth based on their added value; degree of innovation; financial, technical, and market feasibility; and their contribution to society.

The municipal government will provide the chosen projects with secretaries and office and boardroom space at Zapopan’s Business Development Center in Plaza Concentro, and will cover all costs such as Internet and electricity.

Aside from recognition as one of the best startups in the area, the chosen projects will benefit from six to eight months in the pre-acceleration program, including training, specialized mentoring on business development from successful entrepreneurs, access to promotional and media campaigns, and legal advice for the protection of patents and inventions, if necessary.

To finance their startups, the chosen participants will have access to up to 1.5 million pesos ($120,000 US) in seed capital. They will also be able to participate in rounds of private funding organized by the Municipal System of Corporate Financing and Guarantee Funds.

Mexico Goes to MassChallenge

Those selected for the second phase will each present a 10-minute pitch to a panel of experts, with the winners to be announced on July 1. The 10 best projects will be chosen to go to MassChallenge, the world’s largest business accelerator based in Boston, Massachusetts, which recently entered a partnership with Reto Zapopan.

Since its foundation in 2010, MassChallenge has supported hundreds of startups, creating around 3,000 jobs and generating sales of more than $365 million US and profits of over $95 million US. It is a non-profit organization which takes no stake in the companies it supports, allowing them to benefit from world-class mentorship, hundreds of educational and social events, a driven and passionate community of fellow entrepreneurs, and access to funding, marketing, media, office space and more, all with no strings attached.

The best three projects from Reto Zapopan will participate directly among the top 300 in MassChallenge, with the top 26 then chosen to pitch at the annual MassChallenge Awards Ceremony in 2014, which will draw over 1,000 leaders from the U.S. startup community and will offer a grand prize of $1 million US. The Zapopan government will cover the full transport and accommodation costs for those chosen to attend MassChallenge in Boston.

As if all that were not enough, the project that wins first place in the Reto Zapopan will also be awarded a trophy, an additional prize from the sponsors and 150,000 pesos ($12,000 US) in prize money.

Duncan Tucker is a British journalist based in Guadalajara, Mexico. He covers a wide mix of news, politics, business, the war on drugs, culture and sport. Aside from Global Delivery Report, he writes regularly for the Guadalajara Reporter, the Huffington Post and Soccer365.com. Much of his work can be found on Mexico-themed blog “The Tequila Files.” Follow Duncan on Twitter @DuncanTucker.