In the past 24 hours, more than forty thousand people have signed up on Facebook to attend a flash mob barbecue this weekend in Higienopolis, a wealthy neighborhood in Sao Paulo, Brazil. The Sao Paulo state government conceded yesterday to demands from the Neighborhood Association to block construction of a subway station. The neighbors objected that the subway would lead to “different people” congregating in the area.
Danilo Saraiva, an online journalist at leading Brazilian portal Terra, set up a Facebook Event yesterday called “Barbecue of the Different People.” Saraiva, who has only 300 contacts on Facebook, set up the event after lunch and now thousands of people are RSVPing every hour. Messages posted to the Event page read, in Portuguese, “I will take the mayonnaise, I will take the popcorn. I will take the cheap soda.” Saturday in Higienopolis is likely to be…very different.
A Startup Scene Emerging
After decades of military dictatorship, followed by years of crippling inflation, a culture of technology, entrepreneurialism and investment is just beginning to be built in Brazil. Startups are proliferating, there’s a constant battle for talent, a few companies are making millions or hundreds of millions of US dollars annually, international investors are visiting and in some cases putting in large sums of money. It’s really interesting here.
Brazil is deep into social networking; the country has the second highest market penetration by Twitter of any place in the world at 20% (Indonesia is #1), Facebook is growing fast, Google’s Orkut has thrived here like MySpace in the US and Brazilians spend more time each day on social networking sites than anyone else in the world.
Many entrepreneurs here are young and inexperienced, though. The infrastructure is just being born. There are fewer resources, little broadband, an amazing 200 million mobile phones but hardly any smartphones. Apple products cost 2 to 3 times as much here as they do in the United States and employees sometimes cost double – largely due to taxes.
This is the first post I’ve written after a week in Sao Paulo. I’ll be writing more over the coming weeks. I hope to follow up on the Barbecue of the Different People, too. Technology, economy and culture are all changing together here and all around the world.
Sao Paulo has a very class conscious culture; I’m writing these words outdoors at a cafe in downtown Sao Paulo surrounded by tall glass buildings, helicopter shuttles are carrying wealthy passengers over the snarled traffic of millions of cars given permission to drive this day of the week. (Each day, 20% of the cars here are required to take a turn staying off the road during rush hour.)
The Barbecue of the Different People isn’t just happening because of Facebook; it’s also happening here in Brazil because of major economic change. I am sitting with Leonardo Cid Ferreira, a US-educated online marketing entrepreneur. “I’ll be really curious to see if these people will go; if they do it will be amazing,” he says. “This is all Class C people. We’re talking about the newly growing middle class.”
Every single day I have been here, talking to a variety of online and mobile tech companies, someone has brought up the clearly labeled economic class system in casual conversation. Class A is the wealthy, Class B the upper middle class. Class C is the middle class and that group is expanding quickly, gaining purchasing power for the first time and just starting to come online. Class D is the poor. Class E are the people of the favelas, the vast shanty towns on the margins of the city, infamously drug ridden and violent but now largely pacified by militaristic police campaigns in expectation of global attention at the first Brazil-hosted Olympics in 2016.
Leonardo says the open discussion about class divisions is a uniquely Sao Paulan phenomenon, more than it is Brazilian. “My car is bullet-proof,” he says. “That’s common here; I have some friends who refuse to ride in a car that isn’t bullet-proof from top to bottom.”
Leonardo is an uncommonly effective young entrepreneur – he’s built a multimillion dollar search and online marketing company with a staff of 30 in just two years since returning to Brazil from college in the US. He’s not the kind of person that the wealthy neighborhood referred to when they objected to the presence of “different” people. He is though, as many of the young entrepreneurs I talked to here are, appreciative of the social disruption caused by the intersection of declining poverty and increased access to technology.
“With all these people coming into the online world for the first time,” he says, “the coolest thing about this [things like the Barbecue of Different People] is that it’s P2P, it’s bottom up. Three years ago they didn’t have access to the internet and they wouldn’t have been able to respond [to something like the government’s decision] at all.”
As I get to this point in writing this story, there are now forty six thousand people signed up for the Barbecue of Different People. Five thousand more signed on while I was eating lunch.
Capitalism and Social Disruption
Rising tides that lift the boats of the poor are being closely watched by all the entrepreneurs I’ve spoken with. Though they are happy to see it on a human level, as Brazil’s poverty has been brutal and tragic for millions of people, these are also business people looking to build their companies.
“Those are the people every brand wants to attract,” Leonardo Cid Ferreira says of the fast-expanding ranks of the Middle Class.
That was certainly true of the entrepreneurs I met here. Mobile app and e-commerce company Movile is positioning itself to serve an explosion of customers with cheap smartphones but no access to spectrum beyond wifi. ClickOn, Brazil’s biggest native competitor to GroupOn in the red-hot group buying market (ClickOn went from launch to 300 employees in under a year), is working on a major new initiative to reach beyond its bulk of B Class and A Class customers by launching a white-label service targeting the new consumers of the ballooning C Class. Tahiana D’Egmont is an upbeat 25 year old phenomenon from Rio who’s already launched one company, sold another, is now the Chief Marketing Officer at one of Brazil’s hottest social gaming and virtual goods companies and who has let it be known she’s pursuing other projects (everyone wants to know where she will land). She puts it this way: “I love the C Class! They are my customers!” They are her customers today, but that’s also where she came from.
The populations in question are said to be quite enthusiastic about their new status as Desirable Customers. Social media advertising firm BooBox, one of the most high-profile startups in Sao Paulo, asks Twitter and Facebook users to post funny promotional messages for brands in support of advertising campaigns. “We know this kind of thing is controversial in the United States,” co-founder Marco Gomes told me, “but in Brazil it’s really not. People here love brands!” As my wife Mikalina suggested, and Gomes agreed was an accurate assessment of the situation, the upwardly mobile people of Class C have never been able to buy brand name items before and see the ability to engage with those brands as an affirmation of their new status.
As the upper class, subway-hating residents of Higienopolis are about to find out, though, all this growing empowerment of the formerly poor and new found access to online publishing tools can sometimes be a rocky road, for some people and their interests.
For purposes of growth, relevance and to CYA (Cover Your), the phrase social media is now on the lips of almost every business person here, just as it has been in the United States.
Leonardo Cid Ferreira, for example, is taking his search and online marketing business beyond those traditional markets (if you can call anything online traditional here) and is embracing social media for his customers as well.
Next week Ferreira will announce that his firm AD Brazil has merged with leading Brazilian social media agency Dialeto (like Dialectic in English). Dialeto does social media monitoring and advising for clients that include Warner Brothers, Clinique and the Brazilian airline Tam. Dialeto was the first Internet company invested in by Latin Invest, a $20 million Brazilian venture fund. Latin Invest bought out Dialeto’s debt a few years ago and is now putting money into the merger with AD Brazil as well.
Leonardo says the new company born of the marriage will now have social media, branding, communications and engagement in its DNA. He says that even though it’s on everyone’s mind, most companies in Brazil underestimate the power of the internet.
He tells a story of a close friend’s company that went public in a big IPO two weeks ago, then days later was hit with a giant scandal online. The company tried to shut down its previously neglected Facebook and Twitter profiles once they were overrun with criticism, which only made matters worse. And then they called Leo. “You should have called me two weeks ago!” he says he told his friend, “I’ve been trying to get a meeting with you about these things for months. Sorry, but it’s too late for you now – there’s nothing I can do to help you.”
So goes the fast-paced, disruptive, sometimes rocky road of Brazilian economic and technology development in the age of social media. New voices and new strategies are engaging with both uniquely Brazilian circumstances and with many of the same issues people everywhere now face – whether that’s in the corporate board room, the new or old press, or the site of a fast emerging flash-mob barbecue. (The number’s grown now to more than forty eight thousand RSVPs.)
Many of these may be different people than the economic establishment is accustomed to, but they are smart, ambitious, emotional and they are looking to change things quickly. For at least some of the new entrepreneurs in Brazil’s hot internet economy, that looks like good business so far.
Disclosure: Boobox, Movile and Buscape were among a group of companies that contributed to covering the cost of my travel to Brazil.
