AN INTERNET BOOM, WHICH BEGAN IN EARLY 1999, continues to attract the development of web start-up companies. In the past six months, local websites have increased from 40 to about 175. "We are at the beginning of an explosion," says Jorge Becerra of the Boston Consulting Group in Buenos Aires.
The boom is occurring even though few Argentines--roughly 2% of the 36-million population--have access to the Internet either at home or at work. The Internet's growth has been hindered by costly computers, high rates for telephone and connections as well as concern about the lack of security of carrying out credit card transactions. In fact, credit card companies discourage online purchases.
However, the situation is changing fast. Deregulation of the local telecommunications market in 1999, for example, promises to reduce significantly the cost of Internet access. As a result, the number of users is expected to double to more than one million in 2000 and to 3 million by 2001, according to industry estimates.
Charting New Territory. At 31, Fernando Botana is co-owner of Agropool.com, a website in development that when fully launched will allow local farmers to buy bulk purchases of agricultural supplies at low prices." It is a new unexploited sales channel in which you often feel like Columbus, charting new territory," he says.
Getting the company started in the second quarter of 1999 was no easy task. There was a lengthy delay to register the company with tax authorities-as required by law--after the internal revenue service's computer system crashed.
Venture capitalists were unwilling to take a chance on a young executive without an extensive track record. And neither Botana nor his 28-year-old partner, Axel Grippo, had a wealthy family or friends willing to bankroll their venture.
Agropool.com became a reality only after Tempo 2, a Silicon Valley incubator, helped Botana find investors to front half of the US$400,000 needed to launch the start-up.
Botana is an agricultural engineer who quit his job of four years as head of fertilizer sales at the local subsidiary of U.S. agriculture giant Cargill at the end of 1999. He believes his professional experience and Grippo's recent studies in e-commerce at Harvard Business School is a winning formula for an agricultural products website.
The initial strategy is to target farmers who own more than 1,000 hectares, as well as pool orders from small concerns in...