Growth Strategies for Startups: Three Key Lessons from Latin American Founders

In 2022 and the first half of 2023, 501 startups in Latin America raised over $1 million in venture capital investment (LAVCA)¹. However, these ventures continue to face challenges unique to emerging markets.

At BoostCamp 2024, three founders shared their strategies for customer acquisition, tracking key metrics, and building sustainable startups in these markets. Below, we highlight the three most valuable lessons from their conversation about the journey of launching and scaling startups in Latin America.

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Know your Customer and Find Product-Market Fit

The first step for any startup is understanding the customer and adapting the product or service to the market to achieve product-market fit—the point where the market consistently demands your product, marking a turning point for exponential growth.

But how do you reach that moment? And how do you turn customer feedback into a successful business model?

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Deeply Understand the Problem

“We make plans, but the market tells you exactly what you need to do,” says Ángel, CEO of Flai Logistics.

Ángel had first-hand experience with the challenges large companies face in freight transportation. While he initially tried to solve these issues from within, he quickly realized that a more radical step was needed to turn his ideas into reality.

When co-founding Flai, he leveraged collaborative and technological concepts to build a logistics software (#Logtech) that connects companies with independent transport providers, offering visibility and control over their supply chain.

His first customers? The very same companies that had previously rejected the services of his former employer.

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Active Listening and Adaptability

“The business I envisioned at the beginning is very different from where we are now.” —Alberto Bonetti, CEO of YoFio

YoFio started with a bold vision: eliminating cash transactions across the entire purchasing chain—consumer, corner store (colmado), and supplier. To acquire their first customers, they went directly to the colmados, observing first-hand how commerce operated and engaging with customers.

Their initial hypothesis was that their primary customers were end consumers, so they began offering direct loans to them. However, the default rate turned out to be unsustainably high.

YoFio is a #fintech that provides working capital to small businesses, addressing the lack of access to financing in this segment. Once they pivoted to lending directly to colmados instead of consumers, everything changed.

“Product-market fit isn’t just a number; it’s when customers consistently demand your product.”

At that stage, the unit economics flipped, traction increased, and demand took off.

“Until you scale your product, you are the one who has to sell it—no one else can do it for you.” — Alberto Bonetti

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Listen and Build What the Market Truly Needs

“We literally built based on what they needed.” — Michael, CEO of AlterEstate

For AlterEstate, the strategy to acquire early customers started from within the industry. Before launching the startup, Michael was already offering other services to this segment. Through direct interactions, he identified key pain points and developed AlterEstate, a real estate management platform that centralizes CRM, marketing, and operational processes, helping real estate agencies work more efficiently.

Once they solved the first client’s problem, they expanded by approaching other potential customers, showcasing their product, existing clients, and proven results.

Another key tactic was embedding AlterEstate’s name into the systems they built for clients. This generated organic traffic as their clients’ competitors became interested in adopting the same solution.

By applying these strategies, each startup validated its business model, proving that listening to customers and adapting accordingly are the cornerstones of building successful startups in emerging markets.

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Measure What Matters: Lifetime Value (LTV) and Customer Acquisition Cost (CAC)

Financial metrics are essential to ensure the sustainability and scalability of any startup. While each venture has its unique characteristics, Lifetime Value (LTV) and Customer Acquisition Cost (CAC) stand out as two key indicators in most cases.

“If you don’t get that formula right, you go bankrupt. It’s not just about attracting investment; it’s about ensuring your business is sustainable.” — Alberto Bonetti, Founder of YoFio

If you want to learn how to calculate these and other key financial metrics, check out our Startup Metrics Glossary.

In its early months, YoFio faced a common startup challenge: high CAC and low LTV. This combination made their business model unsustainable, forcing them to rethink their strategy to optimize both metrics.

Why Are These Metrics Important?

LTV: Represents the total value a customer generates for the business throughout their relationship. A high LTV indicates that customers not only generate revenue but also remain loyal to the product or service.

CAC: Measures the total cost of acquiring a customer. If CAC exceeds LTV, the startup is losing money on every new customer acquired.

“It’s not necessarily the most important thing, but if you don’t have it figured out, you can’t scale until the numbers make sense.” — Alberto Bonetti

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Growth Strategies: Marketing vs. Sales

The growth of a startup relies on clear strategies for acquiring and retaining customers. Two common approaches are digital marketing and in-house sales teams, but how do you choose the best option for your business?

Digital Marketing: The AlterEstate Case

In this part of the strategy, Michael shared how, during AlterEstate’s expansion into Mexico, they initially focused on digital marketing to create buzz. However, the results were not as expected—they gained visibility and meetings, but struggled to close deals.

Later, they hired an in-house sales team, which significantly improved conversion rates. They continued using digital marketing for brand positioning while also participating in industry events to strengthen their presence.

In-House Sales: Flai’s Approach

For Flai, the sales process initially relied on a 360-degree team handling customer acquisition, onboarding, and retention. However, given the B2B market dynamics, where a single company might dispatch up to 400 shipments per day, they realized the need to restructure their approach.

They transitioned to a specialized sales team, divided into:

• Hunters – responsible for understanding and structuring projects with clients.
• Farmers – in charge of sales management, operational processes, and post-sales services.

This structure has allowed them to serve both large corporations and small businesses effectively.

The experiences of AlterEstate, YoFio, and Flai highlight the challenges and opportunities of building a startup in Latin America.

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¹Startup Directory & Ecosystem - LAVCA