Why services are so bad in Brazil and why we need the start ups

Why services are so bad in Brazil and why we need the start ups

CC by Thoth, God of Knowledge.


I’ve always been passionate about entrepreneurship. That’s why I became very enthusiastic about the growing interest for start ups in Brazil. But something began to bother me about it. I couldn’t fully understand the mixed feelings until recently.

Some background

Traveling around the world has helped me to understand Brazil as much as the world itself. I’ve learned a lot about my home country staying away from it. An interesting paradox, which might be explained by the new perspective that I gained being abroad.

One important lesson about the world: there’s no perfect country anywhere. There are very serious problems wherever you go. But, it’s also true that in some countries people live better than in others.

I don’t think Brazil is in a very bad position. It’s not great. But it’s much better than we probably think. Anyway, there’s a lot of room for improvement specially when it comes to products and services.

Brazilian products and services

It makes me really sad to write that, but I think products and services in Brazil are among the worst in the world, although they’re also, strangely enough, among the most expensive. And let me be very specific about this. I’m not only comparing Brazil to the rich countries. I’m talking about the more than forty countries I’ve visited which range from poor to very rich countries.

We, Brazilians, complain all of the time about the cable company, the telephone company, the electricity company, the government, the bank, the shops, the hospitals, the roads, the schools, you name it. Are they all that bad? Yes, they generally are. And if you spend some time away from Brazil, them you realize that they really are very bad indeed. But also extremely expensive. Which means that we’re being ripped off most of the time in Brazil. That’s my feeling, at least, when I’m in Brazil.

Are these things perfect in other parts of the world? No, they’re not. But, on average, I’d say they tend to be better and less expensive. We really pay a lot in Brazil for very shitty products and quite horrific services, in general. But why?

Some possible causes

I don’t know the exact reasons, but I have some gut feelings about it. As Brazilians we might not realize completely how populated our country is. There are almost 200 million people in Brazil. Only four other countries are more populated: China, India, the USA and Indonesia. We have in Brazil half of the population of South America. It’s a lot of people. 

Fortunately, we have a very low unemployment rate now. The average last year was 5.5%. Actually, in December 2012, it was 4.6%. It’s quite low, specially for a country as big and as populated as Brazil. Just for the sake of comparison: Canada 7.4%, USA 7.7%, UK 7.7%, Finland 7.9%, Sweden 8.1%, France 10.7%, Ireland 14.7%, Portugal 15.8%, Greece 26% and Spain 26%.

If a country has a large population and almost everybody is working, that means there’s a lot of demand for products and services and people can actually pay for it. Which is all good news. 

But it also means that people will probably buy stuff whether they’re good or not. I mean, if there’s such a high demand in the market, then you don’t need to work that hard to make good products and render good services. The very basic will probably be good enough. And that’s precisely what happens in Brazil. 

It doesn’t really matter that much if you do it well or not. You’ll probably sell anyway. Just because there’s so much need and so many people that can buy. And it gets worse. 

Let’s look at education. Unfortunately, it doesn’t matter which figures you look at. When it comes to education, Brazil is a tragedy. It’s that simple. 

Do people go to school? Yes. But the quality of education is generally lacking. So, most Brazilians can read and write in theory. But only barely. There’s a relatively small group (compared to the size of the population) that is extremely well educated. But the majority of the people has a very basic education level. Now that’s a huge problem. 

If most people is poorly educated and almost everybody is working, that means most of the working people is poorly educated. So, it’s almost natural that we all get bad products and bad services in return. Because to have good products and great services, we’ve got to improve the general education level. And we all know how  imperative it is to improve education in Brazil. But, there’s something else.

As I mentioned before, there’s a relatively small group of very well educated people in Brazil. A group that is running companies as directors, managers, company owners, technicians and the likes.

Since they tend to be on the top of the corporate hierarchy, they are the ones making the rules. So they’re actually the most important people when it comes to producing good products and rendering great services. Because they set the direction of the companies. 

If they decide companies should invest more in producing high quality products, or invest more in the education of their workforce, then, this will be done. Because they are the guys who have the power to change companies for the better. These guys are really important. If we want better products and better services, we need to make these guys embrace this goal and understand that more money will follow naturally as a result.

Problem is, this is not going to happen. The guys I’m talking about are actually very well educated corporate jerks. They have the education and the skills, but they don’t have high moral standards. The guys running the big companies, the managers, the directors, are just too busy making money easily offering shitty stuff and ridiculously bad service. There’s a sea of people to buy anyway, whether it’s high quality or not. So, why care about it? Sorry, but I have no hope for these companies. They’re already too messed up. It’s a pity.

The Start ups

Every year there’s a new wave of well educated people coming to the Brazilian market after university. It’s not a lot of people, compared to the size of the population, but it’s a very important group. Because it’s the group that has the greatest potential to change things for the better, in my opinion. Because they can start fresh. They don’t have to carry the burden of the past.

Unfortunately, many of these guys decide to take exams to work for the government. So we lose lots of talents in the process. Some of them are helping the government to become a little bit better. But, in my opinion, the waste is huge.

Others will go to work at one of those big companies and they’ll become part of the corporate world of companies that couldn’t care less for their customers. Another waste.

A few will go to work at some few really nice companies that are trying to make a difference. And a tiny group of people will decide to become entrepreneurs. They will, eventually, create some kind of start up. That’s great. 

This last group is extremely important. Because it can bring significant change to the market over time. It’s such a tiny group with such a huge chance to impact our society for the better, that it’s really important that they choose their path carefully.

The way I see it, and I might be very wrong, the Brazilian start up movement, if we can call it this way, very often tries to follow the steps of what happens in the US. 

So there’s all this focus on trying to create a new concept, testing it, getting out of the building, finding a market fit, getting funding and all of that. In other words, there’s a great focus on trying to come up with new ideas, new concepts. Innovation is king, right?

Well, maybe not. It’s really cool when something like Airbnb or Dropbox is created. But let’s face it. It’s also very rare. And it’s quite hard to innovate and turn the innovation into a great business. So, I say maybe we’ve been putting too much attention into innovation, when in places like Brazil, that’s hardly the most critical issue.

In Brazil companies, with some very respectable exceptions, generally don’t do the basics well. They’re doing it really wrong, whether they’re producing products or rendering services. So, what we need desperately, to begin with, is a bunch of companies that at the very least cover the basics correctly.

I’m talking about the most ordinary types of companies, like restaurants, drugstores, supermarkets, bakeries, shoe shops, fitness centers, you name it. Every sector of our economy can benefit of more of these “ordinary” companies that just cover the basics appropriately. 

For instance, in Niteroi, where I used to live, there are several restaurants. But if you ask me: how many good restaurants do you know there? I say two. Only two. How many good coffee shops? One! In many sectors, I might answer none. Because I really don’t know one good example. We have several that are below ok. But very few that are good. And I don’t even bother to expect one excellent. 

I think it’s really cool to have start ups coming up with new ideas. But seriously, there are many kinds of businesses that are very well known and terribly run in Brazil. If someone decides to create a company to run one of these “ordinary” businesses, but do it really well, I can guarantee you two things: it will make a good money and it will help Brazil to become a better place. We desperately need more of these ordinary businesses well managed.

Good thing about it is that since those ordinary businesses have been around for such a long time, there’s no need to invent a lot. And even better, one can always fly to some part of the world where we can find some very good examples.

Want to create a coffee shop? Fly to Buenos Aires and hop from one coffee shop to the other. You’ll have lots of great ideas. Want to see how to render the best service in the world, spend some time in Japan. You get the idea.

Innovation is cool. But we, Brazilians, desperately need some new ordinary businesses that really care for the customer. We can do it. And if we do it, money will come. Trust me.