Preface

The phrase "Brazil is not for beginners" has become a cliché among consultants, often repeated to emphasize the unique challenges of doing business in the country. While it may sound catchy, it carries an air of arrogance and dismissiveness that doesn’t reflect the reality of entering any new market. While it's true that Brazil presents its own set of complexities, labeling it as unsuitable for beginners can be both misleading and arrogant. The reality is that entering any new market is difficult, and Brazil is no exception. This notion fails to recognize the universal challenges of international business and underestimates the capabilities of those willing to take on these challenges.

Background story

When I first came to Brazil a few decades ago, a completely closed market, military dictatorship, hyperinflation, I heard this sentence for the first time. And at the time it made perfect sense. You couldn't just come to Brazil and get started like you can today.

When I came back to Brazil a good two decades ago, now already a solid democracy, the German company's lawyer told me with a conspiratorial look: “Brazil is not for beginners.” And at the branch office, the so-called old hands told me the same thing with an important and conspiratorial look.

Over the years, I also saw many Brazilian companies embarking on adventures and starting to develop the North American, French, German, Chinese and Indian markets. Quite a few of them got bloody noses there too. So apparently North America, France, Germany, China and India are not for beginners either.

I should have told the Brazilians with a conspiratorial look ... .

Here’s why this statement is not only untrue but also unhelpful.

The Arrogance of "Not for Beginners"

1. Overgeneralization

The phrase assumes that Brazil is uniquely complex, overlooking the fact that every market, whether in Latin America, Asia, or Africa, has its own intricacies. From regulatory hurdles in China to the political volatility in some African nations, entering any foreign market requires thorough preparation and local expertise.

Every Market Has Its Challenges

Entering a new market is inherently challenging, regardless of the country. Whether it’s Brazil, the United States, China, or any other nation, businesses face a unique set of obstacles. These can range from understanding local regulations and cultural nuances to navigating economic conditions and competitive landscapes. To single out Brazil as particularly difficult is to overlook the complexities present in every market.

2. Discouraging Potential Entrants

Such statements can discourage entrepreneurs and companies from exploring opportunities in Brazil, perpetuating the myth that only seasoned experts can succeed. This mentality can stifle innovation and prevent new players from contributing fresh perspectives and solutions.

The Myth of Uniqueness

One of the underlying assumptions of the phrase is that Brazil’s challenges are uniquely insurmountable. However, this is a misconception. While Brazil does have its specific hurdles, such as bureaucracy and economic volatility, these are not exclusive to Brazil. Many countries have their own versions of these issues. For instance, navigating the regulatory environment in the European Union or dealing with the competitive pressures in the U.S. tech industry can be equally daunting.

3. Ignoring the Learning Curve

Every successful business venture involves a learning curve, whether it's in Brazil, Germany, or India. Dismissing Brazil as "not for beginners" ignores the fact that many businesses enter new markets with the understanding that they will learn and adapt as they go.

Arrogance and Dismissiveness

Labeling Brazil as “not for beginners” can come off as arrogant and dismissive. It implies that only seasoned experts can succeed, which is not only discouraging but also untrue. Many businesses, including startups, have successfully entered and thrived in the Brazilian market. This success often comes from a willingness to learn, adapt, and engage with local experts and communities.

Every Market is a Challenge

Unique Challenges

Each market has its own set of challenges. In Brazil, these might include navigating bureaucracy, understanding local consumer behavior, or dealing with economic fluctuations. However, these are challenges that can be met with the right strategy and local partnerships.

The Importance of Local Expertise

Just as in any other market, success in Brazil hinges on understanding the local landscape. Engaging with local experts, conducting thorough market research, and being open to adaptation are essential steps—whether you’re entering Brazil or any other country.

Rather than dismissing Brazil as too difficult for newcomers, it’s more productive to emphasize the importance of local expertise. Partnering with local consultants, understanding the cultural context, and building relationships with local stakeholders are crucial steps for any business entering a new market. This approach is not unique to Brazil but is a best practice for market entry anywhere in the world.

Global Comparisons

Comparing Brazil’s challenges to those faced in other markets reveals that what may seem daunting to some is simply the nature of doing international business. For example, setting up a business in the United States requires understanding federal, state, and local regulations, which can be just as complex as Brazil's infamous bureaucracy.

Brazil - A Market Full of Opportunities

Rather than viewing Brazil as a market "not for beginners," it should be seen as a market full of opportunities for those who are prepared to invest the time and effort to understand it. With a large and diverse consumer base, a growing middle class, and significant natural resources, Brazil offers opportunities that are well worth the challenges.

Opportunities Abound

Despite its challenges, Brazil offers immense opportunities. It is one of the largest economies in the world, with a diverse and growing consumer base. The country is rich in natural resources, has a vibrant tech scene, and is a leader in sectors like agriculture and renewable energy. By focusing on these opportunities and leveraging local knowledge, businesses can find success in Brazil just as they can in any other market.

Conclusion: Embrace the Challenge, Don't Fear It

The phrase “Brazil is not for beginners” is not only arrogant but also misleading. Entering any new market is a complex and challenging endeavor, and Brazil is no exception. By recognizing the universal nature of these challenges and emphasizing the importance of local expertise, businesses can approach the Brazilian market with confidence and optimism. After all, every market is a learning experience, and with the right mindset and resources, success is achievable anywhere.

The idea that "Brazil is not for beginners" does a disservice to both Brazil and those looking to enter its market. Success in Brazil, like in any market, requires preparation, local knowledge, and the willingness to navigate challenges. By embracing the complexities rather than being intimidated by them, businesses can find success in Brazil, regardless of their level of experience.

Afterword and a recommendation

In 2023, I spent six months in Germany as part of two project missions. As part of one project with a private equity company, I had the opportunity to get to know 17 companies. As my project focus was very much on the foreign subsidiaries of the 17 companies, I was of course almost always dealing with Brazil. And then I heard in many of the parent companies of those 17 companies: “Watch out, Brazil is not for beginners”.

I was interested to know where the managers in the German parent companies had picked up this phrase. Quite a few of them talked about their predecessors as sales managers, for example. The predecessor, now retired, had been able to whisper it to his successor with a conspiratorial look ... . A special secret, so to speak ... . I also heard from many managers that they were always working with consultants who knew their way around Brazil particularly well. And they lean over the table with a conspiratorial look and whisper: “Brazil is not for beginners”.

And sometimes it got really bizarre. I met companies that had been told with a conspiratorial look that Brazil was not for beginners. They were told to put the sales for this mysterious and conspiratorial country in the hands of a profound expert - he was even married to a Brazilian and lived in Germany (…). In fact, there are companies that have outsourced their entire sales to a third party - the sales - the essence of the customer relationship, the mutual relationship to get closer to the local Brazilian customer, to understand things better and better, to build expertise and trust.

Why was such a path taken? It has never been entirely clear to me. Did they think it would supposedly lower costs? Were they taken in by a conspiratorial look and a whisper? “Brazil is not for beginners”.

My advice to you:

If someone whispers to you with a conspiratorial look, “Brazil is not for beginners”, stand up. This person will not be a good advisor to you.

What are your thoughts on this perspective? Do you have any specific experiences or examples you’d like to share?

Not to forget the important factor of so-called contextual intelligence. Want to know more about this? No problem. I've just written a post on the BizDev Circular blog about it. If you're interested, hit the link below:

Contextual Intel - Using Brazil as an Example