| Posted: February 4, 2010 8:06 AM by: Jan Pabellon |
Last January 10th, I posted a topic which I hoped would get insights from the community to help not only budding technopreneurs better understand the challenges they face in not only starting their own technology venture, but also help them create truly sustainable, wealth-creating companies which can emulate the success of organiations such as F-secure (Finland), Trend Micro (Japan/Taiwan), Kaspersky (Russia), ICQ (Israel), Skype (Estonia/Sweden), SAP (Germany), Zoho (India), and many others.
I was surprised and happy to find that it generated a lot of insightful comments from very knowledgeable people in the industry (many of whom have actually lived through, going through, or are helping others through the experience).
The gist of the discussion: Filipino technopreneurs face several challenges in getting their company to a point where it can become a truly world class company (initially the discussion was confined to software, but is applicable as well to any technology venture). Here are some of them:
1) Access to capital:
- according to Carlos Perez: "Easy and cheap capital helps you avoid distraction of having to hunt for money"
- But Jay Fajardo had a counter point saying: "Tech startups nowadays require less capital to launch because of very cheap access to web and cloud infrastructure. The focus [has] shifted from raising money to getting a product out fast."
- Francis Egenias shared that organic growth is possible
2) Timing
(need to catch an inflection point in the industry, take advantage of discontinuous shifts in technology and business models)
- Jay Fajardo mentioned leveraging new developments such as cloud computing; but applicable here as well are new trends such as open source, social/Web 2.0 technologies, mobile applications (ie iPhone apps), virtualization, etc.
3) Focus
(dominate a niche, target specific verticals, get into markets where size and capital is not an issue, target the needs of a larger, international market, go into markets similar to your local market, leverage local unique culture/economic/social conditions-->ie as in the case of wireless/SMS technologies; or English speaking talent in the case of customer service and distance learning solution providers)
- Here strategy was mentioned
4) Talent
(access to world class engineering talent, product management and product marketing talent, executive talent, ability to recruit and retain talent--> not losing them to greener pastures abroad or to multinationals with local operations)
- Paco Sandejas and Joey Gurango talked not only about engineering talent but product management talent.
- Giancarlo Angulo mentioned a lack of critical mass of talent
5) Leadership
(of course!)
- Joey Gurango, Paco sandejas and Michael Hamlin talked about competence and experience of the leader (they themselves are leaders of their own enterprise)
6) Attitude/orientation/commitment
(to have confidence to stay the course when faced with challenge)
- Miguel Ladios shared his experience working in a multinational environment and the importance of attitude
- Floyd Piedad shared that we should have an attitude that focuses on solutions instead of over-analyzing problems
7) Enabling infrastructure
(ie government, education, IP protection, etc)
- Michael Vincent Yap and Albert de Cera talked about IP protection
- Ody dela Merced and Ruben Canlas talked about the role of government and education in creating the right environment for entrepreneurship to succeed
Im intrigued however by Michael Hamlin's last post about:
8) how effective communications plays a key part in gaining success on the world stage.
I agree that communicating effectively is crucial (but unfortunately is often missed as I have). Communication plays a key role in the lifecycle of any enterprise/product from startup to maturity--ie getting attention, creating awareness/interest, driving adoption, creating loyalty, building on success.
But just out of curiosity (and in the context of Filipino technopreneurship and what it takes to communicate effectively to the global market), is being in the Philippines (and being associated with the "Philippine brand" if there is such a thing) bane or boon to founding a tech startup and its marketing communication efforts? Does it matter at all?
A review of the communication strategies service companies employ in the IT and IT-enabled services sector seem to prominently tout the advantages of being in the Philippines (or for that matter India, China, Mexico, Poland, etc). But what if you are a product company?
Social responsibility and nationalism aside, does it make business sense to prominently display that your company is "proudly Filipino?" Or that your product was developed by Filipino talent?
Can it be a liability? (ie shows narrow focus? insular thinking?). Should the fact that your enterprise is a Filipino company employing Filipino talent be buried in the marketing copy? Should it be mentioned at all? Some companies I know (both here and abroad) make it a point to highlight the fact that they have international offices (even if its just a one bedroom apartment or PO Box somewhere) to show their global ambitions. At a time where distance is made almost meaningless by technology, does it still matter? Does it really help?
If I were an entrepreneur wanting to set up the next revolutionary open source/cloud computing/social networking/mobile gaming startup right now—what advice would you give?
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"Social responsibility and nationalism aside, does it make business sense to prominently display that your company is "proudly Filipino?" Or that your product was developed by Filipino talent?"
judging from the attitude of a few Indian tech start-ups - that makes business sense. their Indian identity and their products are inseparable. in the end, the whole of India benefits. each Indian tech company is a walking business card of India Tech Inc.
so it seems that the right attitude is the fusion of doing good (helping the country) while doing well (profitable business)
Filipinos have shown that they can do well. its in the "doing good" that Filipinos need some improvement
Being in the Philippines has advantages and disadvantages, but we need to learn to take the good with the bad. Despite the disadvantages, a leader will look at a situation and act on making the most of the situation. Taking advantage of the good points and find out a way to turn a weakness into an advantage.
We should all speak well of the Philippines to foreigners and friends. We should encourage a sense of quality and value in local businesses. We should look to buying local products and becoming self-sufficient in our needs. We should contribute to local schools and local talent. We should develop local technology by cooperation and mutual benefit.
The greatest proof of a leader's ability and skill is to succeed in a disadvantaged environment.
Whether the Philippines is a boon or a bane, I am happy to build and grow an empire right here.
One of the key features that is lacking in the country is the industry's support for R&D in the academe. If you take a look at how it is done in the US - Silicon Valley, for instance, have an environment where universities and companies are a stone-throw away from each other.
You may hear scholarships, professorial chairs, and donations from companies, but these are not enough without the mentoring that academics and students need. Academics concentrate on research and getting its output published - there is definitely nothing wrong with this. Mentoring should be able to provide the much needed insight on how to commercialize these outputs. This is what is lacking.
Tell me - what companies are actively engaged in a research projects in universities? It is very rare.
The country does not lack talent, imho. Entrepreneurship is now being taught in universities, to encourage students to start their companies after graduation. However, the lack of available funding is a major concern -- add the fact that it is difficult to start a company here, thanks to the government requirements!
Now, if companies invest in universities - in money, time and expertise - and guide them to produce commercially viable research outputs, then we might be able to see an increase in the number of startups.
Good comments and excellent summary, Jan. Thanks for doing that and adding useful content for everyone to reference.
Re Imaging and Communications.
First I'd like to focus on Communicating to your customers about your brand (not on the equally important inter-personal communication). This is commonly called Marketing Communications (in the US). Sometimes also called Sales Marketing or "PR" or Sales Promotion in the Philippines. This is of course, is just yet one more piece of the puzzle for the success of any company. And in my personal opinion based on experience of a number of our companies, it is good to remember that we are trying to sell a product or a service and that the goal of that communication is to convince or coax the potential customers out there that your product or service is worth buying. Therefore, the first step is to know those customers and how they will behave and react to pitches.
In particular, if we discuss the "Philippine" brand it must be admitted that historically we have not yet created or developed as many global brands as other nations and a company that states "Proudly Filipino Made" could sell well for the growing number of patriotic citizens (note the success of the Collezione Filipino Map) BUT it could also scare away another audience which is the still large numbers of customers who believe that products from foreign countries have better quality. We could go on-and-on about this, but this point is not as pronounced in industries where the Philippine quality has shown itself like fashion, furniture among others. But if we speak of a Filipino consumer electronic device than we still have to prove ourselves. There are many Philippine manufactured products (Intel, TI chips, mobile phone screens, etc) but we don't yet have too many locally developed Filipino chip or system designs. Dado Banatao, John Ocampo, Marc Loinaz, Rey Bruce are BGN members with Filipino blood who designed world-class products in the US. Rey has even brought some of his design team to the Philippines and that is a great start. But we just need more and more so one day, just like we are starting to trust the Chinese phones - though not yet Nokias or iPhones - the world and our own consumers will trust Philippine designed and built tech products.
My examples by the way are hardware focused but this also applies to software, one day, Philippine software designed and developed in the Philippines will be a brand as our companies like Stratpoint, Accenture, HeadStrong, Orange and Bronze, Exist and others are designing software that is used around the world. Slowly they are uplifting our branding to get close to that goal.
By the way, I think you could sell products in two ways if you have the budget and the channels can be separated, sell the "proudly Philippine made" to the audience you are sure will appreciate and want that. And sell a more normal way to the rest of the world. Just my two cents. If you don't have that budget, it might still be safer in this day and age to have a "neutral" branding and then simply whisper to those who care that it is Philippine-made. Other consumers especially the savvy one, frankly don't care who makes it as long as their products are proven to be reliable, dependable and perform the way they should to the quality level required and at an attractive price.
@Rommel, hey we are visiting UP soon to continue collaborating with the Banatao fellows there. We can meet you as well. Narra through Ernie is following your advice. Good point. We really need to strengthen the linkages. We have lots of good projects and the talent is going to have to come from our best universities (in and outside of ERDT).