The Philippines is still a “baby” in technology entrepreneurship, but the ground is ripe with opportunities as part of the fast-growing Southeast market.
With “low operating costs”, a tech-savvy talent pool, an economy that’s picking up speed, and a young English-speaking population that uses Facebook and cellphones more voraciously than Americans, the Philippines has a “unique opportunity” to prove itself to investors “in the next five years” as a “hub of innovation and technology.”
This view by tech innovators from Silicon Valley was affirmed in the release of the first World Startup Report during the Geeks on a Beach conference held Sept. 26-27 in Boracay.
“Who will be the next Instagram or Facebook?” was a challenge dangled before more than 300 delegates, mostly young Filipino developers, entrepreneurs, designers, and students with some investors, “angels” or benefactors and venture capitalists in the mix.
For now, the goal is simpler—to develop the environment where techpreneurs can learn fast and grow.
“Our time is now,” said Earl Valencia of IdeaSpace.ph in one conference talk.
“The ecosystem is somewhat complete. Several Filipinos in Silicon Valley have moved back to the Philippines in the past year or so. Keep up the momentum.”
The main highlight of the conference was the presentation by World Startup Report founder Bowei Gai, who traveled across 29 countries and 36 cities this year to find out the state of startup communities.
FAIRY TALE
Calling the startup world a “fairy tale” that begins with dreams and personal heroes like Steve Jobs and Spiderman, the 29-year-old Gai urged young techpreneurs to aspire to “change the world.”
A separate report on the Philippine scene was given by Silicon Valley investor and entrepreneur Ron Hose, who flew to Manila in February to start research with a team.
Hose concluded: “The Philippine startup ecosystem is still in its infancy – funding is scarce, experienced talent is hard to find, payment, delivery and Internet infrastructure is poor.
“But for all those challenges, opportunities abound—the local market is big and competition is still very low. Widely spoken English and a super-friendly culture makes the Philippines a great first base for startups aspiring to tackle Southeast Asia.”
Hose, the lead author who presented the report with Beryl Li of SeedAsia, suggested that techpreneurs learn from Filipino taipans Lucio Tan, Henry Sy and John Gokongwei, who dominate the retail industry by selling “things everybody uses or needs…but they don’t know how to play in technology, that’s your competitive advantage.”
Service-based
In a separate interview, Gai said the Filipino techpreneur startup community is probably the youngest in the world, but he expects to see a lot of growth with the ecosystem slowly setting in place all elements that will foster growth.
Gai, a Chinese-American, gave up his job as a manager in Silicon Valley to travel around the world after selling his company “Cardmunch” to LinkedIn.
“There should be a lot more startups in the near future especially with the community being active now,” he said in an interview.
“The Philippines is traditionally not one of the very ‘techy’ countries like Japan. It is more a service-based country like India so the trajectory of growth here is more of that of India,” he said.
Gai’s presentation was a personal travelogue with slides of himself as a boy, superheroes, exotic scenes and insights into how technology is used in the countries he visited. He said he will spend the next few weeks writing up detailed reports.
“The world is full of fairy tales,” he began.
UNIQUE STORY
According to Gai, each country had a unique story of starting out by seizing opportunities that were “low lying fruit”, not necessarily using sophisticated technology.
In China, one website whose cluttered design shocked him, was sold for a trillion dollars.
“Trillion, not billions is the new cool,” in China, he said.
In India, a popular mobile phone service allows people to call in to ask where to buy the cheapest price for an item.
Nepal, one of the poorest nations, had many people using smartphones. The most popular application provides a daily power interruption schedule, he said. It was sold for $100 million.
Ethiopia has only one percent Internet penetration but has its own brand Tango Phone, a popular product people use to listen to music.“It has a large battery pack and is Internet ready at only $26 each. It’s selling fast in Ethiopia.”
The most advanced money transfer system can be found in Kenya where people just text to get cash or buy goods.
Gai said revenues are equivalent to 20 percent of the country’s Gross Domestic Product (GDP).
The small, but advanced economy of Singapore, “is run like a company” and “nimble”, able to reinvent itself and “do whatever it takes to succeed”.
An investor can set up a corporation there in four hours, he said, compared to 27 days in the Philippines or 90 days in Brazil.