Numbers Don’t Lie

Secretary Ramon Lopez of the Department of Trade and Industry is among the hardest working Cabinet members we have today. Under his purview is the unenviable task of attracting foreign investments, shepherding local industries to global competitiveness, creating international trade opportunities and protecting local consumers from unfair trade practices, among many others.
Without doubt, however, the brightest spot in the Secretary’s body of work are his efforts towards developing a culture of entrepreneurship among the youth and disadvantaged communities. This will be the Secretary’s enduring legacy.
Entrepreneurship, as we all know, is the foundation of a strong economy. The proliferation of micro, small and medium enterprises (MSMEs) is what keeps the economy productive and what increases our tax base. They are the drivers of invention, innovation and our greatest source of employment. They support large conglomerates by bridging supply chain gaps. Successful MSMEs who rise in competitiveness progress to become large enterprises with a national and/or international presence.
Examples of economies with a strong culture of entrepreneurship are Germany, the US, India, Taiwan, and China. Each are mammoth manufacturing machines that enjoy huge trade surpluses and, consequently, prosperous societies.
Under Secretary Lopez’s leadership, several programs are now in place within the DTI to promote and support entrepreneurs. Among them are the Kapatid Mentor Me Project, the Negosyo Center, the SME Roving Academy, Shared Services Facilities, the Domestic Trade Exchange, Go Lokal and the Town One Project Program. Some of these programs have been preexisting, others are new initiatives of the Secretary himself. Suffice to say, never before has there been a stronger push for entrepreneurship than there is today.
Secretary Lopez has been a personal friend since the late 1990s and through the years I have come to respect his work ethic, sense of nationalism and, above all, his humility. To be honest, I have always felt guilty for not being as active as I should be in spreading the gospel of entrepreneurship. While I should have raised my hand to join the Kapatid Mentor Me Project, work commitments have prevented me from doing so.
I still plan on being a mentor at some point. In the meantime, however, I would like to share five nuggets of wisdom that I have learned over my 30 years of being an entrepreneur. As many may appreciate, academic knowledge is one thing, but wisdom derived from business success and, especially, failure can be more valuable to MSME’s trying to get off the ground.
Businesses with greater chances of success are those that solve a problem.
Often times, when entrepreneurs contemplate what products or services to take to market, they decide based on perceived demand, on the success of other similar businesses or simply what is convenient for them. Nothing wrong with that — but the probability of success in doing what others are already succeeding in is far less than when you are a maverick.
Through the years, I have owned businesses relating to food manufacturing, exports, business services, restaurants, and real estate. In every field I was involved in, the ventures that succeeded were those that provided a solution to a problem.
To find that “problem,” try to identify what people often complain about. The more complainers there are, the bigger your market can potentially be. Ask yourself, is there a better way of doing it? Will people be willing to pay a premium for a better way?
A personal example comes to mind. Back in the early ’90s when the Internet was still unavailable, I noticed that basic business services were prohibitive for most start-up businesses. Telephone lines were scarce, the cost of a telex or fax machines were exorbitant, as were offices spaces in central business districts.
These were the problems we set out to solve. It was the reason why Fax ‘N Parcel, a one-stop business center, was born. We were able to charge P6,000 a year for a simple mailbox in a Makati or Ortigas mailing address — a large sum at that time. We also made a 30% mark-up for telex, fax and freight services. We provided secretarial services and conference room rentals and charged handsome toll fees by the hour. The business was a success for its time as people were willing to pay for the convenience. It proved that solving someone else’s problems has value.
One cannot be a specialist in many things, especially when starting a business. Fledgling businesses need to specialize. Being outstanding in one thing is how to stand out and explosive growth only happens when you specialize.
Excellence is difficult to attain. Not only do you need to be the authority in your field, the quality of your products or services must also be a notch above the rest. You should be able to deliver a superior customer experience every time.
An excellent example that comes to mind is a Filipino company called S.C. Vizcarra. Although the company has been operational since 1925 as a purveyor of Filipino handicrafts, the third generation has successfully reinvented the enterprise to be the best in locally designed and engineered bags.
In the last 10 years, S.C. Vizcarra has become the last word in bags made with flawless craftsmanship using leather, woven materials and fabric, or a combination thereof. The company now supplies the top fashion houses of the world and also exports its own brand under the brand name, Zacarias. Their success came on the back of being excellent in one thing.
What is it that you do best? What are you passionate about? Whatever it is, it is likely where your field of excellence lays.
Pierre Marmonier is a Frenchman who settled in the Philippines some 20 years ago. Born in Léon, Pierre, as a young boy, learned the art of making jams and fruit preserves based on the age-old traditions of his hometown. For as long as I have known Pierre, jam making was his passion and best pastime.
He has since made it into a business. Today, Pierre is the man behind The Fruit Garden, the local equivalent to the global conglomerate, Hero Jams. From a backyard business, Fruit Garden’s products are now enjoyed in most luxury hotels in the Philippines, Korea, and ASEAN. He is also part of the supply chain of many food manufacturers.
All things being equal, the strength of your brand is the tipping point that makes business flow your way. It is what makes customers choose you over others.
Too, a strong brand is critical to scale up your business. Having a multitude of customers loyal to your brand ensures you of a client base when you scale your distribution channels from one to one hundred.
And since your brand speaks not only about your product but also the integrity of your management, a strong brand compels other companies to do business with you, whether as a customer, supplier, or an investor.
In branding, it’s important to talk about your single, most remarkable competitive advantage, not all of them. For instance, a cereal brand that claims to be high in fiber, cheaper, and made with organic ingredients is likely to be less remembered than one that simply claims to help in weight loss. The principle of specialty applies in branding too.
The strength of a company is the collective strength of its employees.
Ideas are a dime a dozen but employees who have the ability to execute are worth their weight in gold. In business, it’s all about the ability to execute despite the hurdles faced. It can spell the difference between a still-born project or one blossoming to fruition.
As entrepreneurs, our job is to find good talent and retain them.
Until I have the time to serve in Secretary Lopez’s entrepreneurship programs, I hope these humble nuggets of wisdom can help those under his stewardship.
Andrew J. Masigan is an economist.