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Start-ups’ kuya

By Pola Esguerra del Monte, Multimedia Editor
AS FAR AS the internet is concerned, everyone who enters its realm is “at least 18 years old.” That includes the 13-year-old self of Iran-born Forbes under 30 lister Shahab Shabibi, back when he was lurking at 3 a.m. on Yahoo! Messenger (“My parents didn’t mind; I had high grades.”) to chat with a programmer he was building a company with.
Today, at 22 and finally legal, Shabibi is still a builder of things. After the success of rapsong.ir — that company he started in his teens which became Iran’s first underground music portal — as well as a Tarafdari, Iran’s leading sports social media network with more than five million visitors every month, he moved to the Philippines in 2010 and realized he could use his knack for innovation for a deeper social purpose.
“When I came to the Philippines, it was a very eye-opening moment for me,” he told SparkUp. “When I began studying, that was the time that I started getting a better understanding of what is really happening here,” he said. “And then I remember, I had this moment where I realized that what I’ve been doing in Iran is not so amazing. To make another entertainment website, to make another sports website, is not something that truly changes people’s lives. I found myself looking at more fundamental problems that I haven’t seen before.”
That idea came to him while he was working at Rocket Internet in 2014, where he was tasked to setup carpooling platform Tripda. “People started e-mailing me ‘Wow, this is amazing!,’ ‘I’m saving two hours a day!,’ ‘I don’t need to commute anymore!’ I realized that I had never heard this from any of my users back in my previous platforms,” he said. “That’s when I thought to myself that technology can really change people’s lives. And that’s the time I decided that I want to be here and I want to build a company here.”
That company turned out to be Machine Ventures, of which he is the CEO and co-founder together with Harvard-educated health tech guy Farouk Meralli. “Back in our home countries, these problems didn’t exist and that there was a big calling for us that we should do something here,” he said. “We set up Machine Ventures with the idea of solving real world problems using technology as means to make it very big and scalable. We started looking at what is happening in the Philippines and identified a few key issues: lack of infrastructure, poverty, and lack of mainstream quality education.”
The first product the company hatched is HeyKuya, an SMS-based personal assistant service, that gave job opportunities to men, through food delivery and travel booking, among others, to over 15,000 users. In only five months, HeyKuya was acquired by a similar Indonesian personal assistant service called YesBoss.
LESSONS
The acquisition served as a validation, but it also taught Shabibi new lessons.
“As much as we wanted to be about impact, about solving problems, there is this unavoidable discussion about the financial side of things,” he said. “That really helped us to understand that, we don’t want to just build solutions, we want to build sustainable solutions, we want to build solutions that economically make sense in the way every stakeholder would be willing to continue what they are doing because it is also financially reasonable.”
He reflected: “Another realization that I had afterwards is that it is really sad that you cannot control your company after you sell it.”
With Machine Ventures, however, with him at the helm, the journey was just as tough—perhaps even tougher.
“The Philippines is probably one of the hardest countries to setup a company in,” he observed. “Generally, entrepreneurship is very tough but I would say in the Philippines it is much more magnified in terms of all the other inefficiencies that are out there, like supplier deliveries most likely won’t happen on schedule. Likewise, you definitely can’t pay suppliers easily because you go to the bank and all these processes are very lengthy and very tedious.”
But this reality only toughens him up. Machine Ventures is now composed of 24 people who “the resilience and the ability to not take ‘no’ for an answer.” He says: “We believe in that idea of learning entrepreneurship by doing, and learning by mastery, not just taking a course and passing an exam but literally going through the journey with someone who has done it before, and as you do that more and more, you learn.”
Right now, what keeps him busy is the launch of another new venture, MyKuya, a service similar to HeyKuya, whose mission is to create one million job opportunities over the next three years.
“We are building it as a platform where people can get things done, but on the other hand, it also opens a lot of people to job opportunities, the ability work whenever they want, to be their own boss, to have self-respect and self-dignity in what they do in day-to-day basis,” he said.
With all these plans, does he consider himself a social entrepreneur? “I mean, that’s a buzzword right? If I say ‘yes, I’m a social entrepreneur,’ it would probably get more clicks,” he laughs. “But I would say that as an entrepreneur, I have the responsibility and I’m on a mission to solve problems, and the biggest problems are often social problems,” he said. “And the same way that I’ve tried to solve smaller problems in my own little way before, now we are focused on solving bigger problems, and they happen to be social.”

How a 24-year-old plans to send 3,500 college kids to school

By Robert A. Vergara, Jr., Digital Reporter
IT WAS IN Africa that Carmina Bayombong, child of non-government organization workers, first caught glimpse of poverty. This was cemented around a decade later at the University of the Philippines Diliman where while finishing her degree in industrial engineering, she met other students who were forced to drop out due to lack of resources.
This led Ms. Bayombong, now 24, to establish InvestEd: a Filipino start-up engaged in matching student borrowers with lenders via an online platform.
Launched in December 2016, InvestEd offers student loans amounting from P10,000 to P80,000. Students need only to create a borrower account invested.ph online, get notified of qualification within seven business days, be interviewed for a final assessment, and sign a loan agreement that they will pay their loan after finishing their degree.
InvestEd gets investors — lenders — who are promised that they can grow their money for 7%-11% per annum with a minimum amount of P100,000, deposited in tranches.
To secure their investment, a six-point approach to repayment is enforced. This includes multiple matching, where a lender is matched with at least three borrowers to reduce risk, as well as a credit investigation technology using a credit scoring and profiling algorithm powered by artificial intelligence. Lenders are repaid bi-monthly over 12 to 36 months, depending on the student’s loan amount and starting salary. An amortization schedule is provided after depositing their pledge.
Invested was recently awarded a $100,000 grant from the government of Dubai last week to grow its number of loaners from 70 to 3,500. The company is also currently developing a scoring system to conduct the applicants’ background check using social media data, as well as a technology that will shorten the application process to 10 minutes.
“In 2017, we had a different business model,” Ms. Bayombong shared. “We didn’t have service fee, and we only had a very low interest rate. It couldn’t even cover 20% of our costs. We could’ve kept our previous business model and just rely on donations and lenders. With that model we would probably help a thousand students in 10 years.”
But with the revamped and “more sustainable” model, she says, “we could help 10,000 students in just three years.”

Funny shirts, serious business

By Pola Esguerra del Monte,Multimedia Editor
SO HOW have you been since our last interview?
Ayun,” Ali Sangalang, the writer, answered with a straight face. “Ang yaman na namin.”
Chuckling, Panch Alvarez, the artist, quickly interjected: “Hindi, joke.”
Naka-Uber pool kami,” Sangalang clarified.
From the first ten seconds of the interview, one can already glean how the founders of Linya Linya, purveyor of witty shirts, work together: Sangalang is the guy who spews humor without effort. Alvarez, his schoolmate-turned-colleague at ad agencies and in Malacañang, sees right through him and interprets his lines through art.
They decided to put their collaborative art on t-shirts bought by the bulk in Divisoria. The two, who grew up wearing Pidro, would hull those shirts to a printer in Parañaque and then onto bazaars in Rockwell. At the end of the day, they’d spend their earnings on booze.
Ganoon ka-strategic ’yung mga decisions namin,” Sangalang noted.
It didn’t take long before they realized that it takes more than just creativity and a little capital to run a business. That’s where musician Jim Bacarro, who completes the triumvirate behind Linya Linya, came in.
Armed with a supply of 250 shirts — the sum of their initial investment — they set up an online store. In a day, they sold three shirts.
Bacarro, who quit his job in marketing to do Linya Linya full time, had a panic attack. He recounted: “I talked to my wife,” referring to actress and singer Saab Magalona. “I said, ‘Look. I’m really, really in love with this. Can you give me at least six months to see where this goes?’”
Only then did the company have a semblance of a system and strategy. It included getting only fixed salaries (“Sweldo ha,” Bacarro emphasized. “Hindi pa dividends.”) amounting to P6,000 each for a month, enough to pay the rent.
After opening a first stall at the UP Town Center, Linya Linya has grown into a 15-store-strong T-shirt company. Advertisements are plastered at the back of buses plying EDSA, close to their market: the average working Filipino who toils in the lamentable traffic situation but still manages to laugh despite the daily struggle.
Like the pace of buses along EDSA, success will take time. “In terms of what we’ve done, I don’t think we’re there yet,” Alvarez said. “But we’re continuously getting there. We’re getting there.”

Leaving work to live a life

By Robert A. Vergara, Jr., Digital Reporter
FOUNDERS WHO were formerly employees have that one moment where they realized they had to give up their corporate careers. For Ginger Arboleda, the 33-year-old chief operating officer and cofounder of Taxumo, that moment came in 2012 when she was due to a promotion that would catapult her into an executive position at a banking giant she had been working at for more than six years.
“I was happy but I wanted to do so much more,” she said in a forum organized by SparkUp in April. “I wanted to see the direct impact that I could have to people.”
That same year, she became pregnant again, following a miscarriage in 2010.
Arboleda recalled, “I couldn’t see myself as one of the executives of the bank. When I found out that I was pregnant again, I realized that [maybe it’s time] to focus on living my life again.”
So in January 2013, a few months after she left the corporate world, Arboleda began organizing Manila Workshops — a series of 101 sessions for aspiring entrepreneurs and freelancers. “After a few work shops, I realized that it was what I want to do,” she said. “I want to see that our attendees indeed follow their dreams.”
And in that process, Arboleda stumbled upon another idea. “Things started when I was doing my taxes,” she recounted. “I found it frustrating. It was so tedious. I had to line up at the BIR and renew a lot of business papers, and numbers aren’t my forte.”
In 2015, Arboleda with her husband EJ, who has a 15-year background in IT, came up with the idea of creating a platform that would automate the rigorous process of filling taxes for local entrepreneurs and freelancers: an app which they christened Taxumo.
The two began presenting the idea in pitching competitions and later on became part of Echelon Asia Summit’s top 100 start-ups and IdeaSpace’s incubation program, both giving the company seed funding and mentorship opportunities, among other benefits. Last year, the company also received the four-year tax holiday grant from DTI’s Board of Investments.
Taxumo is now valued at $1.5 million, following a funding round.
But for Arboleda, valuations are just “all about $1 billion,” harking to the number required to call a start-up a unicorn. More important to her, she says, is “helping 100 million Filipinos. For us, that matters more than the valuation.”

How a government employee began to weave dreams

By Robert A. Vergara, Jr., Digital Reporter
AKABA’S 24–year–old Chief Operating Officer Daniel Lumain was immersed in implementing policies for government-run companies before the country changed leadership in 2016 and put an end to his two-year career.
But that backdrop gave him “not just the connections,” but also the fuel to continue being of service to his countrymen. He then returned to his undergraduate thesis at the Ateneo de Manila University and grew it into what Akaba is today: a social enterprise selling bags and accessories made of handwoven textiles by over 100 weavers from Ilocos Norte, Isabela, Abra, Oriental Mindoro, Zamboanga, Sulu, Basilan, Iloilo and South Cotabato.
“It’s our mission to help these weavers promote their artistry and craftsmanship, but at the same time create a sustainable business that is relevant to the supply chain,” he said. “When we went to Ilocos Norte, we found out that a lot of weavers create handwoven textiles for around a month or so, but only sell them for around P20 per yard, and when we went to the market we actually saw middle men selling them for P150 to P200.”
Unlike many handwoven crafts, however, Akaba didn’t target the so-called “tita market.” “We chose a younger market and lowered our price points. What we always say is if you buy a high-end product worth P10,000, sure you’ve helped a community, but when is the next time you’ll help them? We can sell a product for around P1,500, sell a hundred pieces, and basically continuously support the communities.”
Akaba currently sells its wares across major malls, but because it aims to become an established “Southeast Asian brand,” it is also expecting to enter e-commerce platform Amazon to tap the American market this year, on top of its plan to expand its ties with Cambio Market to further introduce the brand in Canada. Lumain added that the team is also considering to widen its Asian market by selling its products in Hong Kong and Japan.
“I always believe that poverty is not just an economic situation, it’s a mind-set problem,” he said. “These people changing their views, believing that there’s a chance for them to have a better life, that in itself is the biggest achievement that we’ve had.”

Going beyond taste

By Robert A. Vergara, Jr., Digital Reporter
I DON’T WANT to start a food business that solely sells food,” said Francis Reyes, the 25-year-old CEO of Caravan Food Group, Inc., parent company of rolled ice cream store Elait and donut shop OverDoughs. “I want to send a message through food,” he added. “I want to hire people who the usual food entrepreneurs wouldn’t hire.”
Graduates from College of Saint Benilde’s School for the Deaf currently staff Elait’s branches in three malls. The company is also in the process of employing more people with autism or down syndrome for OverDough’s current stalls.
This ambitious idea, Reyes admitted, was risky for a service-oriented business, especially in this age of social media when one’s dissatisfaction can easily taint a brand’s reputation.
“I didn’t know how the public would react so, at first, we paired up deaf employees with those who can hear, then eventually we saw that they can handle things by themselves,” he recalled. “That’s when we decided that everyone would be deaf in the whole team.”
Reyes, who holds a degree in hotel, restaurant and institution management from the University of the Philippines, hails from the family behind clinic chain SkinStation. And while that kind of background might attest to his business potential, it also posed a challenge: some mall operators would press him about building his own brand when he could capitalize on their already established family business. After all, the playing field for dessert concepts was already dominated by big, mostly foreign, players like, say, Dunkin’ Donuts or Dairy Queen.
“When I was trying to pitch our concept to mall owners, I really had to push the idea that what we’re different, that what we’re doing is something else,” he said.
The persistence, however, did pay off. The company has earned enough profits to sustain operations and even fund expansion plans.
Yet more than the money, Reyes considers the fulfillment of his deaf employees as his biggest achievement in business to date.
“When I was interviewing them at the start, their goal was just to survive and support their families,” he said. “Now, they really appreciate the business more. They really take care of it, and they treat the branch as their home. They have a place to belong to.”

Coming up roses

By Pola Esguerra del Monte, Multimedia Editor
AT THE height of the AlDub love team phenomenon, Diane Yap and Lauren Gavino, who had been running an online flower shop for only a month then, received an order for 49 stems of red Ecuadorian roses to be delivered at the Philippine Arena in Bulacan, where some concert with ticket sales reaching P14 million would be filled with 55,000 people.
Their response: “If you want, on top of the cost of the arrangement, pay for our gas and toll.”
On that day, Oct. 24, 2015, that three-hour commercial-free episode registered a TV rating of 50.8%, the channel stated citing data from AGB Nielsen, compared to the 5.4% registered by the competitor. Tweets for the hashtag reached 39.5 million. And amid that number of viewers, actor Alden Richards was walking up the stage carrying that 49-rose boxed arrangement himself— the brand name “Petalier” in clear, full view.
Gavino found herself crying in front of the TV.
“Ang kapal ng mukha namin ’di ba?,” the two now laugh, looking back at what they consider their store’s big break. “Sobrang fail namin. We didn’t know who AlDub was.”
But entrepreneurship isn’t a bed of roses, and getting flowers on screen took more than just luck or serendipity. At 11 p.m. the previous night — only a few hours before the concert — their supplier for the flowers backed out. Yet instead of giving up right then and there, they insisted on delivering.
Yap had a backup plan ready. The day before, she had begun contacting all the flower suppliers she could find on Google—pleading “Please po, magbabayad kami.”—all while going around public markets to do surveys for a senator she was then still working full-time for. After finding one, a certain “Dra. Anna” who remains their main supplier to this day, they finally got the flowers by 2 a.m., arranged all 49 stems, then had their personal driver to deliver it to Bulacan. The rest, as they say, is history.
“That’s the first time people saw pretty roses in a box,” Yap said.
Influencer marketing has since been Petalier’s main avenue to drive sales.
A “calculated gamble,” Yap describes. “Sometimes they’re effective, sometimes they won’t post you. So that’s money out the door.”
Still, it works, and the two have also launched a new baby: a luxury balloonery called Blloons.
“We thrive on Instagram. We’re typical millennial business people. Uber doesn’t own a single car. We thrive online,” she said. “You can go far with just online. We’re the perfect example.”
Petalier is an online business. Orders can be placed on petalier.com but queries can be sent to 0977- 841-7738 or mail@petalier.com.

The taste of childhood

By Joseph L. Garcia, Reporter
YOUNG CHEF Miko Aspiras channeled memories of childhood playgrounds in the Philippines to create a special dessert for his presentation during Madrid Fusion Manila 2016.
For many Filipinos, playtime would consist of playing in the hot sun on a swing set. Aspiras gathers these elements together, creating a story from sensory memory: the taste of sweat, rust, and santan flowers. “It’s a memory of when I was a child, through flavors that I didn’t really intend to taste, but I’ve tasted… it’s part curiosity in my head.”
Parks and gardens around the country have santan bushes growing in them, filled with bunches of its tiny flowers. Many people’s childhood memories include plucking out a tiny flower and sucking out the sweet tiny drop of nectar from within its long hollow stem. Aspiras gathered a humungous bunch of these flowers and extracted the nectar to use in his dessert.
As for sweat and rust, the chef relied on the help of an “extraction system,” a machine which enables one to get the approximation of a flavor of something. Aspiras placed in a sample of his own sweat, and a sample of rust in the machine. “It’s… something that I can remember all the time,” he said, talking about the sensory memory of childhood sweat, which he says tastes like alkaline and salt. With this in mind, he added this to salted caramel, which he then distilled, leading to a clearer consistency. “It’s perfect for my dish, because it looks like sweat,” he said.
Aspiras is currently involved in restaurants under the Tasteless Food Group, which includes the French-Japanese bistro Le Petit Souffle.
He started out learning about bread and pastries under chef Sau del Rosario in 2007, going on to refine his skills while working in the pastry sections of top hotels including Fairmont, Raffles, Edsa Shangri-La, and Resorts World Manila where he worked with Cyrilly Soenen.
The young chef has received a slew of awards in his short career, including awards and citations from the Philippine Culinary Cup, World Association of Chefs Societies Congress, and the Hong Kong Culinary Classics.
According to the souvenir book for Madrid Fusion 2016, Mr. Aspiras has used, or has tried to use, ingredients such as pig’s blood and rotten milk to achieve his sensory goals.
At a press conference after his presentation, he was asked whether he knew that the odd ingredients and the odd techniques he likes to use would become hits, especially in the Philippines, where slices of cake can be more than enough to satisfy most people’s sweet tooth.
“I didn’t know. I really didn’t know. It’s just that I’m pursuing my dreams… I’m really happy that a lot of people are appreciating it.”
First published in BusinessWorld on April 14, 2016.

A word of advice for start-up founders

WHEN 28-year-old Katrina Chan returned to the Philippines in 2012 after finishing her studies in the US, the local tech start-up community was just in the “awareness and capacity building” stage, a stark contrast to where she came from.
“Everyone in the US was working or was aspiring to work in Silicon Valley,” she recounted. “When I came to the Philippines, I wondered where the tech scene was, who the start-up guys were, and I quickly found out that there was almost no scene.”
Ms. Chan, who graduated from Carnegie Mellon University with a degree in materials science and engineering, with additional major in business administration, said she even struggled to find events organized for start-ups.
But a lot has changed since then. Fast forward to 2014, the country has witnessed the unprecedented rise in the number of new and innovative b u s i n e s s e s , mostly led by ambitious young entrepreneurs. The current count, according to a study by PwC Isla Lipana and the Department of Trade and Industry (DTI), is at around 300.
Along with this is the growing interest of the private sector to support or invest in these startups, paving the way for the establishment of organizations that support through mentorship and seed funding, among others.
Ms. Chan, for instance, began volunteering before heading the growth division of business incubator IdeaSpace, where she mentored early-stage start-ups. From there, she founded and now directs QBO Philippines, a partnership between government agencies such as the DTI and Department of Science and Technology and JPMorgan Philippines. Launched in 2016, QBO aims to support and grow the country’s startup ecosystem by providing forums, seminars, and even business incubation to local start-ups.
“We’re seeing a lot of growth across Southeast Asia,” she said. “More people being bullish that start-ups can actually compete in the global stage.”
But while Filipino startup founders already have ideas bright enough to conquer the global market, Ms. Chan observed they lack one more thing — angst.
“What I see missing a lot here is ambition and confidence in their idea,” she said. Relative to foreign founders whose startups command the level of funding, development and traction, Filipino founders, she observed, are “shy.” Instead, she says, founders should have “the grit to go through the initial pains.”
“What matters is who does it faster, who executes it better, and a lot of that is driven by the team or the founders,” she added.
“It’s not about the solution, it’s about the problem you’re solving,” she concluded. “If the problem exists, then your product will make sense.” — Robert A. Vergara, Jr.

The skateboard: a vehicle for chicken

By Pola Esguerra del Monte, Multimedia Editor
FROM MERE slacker uniform, skateboard attire has seeped into the runways of the world’s fashion capitals.
For trans-disciplinary designer Sean Bautista, the skateboard culture is more than just a fashion thing: it is also a vehicle to purvey chicken.
The Comme des Garçons-wearing Ateneo graduate who looks up to David Chang took workshops in design management at Parsons School of Design in New York City before building two original concepts: Tetsuo, an East-Asian casual dining restaurant, and Transit, a retail design concept.
“I’m a fine arts student,” he insists when asked if he ever considered taking a business course. Tetsuo, after all, began as a chicken stall at Ateneo competing for space in the cafeteria. In a week, they met their ROI. After that, they began selling merchandise (imagine, a chicken stall with its own merch), before branching out to events.
“Organically” is how he describes the ideation process. “I and a few friends came together,” he recounted. “I mean we just hung out, we were into skateboarding, music, hiphop… but then we also liked cooking.”
“So from that idea and just trying to be authentic to ourselves, we’ve created a brand that suits or embodies what we thought. Like, embodies our relationship as friends. It starts with the chicken concept because, yeah, we wanted to create something that was palatable to our audience and that everyone would enjoy, but then we tried to elevate the concept and create a bigger personality around it by injecting things that were authentic to us,” he said. “To simplify that idea, we just came from a unique standpoint of dudes just hanging out, cooking together, and being interested in different facets of subculture, and then translating that into a product.”
From its formerly five-square-meter space inside Ateneo, it has expanded into a 50-square-meter restaurant along Katipunan, housing 31 seats. And it is, in fact, things like the playlist, typography, and visuals, among others, that formulate the overall brand.
“I’m able to connect to other people in a way that I wouldn’t have been able to do if I was just thinking about the business,” he says. “If I was only thinking about business goals, I don’t think Tetsuo as a product would translate in the way it does.”

The rising tech start-up scene in the Philippines

By Robert A. Vergara, Jr., Digital Reporter
IN 2016, 22-year-old Charles Lim established his own company Veer Immersive Technologies, Inc. (Veer), dismissing a possible corporate career in line with his background in computer science.
Lim, who hails from a family of Filipino-Chinese businessmen, established Veer that develops software content focused on augmented reality (AR) and virtual reality (VR), banking on the growing trends of emerging technologies.
To date, his company’s clients include Philippine Airlines, to which it provides VR-enabled training for its cabin crew.
“Right now we want to focus on the airline industry, to create a really good system that would revolutionize cabin crew training for any kind of airline, be it in the Philippines, Singapore, US or Europe,” he said.
Veer is just among the booming technology-powered start-ups in the Philippines. Since 2012, the country has witnessed an unprecedented rise in the number of new and innovative businesses mostly led by ambitious young entrepreneurs like Mr. Lim.
According to the first study profiling the Philippine start-up ecosystem by PwC Philippines and the Department of Trade and Industry (DTI), there are currently more than 300 start-ups in the country and over 200 of them are actively operating.

INCUBATORS
With this came the interest of the private sector to support startups by investing in them through business incubation, providing selected enterprises with mentorship, funding, and office spaces, to name a few grants.
For example, IdeaSpace Foundation, Inc. — established in 2012 with the help of companies, including Smart Communications, Inc., PLDT, First Pacific, and Meralco, among others — has received a total of 4,386 entries for its annual start-up incubation program since it opened. A total of 50 start-ups have undergone the program.
Kickstart, a venture capital firm under telecommunication giants Globe Telecom and backed by Ayala Corporation and SingTel, has been investing in tech start-ups in different funding series. Today, its portfolio of investees is comprised of 24 companies, including Wattpad, Zalora, coins.ph, and Kalibrr.
Lim and his company benefited from such initiatives. Veer had undergone the incubation programs of organizations like LaunchGarage and BrainSparks.
“Incubators are a huge help for businesses that are starting out because of the support and community that they provide. The years’ worth of experience and network that mentors can provide prove to be invaluable to businesses in their infancy as they learn to get their feet off the ground,” he said.
GOVERNMENT ROLE
The public sector, on its part, has also launched several initiatives to support these businesses.
In 2016, DTI and the Department of Science and Technology partnered with IdeaSpace and J.P. Morgan Foundation to establish QBO Innovation Hub, which aims to develop the local start-up scene.
Located at the DTI International Building in Makati, QBO has served as a mecca for start-up founders and budding entrepreneurs seeking network and education through weekly forums and free business 101 classes.
In 2017, the Department of Information and Communications Technology, in partnership with the private sector, launched the first Philippine Roadmap for Digital Startups, laying out strategic plans to develop the country’s start-up community.
In October of the same year, DTI held ASEAN Slingshot, a convention that gathered more than 80 tech start-ups from across Southeast Asia, including Mr. Lim’s Veer. During the event, at least 20 foreign angel investors were also invited and introduced to participating start-ups.
Just this May, a bill dubbed as the “Innovative Startup Act” had been passed on final reading in the Senate. Once enacted, the policy will direct the appropriation of a P1-billion venture fund, on top of other support like tax exemption, expedite processing of business permits, and free access to government services.
Katrina Chan, director of QBO, believes that the government plays a crucial role in developing the local start-up ecosystem.
“There’s so many things that the government can do, but at the end of the day it’s not the government’s job to create start-ups. The government’s role is to create that enabling environment where start-ups can thrive,” she said.
“The more that the government creates this kind of environment, it’s easy to start up, it’s easy to invest, and a lot of it will happen so start-ups can compete with the big guys.”
FUNDING
The current developments in the local start-up ecosystem have yet to transcend outside the Philippines. While Southeast Asia has pulled in more money from investors since 2012, only a small chunk of it went to the Philippines.
According to data from CB Insights, the country is far from its neighbours when it comes to outsourced funds. From January to September 2017, for example, the country has pocketed just $18 million, far from Singapore’s $3 billion, Indonesia’s $2.9 billion, and Malaysia’s $352 million.
However, the data showed that the Philippines had a significant deal activity despite the low funding, closing a total of 100 deals over the years.
For Mr. Lim, the development of the country’s startup ecosystem lies no longer just in business attributes, but in culture.
“I think we need to address the crab mentality and the mind-set that people are always out to get you. It’s too common that I see a person refusing to disclose their business idea fearing it might get stolen,” he said.
“We need to better develop a culture of collaboration and support for one another. We’ve taken steps in that direction, but some of the overarching issues are pretty deeply rooted in Filipino culture.”

America’s start-up scene is looking anemic

By Noah Smith
WHY AREN’T PEOPLE starting more start-ups? That might seem like a weird question to ask, in an age when Silicon Valley ventures are hot commodities and money and talent is flooding into machine learning companies. But in fact, Americans don’t start businesses like they used to.
Some of this decline has come from the decline of small businesses. When national chains like Walmart Inc. and Target Corp. can come to town and muscle out the competition, there’s not much point in opening a mom-and-pop shop. Online retailers like Amazon.com Inc. just compound the effect. Research indicates that this has been responsible for much of the overall decline in entrepreneurship.
That’s worrisome, because small business was traditionally one of the main gateways to the middle class. Without the option of starting a corner store, Americans without high skills or advanced degrees will find it that much harder to maintain comfortable lifestyles. Instead, many will have to seek jobs from large corporations, depriving them of personal autonomy and possibly driving down wages due to the increased competition for jobs.
This is an old and well-known problem. The decline in business formation in the retail and service sectors has been happening since the 1980s, even though the US government has enacted a steady stream of policies to counteract the trend. More initiatives to put the government’s thumb on the scale in favor of small businesses would probably be a good thing, but the decline in new retail businesses isn’t an acute crisis.
More worrying, however, is the decline in high-tech business formation. Tech businesses, unlike corner stores, tend to be high-growth businesses that employ lots of people. That same demand for labor also probably helps to drive up wages. And perhaps most important for the long term, technology startups are important for productivity growth.
Innovation is at the core of what tech startups do. They don’t necessarily do original science, but they take scientific findings and new technologies and combine them with creative new business models. That results in either better or cheaper versions of existing goods — for example, improved lithium-ion batteries — or entirely new goods that people didn’t even realize they would want, like coding tool GitHub (which was recently acquired by Microsoft Corp. for $7.5 billion). Newer, better and cheaper products raise the overall standard of living in the economy.
So it’s disturbing to see that high-technology start-ups have also been getting rarer. Here is a graph from a recent paper by economists Ryan Decker, John Haltiwanger, Ron Jarmin and Javier Miranda, who study economic dynamism and business formation, showing the percent of young businesses in various sectors:
The data only goes through 2013, so it’s possible that the last few years have seen a reversal of the trend. The Great Recession — from which the recovery only really began in earnest in 2013 — probably pushed these lines downward. But there are reasons to think there hasn’t been much of a start-up recovery. Chris Canipe of the website Axios notes that startup formation has barely ticked up in the last few years. While it’s possible that high-tech companies are bucking the overall trend, it seems unlikely.
So why are so few high-technology companies being formed in the US? There are a number of possible explanations. The boom in high-tech activity in the 1990s might have been a one-time bubble, or a temporary burst of activity in response to the invention and expansion of the internet. Davis et al. also mention the possibility that the US’s aging population might result in fewer founders and high-tech workers. An extremely pessimistic possibility is that there might simply be fewer new technologies and ideas to exploit.
But it’s also possible that the high-tech sector is becoming dominated by a few big players, leaving less room for innovators to break in. Tech titans like Amazon, Facebook Inc., Apple Inc., Alphabet (Google) and Microsoft have grown to staggering size.
These companies may be such powerhouses that entrepreneurs don’t find it worth their while to enter the market, because they’ll just get out-competed.
If Alphabet et al. are actually doing their own innovation, like Bell Labs or Xerox PARC in past decades, then this isn’t that big of a problem. But if it’s merely the threat of big-company competition keeping tech entrepreneurs out of the market, the picture looks worse.
Suppose I have a great idea for a new kind of algorithm to match customers with products. I could start my own online retailer built around that algorithm, but Amazon could just copy it (rather than acquiring my company), so I don’t. Yet in this hypothetical example, since I don’t actually start my start-up, Amazon actually doesn’t invent the new recommendation algorithm, and the innovation never gets done!
In other words, big tech companies might be acting like Walmart and Target, but muscling out tech startups rather than mom-and-pop stores. But unlike the retail sector, competition in the innovation space might sometimes leave new ideas unexploited.
The source of the decline in startup dynamism isn’t yet known. More research, and better understanding of the last few years, is needed before any definitive conclusions are reached. But if the tech sector is getting too concentrated, regulators might take a second look at options to reduce the dominance of the big players. — Bloomberg
This article does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.