By Adrian Paul B. Conoza, Special Features Assistant Editor

Given an innovative environment and more sources of support, the Philippine startup community has the potential to grow the next unicorns, or startups with a valuation of over $1 billion. This was stressed in the second part of the BusinessWorld Insights series on Philippine startups held recently.

Rene “Butch” Meily, president of IdeaSpace Foundation, Inc. and QBO Innovation Hub, expressed his optimism that the local startup space can soon have its next unicorns, albeit they are hard to find.

“If even a few of these companies turn into unicorns, it’s going to lift all boats. We’re all going to benefit. And that’s the great thing about the startup ecosystem: Somebody’s success is a success for everybody,” Mr. Meily said. “The more successes we have, the more investors will come in, [and more] young people will want to start their own companies, and the more companies are going to go public. It’s a virtuous cycle.”

Ideaspace Foundation runs founder-focused programs for early-stage tech startup founders solving emerging market issues. The foundation also has an Opportunity Fund which enables them to invest in early-stage startups.

The QBO Innovation Hub, meanwhile, provides support to startups across various sizes and development stage through programs like networking events, feedback & mentorship sessions, and an incubation program.

Mr. Meily also noted that the digitization of micro, small, and medium enterprises, which compose about 98% of the Philippine economy to date, can be an opportunity for startups to turn into unicorns.

“There are human resource platforms that are promising, but there are also startups which are helping businesses export products. There’s a number of these ideas and companies that are out there that have a lot of potential for growth,” Mr. Meily noted, adding that there are as well a number of businesses that look into digitizing sari-sari stores.

For Anna Irmina B. Navarrete, co-founder and president of Kickstart Ventures, Inc. (KVI), the pressure to become a unicorn must be removed among Philippine startups. “What we want to focus on is creating companies that are sustainable, that are scalable, that are massively successful,” she said.

Ms. Navarrete stressed that the Philippines can be a leader in the startup industry, as much as it has become in the business process outsourcing industry and in terms of companies that have expanded globally from a Philippine base.

“The Philippines has succeeded at creating and supporting industries and companies that solve real problems, created jobs, and served employees, customers, shareholders, and communities. I think we (startups) can do the same thing,” she said.

KVI launched in 2012 its first fund which focused on helping consumers and businesses adopt digital. Then, in 2015, it unveiled a bigger fund to make investments in telco, media, and associated technologies. More recently, in 2020, it introduced the Active Fund, which looks into technologies that support the future of data, work, home, and life.

While becoming a unicorn apparently takes much time and effort, progressing into a camel, or a startup that can survive a crisis without a sky-high valuation, can be the initial step for startups to take.

“Camels might be more practical, they’re easier to build, they are more resilient. Unicorns have this need to grow so fast, almost at all cost; while camels are more focused on profitability,” Mr. Meily said. “I think what you’re going to need in order to survive and be a successful company [is] to do well first, and that means making money… Unless you do that, you might not survive the ‘deserts’.”

Yet, for both camels and unicorns to thrive, cultivating an inclusive and innovative environment is seen to be necessary.

“Whether we talk about camels or unicorns, still we really need to focus on building the foundations and ensuring that we have a robust startup and innovation ecosystem,” Dr. Rafelita M. Aldaba, Undersecretary of the Department of Trade and Industry (DTI), said during the online forum.

She shared in detail the policies and initiatives that DTI has set in place together with other government agencies to further enhance the Philippine startup ecosystem.

The policy reforms include the Ease of Doing Business Act, Philippine Innovation Act, Innovative Startup Act, and the One Person Corporation, which is included in the Revised Corporation Code.

Moreover, Ms. Aldaba shared about the Startup Venture Fund, a P500-million fund being implemented by DTI and the National Development Company that aims to help startups develop their products, scale up, and expand.

The Undersecretary also mentioned DTI’s Regional Inclusive Innovation Centers (RIICs), which she said are intended to “connect our startups with large small and medium enterprises along with government, co-working spaces, accelerators, incubators, research and development labs, universities, and funders.”

To date, there are eight RIICs, with the first four established in Legazpi, Cebu, Cagayan De Oro, and Davao.

“With continuous government support and whole-of-nation thrust towards creating an innovative society, I also truly believe we’ll be able to have an environment where camels and unicorns can thrive and develop,” Ms. Aldaba said. “We also remain committed to fostering the development of the country’s startup ecosystem through the implementation of the Innovative Startup Act and the Philippine Innovation Act.”

Ms. Navarrete of KVI added that the Philippines already has in place many of the essential market characteristics for unicorns to thrive.

“We’ve got a young demographic, high mobile and broadband penetration, and an openness to try new things. Especially when you think about the last two years, we now have a new Filipino consumer who is much more digital, much more willing to test new things,” she explained.

KVI’s president also pointed out that freely sharing information is a key for startups to be successful that they can progress into unicorns. “When you look at big success stories globally, these have come because information, data, and science are respected,” she said. “Conversely, when you think of… startups [that] have had spectacular failures, [they have] come from disinformation, fraud, and abuses.”

Another aspect within the environment that should be improved further, for Mr. Meily, is entrepreneurship among Filipinos.

“There’s always been this tendency to play it safe… and we hear this time and again, ‘Okay ka na diyan, huwag ka nang umalis’ (‘Stay there, don’t go elsewhere’). I think we need to cultivate a new type of culture where it’s okay to take a chance, to fail, and to start again,” he said. “If we can get that entrepreneurial mindset that you don’t have to go abroad or work in a big company to be successful, you can start your own company and create wealth for yourself, your employees, and the country.”

By Chelsey Keith P. Ignacio, Special Features Writer

Highlights from the International Trade Centre (ITC) Ecosystem Mapping Report for the Philippines were presented at the workshop on “Strengthening Philippine Entrepreneurship: Findings and Key Recommendations from the Ecosystem Mapping” held last May 18.

The Ecosystem Mapping Report provided a ‘bird’s-eye-view’ of the business supporting organizations operating in the country. It included insights into service overlapping and gaps in the offerings and recommendations formulated based on the findings for the institutions in the network.

The report, which has also been conducted in other countries, followed the ITC’s methodology. Its three pillars include service mapping and gaps analysis, network analysis, and user experience analysis.

ITC National Expert and Startup Village Founder Carlo Calimon went over the report’s first pillar. “There are many [ecosystem] players, whether it’s incubators, accelerators, investor groups, associations, and the like. And at the end of the day, their objective remains the same: to support the development of entrepreneurs in the country,” he shared.

He also explained the eight gaps identified regarding the service offerings, among which concern government support and leadership for the ecosystem, limited access to funding (especially for the idea to the startup stage), and lack of focus on areas outside Metro Manila.

One of the identified overlaps is duplication of programs, with majority of the support focused on the idea to the early- stage entrepreneurs. Another overlap is high competition as organizations compete for limited resources like funding and the startups themselves because of comparable service offerings.

“In the Philippines, what we’ve seen compared to other ecosystems that ITC has mapped is there’s an abundance of actors in the ecosystem,” Claire Sterngold, Ye! community manager at ITC, noted. “However… while you have a lot of actors in the ecosystem, we’re still exhibiting more of a hub and spoke model where we have a number of actors with a high degree centrality, where they have high numbers of connections coming into them. But then, the bridging capacity, the betweenness centrality, between factors that are connected to the key node is not quite there. And that’s where the network analysis can provide guidance and insights into how these networks can be strengthened.”

Key insights presented from the report’s network analysis are that connections are concentrated in Manila; the potential growth through differentiating connections; setting up a country guide that could provide information to entrepreneurs; and expanding the support beyond the technology sector.

Furthermore, despite various support available, one of the six key findings from the report’s user experience analysis is that entrepreneurs do not know where to go for support. “So it’s not about a lack of presence or support programs; it’s about a lack of awareness of said programs,” said Chino Atilano, an ITC national expert and TimeFree Innovation founder.

Credibility is another challenge for young entrepreneurs. “It hinders them from doing business with different corporations, potential customers and potential partners, just because of their age and most especially if they’re also female,” Mr. Atilano shared.

Nine recommendations are presented in the report to help strengthen the country’s support ecosystem for startups, especially for the youth and women-led.

The Ecosystem Mapping Report will be published on the website of the Department of Trade and Industry (DTI) by the end of the month.

“The report is a welcome addition to our continuing effort to better understand the Philippine entrepreneurship ecosystem and work together to further foster innovation and collaboration between and among government agencies at both the national and local levels, the stakeholders from industry, startups, MSMEs, youth and women entrepreneurs, academe, and other sectors,” DTI Undersecretary Dr. Rafaelita M. Aldaba said.

Aside from the introduction of the mapping report, the workshop also included a panel discussion and breakout discussions. It is organized together with the DTI under the ARISE Plus Philippines, a European Union-funded project that seeks to cultivate inclusive economic growth in the country through improved international trade performance and competitiveness as well as economic integration.

By Bjorn Biel M. Beltran, Special Features Writer

Cryptocurrencies, once only acknowledged and traded in the more obscure recesses of the Internet, have been steadily gaining more attention among investors over the past few years. It would be difficult not to, as last November, bitcoin, the most popular cryptocurrency, hit an all-time high of more than $68,000, pushing the value of the crypto market to $3 trillion.

Bitcoin now hovers around $30,000, plunging the market’s value to around half of what it was. The market’s volatility has led to a number of investors losing vast amounts of money due to improper risk management and lack of understanding about cryptocurrency in general.

“Personally, I know some people who lost a lot of money due to improper understanding and risk management investing in this space,” Jiro Reyes, chief executive officer of crypto edutech platform Bitskwela, told BusinessWorld in an interview.

Citing research done by the Organization for Economic Cooperation and Development (OECD), Mr. Reyes pointed out that 74% of Filipinos are aware of cryptocurrencies today, but 83% of them do not understand it well.

“This is absurd given that the Philippines is actually number 15 in global cryptocurrency adoption, reaching 76 billion in transaction volume from June 2020 to July 2021,” he said.

In addition, the Philippines ranked first out of 20 countries in terms of ownership of NFTs or non-fungible tokens that are traded digitally. About a third of Filipino Internet users claim to own these tokens, according to a December online survey by Australian information service provider Finder.

“That is a good thing, right? But if you pair it with the lack of education and crypto-literacy in the Philippines, you come up with a population that is investing into an asset class they do not understand, leading to billions and billions of pesos being lost in crypto-related scams locally,” Mr. Reyes said.

“That’s what we’re here to solve at Bitskwela, in all languages for all Filipinos.”

Bitskwela (bitskwela.com) is a Filipino-led edutech platform that strives to make bitcoin and cryptocurrency education accessible to all Filipinos of any ethnicity. The platform currently offers 13 modules and a five-minute crash course on cryptocurrencies in English, Tagalog, Cebuano, and Ilocano, translated by professional translators who are native speakers of their respective languages.

Bitskwela is also planning on expanding their content to cover other major Filipino languages such as Ilonggo, Bicolano, Waray, Pampango, and Pangasinense, as well as offer alternative learning resources such as blogs, podcasts, newsletters, quizzes, webinars, and face-to-face events for a more holistic learning environment.

“Cryptocurrency is just a tool. I have lots of friends who tackled cryptocurrencies, they failed at it, now they hate it. What I’ve noticed overall is rooted in the lack of education and the lack of understanding,” Mr. Reyes said.

“We’re helping people in general tackle the space better. Sadly, the common mindset people have when tackling cryptocurrency is ‘Okay, I’ll throw money into this cryptocurrency, or this NFT, or this game, and I’ll be rich overnight’.”

He hopes that by teaching cryptocurrency, Filipinos can also indirectly gain a better understanding of financial literacy and risk management to help them make informed decisions regarding their money, especially as the crypto industry continues to grow and develop at a rapid pace.

“We see the fast pace of the crypto industry as an opportunity rather than a risk. With the exponential growth of the industry comes lots of things that Bitskwela can simplify into digestible forms for the common Filipino,” he said.