This stereotyping of the millennials as the generation wanting instant gratification will sound like a misplaced accusation. That is, if you train your eyes on the pastillas scam and the like, which shows that even earlier generations want instant gratification through corruption.
Turn to this group of millennials, specifically the startup entrepreneurs, and you will see nothing but the reverse of the stereotype. From identifying a pain point, to ideation of a solution, to coming up with a marketable product, then getting investors before scaling up – that could mean about three to five years of work in total without income. It could be more if you add the years pivoting to another product if the first one does not become viable.
The 2020 Philippine Startup Survey report (www.pwc.com/ph/startup) was launched at the Tower Club last Wednesday by PwC Philippines in partnership with the Management Association of the Philippines, IdeaSpace Foundation and QBO Innovation Hub. It already shows data-wise that since two years ago when the first report was issued, the behaviors of both investors and startup entrepreneurs are adjusting in the right direction.
Venture capitalist investors are more familiar with the risks. Some have even adjusted their investment horizon from three years to as much as nine years. A longer investment horizon means that some investors are accepting of the fact that the tech business, while built on speed, takes time to build value. Those with a shorter investment exit period, on the other hand, buoys up confidence that startups can become successful in three years and that investors can cash in and reinvest the proceeds.
Turning to the startup founders – they have set their sights not only on product development and financing but on other business issues like project management, marketing, and even governance. So for the tech startup, it’s not only an issue about creating the app, although for them it’s probably the most enjoyable thing. Many are now into the most important issue of being sustainable after you learn that you can be viable.
Key to that business life is not merely having investors. It’s about having the right strategic partners, in the person of big corporations, which are preferred. That’s because they can also be customers or better yet, big brothers – but on a non-exclusive basis (as exclusivity will kill the potential of the startup).
Take the example of Mober that’s founded by its CEO, Dennis Ng. Mober is a same-day appliance/furniture delivery app that has partnered with Ms Tessie Sy Coson’s SM department stores. With Mober’s 70,000 bookings annually and with its potential to further scale up, it is now addressing the lack of drivers (made tough due to much competing demand) with a program Dennis calls “driverpreneurship.” It allows drivers to eventually own the vehicles they drive.
Or take the example of AIDE, which was co-developed by Paolo Bugayong. AIDE is a medical service app that brings medical attention to homes instead of people enduring hospital lines and the traffic before that. They partnered with Ayala, leveraging on the latter’s trusted brand, as there is a lot of trust required for people to rely on medical professionals that AIDE vets and offers. They also get that important incidental free business and management advice from a seasoned conglomerate
Obviously, partnering with the big boys is not the only model that accelerates, if not ensures, captive revenue. Ellard Capiral started Admov, a very interesting “sniper advertising” app that uses facial detection to allow for targeted advertising. A person boards a ride-sharing car, where Admov “snipes” the passenger’s facial features. Admov then plays the most suitable advertisements on an iPad, whether it be about salon products or vacation getaway, depending on the needs implied by the looks of the person. This app has so much potential as well, I believe, for security and crime-solving, even.
I can’t miss mentioning Roland Ros’ Kumu, a live streaming app built for the Philippine internet speed. Kumu allows those who stream to earn from those who watch them. It’s about selling authenticity, according to Roland. Most people may lack special talents, but everyone has the potential to be authentic – and that makes the app so inclusive and unadulterated. Now with three million users, Kumu can let anyone have their 15 seconds or 15 minutes of fame and actually earn a few bucks doing that. (We actually had fun trying it during the session break, and mind you, your own authenticity can be addictive.)
There are about 400 active startups now in the community and more investors are taking these on either into their portfolio, or to enhance their own journey into a more digitally assisted business model. We care to have a healthy startup community, and advocate for a more supportive policy because we cannot underestimate the game-changing potential it can have in the Philippine economy and Philippine quality of life. I reiterate Israel, a country with eight million people but with 5,000 startups, as the best example. It is technology and business that converted their almost eradicated race to one of the most prosperous, most educated, and most militarily secure people in the world.
We should take inspiration as acceleratingthe growth of our startup population could, as it did for Israel, be a hockey stick on the standard of living and happiness of our people.
* * *
Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He is the chairman of the Integrity Initiative Inc. (II Inc.), a non-profit organization that promotes common ethical and acceptable integrity standards. Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.