Philippine startups

Philippine startups have many challenges to face — restrictive government regulations and Asia’s second slowest internet being just two of those — and it was only in the last few years that tech innovation has begun to take root in the country’s business landscape.

The country has a long way to go, but investors have begun to take notice. The technical talent that the country is known for, added with the growing entrepreneurial spirit, has set the Philippines on the course of developing an actual startup ecosystem.

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But there is a noticeable shortage of startup information from the country, and it seems like the only news its neighbors hear from it are the huge ones. There are rare instances when Philippines startups interact with their Asian counterparts and, even within the country, it is only recently that startups begin to interact with each other.

A reluctance to make noise

For one to understand how the Philippine startup community works, one has to understand the culture of the Filipinos. Humility, along with respect for the elderly and those in authority, are virtues drilled into us at birth. So, if you’re wondering why a lot of Philippine startup founders are reserved and hesitant about tooting their own horn, it can probably be traced back to that.

Filipinos are generally averse to promoting themselves and their accomplishments for fear of being called boastful. You are expected to be proud of your accomplishments, but not too proud. You have to learn how to be able to highlight your skills and accomplishments quietly and humbly. And it is not just that. There is a general aversion to being aggressive about promoting your own accomplishments: Other people’s, yes; but your own, not so much.

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I have had discussions with several founders who told me that one of the biggest reasons that they refuse to talk about what they are doing is that they “don’t want to pre-empt it.” I take that as another way to say that they fear failing in public. It’s not surprising, as it was only in the last two generations that the entrepreneurial bug has bitten the country and a lot of (passive-aggressive) parents still believe that entrepreneurship is “just a phase” their kids are getting into. Indeed, a large number of young startup founders I have talked to mentioned being told by various parents to just join a large corporation (here’s a funny way for you to visualise that).

This reluctance to make noise becomes a problem for startups who want to be globally competitive. Yes, your product may speak for itself, but it’s not going to be able to unless you catch the attention of the people who should be listening to it. If Filipino founders hesitate, even just a little, to actively get their startups into the public’s radar, they put limits to the net they cast when looking for potential investors, clients, and partners.

An eye to the West

Everything from pop culture to fashion to art to urban planning in the Philippines has western influences. It’s not really surprising that we look to the west for our business influences.

Even within the startup community, there is always that eye to western developments. Startups want to be the next Uber or the next Airbnb. Rarely do we hear a Filipino startup founder say that they want to be the next Alibaba or Grab.

There is nothing wrong with that, of course. We get our inspiration and influences where we find them, after all.

But this means that there is a disjoint between technology and relevance. Let’s not mince words here: The Philippines has been stuck in the third-world. Yet we try to shoot for the exact same first world technologies without much thought to its relevance in our current situation.

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There is no shortage of startups that tackle urban problems like transportation and banking, but not many startups that work to address problems of the rural areas. But what I think that most entrepreneurs (I hate to generalise, but here I am) fail to realise is that there are a lot more places in the world that look like rural Philippines than Palo Alto. The problems that the Philippine islands face are a lot more similar to problems that a lot of other developing countries are facing, compared with the first world we try to mimic.

Let me give you an example:

Over half of the country’s population lives in rural areas. Manila, the world’s most densely populated city, became that way due to migration of people from the rural areas — a population growth amounting to 3 per cent yearly. Now, imagine if Philippine startups work on addressing gaps in rural and agriculture oriented industries (say, give farmers easier access to funds and aid them to be more productive), then people would not be flocking to urban areas for better opportunities. It solves two obvious problems — agricultural productivity in rural areas and traffic in urban areas — and perhaps many more gaps can be addressed as an offshoot of those.

This is not to say that the Philippines should not look at first world countries for inspiration. However, it would do the country a lot of good if its startups work on addressing it’s present needs as well as broaden their network by also looking to its Asian counterparts for insights and partnerships. It could be that for Philippine startups to achieve the global competitiveness they want, they would first have to adopt a regional mindset.

A changing landscape

If the past few years are any indication, things are changing for Philippine startups. There is an ongoing shift in cultural mindset that leans into entrepreneurship, just as there is a growing consciousness of the problems outside of urban areas that need to be addressed.

Outside of the capital, there are approximately 150 business districts and IT parks in various states of development — valuable not only for multinational companies wishing to set up shop in the country, but more so for startups in areas that need resources.

The government has amped up its support for the startup community and recently launched an innovation hub that aims to support startups developing tech products and services that are ready for an international market, as well as a place for tech innovators to exchange ideas, receive mentoring, collaborate, and learn how to pitch their products to foreign investors. This initiative, while based in Metro Manila, will have satellite hubs all over the country to provide support for tech innovation in the islands.

Also read: QBO innovation hub will provide resources to enable Philippine startups, launches in Manila

The startups themselves are changing; the regular meet-ups organised by various co-working spaces and startup groups have created an avenue for the startups to interact with each other. And while startups are as geographically fragmented as the country’s islands, this growing sense of community in hubs all over the country allows startups to have a clearer picture of the current situation and realise these two things:

  • There are issues that need to be addressed first if we truly want to fully utilise the first-world technologies we want to mimic;
  • Failing publicly can be a way for startups to get insight and feedback from the community and get on the radar of potential partners.

And maybe then, the whole community can take a crack at global competitiveness.

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