Philippines startups: pain points, pivot, profit (Part 1)

Alexander B. Cabrera Chairman Emeritus, PwC Philippines 22 Oct 2017

Be laser-focused, but be ready to pivot. Dream big – with small funds. Be comfortable with the unknown. And be very passionate, but do not fall in love.

If you find the preceding statements a bit conflicted but a bit fascinating, it may add more to your amusement if I tell you that they are the rules of engagement in the battleground of a fast-growing sector in our economy called startups. I will prove them in a bit.

These new, technology-powered businesses have so much potential that it is almost intriguing that most traditional investors hesitate to take them in their portfolio. The startup entrepreneurs are mostly young and have traits in common. They are highly perceptive in identifying pain points, very skilled in problem solving, and – they have grit. Lots of grit.

This Sunday, until the next, I will get you acquainted with how they think and maybe even provoke a startup mentality or spirit that you never thought rested in you. We are helped by the first-ever Philippine startup survey entitled “Off to a great start”, which is a joint effort between PwC and QBO Philippines for the Slingshot ASEAN: Startup and Innovation Summit, a venue where regional angel investors and startups meet. (QBO, by the way, is an example of a living public-private partnership among the Department of Trade and Industry, Department of Science and Technology, IdeaSpace Foundation and J.P. Morgan; and we in PwC are happy to join the fray.)

I daresay that startup entrepreneurs and ordinary folks like us think the same way – up to a certain point. We all have the same ideas on what the pain points are because we experience the same pains. If identifying pain points is arguably no rocket science, the real science comes in their approach to solving these pain points. Creating a business around their great idea is the story of their human endeavor. Let me get you started.

“Where can I find reliable (blue collar) staff, today?” – Businessman
“Who is willing to hire me?” – Jobseeker

Audrey Tanco Uy of Bizu Catering Studio is in the restaurant/catering business, and is very good at it, with one recurring thing stressing her. When she has simultaneous events, she just can’t get enough people or can’t get easy access to the staff she needs. When she tried to solve her problem, she realized there is hardly anyone solving this problem for the service industry. If corporates don’t get much help, well, no one is really helping the C and D segments find jobs (i.e. there is no “executive search” services for servers and the like because they are not executives, and job recruitment platforms out there serve the A and B markets).

So Audrey, in the process of finding a solution to her problem, came up with a business that can “serve the servers”, and cater to the needs of the industry for staff, full-time or part-time. To have outstanding reach, it must be tech-based. She knows the industry, but she is (or was) not techie – an issue she solved by partnering with someone strong in technology. Maximizing the Facebook platform to crowdsource and screen jobseekers in the industry, Servehappy Jobs had 5,000 job posts on its first year. The industry problem is being solved. She is also helping thousands earn a living.

“Science is a difficult subject to teach.” – Teacher
“Science is a difficult subject to learn.” – Student

Joshua De La Llana gamified learning about electricity by using magnetic cubes and a supporting app that can teach electronics to young (and old) people. The toy consists of 20 different electronic blocks, where a block can be a light, a meter, a capacitor, a switch and other circuits. (If I seem to be just mumbling these words, it’s because there was no Tactiles during my time, and I wouldn’t touch anything about electricity in my house even if the house is insured!). Students can do countless combinations with the tiles, depending on the project. The toy can also teach programming, which makes it unique.

Tactiles is now going to China, and I know what you’re thinking: they risk being copied. But in the world of startups, that’s the risk you live with the minute you go online for the world to see. So for them, better to leverage on the benefits of being the first mover and innovator.

“I am late for my meeting, and I still can’t find parking!”

You can almost feel the stress, can you? For it probably happened to you, more than once. Martin Luchangco, Founder and CEO of Fetch Valet, who used to work in an insurance company, observed that his officemates would excuse themselves from meetings to move their vehicles and manage parking fees. He was so moved by this parking pain that he moved out of his job to set up his company that offers valet service on demand. Now, it has several pickup points in BGC.

He validated that the fear of handing over the key to one’s car to someone they don’t know is overcome by the pressing need to get rid of their vehicles safely, so they can start walking to a meeting. Fetch Valet’s platform solves that “trust” issue by sending the picture of your driver (who is well-screened by Fetch Valet). The planned add-on services are great, like gassing up your car and having it sparkling clean when returned to you, when you’re ready to leave.

“I don’t know how to organize a big conference, I can’t even organize my own date!”

I have been to these big two or three-day PwC global conferences where we are asked to download a conference app as you will simply be lost without it. It tells you where the breakout rooms are for the different technical sessions, the speakers’ presentations, and what’s next on your schedule. It allows you to message someone attending the same conference. Imagine this app is guiding more than a couple of thousand people attending the conference. It is indispensable. I am amazed that a Philippine startup has a similar product, and thriving.

Valenice Balace, founder of Honesty Apps, already has contracts for the next three years, and a lot of tailoring to do for the different big meetings that will be powered by her Summit, a conference app and dashboard that can be customized for the client.

Valenice exemplifies “pivot.” She started her business with a dating app called Peekawoo to address the pain points of single people. When she got engaged, she couldn’t do the romantic side of the business anymore and she pivoted to addressing a business pain – that of holding big meetings. This is what is also meant by “be passionate, but don’t fall in love.” It is: do not fall in love with your product as the time may come that you will need to let go – quickly, that is.

(To be continued next week.)


Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Tax Committee of the Management Association of the Philippines (MAP). 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.

Contact us

Alexander B. Cabrera

Alexander B. Cabrera

Chairman Emeritus, PwC Philippines

Tel: +63 (2) 8845 2728