Phl startups: pain points, pivot, profit
AS EASY AS ABC (The Philippine Star) - October 28, 2017 - 4:00pm

(Second of two parts)

If millennials are, fairly or unfairly, typecast as those who expect to be handheld more, and the ones who feel “entitled”, then startup entrepreneurs are the antithesis of that stereotype. Not only are they self-motivated and independent, they are mentally prepared for hard work and sacrifice. They are not overnight successes, and many of them are still struggling to find traction.

One startup founder who has had a couple of pivots already to find profit intimated that if she can turn back the hands of time, she would consider a brick-and-mortar business, which may give her faster returns. But a startup cares for passion first before profit, and did I tell you earlier they have grit, lots of grit? Let’s get back to those pain points and how they solved such.

“How do I know what my employees in the field are really doing?”

If you have a sales force out in the field, or personnel in branches around the country, accept your human reality – you are not omnipresent. Imagine that you can monitor those in the field and in the branches, and their activities as they happen. And imagine that your same people know that their activities from far away are known to management, in real time. Will their performance improve? Will your revenue improve? Absolutely.

Businessmen who use the Tarkie mobile app swear by it. The ability to monitor in real time when field personnel logs in and out of work, when they deviate from their itinerary, or whether supervisors are doing their job at their respective outlets, is a game changer. It increases productivity. It is empowering for any business.

Rio Palabrica-Ilao, founder of MobileOptima Inc., actually had to do a few pivots before finally gaining traction with her digital tracking app. From a time-keeping system, to a tablet-based inventory system, and then finally to an app that tracks employees in the field, captures field expenses, and generates reports. Now that Tarkie is “tracking”, it is beginning to scale up its volume of users. Their challenge is to constantly keep the architecture strong, and the dashboard dynamic, with new innovations. It is also worth pointing out that this startup company is run by a partnership between Rio and her spouse – another interesting dynamic that we don’t have space to take up this Sunday.

“I am a small business, with small funds, and I am at the mercy of my clients as to when I get paid.”

“Cash is king”, or maybe, cash flow is king. For SMEs, who shun borrowing because of its tedious requirements and covenants, cash flow must necessarily come from investments – and from sales. B2B sales are however, almost always not in cash, and receivables don’t get converted to cash that quickly. Not only do big companies and payers have longer payment cycles, some receivables could become long overdue.

Magellan Fetalino not only observed, but felt this pain of SMEs who struggle to make both ends meet, let alone grow the business because the expected cash flow does not happen on time. His solution, factoring. His medium, fintech. Through the platform that his company, Acudeen Technologies, Inc. developed, SMEs are able to sell their receivables online for instant cash. The platform includes a credit rating system for the receivables and the SME to help retail buyers and big financial institutions evaluate the collection risk of receivables or invoices they will buy.

Receivable or invoice financing, and factoring, are maybe highfalutin terms for the common SME, so the first step for Acudeen is to educate SMEs on the product. In over a year, Acudeen has processed over P200 million in receivables. That he processed over P200 million is not what’s interesting. It is that he did not even need to have the money to convert them to cash.

“Can I pay all my bills in a “one stop shop”, in my house clothes?”

This startup’s fast-growing enterprise serves the Filipino masses, both the banked and unbanked, with their most common financial transactions – utilities payment, money transfers, mobile load purchase, even travel ticketing and courier services. But, Allen G. Mascenon did not only serve the masses. He created entrepreneurs, leveraging on the power of franchising for ExpressPay, Inc. and the technology of electronic fund transactions.

Growing more than 200 percent year on year, Expresspay now has over 1,000 outlets nationwide with the ambition to grow his network to 10,000 outlets in the next four years. Expresspay’s bold growth targets will allow it to bring financial inclusion to the country’s 7,100 islands and its barangays that do not have easy access to financial services, or the resources to own smartphones. Expresspay’s success story may just be starting as it is may soon shed off its startup label with its application with the PSE for initial public offering of its shares.

“Can I construct an awesome-looking house with a mid-size budget, four times faster, and 100% more beautiful?”

Dream on, you may say. But Robbie Antonio, founder of Revolution Precrafted, would say “dream no more”. That reality is here, and can even exceed your wildest dreams.

Very little is startup anymore about his enterprise, and Robbie is an entrepreneur with a truly big-time mentality, and a great idea to back it up – so great that he was able to now get 61 renowned architects and designers internationally to back him up (via exclusive contracts!). The idea is to build designer houses, made to order, then ship them – done in about 90 days, at a fraction of the cost it would take to have these constructed the traditional way. “Democratizing design”, as Robbie says, and breaking the privilege of the elite few with a business that brings great architecture to people.

Now present in six different countries, and targeting 18 countries his company identified, he has closed deals to supply more than 12,000 units. He is reported to be the country’s first unicorn, which is a startup valued at least US$1 billion. (How proud, I wonder, his father is – Jose Antonio, founder and chairman of Century Properties that developed Trump Tower, among others.)

My two Sundays were devoted to some of the country’s very own startups. They see pain points, they don’t complain. Instead, they find their passion, do something to solve it, and make an enterprise out of it. A truly admirable bunch, aren’t they?

* * *

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.

 

 

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