Archive for the ‘business’ Category

The Future of Web Startups – in the Philippines
October 13, 2007

Here are some of my reactions to Paul Graham’s latest article, The Future of Web Startups. Pardon the lack of a creative title. All quotes below are from the article. Read his article before this post.

It’s so cheap to start web startups that orders of magnitudes more will be started. If the pattern holds true, that should cause dramatic changes.

Money-wise it may be cheaper in the Philippines IF talent is available. The common industry wisdom seems to be, from my point of view: the talent is available but needs to be tapped. At the moment, much of the talent that is available and productive is so because of outsourcing+offshoring. So, the Pinoy talents are put to use building Other People’s Products. But that is not a total loss since the skills picked up there can be used for Genuine Filipino products later on.

In the last batch of startups we funded, we had several founders who said they’d thought of applying before, but weren’t sure and got jobs instead. It was only after hearing reports of friends who’d done it that they decided to try it themselves.

Note “we funded.” There is no Paul Graham/Y Combinator in the Philippines who will fund $50K + (number of founders) x $50K – which is a lot of money in the Philippines. Let’s say the biggest expense is labor, and, software architects/developers are a factor of 5x cheaper in the Philippines. Bring down the figure down to $10K, and still you will be hard pressed to find anyone in the Philippines to put down half a million pesos (or less, at the moment). And if they do, it would be for the entire company, not for Y Combinator’s 6%. Why? No venture capital market for the investors to recoup their money with. And it boils down to the reason that it’s difficult for the Filipino web startup to make huge amounts of revenue, or to to sell to a huge company, either a Google/Yahoo/Microsoft or a more traditional company.

If startups become a cheap commodity, more people will be able to have them, just as more people could have computers once microprocessors made them cheap. And in particular, younger and more technical founders will be able to start startups than could before.

I think more young Filipinos are becoming aware that putting up a startup is a viable option. They just need to find the means. I just don’t know what formal programs are in place in computer science/IT education to help the students get started. (However, the quality of computer science education is another topic altogether.)

It’s true that you can now start a startup anywhere. But you have to do more with a startup than just start it. You have to make it succeed. And that is more likely to happen in a startup hub … This is not a nationalistic idea, incidentally. It’s cities that compete, not countries.

First thing, is it possible to build startup hub in the Philippines? Even if it’s Metro Manila, not all the pieces are in place. The university/industry/capital equation is not complete. Right now folks based in other cities and towns outside Manila or Cebu often have to move to find real tech jobs. On the other hand, one man startups working from their home broadband can put up a startup from anywhere in the Philippines with broadband access – but they won’t get the startup hub benefits.

Second, can Filipinos with startups in the Philippines move to tech hubs? Not quite. Filipinos don’t have mobility to relocate to Silicon Valley for legal and financial reasons. Legal because it is difficult to get a work visa unless you already have a US employer. (Can you work on your startup on a visitor’s visa? I don’t know. And even that is difficult to get for the typical person, “as we all know.” Financial because rent and living expenses in in the US is too expensive for somebody who just saved up startup money from their day job. To make it worse, Silicon Valley is even more expensive than the average US location.

As well as mattering less whether students get degrees, it will also start to matter less where they go to college. In a startup you’re judged by users, and they don’t care where you went to college.

This is a good thing in the Philippine university degree vs US university degree scenario. Filipinos who attended university in the US naturally have a benefit in getting hired in a Big Web Company. However, if joining the Big Web Company is done through acquisition, then the metric is not the degree or where it came from, but performance. That said, I’m still waiting for a Filipino startup to be acquired by a Big Web Company.

The greatest value of universities is not the brand name or perhaps even the classes so much as the people you meet. If it becomes common to start a startup after college, students may start trying to maximize this. Instead of focusing on getting internships at companies they want to work for, they may start to focus on working with other students they want as cofounders.

Filipino universities can already do this. “Cofounders” can be the people you work with for school projects, for instance.

This might seem a depressing scenario for Filipino web startups, but at least some things are happening that can make it easier. I hope this is a starting point for discussion.

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IT Globalization: A Two Way Street
September 27, 2007

A curious pair of stories coming from the same interview:

In the first article, Fermin Taruc wears his Philippine Software Industry Association (PSIA) hat and complains about an effect of globalization. There is job mobility for the Filipino programmers, who can move to Singapore and meet the demand there.

In the second article, Taruc wears his business hat, as Managing Director of a software firm – Gurango Software. This company has been busy acquiring foreign companies and moving their back offices to the Philippines. This is globalization as well, this time in his company’s favor. What about those people abroad (in the US I guess) who lose their jobs due to this move?

Personally I think the answer to “losing people” to Singapore and other places is developing the Philippine talent pool. I put the “losing” in quotes since when IT professionals move abroad, they may be lost to the company who used to employ them, but still may be a net gain as they pick up experience and skills from situations unavailable in the Philippines. Even if they don’t come back home, physically, they still have influence over the Filipino developer community.

Senior Developer Issues
June 22, 2007

We’ve been talking about tech, our country, and our capabilities in starting startups. Now let’s look at something common to small, new companies and large, established ones alike. Software Developer Talent.

First of all who are the “seniors” and what makes them senior? While this was a PinoyJUG mailing list discussion on junior Java developers, it’s not limited to that skill set. The different criteria discussed were: tenure, technical skills (but are they all applicable?), talent, salary, maturity, and even political skills.

Once we have defined who the seniors are, are they available for hiring? Or did they move abroad? What does it take to get them back? There is current discussion on how Philippines-based companies are now boosting salaries to never-heard-before levels to attract or retain talent.

Of course, keeping talent is not just about salary. Pay is just 1/3 of Joel’s Criteria for Geek Job Satisfaction. Then Gabusch adds tips on keeping creative people happy. I had some thoughts on it as well comparing the developer situation in the Philippines and abroad (within my limited experience of course.)

There is seniority in terms of age. There was a discussion about the maximum age posted in local job ads, and postings for in other Asian countries. It seems that this is ageism is common in Asian work cultures, even as it’s illegal in US (and probably elsewhere.) I suspect this is because Asians are not comfortable with working with older or younger people as their peers. The younger people would look at an older person as someone who should be more senior to them in the organization. The older people would feel insecure that they are at the same level as younger people. But then again, it could also be due to the higher salaries that older people would get, or perceived higher costs and lower productivity.

What are the positions for senior developers outside of a traditional organization? There has been a discussion on PinoyJUG and a parallel one in PLUG (Philippine Linux Users Group) regarding the proper salary for a telecommuting US job. The most important point has been: should the candidate ask for a higher salary, since the US employer is expecting to spend, and to keep up the price expectations for Filipino developers? Or should the candidate avoid this “‘entitlement”‘ and ask for what they would normally want or need if it were a local company hiring. This has our country’s outsourcing competitiveness in mind – at least price-wise.

Will Google Ever Buy a Philippine Company?
April 21, 2007

Let’s say you did start a startup in the Philippines. Would Google buy you out? How about Yahoo, Microsoft, Amazon, or eBay (like Stumbleupon?)

Or would Google & Company ever buy into a local company? I thought that when a Google executive came over it was for some deal. No go there.

I hope this happens soon, to put a locally educated Pinoy in Google.

Can you suggest any candidates for acquisition?

Nokia Nseries: Not Selling?
January 28, 2007

“Giga” Om Malik writes about Nokia’s Nroblems. Selling in the US is tough. How are they doing here in Nokia-loving Philippines?

I’ve been curious as to why US consumers don’t want to pay cash for phones, and prefer to get it through carriers instead. Or is it how the market works? There are people here who buy $800 and above phones, a lot of money in the Philippines but (should be) small change in the US. Why is handset purchasing behavior different?

Or maybe it’s because the Nseries using S60 are too complex, and arguably buggier and slower, than Series 40. Maybe Nokia should come out with high end, high margin “feature phones” – that are more practical than the “fashion” phones or other fancy units.

They can’t shake away the “multimedia computer” that easily. The N95, from the early reviews, really has it packed with features and complexity.

Problogging backlash?
December 1, 2006

So some people just don’t get problogging.

Lots of interesting discussion there. Expect this when you’re doing something disruptive.
Abe dispenses problogging advice freely. Even if you don’t make it your career, it’s all good stuff.

LinkedIn Philippines
November 16, 2006

No, there is no LinkedIn Philippines.

Why are there few Filipino users in LinkedIn? Is it because Pinoys prefer the fun social networks, or, the influential and connected people who should be on LinkedIn aren’t there (or even on the Internet at all?) Or it is because you need to pay to get full access?

I got the thought from Abe’s post on: Control your destiny on Search Engines.

I would also like to hire through the LinkedIn network, sometime.

Outsourcing Yourself to the Philippines
November 16, 2006

From Abe’s blog, David Dennis commented. I remember him from inet-access (Internet Access mailing list) of the olden days. He wants to work on his Internet business from here. I remembered an earlier thread from Kevin Burton, the latest post: Startups Should Eat and Party Like Kings. He worked on TailRank from Phuket.

I’m sure Thailand is ahead of the Philippines in many aspects – especially in tourism development – but I think we are better off if the principal needs to outsource the work or hire direct. I know of a number of folks  from abroad who started businesses here.

Exist Goes Global
November 16, 2006

I joined the invitation through Abe Olandres to attend the Exist launch/presscon.

I finally got to meet the chairman, Winston Damarillo, who read my old blog post. I pointed out the Filipino Connection of his previous company, Gluecode Software, sold to IBM. This did not come out in the press.
He had an interesting talk/discussion about outsourcing/offshoring to the Philippines, developing the local talent pool, and the topic of the launch: growing global.

He had an open forum with Jerry Rapes, his GM; Eric Manlunas, a Fil-Am venture capitalist; and Steve Nathan and Chuck Ames, his partners and investors.

We also chatted about open source Java and the other tech companies in his venture portfolio.
Now, we’re having a small blogger meetup at Starbucks Shangri-La: Abe, Noel and Gail.