While there is nothing wrong with aspiring to be a company with a high market value, a Silicon Valley-based Filipino entrepreneur said Philippine startups should focus more on creating value for the communities they serve.
Aldo Carrascoso, founder and chief executive officer of GlycoProX Biosciences, Veem, and Jukin Media & Verego, said that focusing on becoming “unicorns” detracts the purpose of why people launch startups in the first place.
“It is great to aspire to be a unicorn in terms of valuation, but Filipino startups should focus on creating actual value,” he said in a panel discussion during the kickoff of the fifth edition of Geeks on a Beach (GOAB) in Puerto Princesa City, Palawan on Thursday.
A unicorn, in the world of business, is a company, usually a startup that does not have an established performance record, with a stock market valuation or estimated valuation of more than $1 billion.
Thursday’s panel discussion tackled whether it was possible for the Philippines to produce unicorns from the tech industry.
The term was first popularized by venture capitalist Aileen Lee, founder of Palo Alto-based seed stage venture capital fund CowboyVC.
In her article “Welcome to the Unicorn Club: Learning From Billion-Dollar Startups,” she looked at software startups founded in the 2000s and estimated that only 0.07 percent of them ever reach $ billion valuation, surmising that those that do reach the mark are so rare that finding one is as difficult as “finding a unicorn.”
1st, prominent unicorns
Lee argued that the first unicorns were founded in the 1990s, Google Inc. being the clear “super unicorn” of the group with a valuation of more than $100 billion. Many unicorns were also born in the 2000s, although Facebook Inc. is the decade’s only super unicorn.
Other prominent unicorns today include Uber, Airbnb, Dropbox, Spotify, Pinterest, and Lazada, to name a few.
Treading the path toward that level takes mindfulness of revenue, a good business model, addressable market, and a product-market fit, said Carrascoso.
The entrepreneur said startup founders should not only strive to reach billion-dollar valuation, but seek opportunities to help billions of people.
Even so, the members of the panel all agreed that the Philippines has the potential to produce its own unicorns.
Yobie Benjamin, founder and chief technology officer (CTO) of Tokien.io and CTO at ClickSWITCH.com, said that the Philippines already has its own unicorns, including fast food chain Jollibee.
“Jollibee may not be tech-related, but it is worth over one billion in market capitalization. If it’s a problem that affects a billion people, that’s a better metrics than trying to be a billion-dollar company,” he said.
He added that successful startups have a huge addressable market, pain points to solve, and products or services that apply not only to problems within a certain location, but faced by people everywhere.
Benjamin cited Xoom, a San Francisco-based digital money transfer or remittance provider, which traces its foundations to serving clients between the Philippines and the US.
Since then the company has expanded to India and Mexico, among others, and was bought by PayPal for $890 million. Today, they do $9.1 billion in money transmissions and are operating in 18 countries with a demand for money remittance services.
Plug and Play
Jojo Flores, co-founder and vice president for operations at Plug and Play Tech Center in Silicon Valley, said that the Philippines has the potential to be significant in the area of financial technology, agriculture, and aquaculture.
“I think those verticals are very big global concerns with pain points and problems that can be addressed and solved,” he said.
Flores also stressed that behind a successful startup is an excellent team that executes a company’s goals and objectives.
Startup accelerator Plug and Play has produced two unicorns in the last decade, including file hosting service Dropbox and peer-to-peer lending company Lending Club, which the platform invested in extensively.
Some 400 participants from the government and private sectors, including successful technology entrepreneurs from Southeast Asia and Silicon Valley, gathered during the GOAB conference which began yesterday and will end today.
Tina Amper, founder of TechTalks.ph, GOAB organizer, said the conference aims to help the tech startup community in the Philippines thrive in a global ecosystem.
“We want to facilitate business among most of you and also use GOAB to showcase the best of the Philippines to the rest of the world,” she said in her opening remarks.
In the last five years, GOAB has been held in Boracay, Cebu, Bohol and Palawan.