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The Single Most Terrifying Thing Facing Philippine Startups

Image representing Mark Zuckerberg as depicted...

Billionaire, Rebel, Philanthropist. Also very Lucky. Image via CrunchBase

Technology’s been sold as the great equalizer. Investing in the innovation economy, it’s been argued, helps emerging markets leapfrog the rest, increase GDP and per capita income, and make everyone better off. With technology, we can go from rags to riches.

Certainly, there’s been tons of great news about the Philippine startup scene – a leading seed fund, new cohorts in an incubator, digital media innovation, and bigger funding rounds. More people are interested to become founders. More schools are supporting startups. The future looks bright.

But after reading, Nick Bilton’s Hatching Twitter and Ben Mezrich’s Accidental Billionaires, one starts to make these observations:

Mark Zuckerberg came from a well-off family, went to Exeter, had access to computers at a young age, and even had a software developer as a private tutor  at home. He built a private network between their house and his dad’s dental office. In high school, he built a machine learning music player that Microsoft wanted to buy, which Mark turned down to go to Harvard.

Ev Williams started Twitter when he was already rich. Flushed with cash from Google’s acquisition of his previous startup, Blogger, Ev had the resources to co-found Odea with Noah Glass. Odeo was mostly funded by Ev, and the financial resources along with Ev’s reputation, allowed it to hire talented engineers, which eventually included Jack Dorsey, Twitter’s co-founder. Everyone knows that Twitter was originally a side project, when Odeo’s original product – a podcasting platform – faced competitive pressure from Apple when it placed podcasts in iTunes.

Snapchat’s Evan Spiegel grew up wealthy and privileged. His father is a partner at a prestigious law firm. His mother is the youngest woman to graduate from Harvard Law. They live in a $4.6 million home in LA’s Pacific Palisades. At 17, he pleaded his father to give him a BMW535i.

Instagram’s Kevin Systrom went to a private boarding school before attending Stanford.

Even Bill Gates famously honed his programming skills for years at his private high school and eventually at Harvard, both of which had mainframe computers that most schools in America didn’t have at the time.

By now, you can probably see where I’m going. The founders of global technology companies had built-in, unfair advantages.  They had privileged access. Of course, one cannot discount innate talent, and a bit of rebelliousness. But to deny the role of the genetic lottery, social class, the environment, and a privileged access to financial and technological resources is not a tenable argument. Perhaps up to 80% of success are driven by things we can’t control.

And that’s the most terrifying thing about Philippine startups: no matter how bright the future seems, we will likely remain a laggard as the West continues to build on existing technological advantages. And that’s a tragedy, because I believe the innovation economy – beyond sloganeering on tourism, BPOs, and remittances and along with its prerequisite institutional reform –  is perhaps the single most important driver in improving Filipino lives.

Democratizing access to the ingredients of a scalable tech business – devices, software, cheap internet, computer literacy, coding education – will be biggest driver of this innovation economy. They are the ingredients people need to stir the pot.

There’s evidence to suggest that the access gap is widening. Consider this: America continues to invest in computer education. Harvard’s CS50 is now free for all to take. And so are tons of software development courses on CodeAcademy, Udemy and Coursera. Innovation programs such as General Assembly, Startup Intistutue and Launch have expanded rapidly. Wealthy American entrepreneurs are cycling money back at an unprecedented scale to fund education, internet access, and startups (how about the local tycoons?).

But we can do something. If a homeless man can learn to code and build app, our possibilities are not limited by our existing environmental constraints. What can we do?

First, DepEd can massively require not just computer literacy but basic coding across public schools, starting perhaps at Grade 3. Create a PPP to significantly subsidize the cost of devices, funded perhaps by an ad-driven revenue model. In the collegiate level, it’s time to make technology related courses as popular as business, nursing or HRM.

Second, we can drive knowledge transfer by making it easier for expat founders to establish startups here. Sheila Marcelo is the Filipino founder of Boston-based Care.com, and she had an excellent idea: make foreign entrepreneurs and investors fall in love with the Philippines on a personal level. Start with those with a Philippine connection – someone who has a spouse or relative, a Filipina nanny, or spent time here volunteering. Establish a regular, APEC-like forum that not only invites them to pursue business opportunities here, but also carves significant to allow them to experience the beauty of the Philippines outside the capital.  Let our hospitality take over. We can’t compete with Indonesia with huge macro numbers (population, internet users, etc), but we can compete for hearts and minds.

Third, we can build on existing efforts. The good news is that some people are getting stuff done. La Salle has Animo Labs, and Xavier has XS Next Lab. At our company, we try to close the gap in small ways – with education and continuous learning in mind. For example, one merchandiser attended an introductory class on cloud computing. Kickstart Ventures, meanwhile, regularly hosts workshops on lean startups and innovation. The Amazon Web Services team in Singapore has been very generous in sharing their stuff locally too.

It’s rightly justified to focus on education – create the infrastructure and get out of the way. The rebels will naturally emerge and build amazing products. We’ll have our own local version of  The Hacker Way. Maybe #StartupPH can call it… the PHacker Way. Whoaaaaah. Wait! That sounded really really bad when you say it out loud. But hey, it might just get people excited enough.

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2 thoughts on “The Single Most Terrifying Thing Facing Philippine Startups

  1. Grant Cheng says:

    I think economists have a term for this: cumulative advantage. I think it’s actually quite evident here in the Philippines, where the big family conglomerates can get to diversify and acquire other business interest because they can afford to fail or experiment, in addition to all other inherent advantages they have.

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