Table of Contents:1. Country Overview
Advice for Local Entrepreneurs
Understand that the chances of you raising money is low. If you are an engineer with little resources, it is probably a good idea for you to outsource and learn how to code. It is best to generate cash early.
Attend Startup Weekends and other startup events and gatherings to meet your business/design counterparts, bounce ideas off like-minded folks, and possibly even find funding.
Reaching out and asking for advice from experienced entrepreneurs and professionals will be helpful at improving your business model and preventing mistakes. While some of these exemplars will be invited to startup events, a determined startup entrepreneur should also be able to reach out to them individually. Some of these successful business leaders are actually approachable, respectfully ask for a little of their time in order to get advice on business matters.
If you must raise funding, go raise seed money locally. Raising more funding outside would be preferable after the seed round. It would be beneficial if you have good contacts outside the Philippines.
WSW maintains a list of all of the entities who have previously invested in a Philippine startup in the project’s database. From the data provided, the list of 45 investors who have invested in at least one company in the Philippines are mostly funds and individuals from abroad looking into investment opportunities within the country. Feel free to take a look at this data and use this as a tool to find your next investor.
When you are ready to grow and need to do fundraise, it is best to look at the list of 47 investors who have made at least one investment in the Philippines. Most of the investors do not have operations in the US, but have shown prior openness to invest in the Philippines. These are the best group of investors to target as they have the highest likelihood to invest.
Advice for Foreign Entrepreneurs
It’s a beautiful country, but you have to be patient. One needs to adjust to understand the culture. Having a local partner is critical. Your partner can help you connect with useful contacts to run your business. Your partner can also be key to a smoother adjustment period while conducting activities for the business. It is important to localise and make sure that your ideas are feasible in the local context. Be mindful of the power and control of the local powers, the politicians and the big business families.
The cultural diversity of Philippines and her friendly, English-speaking citizenry make adjusting to life in the country much easier. However, it is important to understand the local scene and plan before coming to the Philippines because the lack of infrastructure, funding, and local support (as compared to Western nations), may prove to become expensive and frustrating hindrances.
As a foreigner, you will have many special privileges, but do not abuse your status symbol. Build your image carefully because words do travel fast in the community, especially in the small tech circles. Do not end up being labeled a fly-by-night confidence man, or worse, a “sex tourist.” Once labeled, it will only attract the wrong type of people, and that will lead to your eventual downfall. Instead, always ask yourself, “How can I help everyone by doing what I am doing?” If you prove yourself to be an asset to the community, then you will be able to attract people with the right mindset.
Constantly remind yourself of why you traveled across the world to be in this country. Work hard, but do remember to take time to enjoy the sights, sounds, tastes, and smells of this multi-island paradise!
Advice for Foreign Investors
The usual target market for technology products are the A to C class, which comprises of 10% of families in the country. This target market can be very small. However, some investors may target particular niches and markets that find income inequality in the country opportunistic. It may not be necessary to set up a base since there are only a few number of quality deal flow as of early 2014. Usually, better startups stand out easily from the rest and reach out to investors from the rest of Asia and the US. If you show your interest to invest in the Philippines, local companies will find you.
Advice for Foreign Companies
Work with people that have worked with foreign companies before. It is hard to hire locals who are not accustomed to Western standards. Professionals that have worked in offshoring and business process outsourcing companies are very likely to be sufficiently Westernized in their work practices.
The local market is challenging because of its underdeveloped infrastructure. In addition, the Startup scene is fairly new. Be careful of the big conglomerate families. It is better to work with them rather than to work against them.
Read and re-read the earlier advice regarding hiring as it proves to be the biggest initial headache for most of the foreign companies.