Thursday, February 22, 2024

PH startups already eyeing foreign markets for growth, survey says

By Edd K. Usman

Almost all Philippine startups are already eyeing overseas markets to boost their growth and valuation, results of a 2017 survey of 106 local startups said.

Officials of DTI, PwC Philippines, and IdeaSpace Foundation, Inc. pose for a photo during the launch of the 2017 Philippine Startup Survey in Makati City in October. (EKU)
Officials of DTI, PwC Philippines, and IdeaSpace Foundation pose for a photo during the launch of the 2017 Philippine Startup Survey in Makati City in October

According to the Philippine Startup Survey (PSS), 95 percent of 106 startups surveyed are planning to tap markets beyond the country’s borders in the next five years.

The Department of Trade and Industry (DTI) and its private sector partners unveiled the report during the PSS briefing for media at the DTI International Building on Oct. 18 in Gil Puyat Ave., Makati City.

Isla Lipana and Co. and PwC Philippines (PwC) conducted the survey in collaboration with public and private sector-driven QBO Philippines, an Innovation Hub co-founded by DTI and the Department of Science and Technology (DOST).

Researchers polled 106 CEOs and founders of startups to give both the government and the private sector a wider idea on the country’s still ?emerging? startup community and, hopefully, help struggling entrepreneurs stronger support.

?Through insights gleaned from this report, we hope the government and the private sector can continue to collaborate to support entrepreneurs in turning their ideas into reality,? Rene ?Butch? Meily, president of QBO Philippines and IdeaSpace Foundation, said.

He described the survey as “a watershed for the Philippine startup community.”

While the startups intend to go global, they are first eyeing the Philippines’ neighbors in the Association of Southeast Asian Nations (Asean) as new territories for their market.

Not surprisingly, their top regional preference is Indonesia (59 percent), which has a population of over 261 million in 2016; Thailand, 57 percent; Malaysia, 55 percent; Vietnam, 52 percent; Singapore, 49 percent; and Myanmar, 33 percent.

Confidence and optimism about the country’s business prospects going ahead remain strong among startups: 86 percent of the respondents believe the Philippines will be better in the coming 12 months.

A little more than half ? at 54 percent ? said that they will already be in new markets overseas in the next five to ten years, said the study, which also interviewed 22 of the respondents face to face.

The 106 respondents are into technology (35 percent); retail (15 percent); financial services (9 percent); telecommunications (5 percent); education (5 percent); and transportation (4 percent).

Covered in the survey are startups founded in various years, such as before 2012, 11 percent; 2012, four percent; 2013, six percent; 2014, 14 percent; 2015, 11 percent; 2016, 35 percent; and first months of 2017,19 percent.

Most of the founders are into software development, 72 percent; entrepreneurship, 67 percent; and sales, 55 percent.

Just over a quarter ? or 31 percent of the respondents ? are equipped with financial management skills.

Like startups around the world, entrepreneurs in the Philippines have had to struggle with getting funds for their capital (88 percent). They also are hampered by the government’s regulatory requirements (54 percent); and with 50 percent of them identified the general economic/business conditions as their third biggest challenge.

As this developed, the CEOs and founders in the study mentioned the three most important factors that can help startups are available market (39 percent); availability of talent (20 percent); and low barriers to entry (16 percent).

Jade Roxas-Divinagracia, the corporate finance managing partner at PwC Philippines, said the research involved asking the subjects on “their experiences, insights, motivations, plans, and needs.”

?The report gives a snapshot of the beginnings and the current status of the Philippine startup ecosystem,? she emphasized.

For those thinking of developing a startup, IdeaSpace Foundation, also a co-founder of QBO Philippines, has some words of wisdom for them.

Out there in the real world, said Diane Eustaquio, IdeaSpace executive director, the landscape is not easy to navigate and will not get more easy being volatile, uncertain, complex and ambiguous (VUCA).

?Let us continue to work on paving the way for Philippine-based technopreneurs and their innovations so that they can prove their impact on creating greater business value and a brighter future,? Eustaquio said as she called on for sustained collaboration.

Lawyer Alexander Cabrera, chairman and senior partner of PwC Philippines, commended the entrepreneurs who submitted to the research.

?I hope that the stories will inspire other startups, investors, corporates, and the government to work together and build great companies. There is a huge multiplier effect to empowering aspiring entrepreneurs,” he said.

DTI and its partners formally launched the survey last Oct. 20 during the “SlingShot Asean: Startup and Innovation Summit” at the Philippine International Convention Center, Pasay City.


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