CEBUANO tech entrepreneurs who have had their fair share of stories on starting up and searching for investors to finance their ideas have one common advice to startups: build and develop their products or services and find real customers first before jumping on to find funding.
Vince Loremia of KallFly, Eddie Ybañez of miCab, Bryan Yap of the Republiq Group, and Jann Hiolen of Sellax stressed the importance of establishing the business first.
“Venture funding is for scaling, not for starting your own company,” said Loremia, during a panel discussion last Saturday for the Google DevFest and GDay X Cebu held at the JCentre Mallin Mandaue City, which was attended by over a thousand developers, entrepreneurs, and students.
According to the 2017 Philippine Startup Survey initiated by QBO Innovation Hub and Pwc Philippines, funding has been considered a major hurdle that most startups in the country face. Eighty-eight percent of founders said capital requirement was the number one hindrance they encountered when starting, followed by regulatory requirements (54 percent), and general economics, and business conditions (50 percent).
About 63 percent of the founders said they plan to raise funding through external parties such as venture capital funds and other investors.
It was not easy for the four entrepreneurs to find investors to help them scale their business, saying it took them some three to five years to solve their company’s internal problems, which ranged from finance, human capital, product development and market.
In recent years, however, their respective companies gained traction and support from various investors and clients.
Loremia, who co-built on-demand virtual contact center KallFly, has received funding and support from international accelerators and investors to include JFDI Asia in Singapore and Blue Startups in Hawaii. The entrepreneur/developer also founded Tudlo, a disaster education, reporting, and management app, that received funding from Smart Communications.
In 2016, the Tudlo technology was reinvented in Africa under the name REACT HOA, in collaboration with Smart Communications, the Philippine Embassy in Nairobi, United Nations Development Program (UNDP), and the Red Cross. The mobile app was made available to African countries Burundi, Djibouti, Eritrea, Ethiopia, Kenya, Rwanda, Somalia, South Sudan, Sudan, Tanzania, and Uganda.
Meanwhile, Yap, who founded the Republiq Group of Companies whose services range from digital entertainment, marketing and food, believes that a startup needs to show the numbers first before convincing any investor.
“I don’t advise funding until you are ready to scale. You have to have the numbers,” he added.
Creative Republiq, a digital and creative agency, is now run by 48 people while his other business, Chef On Demand, which delivers meals prepared by local chefs to BPO workers, has since expanded in the Rockwell, BGC, Makati and Ortigas in Manila.
On the other hand, MiCab founder Ybañez, who runs a taxi-hailing app in Cebu and in Metro Manila, similarly shared his piece of advice.
“Funding is good because it will help you jumpstart your business. But focus on getting revenues first, before putting your focus on fundraising,” he said. At present, MiCab has partnered with over 5,000 taxi fleets in Metro Manila, Cebu, and Iloilo.
Hiolen, who founded AI-assisted eCommerce platform Sellax, also raised the importance of having customers first. Finding the right people in the team who share the same vision as the founder is also a common practice among these local tech entrepreneurs.
“Know your weakness and strength. Know when and where to collaborate,” added Loremia.
It also pays to be passionate yet practical about the business, said Yap. In other words, objectively examine the wrongs in the business and its business model and be willing to let go of incorrect practices.
Nevertheless, ignoring critics also seems beneficial too, Hiolen added.
“Sometimes, people will tell you that your startup will not work, or you will not be successful, or will not get you customers, etc. My advice is just do it, just test it until you know it’s not working,” said Hiolen.
Connecting with the right people who will mentor and support startups also helps.