Go Negosyo 3rd Quarter 2006

PLDT/TELEPWEDE REFER TO CD

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3rd QUARTER 2006

G

O NEGOSYO is back with even more business ideas for Filipinos.

From September 14-15, 2006, we are unfolding the biggest technology entrepreneurship expo ever, dubbed as “TechnoNegosyo.” We welcome you to come and visit the vast halls of the World Trade Center in Roxas Boulevard.

Just like our recent offerings, TechnoNegosyo is anchored on innovative forums and an exhibition of over 100 technology-oriented ideas.

And yet again, it is a free public event organized by the Philippine Center for Entrepreneurship (PCE).

TechnoNegosyo extends our series of well-received events kicked off by last F e b r u a r y ’ s groundbreaking GoNegosyo Summit in Market! Market! The GoNegosyo train kept rolling these last few months through MicroNegosyo Expo in the Philippine Army Gym, GoNegosyo Teen Edition Conference in Baguio last June, and several other pocket events that we brought to different communities and schools.

Go Negosyo is truly proving as an effective platform for inspiring the entrepreneur in all of us. I believe the advocacy has captured the imagination of Filipinos and emboldened many to pursue the path of business ownership. Along the way, it has been able to link together the academe, businesses, business associations, government agencies and ordinary citizens by creating accessible venues for exchanging business information and experiences.

When a business involves high technology, all the more should there be a functioning entrepreneurial ecosystem. TechnoNegosyo can also be viewed as a means of bringing the Filipino entrepreneurial spirit to a higher level. It’s because technopreneurship is a world of brilliant,

hard-to-copy innovations accompanied by a high degree of risk-taking, visions of selling to a huge global market, and exponential growth and profits.

I wish to thank several emerging Filipino technopreneurs who worked closely with PCE in recent months to realize TechnoNegosyo. They are the best minds and young guns of technopreneurship led by mobile applications pioneer Myla Villanueva (MDI Technologies), venture capitalist and hardware inventor Paco Sandejas (Narra Venture Capital), IT strategist Dondi Mapa (formerly CICT commissioner now with Dell) and biotechnology business developer Maoi Arroyo (Hybridigm). This country is so lucky to have young and brilliant visionaries who have chosen to launch a techno-preneurship revolution right here although they could have been successful anywhere. They are no less inspiring than the entrepreneurial icons who have appeared in our past Go Negosyo events.

A definite highlight of TechnoNegosyo would be the recognitions that will be handed out to the 10 Inspiring Filipino Entrepreneurs.

We will also be launching a novel Idea Factory, during which the Department of Science and Technology will present promising technologies & applications from Filipino researchers and scientists that will be matched with potential funders and mentors.

We urge all sectors to follow through the gains from TechnoNegosyo. Let’s all begin collaborating with each other through research partnerships, joint ventures, sourcing agreements, and technology transfer.

I invite everyone to look into the promise of high technology, particularly IT and biotech, for improving peoples’ lives and creating opportunities.

Cover Art by Benjo Laygo

10 Most Inspring Filipino Technopreneurs 6 DIOSDADO BANATAO Computer Chips 7 NONOY & BEN COLAYCO Online Gaming 8 JOEY GURANGO Software Development 9 DANILO MANAYAGA Biotechnology 12 DENNIS MENDIOLA Wireless Technology 16 MANNY PANGILINAN Telecommunications 18 DR. WILLIAM TORRES RP Internet Pioneer 20 PETER VALDES Software Development 22 ORLANDO VEA Mobile Communications/ New Media 23 JAIME AUGUSTO ZOBEL DE AYALA Diversified IT Investing 24 Filipino founders of PESO win grand prize in MIT 26 Biotech The Harmony of Science and Entrepreneurship 28 Wanted: A mini-Silicon Valley in the Philippines 30 Go Negosyo Teen Edition 32 Go Negosyo sa Marikina ... and Quezon City

Go Negosyo Magazine is published four times a year by the Philippine Center for Entrepreneurship Foundation Inc. • Executive Director: Ramon Lopez Magazine Editor: Oscar Gomez Jr. Assistant Editor: Niel Niño Lim Art Director: Nanie Gonzales Photography: Luke Esteban, Ivan Santos • We welcome your comments and any news originating from enablers and advocates of entrepreneurship. Write to gonegosyo@yahoo.com • PCE Secretariat: 5/F RFM Corporate Center, Pioneer corner Sheridan Streets, Mandaluyong, Metro Manila • Phone (632) 637-9229 Fax: (632) 637-78-73

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FORUM AND EXPO World Trade Center, Roxas Boulevard DAY 1, September 14, Thursday

DAY 2, September 15, Friday

Co-emcees: Tessa Prieto-Valdes and Paolo Bediones 9:00 Registration 9:30 - 9:45 Ribbon Cutting Guests: Sen. Mar Roxas, DOST Sec. Estrella Alabastro, Presidential Consultant Jose A. Concepcion III, Vivienne Tan, Myla Villanueva, Marissa Concepcion 9:45 - 9:55 National Anthem by Karylle Invocation by Ms. Jaimie Rivera 9:55 - 10:00 AVP: “Technology and You” 10:00 - 10:15 Opening Remarks by Jose A. Concepcion III Presidential Consultant for Entrepreneurship 10:15 - 10:45 Awarding of the 10 Inspiring Technopreneurs 10:45 - 11:45 FORUM 1: “Profiling the Technopreneur” Panelists: Jaime Augusto Zobel de Ayala (Ayala Corp.), Atty. Felipe Gozon (GMA Network) Moderators: Myla Villanueva (MDI Group Holdings), Joey Concepcion (PCE) & Cito Beltran (ANC) 11:45 - 1:00 Exhibitor Networking / Lunch Break 1:00 - 2:30 FORUM 2: “Broadbanding Your Business” Panelists: Ben Colayco (Level Up!), Ray Espinosa (ePLDT), Tunde Fafunwa (Bayantel), Judd Gallares (GMA New Media Inc.), Minette Navarrete (Globe Telecom), Gao Pronove (GoVida), Dr. Bill Torres (Mozcom), Dennis Valdes (Philweb) Moderators: Dondi Mapa (Dell Philippines) & Ms. Miriam Quiambao (GMA Network) 2:30 - 2:45 Break/TechnoNegosyo Partners Segment 2:45 - 4:15 FORUM 3: “Growing Money From Trees: Business Opportunities In Biotechnology” Panelists: Dr. Nina Halos (Arnichem Biofertilizers), Jun Lao (Chemrez Biodiesel), Sammy Latay (Elixir Pacific International Corp.), Danny Manayaga (Secura International Corp.)

Moderators: Maoi Arroyo (Hybridigm Consulting) & Mari Kaimo (ABS-CBN) 4:15 Exhibitor Networking 6:00 - 9:00 Raffle & Entertainment

9:00 Registration 10:00 - 10:10 Presentation of Day 1 Highlights & Go Negosyo MTV 10:10 - 11:40 FORUM 4: “Jumpstarting Your Tech Venture” Panelists: Domingo Bonifacio (Remec Broadband Wireless), Joey Gurango (Webworks), Martin Lichauco (Walden International Phils), Atty. Christopher Lim (Quisumbing Torres Law Firm), Dennis Mendiola (Chikka Asia), Dennis Posadas (Rice Bowl and Chips Author), Mark Yambot (Microsoft) Moderators: Paco Sandejas (Narra VC) & Pia Hontiveros (ANC) 11:40 - 11:45 Presentation: “A Day In The Life of A Technopreneur” 11:45 - 1:00 Exhibitor Networking / Lunch Break / TechnoNegosyo Partners Segment / MOU Signing of DOST Technopreneurship Program 1:00 - 2:30 Idea Factory Promising technologies/applications from IT companies, researchers and scientists are presented as business opportunities to entrepreneurs, funders and angel investors, in search of mentoring and financial support for incubation, development and next-stage growth Reactors: Maoi Arroyo (Hybridigm Consulting), Dickie Gonzalez (PESO), Joey Gurango (Webworks) VC/Investor Panel: Martin Lichauco (Walden International Phils.), Gerry Valenciano (ICCP Venture Partners), Paco Sandejas (Narra VC), Myla Villanueva (MDI Group Holdings) Moderators: Anthony Pangilinan, Twink Macaraig (ANC)* 2:30 - 4:00 FORUM 5: “Trending Tomorrow: Where Technology Is Taking Us” Panelists: Patrick Aronson (Motorola), Ricky Banaag (Intel), Ernest Cu (SPi Technologies), Tunde Fafunwa (Bayantel), Benedict Hernandez (eTelecare Global Solutions), TJ Javier (Microsoft), Butch Jimenez (PLDT), Patricio Pineda (Globe Telecom) Moderators: Anthony Pangilinan & Karen Davila (ABS-CBN) 4:00 Exhibitor Networking

*For confirmation

6:00 - 9:00 Cocktails & Entertainment / Launch of gonegosyo.org

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IOSDADO Banatao, better known by his nickname Dado, is a serial entrepreneur and a recognized engineer working in the high-tech industry. A startup veteran, he co-founded Mostron (PC motherboards), Chips and Technologies (PC chip sets, eventually acquired by Intel), and S3 Graphics (high-speed video/graphics chips, renamed to SonicBLUE). It is Silicon Valley folklore that he chose the company name S3 to mean “Start-up Number 3.”

A pioneer in graphics acceleration, he introduced the semiconductor industry’s first single-chip graphical user interface accelerator which significantly enhanced the performance of today’s PCs. This chip is

now found in at least nine out of 10 PC motherboards.

It was also Dado’s genius that gave the world the first Ethernet controller chip that enabled computers to link up and communicate with one another and the first chip set that significantly reduced the complexity of the personal computer. In a nutshell, Dado’s innovations made computers cheaper, faster, and more people-friendly.

He is currently the managing partner of Tallwood Venture Capital.

In 1997, he was honored with the prestigious Ernst & Young “Master Entrepreneur of the Year” award in the US. Forbes Magazine has often included him on its “Midas List.”

The man hailed as a Silicon Valley visionary actually hails from Cagayan Valley. He was born May 23, 1946 to a rice farmer and housekeeper and grew up in Barrio Malabbac in the farming town of Iguig. As a kid, Banatao used to walk barefoot to school along dirt roads.

He spoke Itawes, Ibanag, and Ilocano.

Thanks to good grades in math and science, he attended college at the Mapua Institute of Technology, where he graduated cum laude with an electrical engineering degree. As a freshman, Dado recalls assembling his own electric guitar set when he could not afford to buy one.

He applied as a pilot trainee at Philippine Airlines. From there he was recruited by Boeing to be a design engineer. It allowed Banatao to pursue a masters degree in electrical engineering and computer science at Stanford University, which he completed in 1972.

In the early 1980s, Banatao set out on his own with $500,000 pooled from friends to start Mostron. Struggling to keep the company afloat most of the way, Banatao hit the jackpot when Mostron came up with the first system logic chip set for the XT and the AT personal computers, which lowered the cost of building the PC while making it a much more powerful machine. In 1996, his second startup Chips and Technologies was bought by Intel for a reported $430 million.

‘We can make a global impact in Web services’ One of the most inspiring Filipino success stories in business, Banatao offered his sage advice during a recent visit: How to develop the next Dado Banatao: “Does one need a US degree? That is not an issue per se. The real issue is whether you can actually compete with people there with similar degrees. You must always update and refresh your knowledge by making it respond to current needs, which depends on the industry you are working in. It doesn’t matter where you start — here or in Silicon Valley — as long as you are solving a “global pain” or want.

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“We have to get more students into engineering and sciences because they’re the ones who will come up with products. These students must be well-versed in basic concepts— the deeper, the better. Don’t go broad, but rather give them deep knowledge.”

How to succeed in technology: “Understand what’s going on. Go down one to two levels below the surface. Look deeper into trends. What you know now is already done.

Look under the covers— what will rise in three years? About 95% of the time, I am planning five to 10 years ahead. When we invest, our horizon is 5-10 years.”

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OME colleagues thought invest ment banker Aloysius Colayco was in a career funk, or maybe entering a midlife crisis, when in 2002 he began talking a strange language. He spoke of fantasy worlds, epic threedimensional battles, avatars and virtual heroes.

At 52, “Nonoy” Colayco was widely respected for his deal-making flair which netted considerable foreign investments for the country. He was chairman of the Jardine Matheson Group-Philippines (which owns, among others, the Mandarin Oriental), managing director of Argosy Partners, and was advising major Filipino firms such as JG Summit, RFM, Aboitiz Group, and Republic Cement.

As it turned out, Nonoy’s investing taste was improbably shifting in those days from his usual brick-and-mortar fare. Among friends, he began to pitch the innovative business plan of his son, Ben. It was for a geeky little startup which they decided to call Level Up! Fast forward to early-2006: Level Up! is already the Philippines’ leading publisher and distributor of online games, with a market share of about 80 percent. It has also expanded to India and Brazil, and is responsible for hawking the phenomenal Koreaninvented online game, Ragnarok, to almost seven million registered users in the Philippines.

Entrepreneur Philippines publisher Liza Gokongwei Cheng wrote

in 2004 that Ragnarok “has taken our youth by storm. It is changing the way many young Filipinos are spending their leisure (and school) time. It is also singlehandedly reviving the dying Internet café industry.”

Today, father and son have leveraged their first-mover advantage in local online games. They have already reaped a windfall for themselves and their co-investors by divesting a minority stake in Level Up International Holdings to Hong Kong’s First Pacific Group. PLDT is crafting the merger of Level Up! by early2007 with the telecom giant’s own gaming subsidiary, Netgames.

Ragnarok belongs to the genre called massively multiplayer online role-playing game, or M.M.O.R.P.G. “Massive” refers to the fact that thousands of players can simultaneously occupy one vast virtual 3-D world. With roots traceable to cutting-edge PC technology, the MMORPG business actually started with an older audience. Increasingly, MMORPG attracted kids in the mass market.

Level Up! COO Ben Colayco sees online games as a potent way of getting Filipinos to embrace technology and discover how the PC can improve their lives.

Ragnarok gives its software away for free but charges for the game service. A player can download the

How the Philippines can be a major player in technology: “If we want to make a global impact, let’s focus on Web services, ideas and products beyond personal computing. The Web consists of a body of applications on top on the Net infrastructure. Nobody yet owns this technology space today so it has a wide open potential for us to take advantage of. Within web services, we can develop mobile services in particular. We will all become infinitely more productive because of the Web. “In the Philippines, some segments in software can be nurtured with local expertise and infused with global marketing. Innovation is a cancer that spreads and becomes global ultimately.”

Practical advice for startup entrepreneurs: “Vacation is a luxury for startups. Also, if you’re not yet married

game from the Web or through a CD distributed in Internet cafes, through magazines, and during events. Level Up makes money by selling pre-paid Internet card denominations for as low as P50 for eight hours and P350 for a month of unlimited play. ‘Ragnarok’ can draw as much as 60,000 concurrent users online.

Level Up’s marketing machine has negotiated co-promotions with major consumer brands and inspired music videos, Ragnarok songs, comic strips, hot-selling merchan-

dise and a cartoon show.

It’s no mystery why, in the mythical world of Ragnarok denizens, Nonoy is known as the “Invisible Hand” while Ben answers to the title of “Game Boss.” Both Filipino entrepreneurs are going to be global players to watch, as online fantasy games become a billion-dollar entertainment phenomenon among legions of cybercustomers.

and are working on a startup, postpone! In Silicon Valley, the divorce rate is very high. If you are already married, then it’s best if you could share the whole experience with your partner.”

How to deal with a “lemon” investment: “You kill it. We have shut down companies after only three months or two years. We behave like investors in a public market, we kill the bad ones early. Having said this, you must take failure as a learning experience. In Silicon Valley, people give you at least one chance to prove yourself again. You just make sure that you have a better and bigger idea the next time. I use golf as an analogy here: it’s about making that one good shot that brings you back in the game.”

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J

OEY Gurango has not always been the huge success he is today— the Filipino technopreneur who sold his own company to the biggest software company in the world.

He went to the U.S. when he was 18, attended college there but later dropped out. Except for a short stint at Apple Computer, he spent most of his early career starting numerous business ventures—in injection molding, a laser machine shop, door-to-door sales, and even gourmet pizza deliveries. But these did not exactly fly.

The first “real” company he started in 1984 ended up in bankruptcy two years later. The experience never dampened Gurango’s drive, much less his spirit. Over the next 15 years, he started, grew, shut down and sold several more businesses.

In 1987, Gurango, together with a Seattle-based partner, set up Match Data Systems, a company that developed customized PC software for Fortune 1,000 companies. Four years later, the company established an R&D center in the Philippines, which Gurango ran himself, to keep up with demand.

Before long, Match Data started developing software on contract for a software company called Great Plains, based in Fargo, North Dakota. “We had an accounting solution that we

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developed as an add-on module to their financial management software.

It filled a hole in their product lineup and that made them interested in pursuing a closer relationship with us,” Gurango related.

Great Plains was having difficulty then ramping up its own R&D initiative. So it finally decided to acquire Match Data Systems in 1996 and appointed Gurango as the managing director of its newest international subsidiary. But acquisition by an even bigger firm was to quickly follow.

In 2001, software giant Microsoft, which was looking at expanding its share of the SME market, acquired Great Plains. It turned the company into its newest division — Microsoft Business Solutions. Gurango was made the division’s Asia-Pacific regional director for products and services, leading a team of IT professionals in Manila, Singapore and Australia.

He put up WEBWORKS OS in late-2003. The company develops commercial software such as HR and payroll, manufacturing, financial and project management applications.

From 12 employees working in two shifts in his attic, WEBWORKS OS quickly evolved into a 60-strong organization working out of two offices in Libis, Quezon City.

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Today he is also a “mentor-capitalist”: someone who invests both financial and knowledge capital.

Gurango said it is his desire to help other people accomplish the things he has accomplished — faster and with less mistakes.

“My objective over the next five years is to get some 10 to 15 companies, with the intention of taking at least three of those companies global,” he said. “It has to be 10-15 because most of these companies will not succeed, at least to the level I’d want them to succeed. To get the three, I need 10 to 15.”

“But I’m not limiting what I’m looking at to just IT. As a matter of fact, one of the nine businesses I’m evaluating right now is in agriculture,” he disclosed.

Gurango’s criteria in choosing which company he’ll invest in are: the company has to be Philippine-based; it must bring some benefit to the local economy, whether by creating jobs or bringing in revenues; and it has to be a company he’ll be proud being a part of.

Gurango outlines three key elements in order for entrepreneurs to succeed. One is a success plan, which is more than just a business plan. A success plan contains a specific series of steps along with a measurement of these steps that track one’s progress.

Without a plan to succeed, Gurango stresses, given the track record of most start-ups, the default is automatic failure.

The second element is for an entrepreneur to have a vision: where he wants the business to be and where he wants himself to be. That vision has to be clear, concrete, and specific.

Without a vision, there is no direction.

Lastly, an entrepreneur needs a mentor. A mentor is simply a coach who guides and advises an entrepreneur so that mistakes can be avoided.

Without a mentor, an entrepreneur will take much longer to succeed and make more mistakes than necessary.

After becoming a rising executive at the biggest software company in the world, building successful software companies, accumulating invaluable knowledge and skills, and making his millions, he has undoubtedly made it big.

And now that he is empowering other entrepreneurs, Joey Gurango has finally found his calling.

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N biotechnology, the most rapid and far-reaching changes since the early eighties have been made in medicine and agriculture. Today, a significant number of Filipino entrepreneurs are hopping on the biotech train, hoping to catch up with the early birds and cash in on the re-

wards. One of the earlier birds is Danilo Manayaga.

A BS Chemistry graduate from the Cebu Institute of Technology (CIT), Manayaga wanted to be a pilot but failed to meet the 20/20 vision required for aviators. He worked in Manila for a few years before heading for Southern Mindanao as a salesman of biotechnology equipment and processed plants. Soon, he caught the attention of a company called B. Brown Biotech International, which hired Manayaga to handle their biotechnology division in the Philip-

pines. This started him on an exciting journey to the world of high-end biotechnology.

Manayaga’s involvement with biotech became an obsession even when the market in the country was not getting any bigger. “I started to think of the best strategy to increase business. So I decided to set up my own b i o t e c h manufacturing op-

eration.”

H e started Secura International Corp. in 1993 to distribute equipment and reagents for the local research and biotechnology market.

In the year 2000, a subsidiary, Secura Plant Genetics Corporation, was established to diversify into agribiotechnology as a manufacturer of enzymes, essential oils and plant extracts. Specifically, Manayaga started to do tissue culture on banana and ginger until there was a big list which included papaya.

He had his eye on papain in particular and went looking for a site where papaya could be planted and harvested bountifully. A townmate in

Gingoog City, Misamis Oriental had told him that his former classmates in high school were unemployed even though they owned several hectares of land planted with coconut trees.

“They simply had no money to develop their land so I decided to help them and [in return ask them to] help me with my business,” he said.

Papain has since become the number one product of Secura because demand in the herbal soap industry is high.

Since 1999 Manayaga has invested more than P20 million for the development of Secura though he admits his company cannot compete with giants because it still needs more money to upgrade equipment – and he is talking between the range of P600 million to P1 billion in capital with an expected ROI in two years.

Secura has exhibited its products in Belgium because of the help of CDI, a Dutch government agency that helps Third World countries export their domestic products.

Recently Manayaga was able to set up another company that develops anti-rabies serums. He called his new company Servac Philippines (see sidebar).

He simply brushes off opponents of biotech as a group of misled activists. The issue with Bt corn is a matter of economics and politics: vested-interest groups fear it will eliminate the market for pesticides.

“If you want the farmers to die then use pesticides; but if you want to help the farmers they should use Bt corn because it will increase their yield without harming the environment.”

He adds: “If the government wants to help our scientists, then it should be the first to produce Bt corn because the Bacillus thuringiensis (Bt) micro organism is present in Philippine soil.

Dr. Leodegario Padua of the Institute of Molecular Biotechnology at UPLB used Bt way back in the early ‘80s to eradicate mosquitoes,” Manayaga explains. “He was promoting this so that the Philippine government can use it to fight malaria instead of using the deadly DDT.”

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An entrepreneur in the service of public health

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S there such a thing as an investment which is prof itable, has a vast, growing market, and which allows the entrepreneur to serve the public interest? Servac Philippines, a biotech firm working with the Department of Health (DOH), has found such a niche for itself.

There are 165,000 incidents of rabid dog bites per year in the Philippines, according to the World Health Organization (WHO), and only 10,000 receive the expensive imported drug treatment for it. Rabies, though fatal, is a disease often taken for granted. Few have been known to survive its full-blown onset. In the Philippines, rabies cases increase yearly, 98% of which are caused by unvaccinated and/or stray dogs. The Philippines is fifth in the world with over 500 deaths per year from rabies, with potentially infective bites projected to increase at a rate of 100,000 per year.

WHO recommends the use of Equine Rabies Immunoglobulins or ERIG, also known as the anti-rabies vaccine, to treat people who have been bitten by animals suspected of carrying the virus. Unfortunately, there is an acute shortage of post-exposure treatments such as ERIG, especially since many European countries have ceased producing it, thanks to the virtual eradication of the disease in Europe. Yet the market for ERIG continues to grow in Third World countries, where vaccination and rabies awareness is not widespread and treatment almost always occurs after a person has been bitten.

The Philippines relies on foreign supplies of ERIG. Persons who are bitten need it in large quantities but the cost of the substance keeps it out of reach of those who need it. The current local supply of ERIG which comes from a single European company will last two years, at best.

It was clear that the Philippines needed to produce its own supply.

When the DOH realized this, it turned to the Research Institute for Tropical Medicine (RITM) for help in locating a company that would be willing to take the risk of developing and producing ERIG. RITM found Servac Philippines, which funded the pilot study and followed through by scaling up and optimizing the pilot ERIG production in order to produce the serum commercially.

Danilo Manayaga, Servac president and CEO, came up with an innovative and cost-effective way of producing ERIG. Servac’s process also helps address the twin problems of the need for large amounts of the antirabies serum and the possibility of anaphylactic accidents (such as allergic reactions).

Recently, Manayaga, together with Foundation for Sustainable Techno Environmental Reforms in Asia (Foster Asia) Executive Director Allan Tolentino, presented to the Department of Agriculture’s Biotechnology Program Implementing Unit (DA-BPIU) a short brief called Biotech-driven Agri Industrial De-

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At Servac’s farm in Davao, horses are “living factories” for the immunoglobulins needed for the ERIG. Why horses? Manayaga explains that the human body is not as efficient at producing the necessary immunoglobulins as the horse’s body is; hence, human RIG is much more expensive than equine RIG. The process is simple: a horse is given a shot of the rabies vaccine (antigen), which triggers its immune system to produce the immunoglobulins that destroy the virus. The dose does not make the horse ill, and the horse’s diet and health are carefully monitored so that it is always at peak physical condition. Qualified horses’ blood is extracted at intervals and the immunoglobulins are extracted from this blood. The process yields 1.5 liters of clarified serum for every 3 liters of blood extracted.

When Servac’s proposed state-of-the-art facility is constructed, it will begin to commercially produce ERIG for RITM and other DOH Animal Bite Centers situated all over the country. But dog bites occur at the rate of 200,000 per year and there is also the DOH commitment to make the country “rabies-free” by 2020 to consider. Adding on the export market for a cheaper, purer anti-rabies vaccine, the commercial potential becomes as attractive as the chance to serve those desperately in need of ERIG. The Asian market alone is vast and untapped.

Servac’s production facility, which is partly financed with a loan from the Development Bank of the Philippines, will operate according to international Good Manufacturing and Good Laboratory Practices (GMP and GLP) Standards. It is expected to be operational by the end of 2006, after DOH, RITM and Servac jointly confirm the quality and clinical safety of the ERIG produced, to be subsequently certified by the Bureau of Food and Drugs.

The work doesn’t end there, though. SERVAC is committed to helping the government attain vaccine self-sufficiency through more build-operate-transfer (BOT) schemes. “We share our resources with the government in order to better serve those in need,” says Manayaga. Servac is ready to produce other vaccines for other diseases, and are simply looking for partners to help them expand.

With the world’s concern being turned to avian flu and similar diseases, Servac Philippines is already in the unique position of being able to act quickly if it can partner with an entrepreneur who will help it capture the Asian market for ERIG and similar vaccines, thus serving not only the Philippines but also the rest of the developing world. – Charlene Fernandez

velopment System (BioAIDS) as a prelude to his plans of Manayaga’s thoughts are fixed on broadening the potentials of natural biotech products to make the Philippines a major source for the world market. He says biotechnology or genetic engineering, if used for the benefit of mankind, is very good.

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The increasing use of plant cloning, tissue culture and micro propagation is the wave of the future, he stresses. “We are using this technology to plant banana and pineapple, so why not use it on sampaguita, papaya or other herbs?” – excerpted from Biolife Magazine

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N ex-Subic volunteer who founded six-year-old Chikka Asia, Dennis Mendiola, 39, is charging ahead to establish the Philippines, already the world’s texting capital, as the global nexus for wireless mobile applications.

Chikka Asia already provides enhanced mobile messaging services to mobile carriers around the world. Its flagship mobile instant messaging service is widely used to send text and MMS messages in countries like the US, Guam, Philippines, India, and Thailand.

“Chikka,” which is Pinoy slang for small talk or chit-chat, is a wellrecognized brand today, having blanketed the wireless space with various uses for SMS or texting.

As an entrepreneur, Mendiola has every reason to be proud that: • He launched first in the most coveted texting market in the world. Chikka has 90% share of the Philippines’ mobile instant messaging market (in terms of actual revenues generated from messaging itself). Many of its other applications are No. 1 in their categories because of the high utility and enjoyment people derive from them.

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• Chikka owns the largest portfolio of patents for SMS applications worldwide. These certified global innovations have extended the versatility of the mobile phone to airtime transfer (pass-a-load), payments, corporate messaging systems, media promotions, auctions, and even dating services.

• He has created a truly global Filipino company and with that, helped establish the country as a global hub for the development of excellent wireless applications.

• The Chikka organization has grown. It recently celebrated its 6th year as a company with more than 200 employees and applications live with over 30 carriers in over 10 countries.

Chikka has its roots in an earlier e-commerce business, eRegalo.com, formed in June 2000. Through eRegalo, Filipinos abroad shopped for gifts online which were delivered to relatives in the Philippines. The challenge then was how to draw traffic to the site. Hence came the idea of using “free” text messaging from the Net (via the gift site) to draw people in. Immediately Mendiola and his team saw the utility and business

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potential provided by other Net-based applications and services beyond eregalo, such as instant messaging and even auctions.

Meanwhile, in the late 90s too, the Text Revolution was already in full swing throughout the country, thanks to two of the most admired telecommunications companies in the world, Globe and Smart, who had then just agreed on their landmark “interoperability.” (Younger folks might take this for granted now, but it didn’t use to be possible for Globe to text Smart and vise versa).

Chikka’s idea became thus to marry instant messaging (IM), which was immensely popular in countries such as the US where Internet penetration was high, and texting or SMS that was raging in the Philippines with no signs of waning.

Chikka would spawn other technology companies. Crushcow.com introduced mobile matchmaking, which was previously limited as an Internet application. Another company, Bidshot.com, lets mobile auctioneers bid on items via SMS and be alerted on the status of their bid, all done anonymously. It is the world’s first SMS-enabled auction site.

Although deeply immersed in the dotcom wave, Mendiola had eyes

wide open to its eventual bust (which came in mid-2000). That’s because he was confident with Chikka’s and Bidshot’s clear revenue model, plus they’re growth projections were not hinged on advertising or marketing spending. Instead, they were built on the high utility which a community would derive from such services.

Before founding Chikka in June 2000, Mendiola spent five years investing private equity as managing director of Next Century Partners, which rode on the Asian

investment wave, attracted dollars into the country, and saw some of the companies it invested in go public.

Prior to founding Next Century Partners in 1996, he was an investment banker at Bankers Trust in Singapore and Morgan Stanley in Hong Kong. He began his career as a management consultant at McKinsey & Co. in New York.

Mendiola is an electrical engineer by education, with training in programming and logic design. He holds an MBA with honors from the

Harvard Business School and graduated summa cum laude at the University of Pennsylvania, completing a BS in Economics (Wharton) and a BS in Electrical Engineering (Moore).

He also previously headed corporate finance and strategic planning at Subic Bay Metropolitan Authority. He was among the first to answer Chairman Dick Gordon’s call for volunteers, exchanging his promising US career to work in the laharstricken former naval base.

‘If you’re innovating, you never wan wantt to hear that’s impossible’ DENNIS Mendiola shared his thoughts about starting up Chikka, when to quit (if ever), and his road to success:

The biggest obstacles he faced:

“We were racing against time and large established, global players! In the first place, it was a very ambitious project to build the world’s first mobile instant messenger to run on SMS or text. It was even more ambitious to launch it in the Philippines, where a great degree of robustness and scalability was required for our system to withstand the projected volume of messages.

“Furthermore, we needed to hire great talent to design and then to build Chikka. While that talent was surely to be found in the Philippines, many of them were then on their way out, to work in the U.S. for example, where career and financial stability awaited them.

“Even with some venture capital funding to make competitive salaries possible, the biggest challenge was still recruiting the team on nothing more than words, to get their buy-in on a ‘vision.’

What made him persevere and focus:

“It was the thought of more and more people giving up their stable lives and careers to join us on a hard journey. Some like Chito Bustamante (who eventually assumed the role of Chikka COO), came back from booming Silicon Valley to settle here. Countless others have the same story. That’s why I take stock of whatever success we have attained now, and give credit to those who had taken that leap of faith in the beginning.”

What he did differently that made him succeed:

“We hired the right people, those who were natural leaders and had “diskarte,” (I don’t know how that translates to English: shall we say a combination of resourcefulness, intelligence, and tenacity).

“This is important when you are pioneering because you will often find yourself met with cynicism. This is important because if you are innovating, you never want to hear ‘that’s impossible,’ while at the same time,

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leading people to the charge in a world yet unknown.”

On the thought of quitting or selling the business:

“We had never quit when faced with all the odds from the start – such as starting up just as Silicon Valley turned into a bloodbath, the cynicism of potential investors, etc. Why should we ever quit?

“Sell? The option is always there to get strategic partners who would enhance our sustained profitability, increase our international portfolio, and reinforce Chikka as the No.1 brand for quality wireless applications. I do understand that we have investors and shareholders who may need to ‘exit’ or monetize their investments in the company at some point. So going public or merging for exit is also an option.

“But to those who think that going public or being bought out by the likes of Microsoft is the end-all-beall of the IT industry, they are wrong. The only time one ever reaches the ‘zen’ of shareholder wealth creation in the IT space (or any other business for that matter) is when one begins to run a company believing it will continue to be a leader 100 years from now.

That is real stakeholder value. (Interestingly that is also when the Microsofts of the world begin to take notice.) No one wants to buy a One Trick Pony company. Rather people invest in a company that can produce a series of One Trick Ponies forever.”

On volunteering in the abandoned Subic Naval Base right after Mt. Pinatubo’s eruption:

“My experience in Subic was a quasi-entrepreneurial undertaking. In fact, if we hadn’t considered it one, we may have not succeeded as much. Back in 1992, Subic was left by the Americans barren, with thousands of otherwise capable people without jobs. The situation had to be “turned around”. There was no money readily available from the Philippine government to smoothen the transition. Through persistence and true-to-form entrepreneurial type risk taking, we prevailed, landing deals early enough to provide jobs and raise funds to pay for operations, marketing, and improvements.”

I

N the corporate world, his name rings one among entrepreneurial executives. He has built a rocksolid reputation on the success of organizations he conceived, reinvented, or navigated through extreme business difficulty.

He is the chairman of Philippine Long Distance Telephone Company (PLDT), the country’s dominant telecommunications outfit; chairman of Smart Communications Inc., the largest mobile phone operator in the Philippines; and CEO of First Pacific Company Ltd., the Hong Kong-based flagship of the global conglomerate First Pacific Group.

First Pacific, which he founded in Hong Kong in 1981 with a crew of only six people working in a 50square-meter office, now registers

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combined sales of US$5 billion yearly and employs over 60,000 workers across the Asia-Pacific region.

PLDT was a lumbering giant that had monopolized the Philippine fixed-line telephone market for 70 years when First Pacific gained majority control of the company in 1998. But it was a giant in serious financial crisis, unprepared to face a liberalized industry where rapid and dramatic changes were taking place.

When First Pacific took over PLDT, Pangilinan swiftly stabilized a shaky fiscal situation (heavy debt, tight cash flows) before proceeding to transform the organization’s bureaucratic culture— from having the old habits of a big, fat, slow monopolist into one

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that was market-driven and customer-centric.

Pangilinan also led the company in defining a clear vision that was decidedly driven by technology: “I thought that convergence—where telecoms, media and information technology will merge onto a single platform— provided a long-term conceptual beacon for the business, and a sturdy anchor for our future strategy.”

Today, PLDT has been restored back to financial health and now leads the market with innovative information and communications technology (ICT) product offerings.

Driven by stable fixed-line revenues, a booming wireless business and a rapidly growing share in the country’s emerging emarket, it has become the country’s most profitable company and the first one to ever breach the P30billion income mark.

But there are new challenges ahead. “These days, PLDT finds itself approaching another tipping point,” he admits. “The onset of new and disruptive technologies that are Internet-based and broadband, are starting to enter the mainstream and to undermine the current business models that have built and sustained the landline and wireless businesses of telecom companies throughout the world.

This demands new investments— in the next generation I/P (internet protocol) network, in 3G (thirdgeneration) cellular, in WiFi/WiMax, in IP/TV, in mobile video, in mobile commerce—that will breed new products and services, new revenue streams, and entirely new businesses.

What the great German statesman Bismarck once said may be relevant to PLDT reinventing itself yet again: Great changes do not come upon us with the even speed of a railway train.

Instead, it moves forward in spurts, but with irresistible force.”

Although Manny now runs billionpeso companies, he certainly did not come from a wealthy family background. As a high schooler at San Beda College, his daily baon was a measly 25 centavos (“Ten centavos for a bottle of Coke, five centavos for crackers, and another ten centavos to take the bus home,” he fondly recalls.) His personal finances did not improve much even when he entered Ateneo de Manila University to take up economics. His weekly allowance while in college was only P10 and that already included his jeepney fare to and from school.

Despite graduating cum laude in 1986, Manny felt he still needed an MBA degree, preferably from a prestigious foreign university, to ensure a good start for his professional career. But since his family could not afford to send him abroad, Manny, who studied at both San Beda and Ateneo under a scholarship, had to

find yet another scholarship grant.

Fortunately for him, Procter & Gamble was conducting a national competition at that time where the top prize was a rare scholarship to the University of Pennsylvania’s Wharton School of Economics. He entered – and won.

He returned and spent six years with Phinma before deciding to seek his fortune as an OFW (overseas Filipino worker). It was in Hong Kong where he learned the dynamics of international finance. A wealthy Indonesian client shared Manny’s vision and supported his idea of putting up a regional banking and trading business. Manny founded First Pacific in Hong Kong in 1981 which marked the start of his rise as a world-class manager and entrepreneur, his journey from a P1,000-a-month assistant executive job to the chairmanship of the Philippines’ most profitable company.

But what is truly the secret of his success? In a commencement address

he delivered at his alma mater a few years back, Manny told his listeners – the members of Ateneo’s graduating class – the greatest secret of all: that when it comes to success, there are no secrets.

“Success,” he told them, “can only spring from old-fashioned values, values that are transcendent, and endure well beyond the context and circumstance of our time.” These values, he said, are as fundamental as being honest and truthful – especially with one’s self – being diligent, committed, and hard working.

In another commencement rites speech he gave in 2006, Manny elaborated on his message to the graduates and to all the young people who are on the threshold of building their future. “I was born poor, but poor was not born in me,” he said.

“You can make it. Whatever you may wish to do with your future, you can make it. It gets dark sometimes, but morning always comes.”

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O

N any given day, some ten mil lion Filipinos in the country log on the Internet to check their e-mail, chat with friends, surf the Web, post on blogs, join online auctions, download files, purchase goods, and play virtual games.

For all of that, they can thank Dr. William “Bill” Torres.

Torres is widely recognized as the “Grandfather of the Philippine Internet” for being one of the key players in “wiring” the country. He is also the president and co-founder together with the late Willy Gan of Mosaic Communications, Inc.

first Filipino to obtain a PhD in computer science.

Torres helped lay the foundation for the country’s Internet infrastructure. As NCC managing director, he proposed setting up the first Internet connection for the country. In 1993 a company called Computer Networks Systems Corporation (ComNet), founded by Dr. Willy Gan, was contracted by the Department of Science and Technology (DOST) to design and set up a wide-area network (WAN) connecting various local universities and research organizations with each other and to the Internet.

(Mozcom), the country’s first Internet service provider (ISP). Mozcom is the largest among the independents, having the widest geographical reach across the country.

Torres’ influence extends to the government. He is the principal author of the National IT Plan and was chairman of the Information Technology Coordinating Council (now called the National Information Technology Council or NITC). He contributed his technical expertise as head of the National Computer Center (NCC) during the Aquino administration and was largely responsible for encouraging government bodies to set up information systems.

Torres has always been into technology. He graduated at the Mapua Institute of Technology with a degree in mechanical engineering. He then took up graduate studies in mathematics and statistics at the University of the Philippines.

In 1966, he was chosen and sent on a Fulbright Hays grant to pursue a master’s degree in computer science at the University of Wisconsin, followed by a doctorate in the same institution in 1971, making him the

The project was called PHNet. Behind the scenes, things did not proceed smoothly.

Getting funding for the project was frustratingly difficult. It took Torres more than a year to get things going. He finally found a partner in then DOST secretary Ricardo Gloria, who later passed the request on to his successor William Padolina.

Padolina granted funding which went to the Industrial Research Foundation (IRF). Dr. Rodolfo Villarica eventually was the one who actually implemented it. And so, on March 29, 1994, the Philippines got hooked up finally to the Internet.

Upon leaving the government, Torres teamed up with Gan to set up Mosaic Communications with a vision of bringing the Internet nationwide.

Starting with just a handful Points of Presence (PoPs), he was able to increase it to forty in just one year.

He was undaunted by the difficulty and cost of getting leased lines and telephone lines from the various telecom carriers. MozCom persevered and was able to increase its provin-

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cial PoPs by leaps and bounds. By 1998, the company could already claim to be the first and only nationwide ISP that was present in all regions of the archipelago.

The company also maintains its position as the leading independent ISP by being a constant innovator.

It set up Mod.Net.ph, an Internet Data Center (IDC) and a number of application service provider (ASP) initiatives. The company is also focusing on

IP-based software solutions particularly on XML Web Services and mobile technologies.

In July 2001, Gan passed away, but Torres and Mozcom continue to press on. Challenges remain, however. The big telecommunications companies have already invaded the industry by providing Internet access as well. And so, Mozcom responded by focusing on its value-added services.

Torres has been at the forefront of introducing change and influencing policy. He actively participates in various government, private, and educational programs concerning national applications of IT. Today he is an advocate of modernizing the electoral system.

P

ETER Valdes’s passion had al ways been in engineering and software development. Next was teaching. Before he made a name in the IT industry, he was an instructor at the University of the Philippines and De La Salle University, teaching Operations Research (the science of using mathematics for making business decisions). “Teaching has its own satisfaction, since you are able to share knowledge with younger students,” Valdes shares. “At the same time, it reinforces your understanding of a particular field.”

Valdes pursued graduate studies in the US and worked as a software architect and engineer with IBM in Austin, Texas. “I was assigned in the system management architecture group, where we worked on the operating system that runs the IBM servers and workstations. At some point, my supervisor, Robert Fabbio, got this idea of starting a company, and he invited me and two other coworkers to partner with him.”

The result of that partnership was Tivoli Systems Inc., which started in 1989 and is now considered one of the most successful US start-ups. It remains as a flagship product of IBM, which acquired Tivoli Systems in 1996 for $743 million.

“At Tivoli we developed software that manages networks of interconnected computers,” Valdes says. “This was a time when there weren’t a lot of computers networked together yet and supporting the operations of enterprises. But we knew that in time, the Internet would become very popular and enterprises would start networking all their computers, so we came up with a vendor-neutral solution that would manage this.”

Tivoli’s first years were tough.

“Everybody had to work hard, work long hours everyday to complete the

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product,” he recalls. “And there was no certainty that even after that we complete the product, it would sell because basically, we were trying to build something that have not been proven. We really had to believe in what we were doing.”

Valdes had to adjust to the shift to being his own boss. “When you’re an employee, you focus on a specific task or assignment,” he points out.

“But when you have your own busi-

ness, you have to worry about everything, from getting supplies to hiring the right people to cleaning the office, and do your real work.”

After Tivoli, Valdes consulted for other U.S. companies for a couple of years until he began feeling restless again. “I wanted to go back to building technology products again,” he shares. Valdes came back to the Philippines, believing this was the best place to start over. “After talking to professors, students and businessmen here, I made a decision that could find the right people – both managerial and technical – here.”

Late 1998, Valdes co-founded Vinta Systems, a software product

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development company. “The ‘int’ in ‘Vinta’ stands for ‘intelligence.’ Our focus was really to develop intelligence software that can increase the level of efficiencies of business enterprises.” Already, Vinta Systems is making waves in the advertising industry through its Media Optimization and Administration Systems (MOAS) software, a program that not only automates the entire media planning process, but also revolutionizes the way media plans are crafted.

“Even the most experienced media planner can only do so much,” Valdes explains. “But MOAS can look at hundreds of thousands of advertising combinations in a very intelligent manner, and it will come up with a combination that is better that your most experienced planner. That translates to a lot of savings for the customers.” Also, MOAS can compute advertising reach in a thousand of a second, as opposed 20 seconds by a rival program. “This is an innovative, all-Filipino product,” Valdes says.

At present he is a mentor to aspiring and neophyte technopreneurs in the Philippines. “Most of the products that made it globally were made in the US, “ he points out. “ But I know that if given the proper environment and ingredients, you can do the same here in the Philippines.”

Valdes was one of the first to sign up with the Brain Gain Network, an online network and productivity site hosting the largest database of Filipino technical express based here and abroad. “Even today, many keep asking me why I cam back to the Philippines,” he says. “For me, it’s about doing that can have a lasting impact in the country. If I can develop just one product that can go global, I’ve done something that I and the Philippines can be proud of.

That’s what keeps me motivated.” Jacklyn Lutanco-Chua and Marie Anne Fajardo, reprinted from Entrepreneur Magazine, May 2006

S

MART Communications, the country’s largest mobile telecommunications company, is one of the biggest technopreneurship stories in recent times.

One of the central characters in this story is Orlando B. Vea, Smart’s founder and former President/CEO. Sensing the opportunity as telecoms liberalization and massive technology shifts were sweeping the world in the early 90’s, Vea led a group of friends in pooling their limited resources to organize Smart as a challenger in a monopoly-dominated market.

Of their seemingly quixotic quest, Vea recounted that as they were applying for a cellular license, his co-founder David T. Fernando was asked by regulators why Smart wanted a license. Fernando simply said, “It’s because my application for a telephone line has been pending for 12 long years. I cannot wait any longer so I will give myself a line, and many others as well.”

At an early stage, Vea’s group took in as strategic partners the First Pacific Group led by its Managing Director (now PLDT Chair) Manuel V. Pangilinan, and subsequently NTT of Japan.

“As well as choosing the right people, technology and strategy,

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technopreneurship involves getting the right partners,” Vea says. He describes Smart as a perfect partnership, citing in particular a shared range of vision with Pangilinan.

Creatively addressing the gaping unserved market with unconventional pricing, marketing and distribution strategies and a fresh army of committed recruits, Smart soon bested the two incumbent mobile operators and by 1997 became the largest mobile carrier. This set the stage for the eventual takeover by First Pacific and NTT of PLDT. Reflecting on his Smart experience, Vea says that he derives the utmost satisfaction not from Smart’s commercial success, but from having had a hand in the democratization of telecommunications in the country.

“Seeing the cellphone in the hands of the common tao gives me the greatest high,” he says. Smart currently has more than 22 million subscribers, mostly from the lower economic strata.

Vea’s egalitarian mindset springs from his schooling at the University of the Philippines where he graduated cum laude in Economics in the turbulent 70’s.

From Smart, Vea moved on in 2000, again seeking new technology

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ventures that would this time make the internet and broadband services available and affordable to everybody in spite of the country’s low PC and internet penetration.

He has participated in various technology start-ups including: the largest internet café chain with 200 outlets nationwide; a New Media broadcast company; a BPO company operating a platform for games, gaming and entertainment on web and mobile; one of the country’s largest online game operators; a carriergrade voice gateway providing inexpensive global termination for Philippine carriers; and a leading webbased remittance service in the US for the Filipino community.

In pursuit of his vision, Vea has recently partnered again with the PLDT group. He is now spearheading the group’s media thrust as President/CEO of MediaQuest.

Among the services he is setting his sights on are direct-to-home (DTH) TV, Mobile TV and IP Broadcast.

These services will form part of a pervasive platform for the delivery of information and entertainment anytime, anywhere and through whatever device (TV, cellphone, PDA, radio, IPod). The platform will also enable users to create, share and manage their own content.

“E

NTREPRENEURSHIP can sometimes mean reinventing yourself, or changing the character of the institution,” says Jaime Augusto Zobel de Ayala— JAZA to those who follow the career of a man who currently leads the Ayala business empire.

He was among the first captains of big business to come onto the New Economy in a big way.

Although the 170 years behind it make the Ayala Group as “old economy” as a firm can get, the 45year-old CEO has forged ahead to infuse the conglomerate’s brick-and-mortar roots with real technology investment and not just empty talk.

He set up a subsidiary, iAyala, to manage the Group’s Internet-related ventures. A venture capital vehicle, Ayala Internet Venture Partners, invested in several local startups and foreign joint ventures, including Edsamail, SIRF Technology, Music.com, MeetChina.com, Wireless Internet Solutions (WNet) and PinoyExchange.com. It seeded PhilWAP to build a community for WAP users and developers.

Ayala also j o i n e d Bayantrade, a B2B marketplace consortium that includes the Aboitiz Group, JG Summit, PLDT and Unilab.

MyAyala serves as an online retail portal covering Glorietta5, Sureseats.com, and E-Guide. The Group also set up the country’s second Internet data center.

Beyond spinning a host of Internet subsidiaries, JAZA had the singlemindedness to direct all the companies of his group toward his Internet vision. Thus Ayala Land got into cyberparks and online retail; BPI spun off a call center and Internet baking service, BPI Direct; Globe Telecom has marched boldly from DSL to 3G broadband and its various usages; and even Ayala foundation is helping wire schools around the country.

But to the country’s IT community, he is much endeared for his volunteer work in various organizations meant to help jumpstart the New Economy.

He once served as Commissioner for the Global Information Infrastructure Commission and co-chair of the Information Technology and E-Commerce Council. Six years ago, while surveying the sudden downfall of high-flying dot.com and tech stocks, he told reporters that “there is no doubt in my mind…(that) the Internet and IT will continue to fundamentally change the way we do business.”

He has also joined many Filipino technopreneurs who see wireless applications taking hold and becoming the consumer’s primary access to the Web. “I believe we can be a major Internet player. Our major advantage by a long shot is our people, who are English speaking and highly creative,” he says. “The whole multimedia environment is a mixture of music, design, software, engineering.

That whole mix is so available in this country. All it needs is the right environment and the right combustion to take place, and we’ll be many places ahead of other countries.”

On the perceived scarcity of risktaking investors or start-ups with viable business models, he surmises: “Any entrepreneur needs a market. It’s a chicken and egg thing—on one hand you need the industry to come alive for the market to exist; on the other hand, the markets won’t come alive unless the right products and services grow. I would encourage entrepreneurs to focus on areas where services are most needed. Wireless can be the first point of takeoff. Make your point there and use that as a jumping board to other areas.”

“Entrepreneurship may often be associated with starting small, and in

fact it’s very important at that level,” he observes. “But at the same time, you also need entrepreneurial spirit at the level of medium-sized industries and on a larger scale. You need people who are willing to put capital to work and use their balance sheets and reputation to help build the infrastructure needs of the country—such as railways, ports and telecoms. You need not only for the multinationals to come in and build, but also large Filipino companies that have the capacities.”

Using the Ayala telecommunications business as an example, JAZA relates: “We launched Globe in the early 1990s, when the government was seeking to liberalize the economy in a very aggressive fashion and whole sectors were opening up that, traditionally, were difficult to enter. The government wanted to create competition in the industry just when the technology was shifting to wireless and the economy was beginning to grow again.

“At that time, we believed a revolution was about to take place—without being sure how it was going to take place or in what form, but definitely a revolution that we did not want to miss. Our opening came when ITT, the largest investor in Globe at that time, decided to sell all of its telecom holdings around the world. Rather than sell out with ITT, we opted to take a majority stake, bring in a strategic partner, and build up the company’s franchise.”

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$100K ENTREPRENEURSHIP COMPETITION

Filipino founders of PESO win grand prize in MIT ‘It was time to walk the talk’

A

N idea to provide affordable ur ban housing for indigent, transient job seekers in Manila secured the grand prize and US$30,000 in start-up money for an all-Filipino team during the 16th annual MIT $100K Entrepreneurship Competition at the Massachusetts Institute of Technology held last May.

Team members of Centro Migrante were Illac Angelo Diaz (Research Fellow, MIT Department of Urban Studies & Planning), Artessa Niccola Saldivar-Sali (M.Eng, MIT Civil & Environmental Engineering), Chester Yu (MIT Sloan MBA), Neil Ruiz (PhD Candidate, MIT), Tina Laforteza (MIT Sloan MBA), and

Team members of Centro Migrante were (from left) Chester Yu, Illac Angelo Diaz, Tina Laforteza and Neil Ruiz. Not in photo: Artessa Saldivar-Sali and Bianca Locsin.

Rising above 100 other entries, CentroMigrante is the first Filipino team ever to have attempted to enter this competition, the most prestigious of its kind in the United States.

The victory had a double significance, since CentroMigrante was also enshrined as the first-ever winner of the Social Impact & Development Prize, a major category introduced this year which effectively doubled the contest pot from its original $50K. The Development category focused on business plans that serve low-income communities in emerging and Third World markets. The Business Venture prize is the other major category awarded to hightechnology projects targeting specific markets.

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Bianca Locsin (J.D., Yale).

The team includes students who conceived the Philippine Emerging Startups Open (PESO), a local technology and innovation business plan contest co-organized with the Philippine Center for Entrepreneurship and Ayala Foundation. PESO, in fact, was inspired by the format and goals of the MIT competition.

This year, they decided it was time to “walk the talk” and go for the big prize themselves.

“We are proud to be Filipino today,” echoed team members upon accepting the award.

“It’s a great moment because the $100K now offers an equal stand for businesses that are not all about profit,” said Illac Diaz, CEO of CentroMigrante. “It was challenging

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to be together with so many talented teams and it was a great way to build our network.”

The development prize judges looked for plans that had a measurable social impact, are built around an innovative idea, are sustainable over the long run, and have a strong management team.

PCE founding trustee Joey Concepcion said that the team “made us all proud and inspires young Filipino entrepreneurs to believe that they can succeed not just at the local level but also globally.”

The multi-faceted MIT business plan competition remains an economic barometer on what new ideas are being funded by venture capitalists. Since its launch in 1989, more than 85 companies have been formed from teams that have competed. These companies, in turn, have employed more than 1,800 people and have a valuation of over $10.5 billion. These companies have also received $175 million in venture capital funding.

Many of these companies have been extremely successful. Recent IPOs have included Akamai (AKAM), net.Genesis(NTG), and C-Bridge Internet Solutions (CBIS). Recent acquisitions include Direct Hit (acquired by Ask Jeeves), Silicon Spice (by Broadcom), WebLine Communications (Cisco). Other success stories include Actuality Systems, Frictionless Commerce, SensAble Technologies, Stylus Innovation, Virtmed, and Virtual Ink. “The need for the new development prize became increasingly apparent when we looked at the research on campus that targets the developing world,” Esaid Karina Drees, MIT $100K lead organizer.

“We also saw a steady increase in the number of social and global business ideas in our fall warm-up competition. The MIT $100K aims to help bring MIT technologies to the world— all parts of the world.”

The refinement process of the competition, its network of mentors, investors and potential partners, and the cash prizes awarded have helped many of these teams to act on their dreams and build their own companies and fortunes. In addition to the prize money, winning the MIT $100K gives business plans a seal-of-approval, which will help teams reach future sources of funding.

2006 MIT $100K Business Plan Competition Winners Social Impact & Development Grand Prize CentroMigrante, Inc. ($30,000) CentroMigrante combines developmental architecture with a self-help business model to offer a sustainable solution that provides clean, safe and affordable urban housing for impoverished, transient job seekers in developing countries. In the Philippines, for example, as many as one million Filipinos a year spend up to seven months away from their home while looking for jobs as seafarers, most of them living in shanties under depressed and undignified living conditions.

Runner-up: Kalpataru ($10,000) Seeks to increase the efficiency of India’s microfinance industry by bundling the MIT $100 Laptop, designed specifically for the developing world, with a suite of microfinance software, services and peripherals.

Runner-up: OneWorld Medical Devices ($10,000) The Vaccine Pac is a portable, selfcontained, and strict temperature-controlled transport and storage unit designed to reduce the 4.3M vaccinepreventable deaths each year by addressing the large vaccine wastage problem that often results from improper temperature control.

Business Venture-Robert P. Goldberg Grand Prize SteriCoat ($30,000) SteriCoat, Inc. has developed a superior coating technology for medical devices that significantly reduces the incidence of infections by preventing the formation of bacterial “biofilms” and actively killing bacteria.

SteriCoat’s exclusive application technology allows coating of devices of virtually any size, shape, or material.

SteriCoat’s innovation reduces the risk of infections, which prolong hospital

stays and are potentially fatal, and reduces health care expenses associated with treating catheter related infections.

Runner-up: Avanti ($10,000) Avanti is using the “Sadoway Process”, a one-step, continuous process, to produce liquid titanium using molten oxide electrochemistry. Avanti will be able sell titanium at 1/10th of the current price, reducing capital needs by half, with no hazardous waste and pollution.

Runner-up: Terrafugia ($10,000) Terrafugia’s Transition Personal Air Vehicle is a plane that can drive on any surface road, take to the air from most local airports, and park in a household garage. The Transition is designed to increase personal freedom and mobility of pilots, and be the most economical form of transportation for trips between 100 and 500 miles.

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BIOTECHNOLOGY

The Harmony of Science and Entrepreneurship

N

EWSWEEK has called biotech nology “the new global gold rush.” Worldwide, investors and scientists have discovered how biotechnology brings together science, community service, and rich yields for those who invest in research and capital. Explains Chris Evans, considered Europe’s leading biotech entrepreneur (he founded 17 science-based companies in Britain and invested successfully in many others): “When scientists succeed…it’s health and wealth creation.”

Young biotech entrepreneur Maoi Arroyo can’t agree more: She views biotechnology as a lucrative high-technology industry where the Philippines can add value, compete, and carve out a niche in the marketplace.

And she should know because this University of Cambridge Masters in Bioscience Enterprise degree holder runs her own biotech consulting company, Hybridigm. In little over two years of business, Hybridigm has already undertaken and succeeded in several ambitious projects, including the well-received Philippine Biotechnology Venture Summit (PBVS), which is now on its third year.

Hybridigm’s international clients include K & R Partners of the UK and Shanghai Linzyme Biosciences of China. Locally, they have worked with Buhi Corp. (pioneers in the field of hibernation technology that enables the waterless transport of fish, oysters, shellfish, prawns, and shrimps), Ecosystems Technology Inc. (which pioneers waste water treatment biotechnology and has 52 plants to date), Dr. Gloria Despacio-Reyes (biodegradable plastics), the Philippine Council for Industry and Energy Research and Development, 2004 Lingkod Bayan awardee Dr. Carmencita Padilla (newborn screening kits), 2005 TOYM awardee Dr. Corazon de Ungria, and the National Institute of Health.

Founded in April 2004, Hybridigm commercializes scientific technology on behalf of scientists; it is a marriage of entrepreneurship and science. Ultimately, through Hybridigm, Maoi hopes to foster the growth of a Philippine biotechnology industry. The field requires constant study as many scientific and technological break-

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throughs occur on an almost daily basis.

“Biotechnology is an amazing field, when you stop and think about it. Not only does it represent advances in making human lives better, it also is a very viable field for business risks.”

She forecasts that “in less than a generation, every company will be a biotechnology company, just as every business now uses the Internet. Biotech will be an integral part of innovation.”

World-renowned biotech expert Yali Friedman agrees: in an article published by the Manila Bulletin, he says that biotechnology is an area with spectacular potential for the Philippines Hybridigm, true to the hybrid nature of its name (derived from “hy-

Maoi Arroyo

brid” and “paradigm”), stresses the balance of various elements which make biotechnology a viable option for pioneering entrepreneurs.

How is Hybridigm relevant to the average Filipino? “Post-its™, correction fluid, the ball-point pen, disposable diapers—once upon a time, these were all high-tech, and if these inventions weren’t properly commercialized, our lives would be much more difficult.

“Biotechnology is simply using the characteristics of living things to make products or services better, faster or cheaper,” explains Arroyo. “This means better-tasting cheese, ice cream that lasts longer, rapid medical tests for dengue or malaria, and cheaper and environmentally friendly fuels. Most of Hybridigm’s clients are scientists with

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a vision of their discoveries helping our countrymen and the rest of the world.”

Thus Hybridigm offers services needed by scientists who have inventions and products but not the knowhow to protect, license, and commercially exploit their ideas. These services include technology and market validation, licensing and commercialization strategies, business plan creation, feasibility studies, investment analysis, and start-up formation.

Hybridigm is hatching many new projects as well: they have just laid the foundations for the Philippine Biotechnology Network, which will connect scientists with entrepreneurs. They are also facilitating liaisons between the academe and various entrepreneurs and companies. Several training courses, including an ambitious entrepreneurship “boot camp” for scientists, are in the design and planning stage.

Maoi herself is working on four different biotechnology entrepreneurship books.

Perhaps Hybridigm’s most important service, though, is teaching effective intellectual property management—a valuable weapon in the fight to protect inventions from intellectual theft and the scientists from exploitation by the unscrupulous.

Call her idealistic, but Maoi chose to come home and use her knowledge to start a new industry which will open more employment options to Filipinos.

“In Asia, Japan, China, India, and Singapore have led the way in developing biotechnology as business. Other countries—Singapore in particular— are in desperate need of entrepreneurial scientists and managers. Maoi believes that the Philippines, with a number of brilliant scientists constituting a huge untapped resource, is in a position to develop an industry which will be a more sustainable alternative to the export of labor, which is currently its major source of revenue.

Maoi sees the development of a biotechnology industry as a way to keep Filipinos home while elevating their quality of life. Given the rare combination of the opportunity to pioneer an industry and the abundance of natural resources and talent in the country, she may just be right.

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Wanted: A mini-Silicon Valley in the Philippines V

ENTURE capitalist and hard Why in one place? Sandejas ware inventor Dr. Paco Sandejas mentions various reasons. “Probably, neatly summarizes to anyone who most important, is because we don’t cares to listen that the Philippines have enough financial and human needs to create a Silicon Valley-like resources to support more. Secondly, technology hub. ‘one place’ means that people will He cites the findings of Annalee gather around this place and make Saxenian, a renowned author on the it THE gathering point where all the Silicon Valley phenomena, that the human interactions exemplified above success of the Valley in spawning are enabled to happen. It is also a specialist producers of complex, remagnet for our balikbayan imports lated technologies is owed to its: • supportive social structures, particularly entrepreneurship and social & professional networks; • educational institutions closely linked with business, business associations, and standards; and • collaborative practices: whether informal exchanges of information and experience or formal collaborative arrangements such as cross licenses, second sourcing, technological agreements and joint ventures.

“Companies from around the world like Ericsson, Nokia, or Sony choose to set up important R&D centers in Silicon Valley. Why? Because they know that they can’t be left out when new technologies might arise from Dr. Paco Sandejas Stanford, Berkeley or other labs in the area....Geographic and foreign partners. As it is today, proximity to technopreneurs is a key semiconductor companies are in take away lesson for us in the PhilCalabarzon and have to think more ippines, especially since it will make than twice whether or not to make or break the culture of collective a 2-3 hour trip to consult with their learning.” genius friends in Diliman. The softThe key to be competitive, in ware guys in Libis hardly know any his opinion, is building a minihardware guys. They date the pretty Silicon Valley that can in some call center girls! The VCs are in way, entice the IT players of the Makati and they hang out with the Philippines and imported from jobless stock brokers. The telco proabroad to work together in one or viders and banks are in Makati or two places.

Ortigas, at least an hour away from

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the others and oblivious to the fact that we have engineers that can program or even build their boxes.

Government is in another world, Malacanang, Manila.”

He continues: “Even if the technologies of the telephone and videoconferencing will help us bridge the distance, more often that not, physical proximity and presence are needed to encourage interaction and to make it a more meaningful and productive one. Our road and traffic control infrastructure is over-stretched and it will take awhile for our government to solve this.

“We technopreneurs have to band together and decide on a place where we can all work and live within 30 minutes of each other and going to meetings will take up less than 30 minutes. Ideally, we can walk to them! If we are enough who agree, if companies and careers are staked on this, and if we provide the specs to the developers, than it is certain that they will be willing to develop such a minicity for technopreneurs. We will be the anchor tenants for this mini-Silicon Valley.”

Not your typical brainy kind of guy, the boyish Paco Sandejas will gladly give you a guided tour to the convoluted world of IT engineers where he belongs. Dr. Sandejas graduated summa cum laude with a degree in Applied Physics from UP Diliman and was awarded as one of the Ten Most Outstanding Students of the Philippines in the field of science. He went to Stanford University in 1989 where he completed his masters and doctorate in electrical engineering.

After his doctorate studies, he was in and out of Silicon Valley, working as engineering consultant to a company engaged in the design of microdisplays used in military helmets and virtual reality application; and, as product marketing engineer. Dado Banatao, his mentor (incidentally, the most successful and respected Filipino

dotcom entrepreneur in Silicon Valley), encouraged him to stay in California for at least 10 years so that he could become a world expert in semiconductors and communications.

Sandejas believes that Filipino engineers who live and work in the Philippines are among the most talented in the world and have enormous potential. But to realize that potential, they need exposure to the big leagues.

“The Philippines can spawn its own technology success story by showing the world that there can be a purely Filipino-invented IT product in other peoples’ hands – one that will definitely put Filipino engineers on the world map. But this long-term vision can be realized only by investing in our knowledge workers and activities that will allow them to thrive. We need action, especially the action of allocating larger budgets for education, training and R&D.”

bgn.org: converting ‘brain drain’ into ‘brain gain’

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N 1992 Dr. Marc Loinaz and Dr. Paco Sandejas were still completing their Electrical Engineering doctoral degrees at Stanford University when they conceived the Philippine Brain Gain NetworkTM. BGN (www.bgn.org) is an online networking and productivity tool that connects talented professionals and students interested in promoting entrepreneurial initiative, a can-do-attitude, and helping increase the global competitiveness of the Philippine hightechnology economy.

Techies are invited to find the partners they need to develop their dream product.

The founders want Filipinos abroad to know what opportunities might await them if they re-locate to the Philippines and whom they might collaborate with.

“We can still convert the ‘brain drain’ into a ‘brain gain’— through technology transfer to Philippine companies, the advancement of local engineering education, and the realization of start-up ventures in need of ven-

ture capital funding,” says Sandejas who now runs his own venture capital firm here, NarraVC. He believes that the BGN members’ experience in the highly competitive technology hubs in developed countries, combined with their knowledge of local conditions, will contribute to the creation of “cool” technologies.

BGN also offers a portal for news, features, and technical education related to high technology. It also highlights inspiring stories to encourage more people to study, invest in, and/or pursue careers in high-technology, especially along the engineering and science tracks.

The site is also mentoring facility for more experienced people, -- for example, graduate students abroad -- to help graduating seniors decide on their post-graduate academic opportunities and how to obtain funding. Successful entrepreneurs mentor young engineers running their first start-ups.

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Presidential Consultant for Entrepreneurship Joey Concepcion

ON any given day, some ten million Filipinos in the country log on the Internet to check their e-mail, chat with friends, surf the Web, post on blogs, join online auctions, download files, purchase goods, and play virtual games.

For all of that, they can thank Dr. William “Bill” Torres.

Torres is widely recognized as the “Grandfather of the Philippine Internet” for being one of the key players in “wiring” the country. He is also the president and co-founder together with the late Willy Gan of

Mosaic Communications, Inc. (Mozcom), the country’s first Internet service provider (ISP). Mozcom is the largest among the independents, having the widest geographical reach across the country.

Torres’ influence extends to the government. He is the principal author of the National IT Plan and was chairman of the Information Technology Coordinating Council (now called the National Information Technology Council or NITC). He contributed his technical expertise as head of the National

Anthony Pangilinan of The Masters Lighthouse with delegates.

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Computer Center (NCC) during the Aquino administration and was largely responsible for encouraging government bodies to set up information systems.

Torres has always been into technology. He graduated at the Mapua Institute of Technology with a degree in mechanical engineering. He then took up graduate studies in mathematics and statistics at the University of the Philippines.

DepEd CSCA Exec. Director Joey Pelaez with PCE staff (from left): Dep. Exec.

Director Raffy Ortega, Communications Head Oscar Gomez, Project Officers Ali Padilla and Kay Bulaong, Finance & Administration Officer Joanne Zacate.

Famed motivator Francis Kong

Y Speak’s Bianca Gonzalez

Student presentations were always fun Gabriel Valenciano takes delegates to a dancing demo

Event press conference with Baguio journalist/PMA instructor Au Alambra, Dir. Joey Pelaez of DepEd and Joanne Zacate of PCE

Chingkee Tan 0f Ventures Unlimited

Nursing review whiz Ray Gapuz

DepEd Dir. Joey Pelaez and Usec. Fe Hidalgo flank designerentreps Narda Capuyan and Armhand Remojo Joey Concepcion greets teachers from all over

Cultural night with Sining Kumintang of Batangas

Former DTI head Ernie Ordonez talks agribusiness

Social entrepreneur Illac Diaz with delegates

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...and Quezon City

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