Bold Pinoy startups innovate, incubate

Bold Pinoy startups innovate, incubate | Daily Tribune

Innovation is best left to the private sector, which has a better capacity and resources than the government to fill the needs of Filipinos in making their lives comfortable.

Launchgarage has been in the business of helping Filipino technology startups grow to their maximum potential and create rippling effects on the national economy.

Jojo Flores, founder of the business accelerator firm, said startups are the source of new ways of doing things.

“When we listen to them, we get a clearer picture of what the future may look like,” he said.

Flores grew up knowing his father operates a timber business but he said he only gained interest in the world of business while in his college years.

He studied Business Administration at the University of the Philippines and was infected with the technology bug by his friend who is a computer scientist.

Established in 2016, Launchgarage operates as a business accelerator that provides relatively advanced startup capacity-building programs or mentorships and access to corporate partners.

Unlike venture capitalists, Launchgarage does not offer startups massive funds.

“But we do get equity inside the company that is also called advisory shares,” Flores said.

“As its name indicates, we give advice and access to the network that we have. For example, we have this startup that asked help for exposure in other countries so we brought them to Singapore and Korea,” he explained.

Unlike business incubators that help startups realize their ideas and begin implementing them in the market, Launchgarage helps government-funded and university-grown startups enhance their business skills.

“Our goal is to make them more attractive so that they can convince investors and corporations to partner with them,” Flores said.

Following their stint under the incubators, startups undergo accelerator programs where they train with Launchgarage’s network of industry experts and corporate partners.

For nearly a decade, his company has been expanding startups under its partnerships with various government agencies like the Department of Science and Technology, Department of Information and Communications Technology and Department of Trade and Industry (DTI), according to Flores.

Last month, DTI and Launchgarage saw 10 early-stage and five more advanced startups in the creative industry win financial and capacity-building support.

Apart from the government departments, Flores said his company also collaborates with the government of Quezon City for startup programs for students.

Flores expects to help more new Filipino businesses to connect with 40 business incubators that the DTI maintains. Some 30 to 45 startups from Quezon City are currently engaged through Launchgarage.

He said government-led startups signal that the budding businesses are gaining ground amid the aggressive campaign of the Marcos administration on digital and technological transformation.

“Under the current administration, we see a 180-degree turn as reflected with the DTI’s programs. There is a conscious effort to further develop the startup ecosystem and contribute to the national economy through job creation and investments,” he said.

Silicon Valley roots

Flores and a friend created in 2016, Plug and Play, an innovation platform that gathers the public and private sectors consisting of startups and investors to create technology-centric solutions to global problems.

“We are not the source of the knowledge but we are the platform where we can put all these learnings together,” he stressed.

Through Plug and Play, Flores said he was able to identify the need for Launchgarage and speed up the success of its clients through partnerships with global firms.

As an early-stage startup investor, he said Plug and Play can link Filipino startups to over 30 unicorns globally as the Silicon Valley-based company rolls out 200 to 215 projects each year.

Unicorns are startups with at least $1 billion market value. As an open innovation corporate platform, as well, Flores added Plug and Play allows Launchgarage clients to create game-changing products using the resources of the world’s industry leaders.

“That means we are the largest in the world that helps Fortune 500 companies with their innovation strategies. For example, we’ve been working with Mercedes Benz since 2016 and the work that we do with them is to help source startups for them based on their requirements,” he said.

Flores shared that Plug and Play accelerates about 3,000 startups per year, engages in about 25 industries, and runs about 80 programs in 60 offices and 20 countries around the world.

“Because of these, we see a lot of things happening globally and the best practices we try to bring to the Philippines,” he said.

While some accelerators already started operating in the Philippines before Launchgarage, Flores said his company has the expertise stemming from his continuous work with a partner in Silicon Valley.

“None of them were actual founders of technology startups or companies. If you look at our background, it is much different from those of other accelerator founders,” he said.

Unlike foreign startups, Flores said most Filipino startups lack “big thinking” as they are still operated using traditional methods and offer value to a few industries and groups of consumers.

“When I say big, it means they have to have a story to tell how they can become a billion-dollar company,” he stressed.

“For more than 90 percent of the startup founders we meet in the Philippines, their startups are still more mom-and-pop. These are lifestyle businesses rather than technology companies,” Flores continued.

While some Philippine companies have also planted their business overseas, Flores said they remain “dwarfed” compared with truly big companies.

“If you look at Fortune 500 companies now, Apple is over $3 trillion in market value. That’s 10 times bigger than any company in the Philippines,” he said.

Launchgarage runs with the help of three full-time employees and some interns.

Living up to a growth mindset, Flores said he does not impose complex qualifications.

“My only requirement for them is that they work hard and are passionate about technology and innovation. They can come from different backgrounds,” he said.

Success tips

To pass the Launchgarage accelerator test and upgrade from a small startup to the billion-dollar level, Flores said entrepreneurs should first build a high-skilled team.

“I would say that 70 percent of our due diligence is done on the team that should be stronger than the startup’s technology itself,” he said.

A “competitive technology,” Flores said, must be evidenced by the startup’s initial market sales.

“You should be able to sell some of your product already or some people are already using it even if you’re not making money yet,” he said.

“We’ll help as long as I can see that people are willing to pay for your product in the future,” Flores added.

While the pandemic has helped e-commerce and financial firms attract a growing number of customers, Flores said opportunities for entrepreneurs are too massive to predict which industries will dominate the market.

“We see a boom in e-commerce and financials, especially payments. There was also a boom in entertainment. But I’m not seeing any one or two prominent ideas,” he said.