Startup Destination Philippines: “The biggest blocker is mindset”

Female entrepreneurship has many faces: Invited by the organizer of Asia Pacific Forum, in March 22, two diverse ladies came together at Betahaus Berlin to talk about the female founder spirit in Asia, specifically the Philippines: Nora Terrado, Untersecretary of the Philippines, and Paula Schwarz, founder of social impact program Startupboat.

Nora Terrado is 62 years old, but you wouldn’t know. She has an entrepreneurial heart and is dedicating her time to grow entrepreneurship in a country that is overlooked by many as a business location. Close to 7,100 islands, a sunny climate and a rocky political history labeled the Philippines as a destination for honeymooners and scuba divers. But there is more to the country, that recently made headlines as one of the top countries for diversity and gender balance. Nora Terrado doesn’t tire of explaining the beauty and potential of her home country. On March 21, she accepted the invitation of Minister Brigitte Zypries to deliver the keynote message at the Women Founders Breakfast Forum at CeBIT. During the trade fair, she and her team also reached out to potential business partners to establish new ties. In Berlin, the startup expert talked to founders and politicians at a special business lunch and an evening meetup to explore the willingness of European startups to settle in Manila or one of the other Filipino local startup hubs. Right now, the country relatively bigger than Germany with its 100 mio people, is starting over.

Around 150 startups are active in the Philippines

Terrado knows “change has to come in this administration” — or hubs such as Bangalore, Singapore and Shanghai will take over. Around 150 startups are active in the Philippines right now. By 2020, a special governmental program wants to attract 500 young tech companies. And the Filipino market has many things a founder’s heart is looking for:

  • The Philippines is the 8th-most-populated country in Asia.
  • The average age of the population is 23 years old — or young!
  • The Philippines is a founding partner of ASEAN — the Association of Southeast Asian Nations and therefore well connected with countries such as Singapore, Indonesia and also Australia, as one of the region’s dialogue partners.
  • The education level of 99%. The average unemployment rate is around 6 percent.
  • The Philippines is leading in gender equality: They rank #7 in the worldwide ranking on the most gender-equal societies right after countries such as Iceland, Finland, Norway, Sweden, Rwanda and Ireland.

Nevertheless, growing a strong international startup community is not a given, as Nora Terrado pointed out. Today the Filipino startup ecosystems are at least 2 to 3 years behind the German ones. In the Philippines she confesses it still takes up to 32 different steps and approximately 16 days to set up a company. But the government is working on it, she points out: “We are working on a 3/3 ratio: 3 steps in 3 days” she explains. It is a tough goal. To simplify the complex tax system will be an even harder challenge, she resumes. Companies have to pay more than 30 percent of tax. “We aim for 25 percent, but might end up at 26 percent” says Terrado. One has to be realistic.

“Failure is a stigma”

Terrado is honest, well-informed and idealistic — and the German guests of the special business lunch appreciated her open attitude. But numbers and the governments are not the biggest obstacle, says Terrado. “The biggest blocker is mindset”. “Failure is a stigma”. Specifically female founders often hide their ventures till the can show off a successful company. Therefore, the country is working hard on engaging with male and female role models. A special Startup Ecosystem Canvas for the biggest startup hub Manila shows the most active players so young entrepreneurs can find the right expert to talk to. The map is also setting the tone for the upcoming years: Recognition, Funding, Growth and Talent are the areas the Filipino government will work on. And of course working out how success can be defined…..

Accountant turned Female Entrepreneur

Terrado is a good example for change: Smiling, she explains how the Filipino culture works and why she decided to become an entrepreneur later in life. Years ago, Terrado started an accounting career — to make her parents happy and because it was expected. 20 years into her career she took the leap, with some partners founding her own company. After she experienced all ups and downs founders face worldwide, she exited. Like many Filipino parents, her parents too, had framed diplomas of their children’s achievements in their house, she explains. As a status. Lawyers, doctors and accountants are highly valued in the conservative Filipino society — founders not. “We want to change that”. The current government is actively supporting this change, Terrado explained. But we also need outside support and initiative from corporations and foundation, she stresses.

Prototype, Prototype, Prototype

Paula Schwarz is such an “outsider”. Young, half the age of Undersecretary Terrado, educated, from a well-established family, creative, in many ways a “free spirit”. In 2015, she launched the Startupboat initiative. More or less by accident. A startup event on a boat in the Mediterranean Sea made her experience the refugee crisis first hand. Based in Samos, a Greek Island, where the crisis is hitting shore every day, she felt a rising pressure to take action. The Startupboat initiative was born — and went viral and global. “You have to prototype, to experience to create something with your own hands”, Paula stressed at the evening meetup where she shared her experience next to Nora Terrado. Schwarz is on a mission and pouring all her energy into it:

“People live longer, learn more, need open feedback and the opportunity to break down walls.”

She also talks about trust, shared responsibility, life-long learning und radical self reliance — and about giving especially women new perspectives. As a young pretty woman in tech, many people focused on her look, her long hair, she gives some rare insights on her daily live. That’s gone. “I cut is also as a statement”, she explains her current buzz cut. Paula Schwarz clearly wants to be taken seriously. The worldwide success of Startupboat and the support from potent sponsors such as The Bayer Foundation and Cisco are proving her concept right.

Startupboat in the Philippines

After a first Startupboat in December 2016, in April a second Startupboat will happen in the Philippines. To establish sustainable projects, Schwarz has been engaging local partners such as Impact Hub Manila. And Startupboat is by far not the only initiative the young woman is bringing to Asia: Together with corporate support from The Bayer Foundation, she started an Impact Accelerator that is looking for Impact and Social Entrepreneurship startups worldwide. A mission Terrado is also supporting: “We need to grow the social entrepreneurship environment in the Philippines.” To promote her programs, Paula Schwarz is not only reaching out to local influencers such as Terrado but travelling the world and sharing her views at many events. With the World Economic Forum Schwarz is more or less in daily contact, universities are inviting her to inspire students, governments want to learn how to bring the right people together.

Both founders are clearly at home whether in a political arena or the red carpets. On stage at the special meetup at Betahaus, they clearly connected. Any differences you might find on paper became irrelevant. Two ladies, two faces of female entrepreneurship but one mission:

To create, to encourage and to leave a footprint.

PS: Join Asia Pacific Week to get more insights on the startup ecosystem in the Philippines.

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