Inc. Southeast Asia | 20 January 2017
A Filipino tech entrepreneur from Silicon Valley shares his thought process on creating start-ups that disrupt the status quo
There’s a general notion that so-called Southeast Asian “disruptors” play it safe. In short, they watch another start-up in the West (think Airbnb or Uber) disrupt an industry before stepping in themselves to do the same on familiar ground.
Serial tech entrepreneur Aldo Carrascoso seems to be exempted from this mindset.
Carrascoso started his first company, Verego, during his MBA in Babson College. A B2B version of dating and matchmaking sites, Verego made cross-border partnerships feasible during the BPO boom of 2006 to 2007. It remains among the most successful start-ups in the Babson Entrepreneurship Program and has since been acquired by a consulting company for buyer-supplier matching.
Passionate about movies, Carrascoso then created Jukin Media/Jukin Technologies during the viral video boom, democratizing the way networks accumulate short-form viral content and ensuring that content creators are justly rewarded. His second start-up is among the largest user-generated licensing platforms in the world, currently in 221 markets, servicing nearly every major television network with content and has over 35 billion views online. “If you’re on Facebook, chances are we’ve already made you laugh at least once,” he says. “We provide 99 percent of viral content in Facebook. We own Fail Army, which by itself is the world’s largest ‘fail’ viral video compilation.”
Carrascoso’s latest endeavor, Align Commerce, is his most ambitious start-up yet. Align’s multirail-powered, reliable, and real-time system of sending and receiving payments via e-mail is designed to replace complex and costly telegraphic transfers and wire systems by bypassing the banks, or the middlemen. Launched in 2014, Align Commerce is rocking the world of money remittance by being the first and only blockchain company funded by Kleiner Perkins Caufield & Byers (KPCB), the same venture capital that backed Google, Amazon, Uber, and Waze, among others. Carrascoso’s grand vision? To replace SWIFT.
These days, when he isn’t shuttling to and from Sand Hill Road to Manila, the Filipino innovator shares what he’s learned in Silicon Valley to young start-up entrepreneurs who want to enter the industry. These are his five pointers:
1. Global mindset, regional strategy, hyper-local execution
There’s tremendous opportunity for start-ups in Southeast Asia, with its 600 million population, 200 million middle class, and 250 million mobile users. And yet a problem among most Southeast Asian entrepreneurs is an inability to fully maximize their global potential. “Start-ups here tend to think only in terms of their own country, which can probably work in Indonesia where you have 200 million people. But generally there’s going to be a capital crunch if your strategy is focused on your country alone,” says Carrascoso. “The key is to have a global mindset, focus on regionalizing, prove you have that ability to scale in other countries, but execute hyper-locally,” he says.
2. Start with a purpose, execute with grit
Carrascoso cautions against falling under the “cool” image trap of the start-up scene. The problem with a lot of incubators is they provide capital funding without the necessary assembly line. Having mentored a number of students, aspiring entrepreneurs and early stage start-ups, Carrascoso advises to always start with the “why, what, how” principle. “A lot of start-ups are super focused on what kind of app or platform to create without determining their true purpose, their guiding vision. Personally, I find that the most important way for me to contribute to society is to help improve people’s lives through advanced technology,” he says.
As far as potential unicorns are concerned, Carrascoso says that e-commerce and marketplaces are already maturing in the region and that the next generation of unicorns will be in SaaS and Cloud. “If you follow what happened to the States, the moment they figured out marketplaces and e-commerce, companies started putting processes online. So you’re going to see things like HMOs going online, blockchain start-ups—that’s where things are headed. There’s a lot of fintech companies in Singapore now, so it’s starting,” he says.
3. Look at things from different lenses
One of the world’s most dynamic regions, Southeast Asia presents idiosyncratic differences in terms of language, culture, and religion—factors that are not a prominent part of the conversation in Silicon Valley. This is one reason why most Silicon Valley-trained professionals who try to do something in Southeast Asia fail. “Even with highly sophisticated infrastructure, systems, and processes, Silicon Valley start-ups need to localize for the Asian market—and language, religion and culture are things they need to be really sensitive about. It’s a different set of board dynamics than when you go into a Sand Hill Road board, it’s a different way of not only managing your people, but leading them toward switching from an order-oriented mindset to one that is more solutions-oriented,” he says.
4. Target the early adopters
With Southeast Asia living the start-up growth story India and China did five and 10 years ago respectively, Carrascoso suggests looking at the usual bell curves within different countries, specifically innovators and early adopters. He says, “A big indication is Southeast Asia’s rising middle class—that’s 200 million with disposable income who are no longer thinking about where to get money, but are more focused on enriching their lives. They’re why marketplaces and e-commerce multiplied rapidly, and why ‘on-demand’ services are growing. Look at early adopters or your addressable market, and see what they are doing consistently.”
5. The key to scale is empowerment
At the end of the day, says Carrascoso, the secret to the success of all his ventures is “nurturing the person and never the resource. I never saw people as employees that created an outcome—I always see them as people besting themselves and me as an empowerer. Not a lot of people know this, but I spend only a third of my time managing operations, milestones and deliverables. The remaining time is spend talking to my people about everything else outside of work.”
Carrascoso likens this to the difference between Microsoft co-founder Bill Gates and former CEO Steve Ballmer. “When Steve Ballmer speaks in a Microsoft convention, he goes crazy on stage, screams, sweats, and energizes the entire room. After a week, that energy eventually fizzles out. Bill Gates, on the other hand, is very soft-spoken but when he speaks, it stays with you forever. He inspires. A good entrepreneur inspires rather than energizes,” says Carrascoso. “That is the only way to scale.”