Scoping Out the Internet of Things in the Philippines

The Internet of Things (Illustration by Wilgengebroed)

The Internet of Things (Illustration by Wilgengebroed)

Manila Valley Founder and CEO Chris Peralta recently put together live on Facebook a panel of speakers from up and coming start-up CEOs in the Philippines, a subject matter expert from Cisco and just about anybody interested in the Internet of Things (IoT).

Peralta wanted the session “to figure out the IoT, find the raw talent, make people aware (of it) and some of the exciting things happening in the Philippines, and in the process help out the Philippines.”

Trendsetters recognize that wearable technology has something to do with the IoT. Consumers who realize the almost endless possibilities it brings call it the Internet of Everything.

But really, the IoT is a platform or network that just connects needs or problems with applications or alternative solutions. What is not nebulous is that it is a $10-trillion market. Global financial and credit giant Morgan Stanley said 75 billion devices will be connected to the Internet by 2020. And market consultant Frost & Sullivan said 12 percent of ASEAN IoT spending is from the Philippines.

Philippines in the IoT Space

Peralta said, “I think the Philippines has always been the underdog. It has always been a country that no one really looks at. Now if you look at (its) games industry as a parallel, (it) did a lot of outsourcing. But (it) was not producing and promoting the games. And it’s changing.”

He said further: “And I don’t think (the Philippines) is in that sphere just for the game companies. Because (its) at the back end of game creation. I think there’s a lot of raw talent in the Philippines. I think (the IoT) could be a place for (the country) to grow and show (it’s) face.”

Although a lot of people tend to separate the big tech companies from start-ups, a lot of the big tech companies were also start-ups providing solutions or satisfying needs that eventually became niches in the market. Nowadays, there are more start-ups because of the IoT.

In August 2015, The Philippine Roadmap for Digital Start-ups identified sectors where Internet start-ups have developed into household bywords: e-commerce (ebay, Amazon); Search (Google, Duck Duck Go, Yahoo); Communication (Facebook, Viber, Skype); Alternative Currencies (Bitcoin), Enterprise Security (Palo Alto Networks); Disruptive Services (Uber, Homejoy); Sharing Economy (Getaround, Airbnb); Internet of Things (Nest, Pebble Watch, Android watch); Cloud Funding (Kickstarter); Autonomous Technologies (drones, Parrot AR); Rapid Prototyping (3D printing, Makerbot, Autodesk); Gaming (Makerbot, Autodesk); Financial Technology (Venmo, Paypal); Open Sources (Linux, Hadoop); Media and Entertainment (YouTube, Vimeo, Snapchat); SaaS (Salesforce); Marketplace (Craigslist); Health Technology (23andMe); Education technology (Coursera); Food Technology (Spoonrocket, Munchery, Grubhub); Travel (Kayak).

Chris Peralta (Photo by Harvey Barkin)

Chris Peralta (Photo by Harvey Barkin)

Not Connecting Just to Connect

Head of Entrepreneurs In Residence Program at Cisco Jean-Marc Mommessin estimated about 20 billion devices in the IoT. “In the last five years, people were connecting to connect, just for the sake of technology. Now we also have businesses, consumers and customers connecting.”

He added, “The IoT started from hype to so-what. You see a lot of innovation from the start-ups and the big boys, like Cisco, delivering disruptive technology.”

Peralta said when “start-ups came into IoT space, there was so much noise.” Mommessin added, “There were billion-dollar data that nobody could handle. IoT sees the pattern in data as actionable analytics.”

Some Pinoy Start-ups in the IoT

JuiceBox Co-founder and CEO Jason Josol related that his company “built a 3-D model of a customizing juicer. You send information and specify if it’s for a diabetic or for fitness.”

Josol said one problem in the Philippines is that the country has the second slowest Internet speed. But “even slow can be solved if you’re connected.”

“You don’t have to re-invent the wheel. In the case of JuiceBox, it was ‘I have an app. How can I partner it with other apps to better the environment?’ “For JuiceBox, connecting to Apple apps and Fitbit worked.

For Galileo Founder and CEO Jun Lozada, the niche was the safety of mobile device and user. “It’s like the Tower of Babel with everyone owning a platform or app. We backhaul IoT payloads coming to the market. We make it so everyone can move digitally safely.” Galileo is a kill switch app against would be cyber thieves.

Clear Skies Founder and CEO Vince Villena’s company puts together unmanned aerial vehicles (UAVs) customized for client’s needs. They’ve built drones for detecting oil and for gas leak.

The IoT is a platform or network that connects needs or problems with applications or alternative solutions.

Late to the Revolution

According to Josol, “The dotcom revolution started in the Philippines in 2012.” Almost 30 years after Silicon Valley’s. Neither was it sparked by a youthful enterprise in someone’s garage.

Hacker and Launchgarage’s Vince Ching said, “The current mind set is to go corporate for work. After graduation, most of us were at work in huge corporations. When I graduated last year I met (Plug and Play Media & Mobile Co-founder and VP) Jojo (Flores) and Jason. It made me research Silicon Valley. Change was in the air, and I wanted to be part of the growth to make changes. I also saw a lot of my friends not enjoying their corporate jobs and a lot of them quit. They felt they have a larger responsibility than to themselves.”

He also said, “There are less opportunities to get funding from outside if you’re tied in with Ayala. Start-ups in the Philippines should not be bullied by conglomerates. The business mindset is not like (President-elect Rodrigo) Duterte’s.”

So Launchgarage was born. An online hub where “founders, disruptors, hackers, makers, designers, investors and change makers” form a community of “bright minded people with a shared passion for ambitious ideas that can change the world.”

On Josol’s part, “It was the reverse. I was an IT grad. I was exposed early to start-ups because some of my professors were practitioners.” He went to work for a company. “But I wanted to solve problems. I met the founders of (IoT Summit Philippines) Hackathon. I was offered a start-up job. It was a risk because (in the Philippines) you don’t have the luxury of savings.”

According to Peralta, “There are about 38,000 (venture capital) angels in Silicon Valley. In the Philippines, angel fundings come mostly from (affluent) families.” Josol added, “There are about 500 companies that angels are looking into.”

Prohibitive Economic Situation

Josol continued, “The economic situation in the Philippines is prohibitive. But if you go to a start-up, your opinions matter and your contributions benefit others. Start-ups now solve problems, not just expand. I saw a lot of these from the experiences of my colleagues.”

Lozada said they’re trying to “turn every (smart) phone into little TVs.” But according to Stack Head of Operation Rich Manzana, who dropped in on the session, anyone can think of an alarm clock that won’t stop until you step on the rug or for it to talk to your coffee machine and then the shower. “But we’re still a long way off from lighting bulbs on our smart phones.”

Mommessin said the problem is global and cuts across industries. “If IoT is not properly adapted, about half of industries will die. Like the insurance companies, GE and Phillips. A lot of industries will be disrupted.”

Peralta said, “58 percent of IoT revenues come from Asia. There has been a shift of innovation in Asia. Japan used to be the epicenter and the Philippines is way down in the pecking order. Still, so much is happening in the Philippines and there are uncharted opportunities.” He reported that about 60 companies pitched when he was helping in mentorships with PhilDev.

Josol said some people are not deterred by slow Internet in the Philippines and find other means like “SSB (single-sideband modulation in radio communication), SMS (Short Message Service or texting in phones, mobiles and the web), Bluetooth.” Peralta added that “People in the Philippines are open to change. Try new products in the Philippines. You may fail but the people are more welcoming.”

Peralta is the founder and CEO of Manila Valley, an accelerator program in Silicon Valley looking for top Filipino tech start-ups in the Philippines. He thinks of himself as a “relationships” person. When asked about his age, he said, “old enough.” He has been in the mobile and tech industries for the last 10 years. Previously, he was with Nokia and worked in Singapore, New York, Australia and Silicon Valley. He holds an electrical engineering degree from the University of Technology in Sydney, Australia. He “always remained in the background, dabbled in a few investments and supported start-ups in Silicon Valley.”

Peralta is at his best facilitating the panel. What English accent did to entertainment TV reporting, Peralta’s Australian twang did to the IoT panel. He left the Philippines at a young age and grew up in Sydney. “A lot of Fil-Ams say they want to do things but they don’t. At the end of the day, my motto is to get stuff done.”

Harvey I. Barkin

Harvey I. Barkin

Harvey Barkin is editor-in-chief at FilAm Star in San Francisco. He also writes for special interest group projects like PG&E’s Clean Energy, the new California State Common Core Education Standards and Santa Clara County’s Transit Justice Alliance for the 2016 Measure A. He contributed San Juan Bautista and Hollister news to Previously he was a tech writer and book reviewer.

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