PLDT Chairman Manuel V. Pangilinan’s latest baby is IdeaSpace, part incubator, part angel fund, part accelerator but fully backed by his conglomerate.
During a meeting with bloggers from all over the country last week, Pangilinan said his group is setting aside P100 million a year for the next five years to fund startups that will be identified by a nationwide contest.
Pangilinan, known in business circles as MVP, said he is prepared for a large part of that P100 million annual fund to initially “go to waste.”
“Our statistics show that globally, only one innovative idea out of 3,000 sees the light of day. There will be a high failure rate, no doubt about that. But that doesn’t mean you shouldn’t try,” he said.
“There might be some idea of medium success. Not all will be immensely successful. I think that’s fine. That’s good enough,” he said.
While the coverage will be broad, Pangilinan said the projects will have to find “its space in the commercial sun.”
He said the amount of funding will depend on the requirements of the startup company but the initial grant would be P500,000. The group will get a 20 percent initial stake at the company.
Assistance will scale up on a “shared risk, shared reward system,” said Smart Strategic Business Development head Earl Martin Valencia.
Valencia said that in deciding on their stake on the start-up, they wanted the innovator to have operational control on the destiny of the company. “The technology entrepreneur must have a continuing material stake,” said Valencia, who came from Silicon Valley before being signed up by Smart.
Pangilinan said he is investing on start-ups because, “we want to generate this huge amount of awareness on what science and technology can do for the country.”
“There is self-interest here. The applications could relate to a business that we own then we can give you the sponsorship right away. We could ask our company to sponsor the projects directly,” he said.
He said that IdeaSpace is a “social investment” by the group to encourage technology entrepreneurship in the country.
“We want the youth to dare, to innovate,” he said.
“We want people, especially the young folks, to take that risk. You are young enough in the industry. I keep saying that to those who care to listen. Why not? You have years to waste. Of course you also have to think what you’re trying to innovate,” he said.
Pangilinan said Filipinos lack “risk-taking,” something the Chinese do not. He then recounted how they took risks when he and Anthony Salim started in Hong Kong.
He said he hoped IdeaSpace would encourage risk-taking and innovation. Apart from funding, IdeaSpace will offer access to market both within Pangilinan’s group of companies and outside it and business mentorship.
But the key contribution, Pangilinan said, is “to inculcate passion for innovation and entrepreneurship. I think that to me is the most important.”
Valencia said passion and focus are needed by start-ups to see their ideas through.
“You have to be full-time to create the product. When you do it part-time, it would be difficult because the focus is not there. The best entrepreneurs that we’ve seen are those who live, eat and sleep with their ideas,” Valencia said.
Valencia and Meralco vice president and chief information officer Marthyn Cuan said they would be sending a call for entries in May. The entries will be whittled down into a group of 20 that will pitch their ideas to a board of judges.
“You don’t have to have a rich uncle to get funded. You don’t have to have the connection. It’s really based on your intellectual property. It’s really based on your idea and your capability to execute that idea,” said Valencia.
“Now,” Cuan told potential start-ups, “you have a fighting chance.”