Building a startup in a developing country: The pitfalls and opportunities | Hacker News Reader

Building a startup in a developing country: The pitfalls and opportunities

francistan.me

37 pointsfrancistan4 comments

I'm a foreigner living in the Philippines, and I'm aware of a number of small tech businesses run by other foreigners here. Visa issues keep these businesses fairly low-key--foreigners technically aren't allowed to work on the easier visas to obtain. They tend to use their local knowledge to employ Filipinos as contractors efficiently. It can take time to find quality contractors, but it can save a lot of money.

Cost of living is low, but internet access and infrastructure issues can be problems. I pay quite a bit for 3mbit internet. I've had two power outages today. If you show up here and don't adapt, you will get frustrated and miss a lot of the benefits.

There are a lot of colleges here pumping out CS grads who are underqualified. They tend to look for work in call centers instead of programming. Filipinos don't spend money on the web, so targeting products at them is tough. Advertiers are aware of the fact that Filipinos don't spend money online, so ad supported businesses are not feasible. You need to earn in Dollars/Euros/Yen and then spend locally in Pesos.

Us Filipinos are not very entrepreneurial. Talk to any random middle-class student here and you'll be told that the first thing that motivates them to study is so they can get a good job in a multi-national company. Most local tech startups that I'm aware of were founded (and funded) by people with a rich family background. Add the state of the government to the mix and you'll get an environment that is totally not conducive to small tech businesses.

As a Filipino I'd like to see more of my country men venturing into realistically sustainable tech business setups rather than trying to emulate Silicon Valley. The environment there is vastly different from ours. We need to play to our strengths (English proficiency plus currency exchange plus OK 3rd-world level I.T. education) and work from there. I'm pretty sure there'll be innovations so we can use our strengths in a startup context.

I'm a U.S. citizen living in the Philippines. I work out of an office of a local startup (currently one Western guy and a local.) I think that after the parents have spent a lot of money sending their kids through college they would rather their kids work for a large corporation and work their way up the career ladder. This is the case even if a startup would be willing to offer a lot more money. The perception of a good job is more important than the money.

Being an Asian nation, class can be somewhat of a factor here as well. If some employees are from a higher class than the others, then communication can be a problem.

The education here isn't great and the tech students generally aren't up to par in the technical fields. There are probably a handful of students in each of the top schools in the country which are decent. I imagine that school probably isn't a good indicator of skills. You would probably need to find employees who have developed their tech skills through their own passion.

The same reason why mobile is hot here is probably the same reason why there aren't a lot of early adopters and computer tech savvy students. In some cases students might have been lucky to grow up with electricity, let alone a computer and internet connection. For a lot of people here, their phones are their computers. There are internet cafes everywhere, but that's not like having your own system to hack away on.

Though mobile is huge, the Philippines is very poor, so few people are carrying around smart phones. Most people don't even do a lot of calling because it's more expensive. So pretty much all the phones are used for is texting. The cell providers here have some great offerings for mobile micro payments, but I never see people using those services.

The economy is generally horrible, so it's hard to see what you might do to make much money here other than exploiting cheap labor to serve Western markets.

Overall, they have a long ways to go. But the people generally seem content here with what they have. This is no race, they will get where they want to go at their own pace. And there's nothing wrong with that. Maybe the U.S. could learn something from the Philippines, and that's probably why I'm living here. ;)

It might be pertinent to point out that the Philippines is one of the Goldman Sachs deemed "Next 11" countries. (http://en.wikipedia.org/wiki/Next_Eleven) I hope to see amazing changes in these countries in the next few decades. While being a pioneer might be difficult now, it may be very beneficial in the long term.

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