The Philippine economy’s secret weapon: Area 55

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A typical Area 55 scenario at Kickstart’s monthly #raidthefridge community events. Photo credit: Kevin Velasco, Kalibrr

As early as January of 2014, the braintrust at Philippine investment firm Kickstart Ventures – Minette Navarrete, Dan Siazon, Christian Besler, Pia Bernal – as well as Kalibrr CEO and co-founder Paul Rivera were toying with the idea of how to rebrand the startup cluster in the Philippines.

The issue was a momentous one. Paul Rivera, concurrently a Kickstart mentor, explains, “People are attracted to brands. You don’t buy soda – you buy Coke. You don’t buy a car – you buy a BMW. When you go to Singapore and think startups, the first thing that often comes to mind is Block 71, and I think the Philippines would benefit from an identity for its startup scene just like Singapore and Silicon Valley have.”

The Kickstart and Kalibrr colleagues went back and forth over email, but no suggested name sounded right, nor truly captured the essence of their startup scene.

Despite the uncertainty, there was one name they definitely did not want. They were all against the “Silicon + [landform]” formula that other clusters around the world fell into. Kickstart’s senior vice president and treasurer Dan Siazon says, “there are too many Silicon Valley namesakes around globally. I personally think the term ‘Valley’ has lost credibility with overuse.”

Rivera agrees. “We’re not trying to recreate Silicon Valley here, which is impossible to do,” he says. “What we’re trying to do is create an identity for technology entrepreneurship and startups in the Philippines.”

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My Legal Whiz founders Dexter Feliciano and Katrina Chua pitching for business and commercial deals with Globe and Ayala executives in Kickstart’s Deal Day with corporations. Photo credit: Stephen Militante

Where everyone is your pitchman

The search for a perfect name was understandably difficult, given the vibrancy of the small but growing community. The Philippine startup scene, of which Kickstart was one of the main hubs, is centralized in Makati City, Metro Manila – the beating financial heart of a country on rapid ascent.

Kickstart is itself situated on 55 Paseo de Roxas Avenue, Makati City, and it shares an office with non-traditional college The One School (and if you’re anyone who’s anyone in the Philippine startup scene, that address is known to you – it’s where you converge for their monthly #raidthefridge event, where beer flows freely and ideas flow freer).

Entrepreneurs here tried to solve problems that were varied but uniform in their enormity. Some challenges were legal, such as Tripid trying to bring ride-sharing to the Filipino masses, much to the chagrin of the Land Transportation Franchising Regulatory Board (LTFRB). Others were cultural, as in Peekawoo, which wanted to bridge the extremes of offline and online dating with a more wholesome alternative. Many were economic: Lenddo attempts to bring financial inclusion to the emerging middle class. And still others were technical, with Rivera’s Kalibrr seeking to apply the magic of machine learning to improve how companies select who to interview and hire.

Perhaps what set these entrepreneurs apart was how well they know one another, and more critically, how strongly they support each other. Kickstart manager of social enterprise investments and head of communications Pia Bernal tells Tech in Asia how it’s common for founders to pitch the unique value propositions of other startups. For example, Bernals recalls that at Singapore startup conference Echelon 2014, “whenever one of our tiny band of portfolio company founders went on breaks, the remaining founders from the other startups in the portfolio would stand in the other team’s booth and talk about your startup even with you not around.”

The closeness probably owed to the fact that Kickstart-backed entrepreneurs were people, who, at their heart, ultimately just want to bring value to the Philippines. Of his peers, Rivera says, “We’re all united to make an impact, foster change, and create large meaningful companies” that are filled with “doers, engineers, hustlers, and people who will do whatever it takes (WIT!) to be successful.” He adds, “If you can call that a culture, that’s who we are.”

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AVA founder and CEO Oliver Segovia introduces Philippine curated e-commerce to the Singtel regional seed network. In photo (L-R, back) are Aaron Tan, Singtel Innov8; Rebecca Smith, Optus; Ahmad Damanhuri, Telkomsel; Segovia; Peter Huynh and Alfred Lo, Optus; (L-R, foreground) David Goh, Singtel Innov8; Srihathai Pramanee, AIS. Photo credit: Stephen Militante

David Duchovny saves the day

Naming this spirited community remained fitting challenge, one which stumped the team for some time.

Serendipity came in the form of actor David Duchovny. Siazon says, “I just happened to be watching re-runs of The X-Files when the email exchange was picking up steam. Hence the name Area 55.”

For those not in the know, Area 51 is the secret, not-so-secret American military base in the Nevada desert, popularized through such sci-fi fares as The X-Files and Independence Day.

55 Paseo de Roxas Avenue, of course, is the street on which Kickstart sits, making Area 55 the sleeker branding for it. Siazon notes, “It fits because there is something cool cooking up in stealth mode in our basement. Intruders will be shot!”

Joking aside, the name resonated with the entire Kickstart team. Rivera says, “we all immediately agreed it was a good name and it has stuck.”

The term lends the area a much appreciated air of mystery. After all, anyone in their right mind would not resist a visit to a place where the branding conveyed, according to Rivera, the suggestion that “there’s a lot of cool, sometimes clandestine shit that happens here everyday.”

Vice president and head of community engagement Christian Besler gave another reason for why Area 55 might be more than fitting. He says, “We’re all aliens in a way: not necessarily in the literal sense of nationality, but in the perspectives we hold, and in the way we demonstrate those beliefs through our actions. There isn’t a big sign announcing our presence: people need to seek out the place. That’s a bit of a metaphor for startup culture as we see it: it’s not about flashy announcements or hype and glamour; it’s about choosing to be here and execute and participate in the life of the community.“

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Senator Bam Aquino listens to GiftLauncher co-founders Issa Reyes-Lao and Shiela Jocona explaining their concept. In photo (L-R) are Reyes-Lao, Sen. Aquino, and Jocona. Photo credit: Pia Bernal

In clusters we trust

By proclaiming themselves Area 55, Kickstart solidifies itself and the Philippine startup scene as a cluster, allowing Filipino entrepreneurs to easily find them.

“Clusters have been an important economic concept since the 1890s, made popular a hundred years later by Michael Porter in ‘The Competitive Advantage of Nations’,” says Kickstart President Minette Navarrete.

“Clusters offer a concentration of economic resources and activity: interconnected businesses, suppliers, agencies, institutions, and the talent needed to operate. They increase the frequency of close contact, and therefore the probability of collaboration, commercial deals, and partnerships. The handle ‘Area 55’ makes it easy for someone to find and join the Philippine startup community: it’s deliberately not sponsor-branded, so it’s open to everyone who wants to come in.”

Bernal shares similar thoughts. “In the same way that aspiring actors go to Hollywood, wine enthusiasts go to the Wine Country, and startup founders go to Silicon Valley, we hope that the name Area 55 makes it easy for anyone – startup founders, interested investors, digital talent, progressive companies, media – to find their way into the community and meet whomever they want to meet,” she says.

Access to this kind of community may be especially important in the Philippine context, as Bernal hints: “Entrepreneurship is tough, lonely, and often at odds with cultures that prefer the stability of employment.”

In other words, entrepreneurship is often viewed by Filipinos as a risk not worth taking, and so who better to commiserate over its ups and downs than with the few people in the country who believe otherwise? You’ll joke about maintaining your sanity together, but appreciate the outlet. Mental health, after all, is not to be taken lightly.

In this mold, Area 55 is akin to a refuge for entrepreneurs. Bernal adds, “Area 55 offers a community of trust, expertise, and collaboration: founders have the opportunity to become friends, and they support and consult each other, they test and promote each other’s services. That kind of mutual support is priceless.”

That Area 55 may be the entrance for Filipinos into the startup world is an inversion of what most of them know about economic opportunity. For as long as most Filipino adults can remember, the traditional model held that you had to go abroad to earn money. This created a brain drain, one in which our country’s top export became overseas foreign workers.

The Area 55 model says you can devise your own economic opportunities, right there in the middle of the financial district. It is a direct incrimination of the Filipino ideology that sees possibility only in the pairing of a passport and a plane ticket. You would need to look no further than Rivera, who took the reverse approach as a Filipino-American – migrating from California to the Philippines – to see the possibility here.

Yet Area 55 isn’t just about attracting Filipinos who would otherwise go abroad. It also seeks to bring in people of entirely different nationalities, who immigrate from abroad. Kickstart is itself an example of this. You have Filipino-Japanese Siazon, who returned to the Philippines from being a venture capitalist in Singapore to oversee early stage investments by Globe – the telco behind Kickstart. Besler is a German who came to Manila by way of Italy. Or any of Kickstart’s mentors, who variously hail from the Philippines, Europe, Australia, Singapore, and the United States.

Technically- or financially-skilled individuals who have always held contrarian mindsets and are willing to challenge the status quo – whether they are locals, immigrants or visitors – Navarrete feels – are especially poised to excel in the landscape of Area 55.

She adds, “many successes have been built by people who deliberately displaced themselves: they gave up what was conventional, easy and comfortable, to move to a place that offered the potential to build something new and valuable. Whether it’s geographical immigration or challenging convention, self-displacement sharpens focus, increases the urgency of execution, and keeps you humble and grounded in the market. Coming over to Area 55 helps build that mindset.”

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The Dropbox Product Team at the April 2014 #raidthefridge. In photo is Kickstart’s Christian Besler, vice-president for community engagement, fourth from left, together with the Dropbox team (L-R): Daniel Kluesing, Emily Zhao, Joshua Kaplan, and David Mann. Photo credit: Pia Bernal

Does Area 55 have gatekeepers?

Given that the Area 55 umbrella confers so many benefits, the area’s denizens have been working to better define what the term actually encompasses. You could do so geographically, as Oliver Segovia did in earlier blog articles on the Makati-Fort Innovation Strip, and as Rivera did when delineating where Area 55 roughly begins.

“It’s actually at a central point of Makati, across the street from Mandarin Oriental, a five minute walk down from the Gil Puyat MRT Station, in Urdaneta Village, and a flyover away from the Fort,” Rivera says. “The Makati central business district is in walking vicinity to the things that matter the most to entrepreneurs: capital, customers, connections, industry leaders, and influencers.”

The imprint of Area 55 – Kickstart incubates technology companies, after all – extends to cyberspace, where Rivera and others use two different signature hashtags. He said, “I think the Area 55 region is open to any startup in the Philippine startup scene, though we do use the term #startupPH to refer to the whole scene, and anything that happens in Area 55 with #area55.”

Both hashtags are a call to action – they document the rise of entrepreneurship in the Philippines, and in doing so, encourage others to join in. Besler elaborates, “with [Pollenizer CEO and Kickstart mentor] Phil Morle’s inspiration, #startupPH refers to the whole startup scene in the Philippines: it’s a call to innovate and become an entrepreneur.”

A skeptic might argue that Kickstart taking the reins on Area 55 will mean that they can determine who benefits from both the term and the community itself. Undoubtedly, Area 55 will come to be heavily associated with its Kickstart origins, but that does not mean the advantages will be exclusive to them.

Besler points out that Kickstart’s signature events, such as #raidthefridge and the upcoming “Open Fridays” – seeks to bring together everyone in the community, Kickstart-backed or not, to learn from one another.

In fact, Kickstart has brought in many thought leaders and innovators, including Innosight managing director Scott Anthony, Pollenizer CEO and co-founder Phil Morle, National Competitiveness Council Private Sector co-chair Bill Luz, political economist Toti Chikiamco, and founder Garret Gee to take questions from and engage with the local community.

Navarrete says of these interactions: “It’s a great way to stimulate deeper thought and conversations on relevant subjects. And an opportunity for members of the community to interact directly with subject matter experts whom they would otherwise not have easy access to.”

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L-R: Kickstart president Minette Navarrete, Kalibrr COO and co-founder Dexter Ligot-Gordon, and Ayala Corporation chairman Jaime Augusto Zobel de Ayala listen to Zhihan Lee, CEO and co-founder of Bagosphere. Photo credit: Stephen Militante

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US Secretary of Commerce Penny Pritzker sits down to a roundtable discussion of Philippine startup community members. Photo credit: Pia Bernal

Popularizing Area 55

Kickstart is rightfully proud of every stride they make toward popularizing the usage of Area 55 – this report, for example, is the first time the media will use the term, Rivera tells me.

Whether the term will catch on remains to be seen, but the fact that they are even thinking in such broad terms shows how keenly aware they are of potentially shaping the economic destiny of the Philippines.

“Ten years from now, we’re going to look back and say Area 55’s where it all started,” Rivera says. And if that prospect isn’t enough to get you to pack your bags and move to Area 55, he adds, “there’s really good coffee and beer in Kickstart’s fridge.”

Editing by Terence Lee
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