You know that the digital industry is here to stay when you spot some unique scenarios of use for the mobile and online web.

Take for example the parking in the streets of the central business district of Makati. Parking attendants now have PDAs with customized software that allows them to track each car’s parking status. The moment you park on a side street, they input your car’s plate number, and the exact spot you parked on, and everything is wirelessly uploaded to a central server. Tow trucks are quickly alerted the moment any car exceeds the allotted 3 hour parking limit.

St. Peter Chapels, which is a funeral homes based in Quezon City offers customers 24/7 online viewing of all their rooms. Their free e-Burol service allows relatives and friends overseas to view their loved ones’ internment from any web enabled device.

Different churches have started to harness the power of digital to service their parishioners.  Union church provides MP3 downloads of their sermons while Victory Church ( http://victoryfort.org ) makes available for download some Podcasts and Videos of their events. Even the Catholic Church introduced an online Visita Iglesia service during the Holy week for Catholics to go through a virtual Stations of the Cross through an online connection.

Multiply.com houses over 50,000 Filipino online merchants which makes them larger than any offline shopping mall in the world. If each online store merchant averages a very conservative 5 USD in sales each day, that’s 250,000 USD in daily revenue. Imagine how that is affecting the sales of traditional merchants who have not yet established an e-commerce presence.

As the cost of connectivity and the price of access devices drop, more and more users will gain access to digital services. It will be exciting to see what new digital innovations are in store for us in the future.

In July 1999, I launched with my partners my first ever online venture – PinoyExchange.com. The website launched with a front page designed with Microsoft Powerpoint, and a hastily implemented third party message board software. To be honest, the site didn’t look like much, but we were the first Filipino stand alone message board out in the market.

In 2001, while I was an employee in iAyala, two of my partners and I decided that money could be made by supplying fun content through your cell phone. We disagreed at that time with our former company’s direction which was to offer mobile banking software so we left and started Xurpas.

In 2002, my first international venture was established. My partners in Xurpas and I decided that the success model of offering mobile content in the Philippines can be replicated in other countries. Starfish Mobile was born and today it is the largest mobile content provider in the African continent.

In all the ventures I have been involved in, I have not once made a business plan. Contrary to conventional wisdom, I’ve found that business plans are more important for mature companies than for start-ups.  My partners and I spotted opportunities in the market and we seized it. In every industry we entered, we were always one of the first entrants so we were able to grab market share while the space was still empty. We were successful because of our ability to swiftly execute while others were stuck in the analysis stage.

My advice to all the start-ups out there is to skip the heavy business planning stage. The way to move forward is to clearly understand the problem your idea is solving, establish a fair business model, and find the right partners who will share and help you accomplish your vision.  Then do a small scale test of your business idea. If it works, then scaling things up should be fairly easy as funding and talent tend to gravitate towards successful businesses, even if they are still small.

Unless you’ve really tested your idea, even if just in a small isolated setting, you will never really know what its potential is. Just remember that the worst feeling in the world for any thriving entrepreneur is seeing your idea successfully implemented … by someone else.

As the digital space in the Philippines gets bigger, you will find more and more people enter the industry seeking fame and fortune.  Every month new entrepreneurs are joining the digital gold rush looking to establish their mark. With 28 million web users in the Philippines by year end, and with 80 million mobile subscriptions (probably closer to 60 million unique users given the way telcos count an active SIM), there really is plenty of room for everyone to make money … And that’s not counting the global market.

My personal advice to a lot of these entrepreneurs, however, is to focus not so much on building their personal brand name, but to build excellent products. I see so many seminars and articles on how to build your personal brand, and sometimes, I can’t help but shake my head and feel that a number of these guys have missed the point of the Internet. Guys … If you work on building your personal brand … Your business will not scale.  If you work on building a world beating product … your business will scale and as a result, so will your personal brand (i.e. your reputation).

Most entrepreneurs in the digital service business, especially the agency/consultancy/blogger types  have a difficult time growing their company beyond their personal reputation and time. The worst thing that can happen is that the customer always looks for the entrepreneur and not the entrepreneur’s product or service.

My challenge is … if you are a digital expert … then build a digital franchise. Build new intellectual properties. Patent new inventions, systems, or processes.  Create new brands. Establish new platforms. Build your own community. You know you’ve succeeded when you are generating revenues even when 99 percent of your customers don’t know who you are.  Then … Your reputation will grow. The reward: you will attract capital, talent, and strategic partners that will scale your business to the next level.

Now doesn’t that sound more exciting?

Google’s biggest contribution to the Internet and the world of media advertising may not be the engineering prowess of its search engine.  The bigger innovation for Google is how they monetize their search ads.

Google charges advertisers through a pay per click model. Advertisers match their ads to the search terms that are most relevant to the product or service they are advertising. The innovation?  Google implements an auction system to price their advertising inventory. Each time an advertiser chooses a search query to associate their ad to, they make a bid price on the amount they are willing to pay per user click.

With the auction system, Google was able to transform themselves into the perfect media company. In traditional media the more ads you purchase, the cheaper the cost per media is.  With Google, the more advertisers want to associate their ad to a specific keyword, the higher the cost per media (click) is.  The result? — Google revenues grow exponentially with the increase of both their audience and their advertisers.

Google will only reach its ceiling when it hits click inflation for a number of major keyword search terms. Click inflation happens when advertiser demand increases so much for a specific search term that the cost per click becomes prohibitive.  Thankfully for Google, click inflation has only happened for a few of their search terms in a limited number of markets. For them and for the other websites that have adapted their business model, the sky’s the limit.

Last year when Typhoon Ondoy struck the Philippines, something special happened in the social network sphere. Facebook, Twitter and Youtube came alive with updates from people in locations affected by floods brought about by Ondoy. Social networks were used to organize volunteers to source, pack, and deliver relief goods to flood victims. In real time, Internet users would know which relief centers needed supplies or volunteers which enabled them to quickly contribute to the relief efforts.

The Internet was used not only as an information hub, but also as a tool for soliciting donations. One of my companies, MyAyala.com, worked with several local websites to promote an Ayala Foundation donation page for Ondoy Victims. The Red Cross as well created a donation page of their own to raise money for their own relief efforts. Bloggers, major international sites such as Yahoo, local web brands, and social network users promoted these pages free of charge because they wanted to help their fellow countrymen.

Moving forward, digital platforms will play an increasingly large role in the fund raising efforts of non-profits. The Internet’s ability to simultaneously deliver breaking news, captivate people with a developing story told in words, pictures, and video, and provide a payment facility where an interested audience can become participants makes it the natural charity enabler of the future.

Below are some sample online ads leading to the Ayala Foundation Ondoy donation page. A few million pesos was raised via the help of these online partners.

Link from Yahoo to myayala.com/ondoy

Banner ad on Yugatech

Last week, I spoke to a very successful local tycoon who wanted to explore opportunities in the Internet space. He was less concerned with digital marketing for his companies, instead, he wanted to explore online business opportunities for his group. His problem was, nobody in his present group of companies could really understand the online space.

The same problem holds true for many companies in emerging markets. They see the Internet as a place for conversation, for relationship building with their customers.  Like traditional media, the internet is yet another medium for advertising.

What most people don’t realize is, the Internet is NOT just a medium – It is an economy.  And for most emerging markets, it’s an economy where 99 percent of the infrastructure has not yet been built.  Think of the Internet as a major city where settlers are coming in droves – But most of the basic services have yet to be constructed.

To understand the opportunity better, imagine the Internet as a real estate business.  You have so much raw land on both the online and offline worlds. This raw land does not have any value unless you develop it.  In both the Internet and in the real world, a successful ‘developer’ is someone who can convert the raw land into a community – A special place that people want to visit, where people want to bring their friends, where people want to purchase something, where people want to spend their time and carve out their own special place they can call their own.   A community that thrives is a community that grows and can sustainably make money = Successful developers create new economies.

Successful real estate developers turn raw land into Disneyland and not some second rate carnival. Successful online developers turn a simple domain like Facebook.com into the 4^th most populous community in the world – Exceeded only by China, India, and the US in terms of the number of its citizens.



It’s a bit late to write about 2010 trends since we are already in the 2nd month of the year, but I’m still going to give it a shot. 2010 is all about financial opportunity in the digital space. More affordable devices, cheaper cost of access, more advertising money, and the democratization of mobile content access will result in amazing opportunities for the digital entrepreneur.

What to expect in 2010:

• 2009 was a year of change for the local mobile value added service industry.  Enrile’s assault on the NTC commissioners and the telecom companies resulted in a weaker mobile content business. Stricter regulations on mobile broadcasts and tougher rules on subscription content were implemented.  In 2010, we will see a new breed of mobile content providers surface. We will see a lot of innovation in the mobile services space as telecom companies will take more risks to find the next content cash cow. These new services will probably not bring in significant revenue in 2010, but they will be building blocks for new revenue channels for years to come.

• Coming from the momentum of candidates using social media to engage with voters in the coming May elections, we will see in 2010 our government begin to use social networks to engage the public. From live streaming government auctions, to citizen feedback mechanisms, we can expect to see an increased role of the internet in terms of government-public communication.

• 2010 will be the year that most major retailers will launch their first online store. With 28 million Filipinos on the Internet, and several million more OFWs overseas buying gifts online, the online market will be just too large for these retailers to ignore.

• A deluge of new local IPs will flood the market as entrepreneurs adopt digital media to build new businesses.

• The BPO, web and mobile industries will work together to create new outsourced offerings to companies overseas. New hubs for outsourced development will crop up: iPhone & Android development, SEO, and Digital Virtual Assistants, are some of the areas for growth.

• The rise of citizen journalism. Local news networks will find themselves depending on social networks and blogs for the latest news and events. It is possible that local news networks may even financially reward citizens with access to exclusive media/interviews in order to one-up competing networks for the freshest news.

• New venture capital firms and digital incubator programs will surface to fund new ideas and businesses coming from the Philippines. It is time for a return of the incubators: Remember iAyala’s AIVP – Ayala Internet Venture Partners and Hatch Asia back in 2000?   Even the telecom companies may get in the act, opening their own investment fund for promising start-ups.

• Crowdsourced customer service. Smart and Globe started this trend, but expect more brands to set up their own social network channels to engage their customers in real time.

• The online advertising industry will unite in implementing a digital web metrics system.  This will encourage advertisers to more aggressively invest in online media.

• Finally, related to the last point, my fearless prediction for online ad spend this year:  1 Billion Pesos.

Yes, 2010 is looking like a very promising year.