Beyond the usual Competency 101 Profiles – visionary, entrepreneurial, business-minded, collaborative, empathic, empowering – I’ve reflected on (3) less popular characteristics that I wanted to highlight. I picked these (3) values as I consider them ‘currency’ in making one more effective, especially in working with people.

For me, these (3) are : Integrity, Sincerity, and the Ability to Execute – values that I continue to aspire for, and hope to one day realize.

—

1. Integrity

Integrity is the default absolute must-have. After all, it is the cornerstone of being a social entrepreneur.

For me, the seed of integrity starts with the fact that you’re doing this for the right reasons; You have to be fueled by the right intentions.

It shouldn’t be about the money (although self-sustainability is undeniably important), your ego, or the warm fuzzy feeling one gets from “doing good”. My personal opinion is that you should be passionate about solving social problems, and obsessed about living a life of service.

Furthermore, integrity is about uncompromisingly doing the right thing. This can take the form of having core principles that you will adhere to, even when the going gets tough. In Hapinoy, for example, whenever we are faced with difficult decisions, we simplify it to one simple question : “What’s Good For Nanay (the Hapinoy Store Owner)?”. This ultimately sways the decision that we take.

When people know that you have integrity, they will trust you, collaborate with you, support you, do business with you. So you really have to guard this with your life. And the secret is simple : just live a life of integrity (I absolutely know that this is easier said that done!).

There are no techniques to gain integrity and build reputation, one must simply try as hard as s/he can to stay true to it. The easiest way to not have any skeletons in your closet that will explode in your face – is to not have any skeletons in the first place.

2. Sincerity

As a social entrepreneur, you’ll most likely be working with marginalized sectors/communities, tackling a palpable social problem – whether this be on livelihood, healthcare, education, poverty, inequality, access to energy, etcetera.

Now, take note that the people you will be serving and/or partnering with could have already been “betrayed” by over-promising politicians, or “let down” by good-intentioned, yet unsustainable organizations who came and then went away. In any case, earning the community’s trust – that you are here for the long-haul – is an important first step, and the smell of sincerity is a key that opens up communication and dialogue. (And trust me when I say that without the community’s trust, you will not be able to accomplish anything.)

Trust is not something easily given, and as such it must and will be earned through time. In Rags2Riches, it took over a year for things to really mature such that the Cooperative formation became a welcome development and shared goal. And although the program became more robust, I’d like to believe that it is the Community’s belief in the sincerity and integrity of the R2R team that made this social enterprise truly work.

3. Ability to Execute

Most Social Enterprises – especially if they are veritable game-changers – will start as a vision of what could be, and not what is. Now, while this is certainly inspiring, it also lends itself to the term, “Drawing lang ‘yan” – which means to say that it is still only a concept drawing on paper. In other words, it’s a skeptic’s perspective – it hasn’t happened until it has happened. In fact, you can be the most kind-hearted person in the world, but until you fulfill the vision you’re painting  – even gradually – you will be less effective in the eyes of your partners.

A former boss of mine taught me a valuable lesson : the best argument against your critics will always be results. After all, results will always speak for themselves. This holds true as well for social entrepreneurship.

The Ability to Execute and make the vision gradually real is sacrosanct. It not only fuels credibility, but it also spurs a bandwagon effect that increases momentum and growth.

In my view, Hapinoy still has a long way to go in realizing the true potential of the program, especially as we see it in our heads. But we continue to execute, iterate, execute, iterate – and gradually build on the unfolding results. It’s admittedly a continuing uphill battle, but one that we’re absolutely committed to getting to eventually.

—

The reason I call the above (3) as ‘currency’ is this – a large chunk of a social entrepreneur’s time is invested in working with people.

And one particular nuance in a social entrep’s lifestyle – is that we do not strictly transact as other people do. For example, a normal business would be focused on finding suppliers and workers, pay them to do a job – and on the other side, sell to a customer, and gain cash from the exchange. In this model, money is the main currency.

The social entrepreneur, on the other hand, will also transact with money, yes – but will go and build deeper relationships. And at this level, it’s really intangible currency that can spell the difference.

In Hapinoy, we don’t hire and pay microentrepreneurs as labor; We work with them in order to co-build their business; In Rags2Riches, we don’t just sell bags, we sell the broader advocacy of eco-ethical style.

Money definitely speaks – but in social entrepreneurship, so do Integrity, Sincerity, and Execution.

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Traditional thinking suggests that you should start with a great business idea.

I cannot disagree with that; It is after all something I myself would advocate.

But indulge me as I broaden the perspective.

Before embarking on the problem, the need, the industry analysis, the opportunity, the big kick-ass business concept – ask yourself a simple, fundamental question – “Are You Yourself An Idea?”

By this, I mean :
- Stripped of everything, what do you stand for at your very core?
- When people hear your name, do concepts beyond you resonate?
- Are you married to a dream that you will live for until your very last breath?

To be fair, most entrepreneurs start their own businesses, make a ton of money, and in fact become very successful without even tangentially answering these questions. But that branch of entrepreneurship is what I would call ‘Entrepreneurship-Lite’. I’m really a bigger fan of the flipside, of ‘hardcore entrepreneurship’ – the kind wherein entrepreneurs truly pursue a Quixotic vision, ideas they cannot help but humbly submit to.

This dichotomy I believe is what separates the men from the boys, the innovators from the wannabe’s.

When you think of Muhammad Yunus, the idea of Making Poverty History relentlessly surfaces. After founding Grameen which eventually birthed the global microfinancing movement, he is now moving into the next phase with social business enterprise, of institutions and mechanisms that can create a world without poverty. Yunus has been incisively consistent along this path, and it is crystal clear that this idea is what is truly at his very core.

For the first half of his life, Bill Gates stood for a computer in every desk and every home, and this idea eventually made him the richest man on the planet. Now in Act 2 of his life, the idea that all lives have equal value is what consumes him, quite possibly for the rest of his life.

Closer to home, my InoventDesign tag-team partner Brian Quebengco is married to Championing Filipino Ideas – and believe me when I say that you’ll rarely find a more hardcore Filipino entrepreneur than him. From founding Inovent, to conceptualizing the Ilumina, and now with Inovent Academy and spurring the movement of Inovention, his vision is coming more and more into reality.

I could go on and on with more examples, but I really want to throw this back at you.

Are You An Idea? and if so, What Idea Are You?

Because it is the one question when truly, honestly answered – will make everything else easier.

And if you want to throw the question back at me, then I’d quickly answer :  Harnessing Innovation for A Better World.

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Interestingly enough, a group of students had started a social enterprise idea that for me, showed significant promise. It wasn’t just a concept;  They’ve actually prototyped and run a small-scale pilot as part of the course requirements. In fact, with some further refinement, the enterprise was viable. Sales were already being generated, and I could see how it could evolve into larger things.

You would think that the teacher who guided them through this project would be enthusiastically encouraging the students to pursue the enterprise post-graduation.

But the contrary proved to be true.

The students wanted to pursue the enterprise. The teacher, instead of rallying behind this, actually insisted that they apply for a 9-to-5 job instead. That is the better path to pursue, according to her. The social enterprise would just be too risky.

This teacher, whom I don’t know from Adam, has a class on business and entrepreneurship. Yes, my friends. Entrepreneurship.

Imagine my disappointment when I heard this.

Granted, the teacher might have been thinking that the students would benefit from some years’ experience as an employee. I’d really like to give her the benefit of the doubt.

But from the way it was narrated to me, that might not be the case. The teacher was adamant that the students be practical and go for the safety of employment instead. By the way, it might interest you to know that the teacher isn’t an entrepreneur.

Thankfully, there was one member of the group who adamantly wanted to pursue the enterprise, and did go for it. In that bullheaded decision, I see the seeds of a true entrepreneur being born.

I’m not going to sugarcoat it. That business could very well fail. It IS risky. This could be a very hard road to take.

But entrepreneurship is never about using kid gloves – even when dealing with, well, kids.

You fall, you pick yourself up, you move along. That’s what entrepreneurs do. But it’s important that they actually leaped first.

Entrepreneurship is hard, period. Arguably, social entrepreneurship even more so. But if we don’t encourage people to take the plunge, then we’d pretty much never get anywhere.

Peter Drucker said, “Whenever you see a successful business, someone once made a courageous decision.”

We need our schools – and our teachers – to spur more courage, not dampen it.

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Before anything else, let go of your easily-prickable Pinoy pride for 15 minutes and read (or re-read) Nick Joaquin’s A Heritage of Smallness.

In this influential essay, the one-time National Artist for Literature holds up a mirror to the Filipino Soul and eschews our love affair with all things small :

“Society for the Filipino is a small rowboat: the barangay. Geography for the Filipino is a small locality: the barrio. History for the Filipino is a small vague saying: matanda pa kay mahoma, noong peacetime. Enterprise for the Filipino is a small stall: the sari-sari. Industry and production for the Filipino are the small immediate searchings of each day: isang kahig, isang tuka. And commerce for the Filipino is the smallest degree of retail: the tingi.”

He further builds his case, noting the Philippine aversion of going for big, bold risks.

Whereas other countries have the grandeur of millenia-old pyramids, colloseums, or castles, our landscape reveals … invisible traces of the nipa hut, obliterated in months and years, not centuries.

This seeming absence of ambition in our DNA is a reinforcement of Joaquin’s three theories :

“First: that the Filipino works best on small scale–tiny figurines, small pots, filigree work in gold or silver, decorative arabesques. The deduction here is that we feel adequate to the challenge of the small, but are cowed by the challenge of the big.

Second: that the Filipino chooses to work in soft easy materials–clay, molten metal, tree searching has failed to turn up anything really monumental in hardstone. Even carabao horn, an obvious material for native craftsmen, has not been used to any extent remotely comparable to the use of ivory in the ivory countries. The deduction here is that we feel equal to the materials that yield but evade the challenge of materials that resist.

Third: that having mastered a material, craft or product, we tend to rut in it and don’t move on to a next phase, a larger development, based on what we have learned. In fact, we instantly lay down even what mastery we already posses when confronted by a challenge from outside of something more masterly, instead of being provoked to develop by the threat of competition.”

While there’s most certainly truth in this – denial would only be delusional and unproductive – it’s time to reframe Joaquin’s thoughts and put them in a new historical perspective; Most especially since this so-called heritage of smallness is a jiu-jitsu move whose time, I believe, has finally come.

The transformation spurred by the Industrial Revolution saw unprecedented growth and scale driven by cookie-cutter replication;  This great leap forward was facilitated by large-scale organizations and systems : huge industrial factories and their assembly lines, massive one-size-fits-all educational systems, sprawling country-wide infrastructure – all supported by financial institutions that both oiled and churned the giant wheels of commerce.

Just consider the following examples :

The tri-media attack of Television, Radio, and Print became national – even global – platforms, easily influencing and swaying popular opinion at a massive scale.

Big Business got bigger, while the small guys got smaller. The latter would eventually became roadkill for the ever-burgeoning class of multinational corporations : Wal-Mart dries up the Neighborhood Mom & Pops, Starbucks engulfs the local coffee shops, Barnes and Noble kills the community-based bookstores.

The so-called First World Countries’ GDP’s would balloon and dwarf those in the Third World at mind-boggling ratios. These countries even formed an Industrialized Nations’ Club called the G8 – with their collective financial institutions pretty-much dictating the pace of the World Economy.

But something peculiar happened at the turn of the century.

The large institutions started teetering, and are now on their way into becoming dinosaur-obsolete – their 20th century innards simply being torn apart by 21st Century Realities.

The seemingly impenetrable consolidation of media became oh-so-vulnerable. Professionally produced shows on Television compete with amateurish two-minute antics on YouTube; Internet radio is replacing the radio station as we know it; And every week we extol eulogies on yet another magazine and/or newspaper’s death, as they become replaced by blogs, websites, and online forums.

Even Big Businesses are in quite a disarray. Wal-Mart survives through its ongoing reinvention; Starbucks is now buckling under its own weight – in fact, its new experiments are going community-based as unbranded local shops; Amazon.com and a myriad of niche online booksellers continues to threaten the very economics of brick-and-mortar stores. And don’t get me started on the really easy pickings, The Banks That Were Too Big To Fail, But Did.

On that note, the Global Financial Crisis of ’08-’09 swept across the industrialized nations – their financial institutions becoming a worldwide domino of economic disaster. Tackling this dangerous web was no longer something that the G8 could address in isolation, and so to deal with it they had to involve an expanded group, the G20.

The most-developed, largest countries which just a decade ago seemed invulnerable flirted with disaster and economic depression.

This breakdown in large 20th century institutions certainly has me thinking : maybe Being Big isn’t that – pun intended – big a deal anymore.

From 2010 onwards, maybe it’s time to revisit the other side of the spatial spectrum and get reaquainted with the virtues of smallness.

—

It’s no secret that The Rise of Smallness is being fueled by the Internet’s overarching disruptive shadow. Call it what you will – Wikinomics, The Groundswell, The Long Tail, an Army of Davids – the fact is that no other time in history has power been so democratized and redistributed – from multinational companies into a mosaic of startups; from large institutions into the hands of collective individuals.

Indulge me now by sharing with you Exhibits A & B  (both hailing from the same source : uber-brain-food magazine, Wired’s Issue 17.06 – a major, major influence on my thinking with regards to this matter).

Exhibit A is the article, The New New Economy : More Startups, Fewer Giants, Infinite Opportunity -  which showcases the decline in number of the Megacorporations and the viral proliferation of an Ecosystem of Startups.

Exhibit B is more a mindbend, if you will.  Kevin Kelly talks about The New Socialism : Global Collectivist Society is Coming Online – and this is where it makes the leap from mildly interesting to extremely interesting.

Because the secret sauce isn’t really in The Small per se; it’s the aggregation of what I can only call as ‘The Many-Small’ into an almost sentient-network, mimicking swarm intelligence.  And so it’s not just the empowered individual which is the focus of the matter, but rather the groups of individuals bound together, moving from Web 2.0 Guru Clay Shirky‘s hierarchy of sharing, cooperation, collaboration, and collective action.

What does this all have to do with the Philippines?

Because for better or for worse, Nick Joaquin is absolutely right. We are indeed a nation of smallness, divided across a myriad of 7,107 islands.

From sari-sari stores to barangays, from nipa huts to sachets, from farming small plots of land to microfinancing – it is the small that dominates the Filipino landscape.

But if we mirror the Internet model, then we can arrive at the logical conclusion that we’re sitting on a goldmine. And it’s not in The Small. It’s in harnessing The Many-Small.

Our work in Hapinoy is an extremely relevant example to the thinking here. The smallest, minutest unit of retail – the humble sari-sari store – by far dominates the number of retail outlets in the country. While there may be a few thousand supermarkets and groceries nationwide, there are almost 700,000 sari-sari stores sprawling every nook and cranny of the archipelago. 700,000! Numerically, that’s more than 90% of all retail.

So individually, the sari-sari store is too micro to make a dent in the universe. But as a Hapinoy network, the aggregation and alignment of hundreds of thousands of sari-sari stores represents a massively untapped economic opportunity. It’s most definitely not Wal-Mart, but it is a powerful force in its own right.

What makes this model more resilient is that its not solely reliant on a centralized nervous system. Close one Big Box Hypermarket and your business goes under; Close a couple of hundred sari-sari stores and you’ve got an equal number of stores that can willingly take its place. It’s self-healing on the fringes, with a high tolerance for fallouts.

Now extend this Hapinoy model into other Filipino Many-Small realities.

Micro-Businesses.

Barangays.

Public Schools.

Agricultural Plots of Land.

Seven. Thousand. One Hundred. Seven. Islands.

And then add layers of technology to mesh them together – wireless networks, mobile communications, the web as a platform – and the possibilities just effortlessly, exponentially grow.

Let me make it clear that this I am not proposing mere consolidation; The model is hinged on networking and connection. Every point in the mesh retains its individuality – every Hapinoy Store retains its freedom and ownership – it can link and de-link with the chain. But whenever it is plugged-in, then it benefits from the power of the unified group.

—

To end, the challenge of Nick Joaquin wasn’t only in the Filipino’s limited capacity of churning out small things; It was also very much a commentary on the smallness of our thinking – of our lack of ambition, of grandness, of boldness.

But just because we’ve got small things doesn’t mean we have to think small.

The fact of the matter is that we probably won’t be building grand pyramids anytime soon;

But the good news is that we might not even have to.

We can embrace our heritage of smallness;

We can embrace the small things this heritage has given us.

Because at this point in history, we can make enormously gigantically big things out of them.

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Well, the truth of the matter is that lately, I’ve begun to become more comfortable explaining Hapinoy’s Business Model in this way. Most especially now that we’re in a stage wherein we can more tangibly share the next phase of our evolution.

You see, a lot of people look at Hapinoy and mistakenly think that the whole plan is simply to organize, aggregate, and makeover a chain of sari-sari stores.

That’s actually an intuitive observation, as aggregating thousands of sari-sari stores is indeed a significant chunk of the Hapinoy program.

But from the very beginning, we never really saw the Hapinoy Stores to remain as ordinary sari-sari stores. Since a major thrust of Hapinoy is to grow the business of our micro-entrepreneur storeowners – captured in our Path to Prosperity Program – then we have to go beyond traditional business thinking in order to realize new revenue streams. And in a situation wherein commodity goods provide only commodity margins, then innovation and evolution will play a key part in our Hapinoy Stores’ growth.

And so, while one whole path of growth for the Hapinoy community is growth through backward-integration and creating an “inclusive supply chain” for community-based producers (a whole separate blog entry in itself) …

… another big area of growth is really the evolution of Hapinoy Stores into what we call Hapinoy+ (Hapinoy-Plus):

Simply put, Hapinoy+ Stores are those stores that go beyond the traditional sari-sari store model – beyond the basic assortment of commodity products.

A few quick examples :

- Due to our partnership with Smart, we’ve converted Hapinoy Stores into a cellphone-loading platform. In fact, our top stores have been computerized and wired – paving the way for Hapinoy Internet Cafe’s. After thinking through on how to maximize the very same PC’s, we partnered with Intel and have an ongoing experiment on a simple photo-printing solution called HapiPrints.

- With Ateneo School of Government’s iBop-Asia project, we’re actively researching the Hapinoy Healthcare Hub, our exploration into medicine distribution and marketing.

- Just recently, we met with a large beauty-care company’s CEO, and will now explore a new category pillar of products for the BoP,  thus reimagining the Sari-Sari Store are as a center for beauty care.

And the list goes on and on : agriculture, simple technologies for the BoP, food and nutrition, et cetera. The possibilities are almost limitless.

And as these limitless possibilities emerge, this is where the iPhone metaphor begins to rear its head.

Because Hapinoy’s strategy and Business Model is NOT retailing. The truth is that – much like the iPhone – our business model is to be a platform.

To the non-geeks, let me explain that most of the functionalities of the iPhone are unleashed through the applications installed on it. It’s what has allowed the iPhone to go beyond being just a normal phone. Literally, it has simultaneously become a GPS device, a gaming machine, an ebook/comicbook reader, a location-sensitive information tool, a PDA/organizer, and so on and so forth and so on and so forth (all the way up to 100,000+ apps)

But here’s the beauty of the platform business model :

Apple manufactured the iPhone and got it into the hands of millions of people; And yet equally as important, Apple also developed the distribution mechanism to bring the Apps to the iPhone – the much-venerated iTunes Store.

But if you dig down to it, all the applications that you can buy and install on the iPhone – all of these were developed by independent third party software developers. Which then points to the fact that Apple didn’t have to invest in huge resources and manpower in order to develop all those applications from scratch; It just had to open itself up as a platform, and then relied on an ecosystem of these companies who then developed apps for their device.

The beauty is that it’s a win-win-win situation. iPhone users get more functionality, App developers gain sales from selling their Apps, and Apple derives revenue from every transaction.

And so, applying the same thinking to Hapinoy – in order for the Hapinoy Store to unleash the true potential of the network, then the ecosytem must be opened up as a platform to independent entrepreneurs who want to develop “applications” for sari-sari stores. And these apps can take so many various forms — whether it be new products for the BoP, new services even (such as the Hapinoy+ examples mentioned above), most especially new livelihood opportunities for the BoP.

And it will also be win-win-win : you’ll make money, the Hapinoy Store will realize higher revenues, and MicroVentures also benefits from the transaction.

So if you’re an entrepreneur out there who wants to start a social business enterprise, we enjoin you to start with Hapinoy. You won’t have to start from scratch in trying to make an impact; We’ve already got a large network, an ecosystem, a platform, upon which you can build your big idea. Email me : mark@hapinoy.com

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I’ve been invited to share in this event. See you there!

JCI Entrep Summit 2009 : Inspiring Tomorrow’s Leaders

Ideas and stories from business people who are ahead of their time.

“Are You Ready to be an Entrepreneur?” – Rudy Ang, Dean, Ateneo de Manila’s School of Management
“How Belo became Belo” – Vicky Belo, Founder, Belo Medical Group
“The Secret Behind the Largest Consumer Products Company in the World” – Johnip Cua, First Filipino GM of Procter & Gamble Philippines
“Taking the Family Business to the Next Level” – York Vitangcol, CEO, St. Peter Group of Companies
“5 Pillars to a Successful Entrepreneur” – Edward Lee, Founder and Chairman, Citisec Online
“Social Business Enterprise: Doing Good While Doing Well” – Mark Ruiz, Social Entrepreneur, Hapinoy and Rags2Riches
“10 Best Practices for Marketing on the Internet” – Anton Diaz, Professional Blogger, Our Awesome Planet, and
Victoria Jardiolin, Founder and President, Natasha and Marikina Shoe Exchange

Date: October 24, 2009, Saturday
Venue: SMX Convention Center
Time: 9.30am – 5.00pm

for more details, http://www.facebook.com/profile.php?id=100000293037401

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(seated – Mary Jean Notario Cruz of Greenfund, Michael Chen of HBS, Erika Tatad of Hapinoy; standing – moi and Arnel Casanova of AsiaSociety)

Earlier today we had a meeting with Michael Chen, Executive Director of the Harvard Business School Asia-Pacific Research Center.

He was in town exploring possible case studies of interest for HBS. And through Harvard Alumni Arnel Casanova, we – meaning Erika Tatad (Director for Operations of MicroVentures), Reese Fernandez (President of Rags2Riches), and myself – were invited to have a conversation to share our experience.

Amidst the usual discussions on Hapinoy and Rags2Riches, Michael had an interesting question. He asked if my parents were entrepreneurs. And I answered ‘no’ – my mother was a corporate lifer (30+ years in one company until she retired) and my father a civil engineer. It was far removed from entrepreneurial DNA as one could get.

And so now, thinking back at it, that question stuck. It got me mulling about generations of entrepreneurs, of the classic joke that the 1st generation starts the enterprise, the 2nd generation grows it, and the 3rd generation squanders it all away.

Obviously, I’m first-generation. Why the desire to take this path suddenly sprouted in me I honestly have no answer. But it did, and so I’m here.

And now I realize that this current experience of starting-up is perhaps the one most suited for me. Because I’m the kind that likes diving into the unexplored lands and figuring out new areas of opportunity. Of bootstrapping and starting from scratch. Of treading one’s own path.

It’s a heck of a headache, yes. But perhaps there’s no other place I’d rather be.

I just hope that during my lifetime, I’ll also able to enjoy the fulfillment and fruits of my work. And that when things do work out, I hope my 3rd generation doesn’t squander what I’m spending my life to build.

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Now, this is an audience i’m particularly interested in talking to.

So aside from Ryan, Nikko, and myself sharing the Ilumina (Brian was in the US), I also took the opportunity to share life from a Filipino tech start-ups’ point-of-view, as well as a point-of-view of having engineering at the forefront of national development.

Here’s our presentation :

While the general sentiment is really to let go of manufacturing and put all efforts into building service industries, my point-of-view is slightly evolving.

Of course, while a large chunk of this is due to the Ilumina; it’s also validated by some thinking that I’ve come across. In particular, there’s Thomas Friedman’s post on Invent, Invent, Invent; Jeffrey Immelt’s speech at the Detroit Economic club – pushing for big business in America to crank up the industrial machines again; As well as developing markets’ forays into it – India’s Tata Nano and Africa’s Maker Faire. )Special thanks to Emeka Okafor as his posts got me to thinking on this topic in depth)

It’s time for our country to Make – or Break!

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I recently met with a friend whose family business is manufacturing (let’s just call it) “Product Line X”. Through the generations, they’ve grown their company to be one of the Top (3) in their industry; In fact, they thrived while others languished and closed down. Growth has been driven by exports, with more than 95% of their business coming from large retail chains in the US and Europe.

But they’re now in a quandary.

Just imagine the facts of the scenario they’ve been dealt with :

1. One of their largest customers is asking them to bring their price down by 40%.
2. This price point is already below their cost of production. Even if they cut out all the fat in their cost structure, they’re still essentially being asked to sell at a loss.
3. They can actually meet this price point, but this means producing in a neighboring country.
4. If they do sub-contract it outside the Philippines – amazing as it may sound – they’ll still end up making a profit.

Now, this seems like your run-of-the-mill no-brainer business case. Let’s close the factory and source from somewhere cheaper.

But the reason it becomes very tricky is this : my friend’s family has an uncompromising mission — to keep the jobs here in the Philippines.

My thinking on the matter is this –  they have to face the brutal truth. What their business is experiencing is a trend that will just continue, maybe even on an exponential curve. I don’t think their customers will one day wake up and say, “Please increase your selling price.” It’s just not going to happen.

On the supplier side, other countries will only get better, and cheaper. So expect that competition and cost-cutting will continue to be a major source of headaches.

So if I were in their shoes, what would I do?

I’d face reality and find my way towards the ideal — I’d create a bridging strategy that will pave the way for a long-term play.

In my view, the cost-pressure has put their demand on a nosedive. Losing sales in the next few months – at least of Product Line X – is an almost foregone conclusion; Which forces them to either throw in the towel or find a way to play a few more rounds.

So in this context, the first order of business -  is to survive. And if that means outsourcing to another country just to maintain relationships with their customers – and more importantly to generate cash flow – then so be it.

Generating this much-needed cash flow will then allow them to cross-subsidize and sustain the Philippine operations, at least for awhile. They can just chop up the sales orders across product lines and across countries, allowing themselves narrow or even negative profit margins for the locally-based production. This isn’t the most sound business decision, but given their mission, it’s something that they’ll be open to do.

This is a bridging strategy. It won’t play out in the long-term, but it at least allows them to stay in the game.

And then comes the exciting yet relatively scary part.

They have to use this borrowed time to figure out the next growth curve of the Philippine operations.

If my friend’s due diligence is to be believed, we won’t be able to match the cost of production of other countries. We don’t have the scale, nor the efficiency, nor the enabling environment. So a cost-competitive play is simply not an option.

So the only way to survive a situation when you’re creating something for Cost X – is to make sure that the product you’re creating is worth at least 2X. In other words, you have no choice but to make an upward bid for higher-value creation.

It’s no longer about making Product X, which can be made more efficiently somewhere else.

It’s now all about finding Product Y.

And Product Y must be something so unique that it can both command a higher price, and can only be made initially here.

Product Y is not necessarily an extension of Product X. In fact, it should be tangentially-related at the very least, but can be a radical departure at its most extreme. But it will have to build from core strengths that the company has built through the years. These strengths can be people’s skills and competencies, working with certain materials, a strong customer base, or design capabilities. But new strengths have to be built and layered on in order to reinvent themselves towards a company making Product Y.

This isn’t the cleanest nor surest of strategies. But given the chance to run their company, this is exactly what I would do.

I’d move the jobs, to save the jobs.

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So it’s been (3) years since I resigned from the corporate world and decided to make the leap into this entrepreneurial life.

At this point-in-time, I just feel so blessed with everything that has happened – that I couldn’t help but “pay-it-forward”.

And one of the ways I’m letting this gratitude manifest is by sharing what I’ve learned.

Hence, this sort of an ebook – on the 10 Key Lessons I Learned On Resigning From Your Job and Jumping Into A Wild and Crazy Entrepreneurial Life.

So many people ask me advice about it, so I’ve decided to just transcribe everything and upload it to the world.

Hope it connects with the people it needs to connect with.

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