Sep 26, 2016
Paolo: So were joined by Mr. Joey Gurango founder, CEO, and CTO of Gurango Software, independent director at Xurpas, and former President at the Philippine Software Industry Association. So it’s really nice to have you Sir Joey. How do you like the weather here in Geeks on a Beach?
Joey: well it’s warm but it’s supposed to be warm right? So I’m ok as long we have air conditioned places we could go into. I’m ok with the warm weather.
Paolo: is it your first time here in Geeks on a Beach?
Joey: No it’s my fourth. Yeah, I think I’ve been to every single one of them. It was my first time in Bohol.
Paolo: It’s really beautiful actually.
Joey: It’s the only other place in Visayas other than Panay Island that I’ve been to. In Visayas this is only the second other place I’ve been to.
Paolo: So did you see the chocolate hills rolling?
Joey: Not yet actually, I’m going to do that this weekend.
Paolo: Anyway I actually want to ask you I’ve been going through your LinkedIn and I was snooping around then I saw-
Paolo: Yes stalking I tend to do that but I saw that when you were starting tech you worked for Apple when you started out, and a bit also in Microsoft, can you give us some background?
Joey: I’m very fortunate that there are only two jobs I’ve ever had in my life. The first was working in Apple; the original Apple three, and then the Lisa, and the Mac. Then after that the only other job I had was in Microsoft. So I actually got my introduction to software at Apple, even though they are not a software company, because it was at Apple that I was exposed for the first time to excel.
Excel came out on the Macintosh before it came out on the Windows so Microsoft had a pact with Apple where they would build Excel for the Mac and in return they promised Steve Jobs that they would not come out with any other version for at least two years. So it came on the Mac and I got to learn Excel, specifically the Excel programming. So that was my first exposure to commercial software programming, that kind of stuff, and then when I left Apple I actually got consulting gigs doing programming on Excel.
Then after two years of doing that there was an ad in the paper for Microsoft looking for developers for this new project. I applied; I got a job as a contractor working on Excel for Windows. That was when the dominant player was Lotus 123, you know, 90 percent of the market, and excel was going to challenge that, Microsoft was going to challenge that. So when that was done I kind of got my appetite wetted for software as a business because I learned a lot about how you make a business out of software at Microsoft. They were the first real big successful software company. They were the ones that even originated the idea of charging for software. You guys were too young to know this, but in the old days you got software for free when you bought a hardware. IBM had a nice ad back then where when you bought a mainframe from them not only will they give you a box full of software they give another box with a programmer inside. We got a programmer with the mainframe. So I learned about software as a business, as a matter of fact, the first book I read about software as a business was a book by a guy named Michael Kusamato. It was called ‘The Business of Software’ and they used Microsoft as the main case study. So, anyway, that’s really what inspired me at that time to pursue software as a business. Shortly after I left Microsoft I started my own company which was Match Data Systems in Seattle which I then brought to the Philippines in 1991.
Paolo: What does Match Data Systems do?
Joey: Well initially people always said ‘you guys were a dating service’.
Paolo: Dating service?
Joey: No, actually what we used to do, when we got started, was we matched suppliers overseas to buyers in the US. So I guess you could kind of say we were a market place, but it was all manual back then. There was no internet, there was no web, so we were doing it manually; matching people. So people would come to us and say ‘we need injection mould manufacturers’ so then we would contact our contacts in Asia-
Paolo: Through phone calls or...?
Joey: No, not phone calls, telegrams.
Paolo: Telegrams, alright.
Joey: Do you remember telegrams? So that’s what we did in the beginning and eventually that sort of built some software back in the old days some sort of database software that automated into a certain extent and that’s what got us into the software business. So, eventually that became a software business and we were the first, as far as I know, we were the first ERP software company for Microsoft Windows in the Philippines. We started developing enterprise software for our customers back in the US and I came to the Philippines mainly because I kept losing my programmers in Seattle because Microsoft kept hiring them away from me. We’ll hire them on a college paying debt and Microsoft will hire them on a higher salary and we would lose them; so we ended up, um, my brother who was still in the Philippines said ‘hey Joey you know we have programmers in the Philippines’ I said ‘Really? Do they even have computers in the Philippines?’ I was so snobbish. So I did come back in ‘91, found that there were programmers here, and moved the company here with all our development. Eventually, long story short, that company was sold to Microsoft
Paolo: Wow, sold to Microsoft.
Joey: What you now know as Microsoft dynamics contains our software in it that was built in the Philippines
Paolo: So that was built by Filipino programmers, wow.
Joey: So what’s inside, not the entire thing, but the module with Microsoft dynamics, that was built in the Philippines. That’s why Microsoft acquired the company. We were building Microsoft solutions at that time. We were the target. So, anyway, that’s how I got started.
Paolo: That’s a really good history lesson, like we got some snippets of Apple and Microsoft. Very interesting, but it went full circle actually you created an excel for Apple and came back from Microsoft. Very crazy, but we can actually go a bit forward and talk about Gurango software because, like when I was looking at your mission vision, there was something that really struck me like, um, you actually wanted to create a company, to be the most successful Filipino company, by fulfilling your mission; by being an enjoyable workplace for very smart people. That end part was actually what I wanted to ask about. How do you make your workplace enjoyable and at the same time how do you actually gather these smart people to your company?
Joey: Well, it’s sort of a chicken and egg. I believe that smart people generally like working with other smart people, but the fact that you’re working with other smart people makes it enjoyable, so how do you create the environment? Well, first attract smart people and its sort of a self feeding frenzy. You know, like, the more smart people are attracted to your company the happier people will be when they come into the company but I think there’s a certain psychological undertone to that and that is when we talk about smart people we talk about STEM, you know, tech smart people not PhDs and Biology. We’re talking about tech people, specifically, software tech people, and let’s face it; the overwhelming number of people who sort of gravitate towards that field are introverts. They’re a different kind of person than what most people consider successful and because the fact that they’re introverts they don’t fit in to what most people consider fun environment. In other companies, so when you’re working in Sales or Marketing, those kinds of people are your typical business person. Their idea of a fun environment, I think, is different from when you are an introvert. So we do things in the company that I think are more attractive to the introverts than in other companies.
Paolo: Can you give us some examples?
Joey: This might not be introvert specific but most of our guys like to play video games. So usually there are plenty of video games for them to play with.
Paolo: So you have actually consoles in your office.
Joey: Yeah we have at least once a month we do a tournament.
Paolo: That sounds so fun, actually.
Joey: Or in the afternoon we kind of make that up. Frankly, I’m not a gamer so I don’t exactly know what games they play actually. My son who works in the HR department is the one who organizes that but I think they’re all MMORPG. Some of them run online and some of them do on Xbox and PlayStations, that kind of stuff is an example.
Paolo: That sounds fun. How many people are in Gurango software?
Joey: We have 105. More than half or 2/3 are technical.
Paolo: That’s a very large number.
Joey: That’s our product; that’s what we do.
Paolo: Can you give, for example, start ups that actually want to start companies and attract these smart people since they’re still starting out? How can they actually do that?
Joey: Well that’s a different problem. We have the luxury of having an established organization and people working in it so it’s quite easy if you want to attract somebody and if you have an environment that is attractive to them. Just say you’ll talk to the employees and, to be honest, we only have two sources of employees in our company. The biggest is internships, most of the people we hire are interns, or they were interns and then they became full time employees, most 2/3 easily, and the others referrals. It’s rare that we hire a non intern that is not known by somebody in the company so that’s different in the company. What we do is not applicable to start ups. So, since I do coach a lot of start ups, that question comes up a lot. We don’t have an organization so they say ‘How do you attract smart people?’ This is where a start up founder has to have different skills. Like, somebody who is maybe working for an HR department or managers, I always tell them ‘Look if you can’t sell the idea or the value of what you’ve founded to a tech person, and why it would make all the sense in the world for them to become part of your start up you got a bigger problem than trying to gain traction or raise funding’ You’re talking about somebody who, well this is an employee, they’re going to get paid, maybe not a lot, but they’re getting something for it. Secondly you’re offering them a founder’s role which means they’re going to get equity. So they’re getting something and if you’re value proposition, if your vision is something that you can’t sell to this person, and they’re going to get something in return then you got a big problem already. So that’s what I tell them. You have to learn or you find a cofounder or maybe a big supporter that can do the selling for you, but if your start up can’t do that then you already got a big problem to begin with. Because the truth is some of the best ideas I've seen in the last 2 years are being held back because they can’t attract a technical cofounder. They can’t attract enough people to execute on a technical step. They’re great on the vision, the business, and the business model even; as a matter of fact, they can do a jab on the marketing. But when it comes to attracting a technical person, maybe an employee or a cofounder, they can’t do it and that’s holding them back. Even maybe one reason they’re not trying to attract a cofounder is because they believe they’re that person, and they’re not, you know, so that’s holding them back as well. My advice is there’s no easy way to say it or to do it you’ve got to be able to sell the start-up which is different than if you have an organizational already
Paolo: It’s not about selling it to the clients; you have to sell it to your people.
Joey: It’s the first. You can’t attract a cofounder if you can’t attract an employee. My gosh, how can you get a customer? My gosh, how can you get an investor? You can’t sell the vision; you got a big problem already.
Paolo: So you mentioned that you work with a lot of start ups; I believe you mentioned the Launchpad program?
Joey: Generally, I limit my coaching and mentoring and, generally, even investing to those start ups that come through the Launchpad program.
Paolo: Why do you take time off to work with start ups? What’s your goal and what do you want to do in the case of Philippines start ups?
Joey: Oh OK. I have two answers; the first is greed. I do believe that there is, out there somewhere, is somebody who’s got a really good idea, is able to execute on it and just needs some help and I think I can give them that help. Of course I’m giving the help because this is a big idea and if I’m involved somehow I’m going to get something out of it, that’s the greed part. But as you probably know 99 percent of those that I choose to help are not going to satisfy my greed, so you have to have another reason. So I like what Arup Maity, my co founder at Spring, and Ito say all the time ‘It makes us happy’. It’s a very happy feeling to know that you’ve helped somebody, and somehow for the better, even if they never become the next Facebook or the next Instagram. But somehow they’ve improved a lot just through our assistance, either the start-up has gained traction or the founder has become a better founder better businessperson. Just knowing that, and it’s very difficult for me to convey the happiness you get out of that to people who never actually try it, either because they don’t have the opportunity, or they don’t have the ability to do it, but it is a very happy place to be when you’re there. The greed part knowing there’s going to be one or two percent of all the people you helped, that’s kind of a bonus, knowing that that’s possible. The truth is I’ve seen enough to say it’s out there, as an independent director at Xurpas that was a 13 year journey for them. It took them 13 years to get where they are and now they’re the belle of the ball. They’re the role model now, where everybody wants to go, and now Nix and Raymond and Andy went through 13 years of growing their business. So I have to think that the next Nolledo, if they’re starting up their start up today, I might be a great grandfather by the time I see that person succeed; but is it going to be worth it. Well yeah, it would still be worth it. So one part of this greed, knowing that you could make a pretty good return by making that investment, but the big part of it is just happiness. Knowing that you’re able to make someone become a better person, become a better business, become a better - well mainly become a better person.
Paolo: That’s the first time I’ve heard a person put it that way, actually. It makes so much sense, I mean, if greed is really a big part of it you really need to make sure the business actually makes sense or people actually make money and, in the end, success. So I really like that definition actually. You actually made a mention about Xurpas as the independent director what do you do in Xurpas?
Joey: Well provide guidance, I guess, feedback. I guess one reason - well first of all Nix, the CEO of the company - is also a director in my company. As a matter of fact, he became a director on our board before I became a director on his, so I would like to thank- ok back up. Xurpas started as a consumer B2C. Its target audience are consumers and, up until pretty much the point of the IPO two Decembers ago in 2014, they were targeting consumers. Now I had to believe that one reason why Nix asked me or, well, never asked but it made sense to me because one of the things that Nix said he really wanted to get into even before the IPO was that we had to find a way to take the technology that we developed, to take the IT that we have, to take the expertise that we know we have, and apply it to B2B or the enterprise start up. They are now the largest, I guess, if not in terms of number of employees definitely in terms of market capitalization, the largest tech company in the Philippines. It’s only natural when you have a tech company, you can’t ignore the B2B, and you can’t ignore the enterprises. That’s a big part of tech in the Philippines. So I got to believe that was one of the things in Nix’s mind even before, and why he wanted for me to be on the board is because that’s my background. I’ve been doing it ever since I was a kid you know, kid by my current age. Then in enterprise, I've been in B2B, I’ve built products, and sold products to businesses. So I’m on the board. I act as an adviser. I act as a, not really a babysitter, you know, if there’s any wild ideas that are thrown out and about enterprises, I haven’t heard it yet but if something is too wild I’ll raise my hand and go ‘You know guys, I’ve been there; that doesn’t work and let me tell you why’ that’s sort of what I think I bring to the table.
Paolo: You’ve had decades of experience in both enterprise and start ups by mentoring start ups.
Joey: And I am the oldest person on the board.
Paolo: Oh, you are?
Joey: Well there might be another guy but not by much. We both just had our grandchildren recently so we’re both fairly new grandparents, so he can’t be that much older than me if he’s old. It’s nice to for once to be in a position where you’ve got other old people with you.
Paolo: So with your wealth of experience what one piece of advice can you give to start ups that will help them become successful or achieve their goal? It’s a very common question.
Joey: Well if I was sure of the answer I should patent it right? Because it would guarantee success. Well, actually, the real answer is I don’t have the answer. That’s the real answer. I don’t have the one thing that I could tell to somebody and say ‘if you do this you’ll succeed’ but since this is a podcast and I have to say something what I would tell is that you have to be prepared and be willing to put in a lot of hard work if you’re doing something. If you have a start up, if you’re founding, be prepared to put in the hard work, the time, and the learning you have to put in to succeed. It’s really funny because I came from a meeting of investors before this and one of the questions that was raised one of the investors asked ‘is it true that the goal of starts is to get funded and that’s it?’ I answered him back on ‘the goal of a start up is to have a successful start-up not just to get funded, funding is not success’. Money is just the beginning, if you even get funded. We hear about all of the wildest successful stories about a start up and within a couple years exit 4 billion dollars. You have to understand that’s like .0001 percent. Of course they get a lot of publicity since, that’s right; the very fact that they get that kind of publicity is a testimony that it is really quite rare. The vast majority of start ups will go through years and years of hard work and failures and pivots and disappointments before the vision is realized; before the promise is realized. So you have to be prepared for a lot of hard work. You have to be willing to put in time and commitment and learn because most start up founders don’t know 50 percent of what they need to know to succeed. That’s part of why you have the start ups as Steve Blank, and everybody says ‘start up is a search’ You’re searching, it’s not a small business. A start up is a search; you’re looking for the perfect business model that will gain traction. The fact that it’s a search suggest that you learn and I run into too many founders that think they’ve got it all figured out. ‘This is my vision. This is what’s going to happen and I’ve just got to have to go for it and I don’t need any more input’ When I hear that I think ‘OK this guy probably not going to make it’ because I’ve heard it too many times and it’s never happened so they have to be willing to work, time, and commit to learning. That would be my advice and I think maybe that would work. I think if I could patent that I could guarantee success.
Paolo: Maybe you should ask some lawyers tomorrow. Ok, Sir Joey thank you so much, in closing maybe you want to tell us something to your listeners, maybe you want to say where they can actually reach you.
Joey: Yeah I’ll just put a plug in for Spring.ph; it’s a creature of the Philippines Software Industry Association. We run a program called Launchpad and we’ve entered into a partnership with the Department of Trade and Industry and the newly created Department of ICT to bring Launchpad outside of Metro Manila; in the country side. So in the coming months you’ll see Launchpad events all over the country and hopefully if it comes to a venue near you, if you’re a start-up founder, join up. At the very least you’ll learn a lot; at the very best you might find a perfect partner to make this product gatecrash.
Paolo: Awesome. Thank you so much, Mr. Joey Gurango.