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Founder Spotlight: Jay Fajardo of Proudcloud
Software Development

Founder Spotlight: Jay Fajardo of Proudcloud

Jay Fajardo

Founder & CEO
Kotaro Adachi

Founder Spotlight: Jay Fajardo of Proudcloud

Empowering the Philippine Start-Up Community

TechShake recently had the opportunity to interview Jay Fajardo, the founder & CEO of ProudCloud. Fajardo is also the CEO of Launch Garage, an innovation hub based in Quezon City. He is also the founder and CTO of Medifi, an online platform that connects patients to its roster of doctors. When it comes to the Philippine start-up scene, Fajardo is one of the front-runners because he is known as a pioneer serial entrepreneur and investor. In this interview, he shared his broad perspective, vision, and understanding of the start-up scene.

Q1: “Please tell your personal success story.”

Ever since I was a kid, I was always into electronics. I learned how to code at the age of 14 and had sold my first software when I was still in high school. After finishing my education, I worked as a developer for a traditional corporation in 1988. But I decided to quit after six months because corporate life did not suit me at all. I worked as an IT consultant for various companies until 1996. Around the same year, a local newspaper (Business World) commissioned me to create a search engine for them. That was the same time that the mainstream internet exploded and I became the Technology Director of their spin-off, BusinessWorld Online. The search engine I was building became a web based one and the first one of its kind in the country.

From 1998 to 2002, I entered the world of internet telephony and built voice-over-IP networks around Asia at a company called GDA, and later at Pacific Sun.

Around 2002, I left Pacific Sun and founded Airborne Access, a Wi-Fi hotspot network, which was fully acquired by PLDT in 2008. In 2009, I gathered the best web engineers and opened a Ruby on Rails web development shop called ProudCloud. When it was just starting out, there was no concrete local start-up community. I started RoofCamp, a social gathering for kindred minds with a passion for innovation, as a "temporary local start-up scene.” Its purpose was to catalyze the local start-ups. I invited businessmen, designers, engineers, and like-minded individuals to talk and inspire the attendees.

In 2011, I was asked to bring in the first Start-up Weekend Manila, an event for aspiring entrepreneurs. The event's purposes are to refine entrepreneurs’ business skills, give them an opportunity to solicit advice from their peers, let them throw their best pitches at the judges, and allow them to build their own network. It is also the time when the Philippines' brightest entrepreneurs teach the participants how to create a start-up for a sustainable future, either through personal mentoring or by providing critical feedback. 

After Startup Weekend Manila created startup founders, the next important ingredient in the budding ecosystem was seed funding. Friends from Globe’s New Business Group (later Kickstart Ventures) and I decided to create a startup accelerator which we called Launchgarage, a partnership between Kickstart Ventures and Proudlcoud. 

Through its run from 2012 to 2013, it has accelerated start-ups like JoomaJam, MyLegalWhiz, and Peakawoo, and Medix.

During our 3rd call for applicants, we realized that the country wasn’t producing very good quality startups and we decided to stop accepting applications. That’s around the same time that I was convinced that we can catalyze the growth of innovative startups through a space based model. That’s when plans for Launchgarage as an innovation hub was born.

It took 3 years to take make this idea into a tangible going concern when my partner Jojo Flores (founder of Plug and Play Tech Center) and I brought online Launchgarage in the last week of April of 2016.

Q2: “What are the criteria of a successful start-up?”

The first is the team. It is important to have the right co-founders and staff on board. There has to be a shared passion within the team to bring the product to the market. 

The second component would be their problem-based motivation. It would best if the team has personally experienced pain because it would serve as their connection to the problem they want to solve. Imagine businesses just earning money, while failing to add value to society. I am not a believer of profit as motive. Successful entrepreneurs do not just create jobs for the sake of profit. They innovate to solve society’s problems.   

Q3: “What kind of businesses are you interested in as an investor and as a start-up founder?”

First, world changing ideas. Something that has the potential to improve lives, wether in a small or grand scale.

Currently, the trends are in two-sided markets like Airbnb. It actually has a good business model although difficult to grow since you have to deal with two different sides of market, the supply and demand sides. A startup I’m co-founder of, MEDIFI, uses this model. It provides an online platform for interaction between doctors and patients and it’s important to focus on the supply side (Doctors) before you can effectively serve and grow the demand side (Patients).

Q4: “What is the key factor to increase the number of start-ups in the Philippines?”

First, a cultural change that recognizes and encourages setting up your own startup as a viable career path.

On the government policy side, we need to have a regulatory environment that makes it easy to set up a business. It is hard to set-up a company and shut it down when needed. In addition, we also need concrete support from the government, such as tax incentives. In other ecosystems, government is very active in providing these incentives, including subsidies, grants, and investment. 

Q5: “How does the government support local start-ups?”

The Philippines’s technology IQ is not as high in government compared to its neighboring countries. However, this is changing gradually because there are many younger folks working in the government right now that may improve that in the future. They are the new generation of public servants, and they are more attuned to technology and engage the local startup community. Another indicator of the country’s technology IQ is its bandwidth speed. It serves as a measurement of how the government and the private sector manage to collaborate to achieve a high technology IQ. You need to have competition and regulation. It would improve the quality of services. In the Philippines, however, there is no competition. The government should dictate a liberal market environment for telecoms. 

Q6: “Do you think it is better to find investors outside of the country since the number of venture capital in the Philippines is low?”

Outside of Kickstart Ventures, PLDT, and some angels, there is no local mature venture capital or angel investment activity. Because of that, many local startups look to foreign investors for funding. We’ve seen an uptick in investor interest in the region and the Philippines in particular. This will increase as 2017 comes in and this might serve as a wake up call for local investors to step up and participate in the ecosystem.

Q7: “Do you think the Philippines has potential to be the Silicon Valley of Southeast Asia?”

I do believe anything is possible. Do I see great potential in our start-up ecosystem? Yes, I do. But we need to address our weaknesses first if we want to be as successful as Silicon Valley. We are lacking in several areas, particularly in our educational system. We need to generate an inspired work force, with the skills to create innovation and the sustainable ventures surrounding it.

Also, it seems that most economic and innovation activity happens in Metro Manila, Cebu, and other highly urbanized areas, hence the Filipino diaspora towards them. If there is no human workforce left in the provinces, how would the Philippines thrive as a whole? The incentivizing tech entrepreneurs to set up shop in provinces is important. 

Q8: “How would you change the current mindset of the Filipino entrepreneurs?”

The problem is the lack of innovative entrepreneurship. Our country is riddled with problems. For the past decades, it has been begging for change. But how could you create change when there is no opportunity for it? As entrepreneurs, we are tasked to provide jobs for the people. Those jobs are opportunities for changing our future. 

Here is another problem. Our young entrepreneurs lack discernment. They are still bottled-up in the traditional way of doing business. That has to change, and how do we do that? By exposing them to stories of successful start-ups. Let inspiration become their motivation. I was an avid reader of an electronics magazine. I had read stories of Silicon Valley, and how it had reshaped the start-up ecosystem not only of the United States but also of the rest of the world. It served as my motivation. Right then and there, I knew it was possible. Back then, I knew I wanted to innovate and create. Yes, those were the 80’s, and as naive as one can be at my young age. The setting of the start-up ecosystem in the Philippines was different from Silicon Valley, but I did not care. I had challenged myself to push my boundaries further, and that has been the type of life I have been living. 

How could we change the mindset of our young entrepreneurs? It is simple. We need to expose them to what is happening around the world. They need to open their minds and broaden their horizons in creating endless possibilities for the future. They need to be reminded that as long as there are problems, there are ways for innovation to appear.

Q9: “Please give a message for future entrepreneurs.”

If you want to start your own business, you should start thinking outside of the box. Start creating ideas for your future venture. Think bigger than the average Filipino that sells t-shirts online. Think about how you can contribute to society instead of just profiting from it. Create solutions to huge and real problems. If you want to solve our energy crisis, why not invest in a company that provides renewable energy source, or why not fund research for it? How about our traffic problems in the Metro? How would you solve it? You have the power. You have the skills. You have the energy. You have the chance to change the obsolete mindset of traditional Filipino entrepreneurs today.

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