On June 15, The Independent Investor wrapped up its second Open Access Event for 2023 with “The War for Growth: A Discussion on Blitzscaling and Other Strategies”. The event was in partnership with co-presenter and venue partner NEO. Six/NEO in BGC, Taguig was ground zero for the event.
The event brought together esteemed panelists to delve into the topic of rapidly scaling startups and achieving hypergrowth. Attendees of the event were a diverse mix of founders, investors, entrepreneurs, members of the academe, the private sector, government officials, and more.
“The War for Growth” event addressed crucial aspects of blitzscaling and other strategies that enable startups to grow as rapidly and efficiently as possible. Panelists shed light on the importance of innovation, agility, and scalability in today’s dynamic business landscape. They shared actionable tips and best practices to help startups overcome common hurdles and achieve sustainable growth.
David Bonifacio, and Ron Castro. Joining via Zoom: Ayo Camara.
Growth for the Philippine startup ecosystem
The Independent Investor’s managing editor Ron Castro kicked off the event by detailing The Independent Investor’s mission and why discussing growth strategies is important.“At The Independent Investor our mission is to find the most interesting grassroots stories from the Philippine early-stage ecosystem to spur ideas, opinions and actions that can help shape the industry,” said Castro.
Anton Mauricio, General Manager of the leading state-owned enterprise investing in diverse industries, the National Development Company (NDC), was the keynote speaker for the evening. The Philippine government, through ongoing initiatives of the Department of Science and Technology (DOST), Department of Trade and Industry (DTI), and Department of Information and Communications Technology (DICT), like NDC, play an important role in supporting local startups. One of NDC’s initiatives is the Startup Venture Fund (SVF) that supports the development of innovative and high-impact startups to help accelerate the Philippine startup ecosystem.
should partner with the government.
According to Mauricio, the Philippine startup ecosystem is ripe for growth and the government is eager to help. “At NDC, we’re always asking ourselves ‘what can we do to help create more unicorns?’,” explained Mauricio. Mauricio then detailed the government’s various efforts to help the local startup ecosystem, including crafting legislation and offering NDC’s funding mechanisms.
Mauricio then invited startups to work with NDC, revealing that the government body looks for five things in startups they support: startups must be pioneering, developmental, sustainable, innovative, and inclusive. Any startup possessing these qualities has high potential for growth.
When probed during the open forum about what NDC was looking for in selecting startups to co-invest in, Mauricio revealed he preferred startups who were hyper-focused and “all in” on their business.
A closer look at blitzscaling
The keynote speech was followed by a primer on growth and the main event – a panel discussion featuring a lineup of distinguished experts who shared their invaluable experiences and insights with the audience. The esteemed panelists included Jaime Gonzalez, Co-Founder of Pickup Coffee; Mark Frondoso, President of DIGIPAY; Juan Carlos ‘Ayo’ Camara, Senior Investment Associate at Navegar; and David Bonifacio, Venture Partner at TNB Aura.
thoughts on the efficacy of the strategy.
An introduction to the topic by Bonifacio first touched on the definition of hypergrowth or “blitzscaling” as coined by Reid Hoffman, Founder of LinkedIn. Hoffman defines blitzscaling as “prioritizing speed over efficiency in the face of uncertainty”, in relation to growing rapidly. “Yet while companies are attracted to the idea of growing rapidly, the strategy does have its pros and cons,” added Bonifacio.
According to Bonifacio, blitzscaling or hypergrowth enables companies to have a moat in terms of having market dominance, access to capital, talent attraction, and economies of scale. On the downside, blitzscaling has its disadvantages like operational challenges, culture and organizational issues, a high cash burn rate, and loss of agility where startups that grow rapidly observe decision making processes become slower and more bureaucratic.
The panel then delved into the key factors for hypergrowth in the startup world, with different viewpoints on the strategy being expressed by a blitzscaling startup, a businessman and serial founder with a successful track record of sustainable growth, and from the lens of an investor..
According to Gonzalez, hypergrowth was always Pickup Coffee’s mandate as the brand always aimed to be affordable and accessible from anywhere, fulfilling an unmet need in the market. The startup’s ultimate metric is the number of stores it opens daily.
Gonzalez also emphasized that Pickup Coffee’s hypergrowth was also accompanied by a company culture that put a premium on consistent behavior even amidst scaling. “We were always very deliberate about our direction from day one. Every branch follows the same strict playbook,” Gonzalez revealed. “It seems really simple in theory but it’s really a lot of hard work.”
Frondoso, who scaled many of his businesses through bootstrapping, shared a different perspective. “While I agree culture is important, I think what trumps that is the sustainability of the business model. Sustainability makes it easier to grow at a steady clip,” he said.
Regardless of which strategy startups choose, however, Camara added that there were always three factors for determining what business strategy best fits a startup. “It boils down to three things,” Camara said. “One is that the size of the prize to be won has to be big enough. Second is it has to be a winner-take-all market. Finally, the business model has to be defensible—a business should show it can use capital as a fuel source and not just as a moat.”
Gonzalez then shared his belief that the Philippine market in particular was ripe for a company implementing a hypergrowth strategy. “We saw that markets like Indonesia, Thailand, and Malaysia already had similar coffee brands using hypergrowth and saw that nobody was doing it here in the Philippines,” Gonzalez said. “Other coffee brands charge P200 for coffee to subsidize the free WiFi, interiors, and so on. But there are many people who don’t want to sit in a cafe and they just want affordable coffee—that’s us.”
The panel discussion was then followed by an extended Q&A portion with insightful questions that peered into the hypergrowth strategy. In the open forum, the panel members were also joined by NDC’s Anton Mauricio to give the government perspective.
The Q&A portion discussed several topics, such as whether a winner-take-all scenario really exists in the Philippine market and the advantages and disadvantages of securing angel investors vs. bank loans. Overall, the panel emphasized the importance of dedicated owners, technical competence, and logical coherence in startups, highlighting these as often overlooked details.
With the Q&A portion wrapping up, the event concluded on a high note with an exciting raffle, where attendees had the opportunity to win prizes generously provided by Philippine Airlines, PLDT, and Winery.ph. Pickup Coffee, Hotel 101, Engkanto Brewery, and Winery.ph also provided product sampling and giveaways to the audience, who were also treated to a sumptuous and delectable food spread courtesy of Kraver’s Canteen and Cocopan Bakery.
Looking back, The Independent Investor’s second Open Access Event for 2023 offered a thorough analysis of what makes blitzscaling actually work. The event brought together experienced professionals, entrepreneurs, investors, and industry experts to discuss and dissect their own personal experiences with growing a venture, and even what it takes to run a successful startup business.
The Independent Investor team.
The event was made possible thanks to The Independent Investor’s venue partner NEO, platinum sponsors Kraver’s, LEX Services Inc., Pickup Coffee, Hotel 101, and Philippine Airlines. Gold sponsors included TNB Aura, Engkanto Brewery, and PLDT Enterprise, while Gentree Fund, and Winery.ph joined as Silver sponsors. The event was also made possible with the help of supporting partners like Coca-Cola Philippines, Cocopan Bakery, and Golfcarts.ph. Community partners include TNB Aura, Gentree Fund, Endeavor Philippines, Foxmont Capital Partners, Startup Village, DayOne Capital Ventures, Navegar, and the National Development Corporation.