The Making of a Cyber Entrepreneur

When the "Love Bug" was unleashed into the wired world last year, many of us deplored how the Filipino talent could be misdirected to senseless global mischief.

At about the same time, though unknown to most people, a techno-weanie was quietly making strides in proving that there’s a more positive side to the Filipino’s creativity in the field of information and communications technology.

This techno-weanie is 34-year-old Marco Urera, chief executive officer of Internet service provider Edsamail, who is showing other Filipinos aspiring to be cyber entrepreneurs how to ride the wave of the future.

"Filipinos have such impressive skill in IT that competitors, like India, have begun to question why the Filipino’s energy is supposedly ‘misdirected’ to cybercrime and mischief. It’s unfortunate that we’re gaining that reputation," Urera says.

When he established Edsamail in 1999, Urera had already founded program developer Evoserve and was gaining the nod of several large Filipino corporations.

"I first conceived of Edsamail in 1998 when I went to the 1998 Commdex in Chicago. Hotmail was still a new kid on the block but already had some 10 million subscribers. We dreamt of developing our own free e-mail service," Urera recalls.

Urera chose to call his business Edsamail because EDSA is the best-known and much-used avenue in the country, akin to the IT highway he wanted to build.

For 15 months, Urera and his research and development hotshots tried to develop a system which, unlike Hotmail, would be based on an independent program.

Urera and his team initially planned to earn revenues through advertising, the favorite milking cow of American cyber entrepreneurs who were then making very respectable fortunes via the Nasdaq technology board.

But, Urera discovered, the key to commercial success in a country where a telephone line practically costs an arm and a leg was to reduce telecommunications costs.

"Traditionally, ISPs maintain a ratio of 15 to 20 subscribers per telephone line. We had to develop a program that would allow more subscribers per telephone line. That was the key," he recalls.

Subscriber buildup

Urera and his team later learned, quite pleasantly, that their program was not an ordinary key but one that would open the hearts and minds of hundreds of thousands of subscribers. Edsamail people invaded the malls and gave away diskettes in the hope that 150,000 people would be convinced to use their product.

"We thought we needed 150,000 subscribers to make it work. We had that number in three months," he recounts with a smile.

Today, Edsamail enjoys the patronage of some 600,000 subscribers, most of whom demand more from Edsamail than the usual e-mail services.

Edsamail subscribers, in fact, are so demanding that Urera has developed other Internet offerings, called consumer data services.

"Technology raises the expectations of consumers. It has a life of its own and it’s continually evolving," Urera says, noting the tremendous growth of the technology market in the Asia-Pacific region.

He cites Korea which has an estimated 26 million Internet users, 61 percent of whom regularly go into some kind of e-commerce transaction and 50 percent of whom trade stocks online.

"The market in the region is beginning to mature," he says.

With this realization, Urera moved to the fast lane and set his eyes on the larger, and potentially more profitable, regional market even as his team was still developing their product.

"When we approached venture capitalists, we didn’t even have a product yet. We were still working on the program," he says.

But with his exposure in Evoserve, he had gained a positive reputation with one of his prime clients, the Yuchengco group of companies under Alfonso "Tito" Yuchengco III.

With his usual fast-talking style, Urera broached with Yuchengco the possibility of investing in the ISP. He also approached Joshua Madrid of i-Ayala with the same proposal.

"It took us about eight months of sharing the story, doing the roadshow, persistent telephone calls and knocking on doors," he says.
More challenging were roadshows abroad where he had to convince the more hard-nosed Western venture capitalists that this Filipino could deliver.

"I passionately believe that our product has potential. But venture capitalists look at how you intend to monetize your product. It’s all about confidence," he said. "They will have to be convinced that you can deliver."

In dealing with venture capitalists, Urera says, he didn’t have much trouble even with the business plan and financial projections he submitted.

"What is important is confidence. They will look at your financials, your business plan as a gauge of your sense of the reality of your business It’s not what you put down on paper. It’s your good grasp of business," he says.

Apparently, enough venture capitalists believed not only in his good grasp of business but in his confidence and passion as well.

Aside from the Yuchengco group and i-Ayala, Edsamail’s stockholders include venture capital firms from Japan (Jafco Asia), US (Walden and Chase H&Q Asia Pacific) and Singapore (New Era).

Expansion

With its foreign funding secured, Edsamail penetrated Singapore where it now has some 75,000 subscribers. Urera still hopes to penetrate other Asian markets like India and Vietnam.

To meet the continually growing hardware requirements, Urera also forged profit-sharing agreements with hardware companies like IBM which will help Edsamail tap more profitable markets.

Last March, Edsamail signed a $4-million partnership with IBM to acquire IBM Enterprise Storage System (ESS), called "Shark" by marketers, which can accommodate as much as 11.27 terrabytes of computer data. The hardware will allow Edsamail to tap corporates who are discovering the convenience of outsourced data storage services for the vast amounts of proprietary data on their systems.

Online in about three months, Edsamail’s Shark facilities will allow the ISP to serve the growing number of application service providers (ASPs) which sell corporate services and which need more storage space for their data.

ASPs are practical for small and medium enterprises because they can tap corporate services, like accounting, online instead of forking out a few thousand dollars to buy an equivalent program and hardware. Two local ASPs are exploring the possibility of a franchise agreement with Edsamail. Urera is also talking to potential partners in Korea, Indonesia, Sri Lanka, Bangladesh, Vietnam and India.

"I’d like to be there tomorrow but it’s a question of finding the right partner. I’m looking. I’m talking. I’m finding out what they want to see," he says.

"I’ve learned that they want to see not just a story but a bottomline. It’s really a question of the bottomline, not just earnings but profitability," he adds.

That’s why Urera is looking forward to the economic initiatives of the Arroyo administration which has committed itself to developing the IT industry.

Having penetrated Singapore, Urera hopes to break into other Asian markets and hopefully, follow the footsteps of countless cyber-entrepreneurs who have traveled the road paved with high-yield initial public offerings and billion-dollar buy-out deals.

"Everything is crystal ballgazing but an IPO is on the radar screen," he says. "Maybe in one or two years but I want to be in at least two or three countries."

"Remaining focused is the main thing," he says, noting that entrepreneurs are easily distracted because they naturally look at anything that will make money.

But looking at what he’s been doing in the fast-paced world of cyber-business can only lead to one conclusion, Urera remains focused on following the steps of fellow cyber-entrepreneur Dado Banatao, an alumni of Mapua Institute of Technology and founder of S3 Technologies.

S3 Technologies developed the S3 video chip which can be found in almost every computer in the world and which has brought billions of dollars to Banatao, making him one of the legends of Silicon Valley.

That’s Filipino talent harnessed in the right direction!