Entrepreneurial secrets of self-made tycoons

Wealth is the product of energy times intelligence. —R. Buckminster Fuller

 Thanks to progressive businessmen Lino H. Uy, Ruffy Kopio and other officers of the Chinese Filipino Business Club, Inc. (CFBC) for inviting me to be the resource speaker at their July 8 free seminar to encourage the general public, professionals and even ordinary housewives to venture into small and medium-scale businesses (SMEs).

Apart from the interesting and freewheeling open forum, this writer shared some entrepreneurial secrets of the Philippines’ business leaders, which SME entrepreneurs and even non-business people can learn from:

1. Conserve resources to build up capital. Many of the wealthiest tycoons started out always lacking in capital, having to even borrow from high-interest sources like private lenders. Thriftiness or frugality is important; save your earnings for growth. Instead of buying big houses and fancy cars, first prioritize reinvesting in your business. United Coconut Planters Bank (UCPB) chairman and GMA-7 major stockholder Menardo “Nards” Jimenez is an accountant by training, and this self-made Christian billionaire told me about his early years of saving up his earnings to invest in real estate instead of gambling it away on speculative stocks or wasting money on a luxurious lifestyle.

Taipan John Gokongwei Jr. had to live in about a dozen rented homes before he finally bought his house, and he said he’s grateful to his understanding wife because he reinvested his earnings in expanding his factories. He couldn’t forget seeing in Japan that top businessmen there have small homes and simple offices but huge factories, which he said is often the opposite case here in the Philippines.

2.  Never be afraid to fail. Mang Inasal founder Edgar Injap Sia is a provinciano entrepreneur who dared venture into the big city of Metro Manila even if he had no personal contacts or connections, not afraid to fail in his dreams of making his business go big. After selling control of Mang Inasal to Jollibee, Sia is now reportedly developing three condominium towers to be designed by architect Albert Yu and sources told me that he’s investing a lot in real estate in Roxas City, in the province of Capiz.

3. Out-manage your rivals. Billionaire Atty. Felipe Gozon of GMA-7 is a classic example of a chief executive officer who out-manages his competition in terms of cost-cutting efficiency, regular strategic meetings, daily text reports on both TV programs’ ratings and advertising sales revenues.

One dynamic young entrepreneur is Fruitas founder Lester Yu, whose nationwide chain of fresh fruit juice outlets has become perhaps the Philippines’ biggest fresh fruits marketer/distributor. Over dinners where we would exchange ideas, I learned that he is a hands-on manager involved in the nitty-gritty details of the logistics of his business, even hiring professionals to ensure overall operational efficiency and to cut costs.

Of course, in terms of management, who can out-manage the Henry Sy family in the mall and even department-store business? That is the big challenge for their rivals.

4.  Creatively and critically look at problems for new revenues. St. Luke’s Medical Center chairman Robert Kuan is now full-time as an idealistic Christian philanthropist, but he first made a name for himself by turning around his heartbreaking family-squabble crisis with the Ling Nam business and putting up his own new venture by innovating the old noodle-house concept into a modern, quick-service Chinese fast-food resto called Chowking. Today, Kuan is using his innovative ways to manage St. Luke’s as the Philippines’ most modern hospitals, especially its new complex in The Fort.

Zest-O juice boss Alfredo Yao once bought a new European technology for the packaging of juices, which he wanted to sell to local factories, but was rejected. One of those who rejected him was then a major orange juice producer. Faced with that problem, he boldly decided to go into making juices and the rest is history. Another entrepreneur with a similar problem was Hapee Toothpaste owner Cecilio Pedro, whose multinational clients decided not to buy his packaging products. He had no choice but to turn his crisis into a new toothpaste venture.

5.  Take huge risks. The adage “no guts, no glory” is often true, even for small and medium-scale entrepreneurs. However, the risks we take should be calculated risks.  

6.  Be innovative or do business in new ways. Steve Jobs of Apple and the Lee family of South Korea’s Samsung are fantastic innovators in mobile phones, causing former world leaders like Nokia, Motorola and even the Palm Treo to lose global market share. The owners of Fern C vitamin are an amazing success story, using the simple idea of combining network marketing with the daily necessity of a non-acidic vitamin.

Look at the way Andrew Tan of Megaworld developed Eastwood City from a former failed textile-mill complex; it was rejected by two billionaires as seemingly useless, but Tan bought it from the textile family and pioneered a realty project with information technology (IT) businesses like IBM, call centers and BPOs. In those early days when Tan wanted to seek government approval to make Eastwood City a special economic zone for IT ventures, he had to invite government officials to fly to India to see their IT zones. Now, not only is Megaworld’s Eastwood City thriving, the Philippines has surpassed India as the world’s No. 1 in BPOs and call centers.

John Gokongwei’s ideas on the C2 drink and low-cost airline Cebu Pacific Air are profitable innovations.

7.  Marry a good and supportive spouse. In my observations of successful, self-made entrepreneurs, having an understanding wife or husband who supports them is very important, especially in the struggles and the stress they need to overcome to become successful. Many of the spouses endured poverty and hardships with future tycoons.

8.  There is no substitute for hard work. This old-fashioned strategy has been proven in the lives of many tycoons. I can’t forget once asking the wife of Abenson appliances boss Wilson Lim the secret of her husband’s success. She confided that he is “extremely hardworking” because he considers himself not intellectually more brilliant than others and compensates for that by sheer hard work.

Even Zest-O juice owner Alfredo “Fred” Yao, whose new pharmaceutical business offers the Cortal SQR pain reliever endorsed by all 11 Azkals football team members, is a workaholic. Years ago when I would visit him at his Caloocan factory, he was the only guy in the office at 7 or 8 p.m. Of course, Manny Pangilinan’s work ethic is legendary, too.

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Condolences! It was shocking to hear about the unexpected deaths of two dynamic personalities in the Philippine business community: my friend, Boracay resort owner Steve Tajanlangit, who kept inviting me to visit the country’s most famous tropical paradise ever since I met him there for my first visit in September 2001. Tajanlangit was a major catalyst of the tourism developments in Boracay and Palawan.

Condolences also to the family of my friend, former Department of Trade and Industry Secretary Rizalino “Roy” Navarro, a brilliant guy who became a top executive of the Yuchengco Group of Companies after his retirement from government service. One of the secrets to the business prowess of Yuchengco and her eldest child Helen Yuchengco-Dee is their ability to invite the best talents to join them as top corporate leaders.  

At the height of the Pacific Plans pre-need controversy — when I was critical of the owners’ actions, which I deemed unfair to policyholders — Navarro called this writer , requesting me “as a personal favor” to write about Ambassador Alfonso Yuchengco’s side of the controversy and the latter’s track record as a diplomat and civic leader.

In fairness, I believe Ambassador Yuchengco’s family erred on Pacific Plans, but his diverse achievements as a business leader, former ambassador to Beijing and philanthropist are quite impressive. I can’t forget how Ambassador Yuchengco told me of his pragmatic, behind-the-scenes diplomacy and win-win solution to the Spratlys issue during the term of President Cory C. Aquino, in contrast to the seemingly adversarial and impractical public actuations of some diplomats and politicos nowadays on both sides of the Philippine as well as China governments.    

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