The value of a Startup Incubators

With the recent establishment of 2 incubators, one led by Globe/ Ayala Group and another by PLDT/ Metro Pacific, their availability to Philippine entrepreneurs will be a substantial boost in enterprise creation in the country.

From OpenForum.com

Startup Incubators: An Elite Bootcamp for Entrepreneurs

Samantha Cortez, Recent Posts

 

June 11, 2012

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About 543,000 new businesses were created each month in 2011, according to the Kauffman Foundation. And some of those got their start in an incubator.

Startup incubators help emerging companies grow by providing them with necessary resources and initial funding to expand their ideas. In exchange for funding, they typically keep a small percentage of the company. Over the course of a few months, incubators work with startups to create a blueprint for their companies to present to investors at the end of the program. These blueprints usually result in investments. Among some of the more famous companies that got their start in an incubator: AirBnB and Dropbox.

Funding for Existing Companies

Startups seeking early-stage funding aren’t the only companies encouraged to apply. Even companies that are already formed and have limited funding can still utilize the program to amplify their brand.

Mike Onghai, founder of AppAddictive, left a comfortable hedge fund to spend a summer with Philadelphia-based DreamIt Ventures, one of the top 10 incubators in the U.S, according to Forbes. When he arrived at DreamIt, he already had a user base of 50 million people but used the incubator program to transform his consumer-based model into a business-to-business model. AppAddictive is a social and mobile application platform geared towards publishing and advertising that allows businesses to publish apps without coding. Onghai recentlyacquired $1.2 million in seed funding for the company’s drag-and-drop tools for Facebook.

“I had managed a hedge fund and I had bootstrapped two ventures before, but I had never raised money from outside investors for my own startup before,” Onghai says. “I wish there were incubators around when I started my first ventures; I could have avoided a lot of mistakes.”

Social Support

In addition to getting money for your company, the talented connections available at incubators provide invaluable support. The best incubators remain in touch with their startups even after their term has finished. Consider it like having an entire faculty and board of advisors to yourself. They work with you through your projects and most, like DreamIt Ventures, provide legal, accounting, and administrative help.

An incubator also accelerates the development process. During roughly 10 weeks, participants focus solely on the projects at hand and are provided with space and resources.

On Demo Day companies get the opportunity to display what they’ve been doing in front of a room of investors, creating an auction environment. The majority of Onghai’s funding was the result of his demonstration at DreamIt Ventures.

Learning by Doing

Aside from formal mentoring, the peers you’ll be working alongside at startup incubators can provide just as much support. Incubators have a tough selection process, often sifting through thousands of applications. “I was the senior in my group,” says Onghai, “so a lot of people turned to me for advice.”

Incubators are arguably more beneficial than business schools. “I dropped out of a paid-scholarship MBA program to start my online venture,” says Onghai. “Hands-on experience cannot be replaced by lectures and classes. You can get video lectures online these days. I follow the quote, ‘When I hear, I forget. When I read, I remember. When I do, I understand.'”

Is Vietnam a serious threat to Philippines for BPOs

Reading this article one assumes Vietnam can on the basis of cost can replace the Philippines as a BPO supplier. However, it does not take into account the cultural mindset and the fluency of speaking English as the key success  factors for the Philippines achieving no 1 ranking as a BPO supplier in the voice category even beating India.

From IT.Wire.com

Vietnam gains traction as ‘lower cost’ alternative for offshore, outsourcing services

• 27 September 2012
• By  Peter Dinham

Vietnam’s economic growth rate has been among the highest in the Asia Pacific region in recent years, with an annual GDP rate of between seven and eight and a half percent, and strong growth in its contact centre industry establishing the country as a credible low cost alternative destination for offshore and outsourced services.

In its latest report on the Vietnamese market, research firm Frost & Sullivan notes that hiring IT professionals in Vietnam is 30 to 50 percent less expensive compared to other outsourcing countries like India and the Philippines.

According to Frost & Sullivan’s Research Associate, ICT Practice, Dao Thi Minh Thao, studies  have  showed  that  Vietnam  with a strong workforce of more than 15,000 IT engineers of software outsourcing alone, and its low labour cost, is an  “undeniable  advantage  that  drives international companies to this new ideal outsourcing destination.”

And, with customer service becoming a key focus in Asia  Pacific,  Thao says that Vietnam is improving customer relationships for the purpose of greater loyalty, brand recall and profitability, with basic  applications like Automatic Call Distributor (ACD),  Computer Telephony Integration (CTI), Interactive Voice Response (IVR), and Call Monitoring (CM) still leading the trends in the Vietnam contact centre market.

“ACD  is  the  biggest  contributor  that  accounts  for  almost 40% of all applications  and  is  still  growing at a fast rate as majority of contact centres’ primary  purpose  is  to  support  incoming  voice  calls.  It is forecasted that in 2018, ACD will reach the saturated status of 31.7% from 37.3% in 2011 and start to slow down. The same will happen to other current major applications like CTI and IVR.”

Frost & Sullivan reports that BFSI and Telco are the largest contributing verticals and are likely to remain so due to an ever- increasing customer base and an adequate supply of  capital  to invest in new technologies and solutions.

According to Thao, the customer-intensive industries of BFSI and Telco are characterised by large deployments of centres with 200 seats and above, and she says this size band will grow in  prominence as these two industry verticals are likely to dominate revenue contribution.

“Most contact centre projects in Vietnam are deployed by banks, financial institutions and Telco service providers.  These sectors require a high level of customer care. Large seat numbers are needed to always be available to serve customers.”

Thao also says that “currently the less than 50 seats contact centres compromises of  only  more  than  2%,” adding that “over time, the market is expected to see a higher growth  of  less  than  50  seats  and 51-200 seat horizontals based on the increasing  demand from  the  SMB  segment as well as more integrated, cost-effective solutions provided.”

And, Thao observes that although the language barrier is an “obvious drawback, almost 80 percent of the workforce is comprised of young, enthusiastic college graduates with science degrees that are always keen to learn,” and that Vietnam is “propelling their way up in the IT outsourcing industry.”

“For further growth and success, companies should look forward to more efficient contact centre application adoption to align these trends for the future.  Emerging global vendors in providing suitable solutions also need to offer more customised solutions and effective marketing activities at more affordable prices.”

Australia is the largest market for BPO services

For Philippine based BPOs consider expanding in Australia which is considered the largest and most developed market in the Asia Pacific region. At the same time, those willing to get in early into greenfield markets should consider the other countries in the region. I wonder if the Philippines is considered in this group as a market instead as a supplier.

From IT.Wire.com

Asia Pacific BPO market ‘underdeveloped, underexploited’

• 27 September 2012
• By  Peter Dinham

With Australia and New Zealand the exception, the Asia Pacific business process outsourcing (BPO) market is reportedly still underdeveloped and underexploited compared with other markets or regions, with the APAC market for BPO on pace to deliver $6.45 billion in revenues by the end of this year.

Australia remained the largest market for BPO services in Asia Pacific in 2011, with a market size of more than $4.5 billion – over 3.5 times larger than India at US$1.26 billion – and the second-largest consumer of BPO services.

And, in its latest report, Gartner says the fastest-growing BPO markets within the Asia Pacific region will continue to be China and India, with the total APAC market – excluding Japan – forecast to reach US$9.5 billion in 2016, up from $5.9 billion last year.

According to Gartner’s research director, T.J. Singh, the Asia Pacific BPO market is still “relatively underdeveloped and underexploited, with the exception of Australia and New Zealand, when compared with other markets or regions.”

“The Asia Pacific region continues to present service providers with lucrative high-growth and profitable markets that are still relatively underdeveloped and untapped. Even during these trying economic times — the US and European economic malaise — buyers in Asia Pacific are still grappling with issues such as revenue growth, market share gains, scalability, quality of service and better cost management.

“Some negative impacts may surface as BPO grows across the region, including higher wage inflation and attrition, as demand for talent in the domestic market competes with offshore demand from the US and Europe.”

According to Singh, the Asia Pacific market presents opportunities to BPO service providers that are willing to invest in the region, with key drivers for BPO buyers being “scalability, quality, best-of-breed process and technology infusion, and improved service levels.”

However, he stresses that cost continues to be a consideration in all deals. “Asia Pacific is an immature market for BPO services. No one provider dominates every type of BPO service, and very few BPO providers can successfully demonstrate true regional or Pan Asia Pacific BPO capabilities for multiple processes.”

With the fastest-growing BPO markets within Asia Pacific continuing to be led by China and India, and Singh also says that vertical industry, banking and financial services, communications, government (both local and federal), technology, retail, and travel and transportation continue to be the largest consumers of BPO services in the region.

“The BPO service market in Asia Pacific, excluding Japan, consists of a wide range of local, regional and multinational (including India-based) service providers. Although the market is dominated by global and India-based service providers, there are also a number of fast-growing regional and niche BPO service providers,” Singh said.

Singh defines the BPO market as consisting of four segments – that break down into many distinct sub markets – including:
•    Customer management (sales, marketing and customer care)

•    Enterprise services (HR, finance and accounting [F&A], operations and payment services

•    Vertical services (vertical-industry-focused processes, such as mortgage services and credit card services for the banking sector, claims processing for insurance, and billing services for telecommunications) and,

•    Supply management services (logistics, procurement and warehousing