Or the Hazards of being a Filipino Entrepreneur

By ALICE SARMIENTO

There’s an idiom, “Look before you leap,” commonly applied to small businesses, the ones that alight with a spark and feed off the passions of both proprietors and the patrons alike. With documentaries like Faythe Levine’s Handmade Nation narrating the rise of the craft movement, and neighborhoods once known for low-rent and high-crime now finding themselves re-branded as “hip” and “up-and-coming” artist enclaves, the world we live in is giving new hope to the little guys. At least these are the impressions we get from the success stories of Etsy and Williamsburg, and their various counterparts around the region.

The Philippines, despite an undying fascination with material culture and iconic brands, paints a different picture for the survival of small scale businesses in the information age. As a writer, I could feed my dreams of one day owning a bookstore; but every time I visited Datelines, one of Manila’s early experiments in independent bookselling, I remember getting hit hard by the smell of blood.

Datelines used to occupy a prime spot in Cubao Expo, aka Cubao X, now known to most as Manila’s “hipster” hangout. Once a parking strip lined with local shoe manufacturers, Cubao X reinvented itself less than a decade ago through the usual formula of low rent and commercial zoning; however it hasn’t transcended indie status by encroaching upon the surrounding areas, and amidst rumors of demolition, has failed to properly capitalize on its alternative image. By feeding off the love of its patrons, it remains a case study of how well-wishes and sympathy are not enough to ensure a business’s survival. It takes some serious pushing (and by pushing, we mean sales) to keep up a foundation; otherwise, you’re just hemorrhaging money. Take, for instance, the case of Datelines.

What does it mean to be an entrepreneur in the Philippines? Or rather, how successful are Filipino youth at selling not only their merchandise, but their ideas in a market so deeply divided not only by class but by archaic and immovable systems? When I was fashion school undergraduate, I made a little extra on the side by consigning my designs to a friend’s store in another “up-and-coming” neighborhood. We worked on a foundation of trust wherein I supplied her with at least half a rack’s worth of clothes every other month, and if someone bought something, I could just ask her about it and she would fork over my share of the tag. With no contracts, of course this whole arrangement was kept very flexible, and in the long run would have been easy to manage–that is, if either of us had any idea how to manage things.

Creating the goods for a business is completely different from the realities of actually running it, and this is true in the case of fashion retailing–which are two terms that should probably never have been separated in a world where the creative expression once completely integral to the world of fashion is being replaced by what some would read as superficial blandness and herd mentality. But the story doesn’t end there, because anyone with a success story to tell has a few anecdotes of trial and error, overcome by sheer persistence and unparalleled work ethic.

 

 

The end of my foray into the fashion business began with a Macbook. My friend and I were to embark on a partnership, one that involved me helping her develop a line of swimwear and graphic tees, something like Billabong meets Threadless. One morning, as I was driving to her shop, I received a text from the shopkeep. “The police are here. It’s probably not a good idea for you to come today.” Since I was already close by, I decided to wait a while at a nearby coffee shop then come by when the commotion died down a little.

It turned out a man had been skulking around the shop for a few days already. He had observed the daily routines that revolved around the business until he finally worked up the nerve to come in and, posing as a customer, stole some cash and a Macbook. Luckily he was caught before he could pawn it, but that incident was indicative of the security hazards beginning to plague a neighborhood that was (slowly but surely) on the rise.

Later that week, an armed guard was brought in and patrol cars began making the rounds, but even these weren’t enough to prevent a string of crimes around the area–ranging from petty to unspeakable–that would eventually convince my friend to permanently close up shop and seek regular employment elsewhere. All this happened in San Antonio Village, an area made up mostly of low buildings and warehouses that was just beginning to lure people in with the promise of low rent and the market potential of the yuppies who populated the nearby Makati Central Business District. However, the cropping up of small businesses in an area so close to the city’s fringes also meant temptation and access to wealth–no matter how modest–for those who had absolutely nothing, and for whom hunger and desperation was more palpable than the pursuit of entrepreneurial dreams.

This is probably one of the more extreme cases, but it could easily spell doom for the bright young things coming into business with fresh minds and high hopes. An idea, no matter how good, has to be executed in a world that is not subject to the entrepreneur’s whims. Risk may be just another non-negotiable in the language of business, but when physical safety is involved, that changes the context completely. And this is a context already tainted with endless red tape, high taxes, tough regulations, difficult and extremely costly financing, widely existing monopolies (ever wonder why there are next to zero local microbreweries?), and the need for political influence at all levels. All of these make it easy to see how and why the Philippines is no hotbed for entrepreneurial spirit. Coming in at a pitiful no. 136 on the Ease of Doing Business Rank, the Philippines has fallen even lower than Nigeria, Sudan, and Kosovo to name a few, when it comes to making it possible for its citizens to lift their way out of squalor through entrepreneurial spirit alone. It takes some real resiliency (and a shit ton of cash) to run a legitimate business in this country.

 

Twitter is a good place to see how the more persistent (or stubborn) are doing. Come tax season, twitter feeds are full of tweets from young entrepreneurs standing in line at local government offices, filing permit after permit after permit. “I finally gave in and paid up” tweeted a friend, referring to the bribes she had to fork over after 3 weeks of trouble from getting a liquor license approved for her restaurant. To this series of roadblocks, you can add the lack of reassurance that the law will protect you in case something goes seriously wrong.

 

In every developing economy, the spirit of entrepreneurship has signaled hope. To avoid anymore of the typical cliches, it is not necessarily the light of a new day, but the light from the fire being lit under the ass of a formerly complacent generation. In the case of the Philippines, complacence is one thing, but there will always be the combination of social and cultural ills that have resulted in a system too complex to navigate with business acumen alone. And in times of desperation, are those who resort to simpler solutions, like bribes and clout, really to blame?

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Alice Sarmiento is the Managing Editor of New Slang dot com. Stephen Elliott said that being rich is “Not having to do any shit you don’t want to do”.