South-East Asia has seen its fair share of successful unicorns, but none so far have emerged from the Philippines.
Some anticipated Revolution Precrafted, touted as the Philippines’ first unicorn, to be a breakthrough. But it was a bumpy ride for this startup, whose pivot from interior design-led service to technology is a case study on the threats that can stifle a startup’s successful journey.
Revolution Precrafted was founded by Robbie Antonio in early 2015 as an on-demand interior design platform that serves the Philippine market. The platform aimed to leverage the increasing interest in home decors by catering to clients who do not have time to store-hop and choose their own pre-fabricated interior design items.
As Revolution Precrafted gained more popularity, it had been revealed that the startup was in fact struggling and could not deliver on its promises. Various reports in the last two years, including this expose by DealStreet Asia, exposed how Revolution Precrafted suffered a quick undoing because of overestimating its capacities as well as from extremely lofty ideas that failed to take off.
Antonio has since moved on to other ventures with ease, sparking even more doubt as to his motivations with Revolution Precrafted. In any case, Philippine startups hoping to succeed sustainably can learn a few lessons from Revolution Precrafted’s fall from glory.
1. It is imperative that startups address real, intense consumer pain.
The underlying problem with most new ventures and ideas is that they try to solve a very small problem or need. They fail because the market does not feel the solution can change their lives in any significant way.
Revolution Precrafted’s offering was supposed to be its US$3,000 pre-fabricated homes. The company claimed that it could build these within four days and deliver them to buyers for as little as US$8,000 – cheaper than traditional construction costs by at least 50%.
However, according to reports from Rappler, people who have actually bought Revolution Precrafted homes have not had a very pleasant time.
For one, the company is accused of using sub-par materials in their homes. This resulted in walls that were crumbling, ceilings that leak and cracked tiles that turn mouldy after just a few months.
The complainants say that Revolution Precrafted did not deliver on its promise to build them houses in four days either, instead of taking 3-6 months to complete their units. When completed, they looked nothing like what was advertised by the company – none even came with air conditioning devices.
2. Once you have an idea for a startup, know your target market and be ready to meet the market where it is.
Revolution Precrafted targeted the wrong people. Their focus market was Manila-based elite families who are already enjoying all the comforts of life and do not need prefabricated houses. They missed the market of people living in disaster areas and those who are still living in slum areas where there is no electricity or water supply.
The key for today’s startups is to find genuine problems worth solving. There are challenges in the Philippines that can be solved with scalable solutions, including:
These are just some of the opportunities waiting to be tapped into by entrepreneurs who dare attempt them. This will require going back to square one, listening intently, observing keenly, asking probing questions, and having present-day debates about the kind of developments that could be achieved five years from now.
Startups in the Philippines can learn from Antonio’s experience. Many have not been able to scale their businesses, but are eager and willing to do so. The biggest challenge for them is finding sustainable opportunities such as strategic partnerships or other synergistic ones that will help grow the business exponentially, in the most feasible and down-to-earth ways.