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Transformative technopreneurship




Posted on October 05, 2015


Nico Jose S. Nolledo
Chairman and Chief Executive Officer,
Xurpas Inc.

  
  PHOTO
NOT KNOWING how to program a single line of code did not stop Nico Jose “Nix” S. Nolledo, 39, from establishing one of the largest listed consumer technology companies in Southeast Asia, Xurpas Inc. All it took was an early realization of the Internet’s potential to change people’s lives, and a passion to bring first-class mobile experience to emerging markets.

Born to parents who were prominent lawyers with siblings who were academic overachievers, Mr. Nolledo felt early on the pressure to excel. He constantly read business magazines his mother brought home from work, asked her to invest in the stock market for him, and tagged along during her company’s annual stockholders meetings. Rather than pursue law, however, he took up Business Management at the Ateneo de Manila University.

While still in school, he started a number of small businesses like a cafeteria stall, a donut franchise and a game rental -- all of which failed. Though not a musician himself, he started an organization that supplied musicians for university events. Despite the lack of success, these efforts fueled his entrepreneurial drive.

Mr. Nolledo’s first job was managing a mall branch of a fastfood chain. “Originally, I thought I would become a food entrepreneur and the best place to learn would be in the trenches,” he shares. “In a restaurant, you learn many skills you need to succeed in a business.”

At the same time and inspired by the stories of international technology companies, Mr. Nolledo saw the potential of the Internet.

Experimenting in this field, he launched PinoyExchange.com in July 1999 using off-the-shelf software. In three months, it became the largest Filipino online community in the country. The Web site taught him that “like a physical community, a virtual community is a place where people like to go, meet up with others and transact, without being limited by time and space.” He then adds, “That’s when I said I will spend the rest of my life building the communities of tomorrow.”

However, revenue from advertising was not enough to cover costs and in 2000, Mr. Nolledo sold the site to the technology investment arm of a huge conglomerate and joined the company as a manager. While working there, it dawned on him that mobile was the way of the future.

“I realized that the communities of tomorrow will be connected through a smaller screen. Everyone will be carrying a computer in his pocket with a connection the Internet,” he explains.

Mobile phones were cheaper than computers and, therefore, more ideal for an emerging market like the Philippines. With this vision, he and two friends, Raymond Gerard Racaza and Fernando Jude Garcia, founded Xurpas in 2001 with only P62,500 in capital.

Leveraging on their insights into the content needs of consumers, Mr. Nolledo and his team focused on developing Xurpas’ mobile offerings, from SMS, images and Internet pop-up sites to applications. Xurpas provides telecommunications companies (telcos) with mobile consumer content and services such as online casual games, info-on-demand services, chat and messaging applications, ringtones, music, videos and other content.

Furthermore, the company develops mobile platform solutions and mission-critical applications for Philippine telcos, government agencies and top tier companies.

It has service agreements with prominent brands, in which it develops applications that implement the SMS portions of the brands’ mobile telecommunications marketing campaigns and programs that connect them to client telcos.

In order to reach more customers at a low cost, Mr. Nolledo set up the business-to-business-to-consumer (B2B2C) model for Xurpas. It sells its products to intermediaries such as telcos, which would advertise the products as well as handle payments.

For product development and deployment, Mr. Nolledo employs an iterative process that allows Xurpas to create a minimum viable product and do early market testing. He also clarifies that Xurpas purchases the rights to old games from overseas in bulk and rebrands them under new platforms. This allows the company to create content that is more targeted to specific audiences while keeping prices low. Examples of these are its local celebrity-branded apps, such as Anne Galing!, a matching game app with Anne Curtis’ likeness. Xurpas is also working on a grocery and cooking game with Erwan Heussaff, an adventure game with Kim Atienza and a fashion game with Isabelle Daza.

But being financially comfortable was not enough. “I felt like we were at this inflection point in our history -- a super industrial revolution where everything people do will now be coursed through the internet,” he reflects. “We’re either going to be just okay or we’re going to create a legacy for the long term that would outlive us.”

A friend, who eventually became a board member, encouraged him to get Xurpas listed. Several financial institutions thought the business was too small or too risky, but Mr. Nolledo’s persistence eventually led him to SB Capital Investment Corp., which guided him through the initial public offering (IPO) process.

Knowing that the intricacies of Xurpas’ model, products and services were difficult to digest, he applied his iterative process to continually improving his IPO pitch for the benefit of investors who weren’t tech-savvy. On Dec. 2 last year, Xurpas was listed on the Philippine Stock Exchange and raised P1.37 billon, surpassing expectations. Alpha Magazine named the listing as the Best Small Cap Technology Deal in Southeast Asia for 2014 and Finance Asia recognized the company as the Best Managed Small Cap Company in the Philippines.

With this additional capital, Xurpas invested in seven companies that would help it reach customers from the rest of Southeast Asia, starting with Indonesia, a market that has three times the number of Philippine mobile subscribers. It acquired Ninelives, which has billing integration into majority of Indonesia’s top telcos and a permit to operate digital goods, and invested in MatchMe, a Singapore-based gaming firm. Mr. Nolledo himself is a major investor with over 55 technology businesses in his holdings including a stake in Rappler.com, the Philippines’ largest social news network.

Aside from reaching more customers, Mr. Nolledo thinks Xurpas can grow by disrupting everything customers spend on, moving from digital goods to physical goods. To this end, Xurpas acquired Storm, a company that allows employees to convert their core benefits, such as paid leaves, Christmas baskets, etc. into currency that can be used to buy items in an online store.

Daring aspiring entrepreneurs to dream big, he asks, “What would you do if you believed you couldn’t fail? Would you do the same things every day if you were sure to succeed? Many people set their own limits. Anything is possible if you have a larger vision.”

The official airline of the Entrepreneur of the Year Philippines 2015 is KLM Royal Dutch Airlines, operating on behalf of the Air France-KLM Group in the Philippines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet Sponsors are Alaska Milk Corporation, Bench, Bounty Fresh Food Inc., Fiori Di M, HSBC, Jollibee Foods Corporation and Universal Harvester, Inc.

The winners of the Entrepreneur Of The Year Philippines 2015 will be announced on Oct. 14 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2016 in Monte Carlo, Monaco in June 2016. The Entrepreneur Of The Year program is produced globally by EY.