The art of risk-taking
Ramon Castillo carried his technology company through its turbulent past by learning how to take calculated risks and mastering it along the way.
By Geraldo R. Manalo
Last month, we discussed the benefits a business can derive from being listed in the Philippine Stock Exchange and the steps on how to go about it. Now we shall find out how the country's bourse picks companies that it would allow to trade and sell their shares to the public. The PSE has three criteria in deciding whether or not to accept a company's listing application:
Swept up by the culture of change the Edsa Revolution spawned in 1986, Ramon Castillo quit his high-paying job as a design engineer at Intel Philippines to start his own company, Innovatronix. A ping pong table for a work space, P5,000 in capital, a best friend's support, and help from a technician, enabled the company to undergo many reinventions: From providing what he called "innovative electronics" services to technology manufacturing giants Intel, Motorola, and Telefunken, making electronic displays and other products, to setting up 50 digital photo shops throughout the country. Castillo went through one setback after another, but instead of giving up, he fought back.
An example was when Innovatronix, then a start-up, was netting only P400 for eight months. Castillo's never-say-die attitude saw the company through - he pawned his car, borrowed money from friends and relatives, and even went as far as asking for his inheritance in advance.
"You're never going to win if you don't try," was how he explained his spunk and risk-taking adventures. "That's the bottom line. I've known a lot of people who just talk and say things like, naisip ko na rin yon ah! Or idea ko yun ah! They don't understand that in this country, people don't make money out of a good idea, but by implementing it. That's why you have to take risks."
And his risk-taking got him results. The first turning point was when he inked a supply contract with his former employer Intel. Innovatronix also provided the electronic scoreboards for the Southeast Asian Games that Manila hosted in 1991. A year later, the company developed and supplied the Chess Piece Identification System at the World Chess Olympiad that allowed the public to view the players' moves through a giant TV screen and a VGA monitor, now a common practice not just in chess. As early as the 1990s, the company was on its way to success, at one time even hitting seven-figure revenues.
Then came the 1997 Asian financial crisis that carved a path of destruction in the region, and many small businesses in the country - Innovatrix among them - were burned severely. "Lahat ng binebenta namin noon bumagsak. The demand fell by more than 70 percent. Malapit na kaming magsara," Castillo recalls. He had 18 workers whose continued stay would further strain the company's finances, but instead of retrenching them, Innovatronix opened its first retail outlet at New Farmer's Plaza in Cubao in 1998 so they could man it. The outlet also offered photo ID processing services. To do this, Castillo took out a bank loan using Innovatronix's last building as collateral and used it to develop electronic photography products and services, including one that retouches pictures and another that converts them into oil paintings. The services are offered online, making Innovatronix an unwitting leader in the business process outsourcing industry.
Castillo, who is completing his masters in business administration at the University of the Philippines in Diliman, is not too sold on analyses. "In business or MBA schools, analyzing a case seems easy to students. But put yourself in the shoes of the business owner making a decision at that moment. It's not that easy," he says.
Instead of over-analyzing the situation, Castillo prefers his gut feel when confronted with difficulties and uncertainties. "Guts is what differentiates an entrepreneur from a manager," he says.
He cites the dilemma of poultry farm owners who are eyeing to fill the huge overseas demand for chicken but are hampered by the spectre of bird flu. "What would you do?" he asks. "My point is you cannot eliminate risks, especially those that are brought about by uncertainties. Sometimes that risk will reward you greatly, and sometimes these will penalize you terribly. The company willing to take risks has a greater chance of succeeding than one that never dared."
Innovatronix has since recovered from the economic slump and been positioning itself for further growth through export by harnessing the possibilities of the Internet. "With the Internet, our products can reach the overseas market without the need for dealers, which I couldn't do before. We expect 50 percent of our revenues to come from our Internet operations."
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