THE get-rich-quick lure of dotcoms has faded. They have come and gone. What
was thought to be the answer to everyone's eternal question of finding bliss,
the "dotcom" has turned into a nightmare, which until now haunts its victims. It
seemed then that betting one's future (and money) on the Internet has become a
lost cause.
Edgardo Herbosa is an exception. This young, bespectacled
"trader" turned businessman is founder of a dotcom business that has not only
survived the crash, but has thrived despite September 11.
Consider: On
November 2000, Herbosa, who was an expert in international trade, stumbled upon
an idea: an e-Bay-like online trading portal for farmers.
"I'm a trader,
so I knew that agriculture is the biggest market waiting to be tapped," Herbosa
said.
He immediately embarked on a hunt for a possible partner, and to
his surprise, computer company Unisys came knocking on his door. After some
discussions, Unisys decided to "support" his idea, but in exchange, the company
would own part of his soon-to-be dotcom company.
Herbosa decided to give
5 percent stake of the company to Unisys. In return, Unisys would become its
"technical partner," which meant providing all the technology and support to his
online business.
In short, Herbosa saved a lot of money on building and
maintaining the web-based marketplace because of the deal.
By January
2001, the website was up. They named it b2bpricenow.com, a web-based marketplace
that caters to farmers.
Herbosa and Unisys incorporated the company, and
about 40,000 dollars were infused as initial operating capital. Most of the
money went to putting up the website and "marketing" the business.
Next,
he began negotiations with a popular agricultural TV and radio show called Ating
Alamin. He told the producers that they could own another 5 percent of the
company---which, the show's producers agreed to in exchange for advertisement
spots for the next three years.
In that same year, LandBank of the
Philippines, and the Department of Agriculture became partners. He also got the
Philippine Association of State Colleges and Universities to handle technology
education of farmers.
He did this without spending so much money.
"Our timing was good," said Herbosa, as he recalled how he got everyone
to "invest" on his idea.
To date, the bashful Herbosa (he claims to have granted this interview
because he was only forced by friends) said that he single-handedly runs the
company.
There are no employees under him, not even an office to speak
of.
"The technology cost is handled by Unisys, while the people working
for me are paid by LandBank, the agriculture department, and the state
colleges," he said.
The Polytechnic University of the Philippines
currently handles the technology training of farmers (he had to find a way to
teach farmers how to use the Internet, and to do trading online).
Early
this year, Herbosa's hardwork paid off when the World Bank awarded him 188,000
dollar-worth of grant for his idea.
The idea, dubbed "e-commerce for
farmers," was one of the 30 winning bets from 2,400 proposal submitted to the
World Bank's Development Marketplace 2001 competition in Washington on January.
Herbosa said the World Bank found his idea worth supporting because no
one has really thought of it. The contest was created to encourage ideas that
address development challenges.
Over 2.2 billion peso-worth of
agricultural products and services are traded by 700 farmer cooperatives at
b2bpricenow.com, Herbosa said.
And this figure only represents a small
percentage of the 530 billion peso-worth of agricultural trading in the
Philippines every year, he added.
Herbosa also pointed out that there
are a total of 3,700 farmer cooperatives from (with each cooperative
representing 15,000 people) under Landbank, which are waiting to be tapped by
b2bpricenow.com.
B2bpricenow is currently working with Philippine Rural
Reconstruction Movement (PRRM) on the grant it got from World Bank. Herbosa said
part of the grant would go to high-tech hardware for cooperatives in the
country's rural areas.
Prices-on-the-go
B2bpricenow.com
got the WB funding because of its ability to update farmers on the true prices
of goods and services "on the fly," Herbosa said.
Using mobile
technology and Filipino ingenuity, Herbosa has made a deal with mobile phone
company Smart Communications, who in turn, enabled farmers to trade agricultural
products and supplies using their mobile phones.
In short, trading was
as easy as sending "text" messages (SMS or short message service).
B2Bpricenow also allowed farmers to know the latest prices of
agricultural products and supplies by merely sending a text message to a
designated number.
With this, local farmers could readily verify true
prices and therefore prevented them from being cheated by unscrupulous buyers
and middlemen.
"We won the WB contest because we already had one
running, while the rest are mere ideas," Herbosa said.
Dotcoms have died not because it was such as bad idea, but because most
failed to find ways to make money, Herbosa said.
B2bpricenow, for all
its greatness, is a free service. However, a free service does not make a dotcom
business successful, he added.
One needs compelling content and a large
community of users, Herbosa said.
Add to that, he has identified five
"revenue streams."
Money flows into b2bpricenow through online
advertisements; fees from mobile phone transactions (whenever farmers check out
prices, they pay Smart and b2bpricenow two pesos); web page development services
(which it offers to farmer cooperatives); fees from online transactions; and, of
course, grants.
Herbosa plans to offer web page development services to
the farmers through the Congressman in their respective districts.
"The
Congressman will pay for it using their congressional development fund. It's
good PR for them," he said.
Expansions
B2bpricenow is set
to expand in Thailand, Herbosa said.
A Thai bank this year told Herbosa
that it wanted to test his idea among Thai farmers, and thus has disclosed plans
to fund operations of b2bpricenow's first subsidiary outside of the Philippines.
Herbosa also plans to expand to other countries once he gets more
funding, this time, from the Canadian International Development Agency, which
has announced the availability of 8 million dollars-worth of grant to
information and communications technology-related projects in the Philippines
this year.
The success of b2bpricenow in the Philippines is not due to
luck but mostly hardwork and knowledge of the local market, Herbosa said.
His experience and expertise in international trade made him realize
that an e-Bay like portal for farmers would work in the Philippines, and even in
other third world countries.
"B2bpricenow is just a mirror of e-Bay,"
Herbosa said.
In fact, the World Bank might decide to give more "funds"
to the company's possible expansion in other developing countries.
"With
the grant they gave me, the have made the Philippines as a test market for my
idea," Herbosa said.
Personally, he believes that he has found the
killer application for developing countries.