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Friday, January 25, 2008

Future plans

I happen to stumble upon an inspiring speech by John L. Gokongwei, Jr., a Filipino business tycoon, which I would like to share to you guys.

Commencement Address
Ateneo de Manila University
March 27, 2004
John L. Gokongwei, Jr.

I wish I were one of you today, instead of a 77-year-old man, giving
a speech you will probably forget when you wake up from your hangover

You may be surprised I feel this way. Many of you are feeling fearful
and apprehensive about your future.

You are thinking that, perhaps, your Ateneo diploma will not mean a
whole lot in the future in a country with too many problems. And you
are probably right.

You are thinking that our country is slipping, no - sliding. Again,
you may be right.

Twenty years ago, we were at par with countries like Thailand,
Malaysia, and Singapore. Today, we are left way behind.

You know the facts.

Twenty years ago, the per capita income of the Filipino was 1,000 US
dollars. Today, it's 1,100 dollars. That's a growth of only ten
percent in twenty years. Meanwhile, Thailand's per capita income
today is double ours; Malaysia, triple ours; and Singapore, almost
twenty times ours.

With globalization coming, you know it is even more urgent to wake
up. Trade barriers are falling, which means we will have to compete

In the new world, entrepreneurs will be forced to invest their money
where it is most efficient. And that is not necessarily in the
Philippines. Even for Filipino entrepreneurs, that can be the case.

For example, a Filipino brand like Maxx candy can be manufactured in
Bangkok - where labor, taxes, power and financing are cheaper and
more efficient - and then exported to other ASEAN countries.

This will be a common scenario - if things do not change.

Pretty soon, we will become a nation that buys everything and
produces practically nothing. We will be like the prodigal son who
took his father's money and spent it all. The difference is that we
do not have a generous father to run back to.

But despite this, I am still very excited about the future. I will
tell you why later.

You have been taught at the Ateneo to be "a person for others." Of
course, that is noble: To serve your countrymen.

Question is: How?

And my answer is: Be an entrepreneur!

You may think I am just a foolish man talking mundane stuff when the
question before him is almost philosophical. But I am being very
thoughtful here, and if I may presume this about myself, being
patriotic as well.

Entrepreneurship is the answer.

We need young people who will find the idea, grab the opportunity,
take risk, and set aside comfort to set up businesses that will
provide jobs.

But why? What are jobs?

Jobs are what allow people to feel useful and build their self-
esteem. Jobs make people productive members of the community. Jobs
make people feel they are worthy citizens. And jobs make a country
worthy players in the world market.

In that order of things, it is the entrepreneurs who have the power
to harness the creativity and talents of others to achieve a common
good. This should leave the world a better place than it was.

Let me make it clear: Job creation is a priority for any nation to
move forward.

For example, it is the young entrepreneurs of Malaysia, Thailand, and
Singapore who created the dynamic businesses that have propelled
their countries to the top. Young people like yourselves.

Meanwhile, in the Philippines, progress is slow. Very little is
new. Hardly anything is fresh. With a few exceptions, the biggest
companies before the war - like PLDT, Ayala, and San Miguel - are
still the biggest companies today.

All right, being from the Ateneo, many of you probably have offers
from these corporations already. You may even have offers from JG

I say: Great! Take these offers, work as hard as you can, learn
everything these companies can teach - and then leave!

If you dream of creating something great, do not let a 9-to-5 job -
even a high-paying one - lull you into a complacent, comfortable
life. Let that high-paying job propel you toward entrepreneurship

When I speak of the hardship ahead, I do not mean to be skeptical but

Even you Ateneans, who are famous for your eloquence, you cannot talk
your way out of this one. There is nothing to do but to deal with it.

I learned this lesson when, as a 13-year-old, I lost my dad.

Before that, I was like many of you: a privileged kid. I went to
Cebu's best school; lived in a big house; and got free entrance to
the Vision, the largest movie house in Cebu, which my father owned.

Then my dad died, and I lost all these. My family had become poor -
poor enough to split my family. My mother and five siblings moved to
China where the cost of living was lower. I was placed under the care
of my Grand Uncle Manuel Gotianuy, who put me through school. But
just two years later, the war broke out, and even my Uncle Manuel
could no longer see me through.

I was out in the streets - literally.

Looking back, this time was one of the best times of my life. We
lost everything, true, but so did everybody! War was the great
equalizer. In that setting, anyone who was willing to size up the
situation, use his wits, and work hard, could make it!

It was every man for himself, and I had to find a way to support
myself and my family. I decided to be a market vendor. Why? Because
it was something that I, a 15-year old boy in short pants, could do.

I started by selling simple products in the palengke half an hour by
bike from the city. I had a bicycle. I would wake up at five in the
morning, load thread, soap and candles into my bike, and rush to the

I would rent a stall for one peso a day, lay out my goods on a table
as big as this podium, and begin selling. I did that the whole day.

I sold about twenty pesos of goods every day. Today, twenty pesos
will only allow you to send twenty text messages to your crush, but
63 years ago, it was enough to support my family. And it left me
enough to plow back into my small, but growing, business.

I was the youngest vendor in the palengke, but that didn't faze me.
In fact, I rather saw it as an opportunity. Remember, that was 63
years and 100 pounds ago, so I could move faster, stay under the sun
more, and keep selling longer than everyone else.

Then, when I had enough money and more confidence, I decided to
travel to Manila from Cebu to sell all kinds of goods like rubber

Instead of my bike, I now traveled on a batel - a boat so small that
on windless days, we would just float there. On bad days, the trip
could take two weeks!

During one trip, our batel sank! We would have all perished in the
sea were it not for my inventory of tires. The viajeros were happy
because my tires saved their lives, and I was happy because the
viajeros, by hanging on to them, saved my tires. On these long and
lonely trips I had to entertain myself with books, like Gone With The

After the war, I had saved up 50,000 pesos. That was when you could
buy a chicken for 20 centavos and a car for 2,000 pesos. I was 19
years old.

Now I had enough money to bring my family home from China. Once they
were all here, they helped me expand our trading business to include
imports. Remember that the war had left the Philippines with very few
goods. So we imported whatever was needed and imported them from
everywhere - including used clothes and textile remnants from the
United States. We were probably the first ukay-ukay dealers here.

Then, when I had gained more experience and built my reputation, I
borrowed money from the bank and got into manufacturing. I saw that
coffee was abundant, and Nescafe of Nestle was too expensive for a
country still rebuilding from the war, so my company created Blend 45.

That was our first branded hit. And from there, we had enough profits
to launch Jack and Jill.

From one market stall, we are now in nine core businesses - including
retail, real estate, publishing, petrochemicals, textiles, banking,
food manufacturing, Cebu Pacific Air and Sun Cellular.

When we had shown success in the smaller businesses, we were able to
raise money in the capital markets-through IPOs and bond offerings --
and then get into more complex, capital- intensive enterprises. We
did it slow, but sure.

Success doesn't happen overnight. It's the small successes achieved
day by day that build a company. So, don't be impatient or focused
on immediate financial rewards. I only started flying business class
when I got too fat to fit in the economy seats.

And I even wore a used overcoat while courting my wife - it came from
my ukay-ukay business. Thank God Elizabeth didn't mind the mothball
smell of my overcoat or maybe she wouldn't have married me.

Save what you earn and plow it back.

And never forget your families! Your parents denied themselves many
things to send you here. They could have traveled around the world a
couple of times with the money they set aside for your education, and
your social life, and your comforts.

Remember them - and thank them.

When you have families of your own, you must be home with them for at
least one meal everyday.

I did that while I was building my company. Now, with all my six
children married, I ask that we spend every Sunday lunch together,
when everything under the sun is discussed.

As it is with business, so it is with family. There are no short cuts
for building either one.

Remember, no short cuts.

Saint Ignatius of Loyola, your patron saint, and founder of this 450-
year old organization I admire, described an ideal Jesuit as one
who "lives with one foot raised." I believe that means someone who is
always ready to respond to opportunities.

Saint Ignatius knew that, to build a successful organization, he
needed to recruit and educate men who were not afraid of change but
were in fact excited by it.

In fact, the Jesuits were one of the earliest practitioners of
globalization. As early as the 16th century, upon reaching a foreign
country, they compiled dictionaries in local languages like Tamil and
Vietnamese so that they could spread their message in the local
language. In a few centuries, they have been able to spread their
mission in many countries through education.

The Jesuits have another quote. "Make the whole world your house,"
which means that the ideal Jesuit must be at home everywhere.

By adapting to change, but at the same time staying true to their
beliefs, the Society of Jesus has become the long-lasting and
successful organization it is today and has made the world their

So, let live with one foot raised in facing the next big opportunity:

Globalization can be your greatest enemy. It will be your downfall if
you are too afraid and too weak to fight it out. But it can also be
your biggest ally.

With the Asian Free Trade agreement and tariffs near zero, your
market has grown from 80 million Filipinos to half a billion
Southeast Asians.

Imagine what that means to you as an entrepreneur if you are able to
find a need and fill it. And imagine, too, what that will do for the
economy of our country!

Yes, our government may not be perfect, and our economic environment
not ideal, but true entrepreneurs will find opportunities anywhere.

Look at the young Filipino entrepreneurs who made it. When I say
young - and I'm 77, remember - I am talking about those in their 50s
and below. Tony Tan of Jollibee, Ben Chan of Bench, Rolando Hortaleza
of Splash, and Wilson Lim of Abensons.

They're the guys who weren't content with the 9-to-5 job, who were
willing to delay their gratification and comfort, and who created
something new, something fresh.

Something Filipinos are now very proud of.

They all started small but now sell their hamburgers, T-shirts and
cosmetics in Asia, America, and the Middle East.

In doing so, these young Filipino entrepreneurs created jobs while
doing something they were passionate about.

Globalization is an opportunity of a lifetime - for you. And that is
why I want to be out there with you instead of here behind this
podium - perhaps too old and too slow to seize the opportunities you

Let me leave you with one last thought.

Trade barriers have fallen. The only barriers left are the barriers
you have in your mind.

So, Ateneans, Class of 2004, heed the call of entrepreneurship.

With a little bit of will and a little bit of imagination, you can
turn this crisis into your patriotic moment - and truly become a
person for others.

"Live with one foot raised and make the world your house."

To this great University, my sincerest thanks for this singular honor
conferred on me today.

To the graduates, congratulations and Godspeed.

"Ad Majorem Dei Gloriam".

Thank you.

© 2005 John Gokongwei School of Management

Wow! Isn't that something? :D

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