Ready for the big league?

BUSINESS BITS
Rafael Santos

While it is often true that wisdom comes with age, the young turks behind software firm Technominds banked on creativity, enthusiasm, and a clever expansion program to put up a viable business venture. By maximizing the full potential of a multilevel marketing scheme and then shifting to a traditional business model once they achieved scale, they have quietly become one of the fastest rising stars in the mobile and Web-based business.

Technominds president Alvin Tan, 24, shares that as a startup company in 2004, they faced the daunting task of making their presence felt in a market dominated by bigger, more established tech firms. They had an innovative multiplatform reloading platform in the can, but were struggling to get it out in the market.

"We came up with our D-Load service, which is essentially a one-stop loading platform for cellular credit, Internet cards, landline prepaid cards and the like. We were the first to offer an all-in-one, Web-based product for retailers so that they can reload anytime, anywhere. But, we knew we had to have scale first before we could convince telecoms to do business with us," he says.

At first, the big telecom firms were apprehensive about working with such a young team of entrepreneurs with a compelling but untested product. Chief technology officer David Lopez, 30, says the top honchos thought they were just college students applying their thesis project.

"They were apprehensive because they thought we were going to close down in a few months, that we weren't serious about the business. So we set about proving to them that we were the real deal," he says.

The group sourced P1.5 million from relatives to finance the startup, pay for hardware that included routers and servers, and hire an initial batch of seven employees. Being a technology-based company ensured that the startup only needed a few servers and a small group of people to get it rolling. What the group really invested in was the software development side of the business, and the majority of their funds went to R&D and marketing.

"Our multilevel marketing campaign was initially a good idea to increase the volume of subscribers we had for the software support, service, and D-Load business. By giving people fees for the number of people they bring into the group [of D-Load retailers], more people were encouraged to join us," Tan says.

However, he explains that after a year, the commission fees they were handing out started to outpace their revenues, and the company eventually phased out the incentives scheme in late 2005. Although some people weren't pleased with the move, the number of loyal retailers left enabled the company to weather the storm.

"It just came to the point that we had to cut the cord on the incentives scheme, because we were in danger of bottoming out. Fortunately, it has worked for us, and at present we have from 10,000 to 15,000 retail members nationwide as well as 15 full-time employees. What made them stay is that through the years we have fine-tuned our systems to become stable and reliable all the time," Tan says.

The company bagged the Nokia Mobile Entrepreneur of the Year award for its successful D-Load online loading service. Despite its achievements, the company is not about to rest their keyboards just yet. They are currently beta testing a new SMS-based marketing tool called textcast, which would enable online retailers to update their customers about new products by automatically sending out an SMS blast when they post a new product online.

Operations manager Roland Samson, 31, believes the next phase of the company's growth will be planked by increasing their forays into the online social networking business.

"We will be rolling out the textcast to cater to corporate clients as well as online retailers. We are targeting a limited number of companies to acquire the product, because we will be banking on the increased usage of the Internet for retail services to drive the product," he says.