John L. Gokongwei, Jr. – The Path of Entrepreneurship (Marites A. Khanser)

One way of inspiring and encouraging more Pinoy Entrepreneurs to swim in the sea of entrepreneurship is to write about those who’ve made it. This the observation of Marites A. Khanser, the author of the book “John L. Gokongwei, Jr.: The Path of Entrepreneurship” (Loyola Schools, Ateneo de Manila University, 2007). She noted, however, that “very few business success books of the taipans in the Philippines have been written seemingly because of their reluctance to tell their stories or go to the public with the secrets of their business success.”

Fortunately, this has been slowly addressed in the past year or two, with the publication of books on Pinoy Entrepreneurs, for Pinoy Entrepreneurs. There’s “Negosyo: Joey Concepcion’s 50 Inspiring Entrepreneurial Stories,” which contains the stories and lessons of 50 successful and inspiring Pinoy Entrepreneurs. More recently, the Association of Filipino Franchisers, Inc. (AFFI) launched the “Introduction to Entrepreneurship: Success Stories of Filipino Stories,” which contains the success stories and lessons of 15 entrepreneurs (this will be the subject of a separate post). Sharing the stories and lessons of existing Pinoy Entrepreneurs is also the main reason why we have discussions with young and upcoming entrepreneurs.

For this article, let’s focus on John Gokongwei, Jr. It’s really not difficult to learn about his life story and his message, as these matters have been incorporated in his speeches. In fact, it would be more productive to read his speeches, which also contain the lessons on life and entrepreneurship that he learned along the way.

We know that Gokongwei, who lost his father when he was 13 years old, worked hard to support his family. He started by selling simple products in the palengke near Cebu City. He would wake up at 5 in the morning, load thread, soap and candles into his bicycle, and rush to the palengke, where he would rent a stall for one peso a day. He was the youngest vendor in the palengke, but that did not stop him from earning P20 a day (that’s more than half a century ago). The rest of the story is better told in his  own words:

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 tires. 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 Wind.

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 [sent to China after the death of his father]. 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 [Robinsons Retail Group], real estate [Robinsons Land Corporation, Robinson Galleria, Manila Midtown Hotels, etc.], publishing, petrochemicals [JG Petrochem], textiles [Litton Mills], banking [Robinsons Savings Bank], food manufacturing [Universal Robina Corporation], Cebu Pacific Air and Sun Cellular [plus Digitel].

That is the shortened story of an entrepreneur who walked this earth for more than 80 years now, and still counting. Marites Khanser analyzed the entrepreneurial style of Mr. Gokongwei, as well as entrepreneurship in general, in the book. If only there are no copyright considerations, it would be best to just reproduce the entire book here. Anyway, let’s discuss the observations of Dr. Khanser in the book, as well as lessons distilled from Gokongwei’s speeches.

Take risks, calculated risks

According to Dr. Khanser, entrepreneurs like Gokongwei “are risk-takers; they thrive in the high-risk market environments. But the risks they take are well educated; they are not merely gambling.” Indeed, in the words of Gokongwei: “Entrepreneurship is not for the weak of heart. There is no easy path to success. You will need to work harder than your employees, to keep your mind sharp, and to face your inner fears. In the end, entrepreneurship is not only finding opportunities to create value in the business sense, but also finding the opportunities to be your best self.”

Patience is a virtue

There is “no easy path to success,” as Gokongwei stated in the quote above. “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.”

Save

It’s easy to think that we have it all figured when it comes to savings, like “paying yourself first.” But then Gokongwei raised the bar to incredulous heights when he said: “If I have ten pesos, I spend only one peso and save the nine pesos. That was how I ploughed back my profits. I spend very little and save a lot.”

Don’t be afraid to take on the big boys

This is eerily similar to the motto of the Pinoy Entrepreneurs site, which is: “In a global economy dominated by entrenched giants, the Pinoy Entrepreneurs can still make it big.” I realized only now that Mr. Gokongwei is a living testament to this motto, by taking on domestic and global giants. In his words: “Remember the story of David and Goliath? Every industry has its Goliath. But every David knows that all giants have their weaknesses. Every weakness is an opportunity.”

Think big[ger], think international

“But to be a truly great nation, we must also excel as entrepreneurs before the world. We must create Filipino brands for the global market place.” Gokongwei has consistently emphasized in his speeches the need to aspire for the global market, and to see trade liberalization not as an enemy, but as a challenge. “Through the years, the market place has expanded: between cities, between countries, between continents. I want to urge you all here to think bigger. Why serve 86 million when you can sell to four billion Asians? And that’s just to start you off. Because there is still the world beyond Asia. When you go back to your offices, think of ways to sell and market your products and services to the world. Create world-class brands.”

Borrowing ideas, creativity and innovation

Gokongwei never denied that he borrowed the successful strategies of others, like the C2 green tea (beverage in China, supplied by Taiwan) and Cebu Pacific (Southwest Airline business model). The entrepreneur, however, must go beyond simply copying other business models. Dr. Khanser noted that “creativity is an important source of competitive strength for the Gokongwei Group. Its concern for growth and its openness to change are indicators of its creativity as a corporation. But for an entrepreneur, creativity is not enough. It must also lead to innovation.”

Mistakes and disappointments are inevitable

This is one of the Nine Rules for Business Success of John L. Gokongwei noted by Dr. Khanser. The entrepreneur must have a healthy attitude towards failure and adversity. “The important thing to know is that life will always deal us a few bad cards. But we have to play those cards the best we can. And WE can play to win!”

These matters constitute merely a small fraction of the discussions of Dr. Khanser in the book, which is worthwhile to read. Dr. Khanser also discussed the various theories of entrepreneurship, inluding the debate on whether an entrepreneur is made or born, to serve as the framework on the analysis of Gokongwei. While these theories may no longer interest the struggling entrepreneur, the discussions on the lessons of Gokongwei’s life, particularly in relation to business, would definitely help and encourage the Pinoy Entrepreneurs.

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