What to do when your unicorn loses its sheen
The past month has been interesting for the Philippine startup ecosystem — with a report on the massive capital raise by a startup, an update on the prospectives offered by the archipelago’s digital banking sector, a news report about an edutech startup‘s acceptance into Y-Combinator and another on the regional expansion plan announced by a fintech company.
But the one who stole the show in the past few days was Robbie Antonio, who was forced to resign from real estate developer Century Properties following allegations of scandals involving its property-tech platform Revolution Precrafted (RP).
Let us take a little trip down memory lane. In 2017, RP made headlines by becoming the first unicorn to originate from the Philippines. But things turned rocky for RP when leading media publications such as The Ken and Dealstreet Asia exposed the slow — if not disappointing — executions of its various projects.
The episode hit a nadir last Thursday (February 18) when ABS-CBN reported that National Bureau of Investigation (NBI) of the Philippines has opened an investigation into RP’s “questionable” deals, forcing Antonio to put down his papers.
The report detailed that nine contractors and suppliers filed a complaint, claiming that they were lured into different contracts by RP. During the process, they were informed that they would win the contracts in RP’s real estate development projects if they pay 10 per cent of the contract’s value.
These contractors claimed the contracts to be “dubious” as RP was said to have failed to secure permits for the projects.
Those who follow the ‘RP saga’ may feel a sense of déjà vu: two years ago, co-working space giant WeWork’s failed IPO triggered a conversation about financial sustainability for startups — and accountability.
Also Read: Ecosystem Roundup: Filipino fintech Mynt nears unicorn status; EVs in Singapore: how much is just hype?
When the unicorns step out of the lanes
It is not that the unicorns of Southeast Asia (SEA) have never been involved in any kind of troubles/scandals. In fact, if you look at e27‘s past news coverages of major companies such as Grab and gojek, there is bound to be at least one story that is borderline scandalous. Think of how gojek had to fight against regulators when they tried to ban ride-hailing services in Indonesia years ago, or when Grab (and Uber) was fined by the Singapore competition watchdog for their merger.
But at some point, there is a need to address the gap between expectation and reality.
For investors, investing in a company means having a set of expectations that they would demand the company to deliver, in exchange for the financial commitment.
On the other hand, for customers, the value of using a platform goes beyond monetary investment; it is also the promise of solving a pain point that has been bugging them for a while.
Meeting these expectations is more significant than attaining and being the product of unicorn status. Having said that, a company is not solely responsible for its faults. In all its honesty, everyone — from the media to government agencies — is equally responsible for a startup’s fault because they, too, are in search of the next unicorn to put them under the spotlight, often disregarding what really matters at these companies.
It was like we are telling startups that becoming a unicorn is enough and that having a high valuation is all it is cracked up to be — until Something Big occurs and we realised that the party is over (if there has ever been one).
Chances for redemption
So, how should we view what RP is going through at the moment?
I recently saw a tattoo on Instagram that was so beautiful I just cannot get it out of mind. It was an image of the word “relapse” but the “lapse” part was crossed out with red lines — and the artist added “start” on top of it. So I took that the meaning of the tattoo was that relapsing (or making any mistake) is actually an opportunity to restart.
When unicorns go bad, the first priority would be to demand and deliver accountability. This would not be easy for everyone involved, particularly when we add the elements of shame into the equation. But this is the moment for us to clear the air and focus on the work that really matters.
Last year, when the world came to a standstill thanks to the restrictions imposed in many countries, we were given a chance to rethink our direction. For those who had managed to go through this process with patience and a good sense of responsibility, the reward is the promise of a better day.
Will RP be able to get out of this crisis? Will customers and partners be able to take back what is theirs? We can only wait and see in the next days.
The ball is in their court now.
Image Credit: Rosalind Chang on Unsplash
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