The Finishers: Learn First-hand from the Philippine Founders Who Willed Their Startup from Idea to Exit was written by Ezra Ferraz in 2017. This book documents the stories of 11 local founders who were able to scale their startup and exit. This excerpt, titled “Iskolar ng bayan:PinoyMail.com goes after every Filipino online from an internet cafe at UP Diliman,” which focuses on the journey of PinoyMail.com and its founder, Dominick Danao.
2000 users in 24 hours
In 1997, twenty-eight-year old Dominick Danao quit his job as an information technology journalist at The Manila Times to start a business like the ones he wrote about. His first attempt was the regrettably named Cyber Kids (this was five years before Chris Hansen’s To Catch a Predator became popular worldwide).
Out of his in-law’s home in Las Pinas, Dominick introduced the wonders of modern computing to a small group of students on summer vacation. “At the time, the internet was starting off and we thought kids should get into this,” he said, his statement dating the time better than anything else could: Back then, the young Filipinos who would one day be glued to their screens still had to be persuaded to use the web.
Over the course of the summer, Dominick guided his inaugural batch of students through tutorials and updated parents on their progress. Like many of the dot-coms sprouting up in Silicon Valley to ginormous valuations, he had a user base, even if they were sleepy more often than not, and paying customers, even if some of them more appropriately belonged on a soccer sideline. All Dominick had to do was scale Cyber Kids when he perfected the curriculum.
But when school resumed in June, Dominick could not sign up a single student, even for a weekend class. Evidently, parents wanted their kids to give their kids an edge in the world, but only when traffic was not so bad. He abandoned Cyber Kids and the unfamiliar terrain of computer literacy for more familiar ground at the University of Philippines, Diliman, where he had graduated two years earlier with a degree in communications.
There, Dominick rented out a small space at the University Shopping Center, lined its walls with computers, struck them together into a network, and connected to the internet via dial up. He gave his new business the generic, but at least double entendre-free name, Campus Internet Cafe. As it was the first of its kind at UP Diliman, Dominick had a monopoly in his hands and he admittedly charged what were then-exorbitant prices.
“We started at 80 pesos per hour, which is a lot of money for students,” he said, “but it’s better than having no internet access at all.”
On December 31, 1997, Dominick was surfing the net at Campus Internet Cafe when he stumbled upon a CNET article that would fling him wildly in yet another direction the next year. As his internet speed was a mere 33.3 kilobits per second, the page loaded in parts, beginning with the headline: “Microsoft buys Hotmail—The software giant acquires the Web-based email service to make free email a feature of Microsoft Network.”
Dominick smirked (he was reading the article on a computer with a pirated version of Windows), and then scanned through the rest of the article with growing interest.
The stock deal for the two-year-old company has been estimated in the hundreds of million of dollars, according to industry sources. Microsoft and Hotmail officials would not comment on the price...
With this deal, MSN, which stopped releasing subscriber numbers in October when membership hovered at 2.3 million, could boost its traffic substantially, driving a potential 9 million Hotmail members to its collective sites...
The move could prove to be a boon when Microsoft describes its numbers to advertisers...
This was the first time Dominick had heard about Hotmail.com, and further research revealed that it had been founded only a year earlier by co-founders Sabeer Bhatia and Jack Smith.
“Something’s happening here that we should get into,” Dominick said of his immediate reaction at the time. “I thought: Why don’t we do a webmail on our own?”
A localized web 1.0 company was not without precedent. If netizens in the United States had Yahoo!, their Filipino counterparts had their own enthusiastic search engine in Yehey! For Dominick, who had protested against the presence of US military bases as a student at UP Diliman, a Filipino webmail would be another way for him to wave the pambansang watawat ng Pilipinas. It was technopreneurship as technopatriotism: We could build a great product, amass millions of users, and exit just like Silicon Valley’s best.
Dominick registered the domain PinoyMail.com, which he felt any Filipino, no matter their province or dialect, would instantly recognize. It was his best branding effort to date (not that Cyber Kids and Campus Internet Cafe were particularly tough competition), and it was even praised later on by sociologist Czarina Saloma-Akpedonu. She wrote that Filipinos would view PinoyMail.com as a way of laying claim to their “Filipino social identity in cyberspace.” Or to phrase it from the pressure they may have felt: “If you are a Filipino, you have to have a Filipino e-mail address.”
Blessed as he may have been with nationalistic fervor, Dominick admitted he was not the best programmer.
“I really didn’t know how to program very well at that time. I only knew COBOL, but we would have to do PinoyMail in C. I had to learn it in right there in the internet cafe whenever there was a free computer,” Dominick said. “So how does this code go?”
Unlike today, when there are thousands of resources available on the internet to study even the most obscure programming language, Dominick had few such sites at his disposal. What little he did find he copied plenty from. He also took a short-term, non-credit course on C at UP Diliman to cohere what he learned online.
While he managed to program the front-end interface of PinoyMail.com, he could not develop an automatic registration process, which required interfacing with the Linux database. “Either I just didn’t have the brains, or I had lost all my brains programming the webmail interface,” he said.
Because Dominick did not have any more money—an internet cafe, even one with a monopoly, was a capital intensive business—he could not buy physical servers for PinoyMail.com and plug them into data centers, as web 1.0 companies usually did. He canvassed for a virtual host in the United States and found a well-reviewed one by the name of Digital Nation he could rent capacity from. Though Dominick would never see Digital Nation’s infrastructure, he could easily imagine the tools of their trade. “They had a super big pipe to the internet,” he said, trying to clasp his two hands around its circumference, “which we could ride on.”
He convinced his friend Josephine “Jopin” Romero, who had been orgmates with him in the League of Filipino students, to join as co-founder, and as her first official act, lend him her credit card to pay for the virtual hosting.
Dominick also recruited his wife, Amor, into PinoyMail.com. A lawyer by profession, she organized the fledgling outfit’s equity split. Dominick’s childhood friend, Vernier Umali, would recieve 20% for helping him with the product and programming. “He was more techie than me at the start,” Dominick said of Vernier. “He knew hardware. He knew data centers. He knew internet packets.”
Dominick, and in extension, Amor, got 60% because he was the face, the operations, and the ideas behind PinoyMail.com. And Romeo was given 20% for her role over commercial development, which they all hoped would one day involve more complex transactions than handing over her Mastercard. On paper, they were the co-founders of PinoyMail.com. Among themselves, they were the little company that could.
Dominick signed PinoyMail.com up with the virtual host, uploaded his program, and entered into an internet relay chat (IRC) to make his grand announcement in March 1998. “Hi guys,” he wrote to the Filipinos in the chatroom, all anonymized behind usernames. “We are giving away a free webmail account to anyone who wants one.”
All interested users needed to do was send a private message to Dominick with their desired PinoyMail.com address and he would activate it. The pull of this pitch was strong. Not only would people who sign up get a localized email address with 1 MB of space, but they would receive it for free—some internet service providers, in contrast, were charging as much as 125 pesos per month.
Dominick was overjoyed as he got his first few requests. Users, it seemed, were interested in reserving their name (i.e. Jen@PinoyMail.com), before a mass of other registrants forced them into unsightly variations (i.e. Jen76@pinoymail.com, or worse, xxJen76xx@pinoymail.com)
To register Jen for PinoyMail.com, Dominick had to type in—in the command line of the Linux database—the instruction to “add user” followed by their username and password (yes, the system was so primitive he knew your login credentials until you bothered to change them).
“That did not scale well obviously,” said Dominick, who was hit with more than 2000 requests for email accounts in PinoyMail.com’s first twenty-four hours. “And it was also very error-prone.”
The notification process was manual as well. Once Dominick finished configuring an account, he would search for the person that had requested it in the IRC and message them one by one, down the list of 2000. He masked his mounting exhaustion under a guise of friendly enthusiasm, as only people on the internet can. “Hey, your account is now active. Log in!”
PinoyMail.com's secret servers
Jopin put out an SOS signal to her uncle in Atlanta, who was a programmer, to code the automatic registration. She explained that Dominick and two of her co-founders were encoding more than a thousand PinoyMail.com accounts per day. On slower afternoons, they still had several hundred to configure between Dominick, Vernier, and Vernier’s girlfriend, Sherry Sol San Pedro, who was an engineering student at UP Diliman at the time. The Campus Internet Cafe was now a customer service center for PinoyMail.com, one which had dozens of random strangers coming in to surf the net at all hours of the day.
Jopin’s uncle said he did not know how—he was a Windows programmer. Perhaps feeling guilty that he could not help, he wired Jopin $1500 and told her to find someone who could.
Flush with hiring funds, Dominick called up the computer science department at UP Diliman, in search of the teacher who had taught him C during his short-term course. Another teacher by the name of Alex Ibrado answered the phone, but Dominick, frustrated and out of options, explained his predicament, anyway.
“Yeah, I can do that,” said Alex casually in response, who it turned out was a UP Diliman dropout, albeit a brilliant one.
And true to his word, he could. He programmed the automatic registration with ease. As with Hotmail.com, Filipinos could now proceed to the PinoyMail.com website and sign up for their preferred email and password. “I could sleep better,” Dominick said. “And people could sign up while we slept.”
For his work, Alex was compensated at Philippine rates. “We didn’t pay him 1500 dollars. We paid him 10,000 pesos because that’s what he charged us,” said Dominick with a chuckle, who was able to laugh because the co-founders gave him his proper market value later on in the form of PinoyMail.com shares, even if he didn’t initially realize the worth of his contributions.
The co-founders earmarked the funds leftover from the 1500 dollars for virtual hosting, which they would need more and more of as Filipinos flocked to PinoyMail.com. None of these new users knew that PinoyMail.com did not own their own servers in the Philippines, and Dominick believed some of them even assumed it would be a faster webmail provider since it was titularly local.
On one occasion, Dominick heard of another email service bragging about their lease time of 1 Mbps. All he could do was laugh and keep his mouth shut—Digital Nation was supplying 43 Mbps. When some users and peers did inquire about the location of PinoyMail.com’s servers, the founders deflected the question. “You don’t have to ask that. That’s a secret,” Dominick said, as though they had asked the right question at all, and the mystery was in its placement—perhaps he had hidden PinoyMail.com’s data center in the jungle surrounding Taal Volcano, like some mad evil genius.
The right question to ask, of course, would have been: Who owns PinoyMail.com’s servers? The PinoyMail.com co-founders were essentially using the cloud before it was the cloud, and they did not wish to surrender its competitive advantages to anyone who might try to gain ground on them.
One and two were affordability and reliability. “For 40 bucks a month to 120 bucks a month when we were busy, they kept everything online,” Dominick said, sharing that downtime was almost non-existent. “Those guys in the States, they really know their stuff when it comes to system administration.”
The third competitive advantage was scalability. Jopin compared virtual hosting to the sachet economy that has always thrived in emerging markets like the Philippines. “You buy tingi-tingi—what you can afford. You deal with a little now and then just stretch it,” she said. And when you needed more capacity, as demand arose, you simply rented more. With virtual hosting, scaling was a no brainer.
And just how big of a user base did they aspire to scale to? Their first target was 200,000 users, which may sound small in the context of the nine million subscribers Hotmail had at the time of its acquisition by Microsoft, but it was statistically significant for the Philippines. Few Filipinos could afford to regularly avail of the net at places like Campus Internet Cafe, and fewer still could justify the luxury of a connection at home.
In total, out of the 78 million Filipinos living in the country at the turn of the millennium, only two million had internet access.4 From this light, their user acquisition target was bold: They wanted 10% of all Filipinos in cyberspace to have a PinoyMail.com email address. To reach this lofty target, Dominick looked to none other than Hotmail for inspiration.
“Hotmail popularized itself by putting a network signature at the bottom of each email—Sent via Hotmail.com. Get your account now,” he said. “We shamelessly copied that, too.”
Now every PinoyMail.com user was also a brand ambassador, willing or not. Recipients of their emails were chided to get their free PinoyMail.com account now, and many invariably did. The network signature accelerated user growth for PinoyMail.com as well as its geographic reach. As local users emailed their relatives and friends abroad, which is pretty much every country you can think of—Filipinos are everywhere—they, too, signed up.
Even a Filipino in Iceland could appreciate the value of possessing a Pinoy email account, and the fact that it was free all but sealed the deal. Many films use an animation of a map to illustrate the spread of something—perhaps the contagion of a zombie outbreak—with countries reddening as it envelops their territory. The same animation could apply to PinoyMail.com, except it would sweep the world from the Philippines. PinoyMail.com was the country’s first viral product.
Even back then, Dominick was well-aware of the network Pinoy-
Mail.com was gaining traction in—their homepage announced it was for
“Filipinos and their friends in the Philippines and everywhere else in the world.”5 Those friends everywhere else in the world would make up a full 10% of PinoyMail.com’s users in time.
The ability to sign up online was indeed a decided advantage over EdsaMail, the one local webmail that followed in the wake of PinoyMail.com. Like AOL in its earliest days, EdsaMail relied on a carpet bombing strategy, mailing and distributing CDs with allotments of internet time across the Philippine archipelago. This solution was expensive and ultimately more effective at filling landfills than acquiring users.
In contrast, PinoyMail.com was growing so fast organically that the co-founders only celebrated every time another 10,000 users signed up for the service. Though Dominick had extensive contacts in media as a former journalist and these milestones were newsworthy (you could count the Filipino tech companies at the time on a hand, after all), he skipped publicity and shared the news in the internet relay chats where the company began. 20,000 users! 30,000! 40,000!
At this point, PinoyMail.com was still little more than a minimum viable product with a window shine. In a 1998 writeup, Shery Ma Belle Arrieta, the editor of Wired Philippines, praised the webmail for the ability to receive emails with “embeddable graphics” and “live text hyperlinks which let you just click on them in order to be able to go to the URL instead of typing the address in your browser.” What a snapshot of the era—she was excited about links!
In the last paragraph, Arrieta conceded that the “service is fairly new and the options are still currently limited,” noting that PinoyMail.com was still planning to add folders, filters, a junk mail blocker, and a spell checker. If PinoyMail.com could grow at its current rate without the features that were already staples at international webmails like Hotmail, the future was bright for the young upstart. As Arrieta implied with her last line—“It’s one hundred percent Filipino.”—the pull of Pinoy was strong.
While PinoyMail.com was steadily marching toward 200,000 users, the Campus Internet Cafe had turned the tide in the other direction. With the advent of Netopia Internet Cafe, Dominick’s days as a monopolist were over, and he found himself in a price war against a better capitalized competitor (Netopia would eventually sell to ePLDT in 2001). Amid diminishing revenues, Dominick shut down Campus Internet Cafe as dispassionately as he did its Cyber Kids predecessor.
Left without a base of operations for PinoyMail.com, Dominick and his co-founders rented a two story, two-bedroom apartment on the outskirts of Makati, near the city hall and about 100 meters from Pasig River. They could have lived closer to the city center—many of their peers who were making far less than either Jopin or Amor had nicer, more central condos—but by then, the co-founders were pumping all their disposable income into their servers.
PinoyMail.com had shifted from shared space to renting its own dedicated server from Digital Nation, which was when the bills got expensive. One of the highest was $800, a pretty penny for an unfunded Filipino startup in 1999. In the race to keep up with these payments, Dominick had maxed out three credit cards, ruining his credit score in the process. To this day, he’s blacklisted from owning his own credit card (he has a supplemental card courtesy of Amor).
This neighborhood wasn’t the best—the co-founders later learned that the street vendor they could hear through their window hawking balut at all hours of the night was actually pushing shabu. While the environment was a far cry from the beautiful, interior-designed co-working spaces or innovation hubs Filipino entrepreneurs now enjoy, Dominick was dismissive of the danger. “We were young and starting our lives,” he said.
Dominick the strongman
With the automatic registration process signing up new PinoyMail.com users day and night, Dominick could once again focus on product development. As monetization was a priority, especially in the wake of increasingly large bills from Digital Nation, his first addition to V1 of PinoyMail.com was an ad server.
Dominick’s ad server had none of the targeting algorithms that those today have. Assuming they signed up a line of daycare centers, for example, even Filipinos without children would see the banner ads for them. Likewise retirees getting promotions for a popular nightlife spot, or men receiving offers for feminine hygiene products.
“That server really just served the ads in a round-robin fashion, ”Dominick said. If a user refreshed the webmail enough times, he would see every ad in the company’s inventory, again inapropos to who he was or what his interests were. “I’m probably too stupid to figure out what Google figured out years later.”
The co-founders could overcome the ad server’s technical shortfalls with sheer numbers. With enough ads, and with enough users, there was bound to be some alignment—the right ad reaching the right user—the only question was how often, and whether it would be enough to convince advertisers to stay. If a broken clock was right at least two times a day, surely a clunky ad server could hit the mark more often than not, right?
But perhaps the co-founders were getting ahead of themselves. When Jopin pitched PinoyMail.com to companies in her network, none of them were really interested in advertising on their webmail at all. These companies did not have anything against digital advertising. In fact, Jopin was also a partner in an online tour magazine,Tours.ph, that had substantial deals with some of the biggest names in the space.
Philippine Airlines was paying Tours.ph 40,000 pesos every month for write-ups on their flights and destinations, while the Department of Tourism (DOT) was giving 50,000 pesos for content that promoted landmarks and attractions across the country.
When Jopin approached these very two organizations about PinoyMail.com, however, she was rebuffed. She felt they did not know what to make of the webmail, unlike Tours.ph, which as a tourism magazine fit snugly into their existing views. “They were only interested in a digital version of what they already know, in their traditional world,” Jopin explained.
In this cold climate, the co-founders got anxious. Like the shabu dealer pushing outside their two-bedroom apartment, they had to resort to giving away their product as part of a trial, hoping it would lure people in for the long haul.
The results of these PinoyMail.com trials were mixed at best. Dominick’s ad server tracked click-through rates for each ad, and he furnished corresponding reports based on them to their prospective clients. Even if the executives made a show of reading it with interest, Dominick could tell what they really thought. “Oh, these guys are probably just making it up,” he said.
Dominick felt the issue was cultural. “We didn’t have a trustworthy environment back then. I knew that I was trustworthy, but I could not prove that I was trustworthy,” he said.
Unlike the United States, which had the Interactive Advertising Bureau, the Philippines had no third-party validator. Without a watchdog to tell these companies otherwise, there were certain Dominick was augmenting the click-through rate, just as surely as a cab driver would manipulate the meter. He was—in their eyes—guilty until proven innocent.
When their struggles with advertisers came to a head, the co-founders went out as a group for one of the first times since embarking on PinoyMail.com to let off some steam. Later that night they returned home to find the front door ajar. The knob had been brute-forced open.
After listening for a moment in the safety of the corridor—it did not sound as though the intruders were still inside—they ventured in, one after the other, to survey the damage. The local server, which sat prominently on the living room floor, was curiously untouched. If the thieves had tried to cart the server off and scrap it for its parts, the effect on PinoyMail.com would have been disastrous.
“I would lose all of the development that I did, all our intellectual property,” Dominick said. “We didn’t have a disaster recovery site.”
Of the two bedrooms, Jopin was hit the hardest. The thieves stole most of her jewelry, but she tried to remain upbeat. “My room was quite organized, so the joke was: Dapat magulo yung gamit ko, so they won’t know what to get next time.”
Despite their attempts to make light of the situation, the break-in reminded them of the alternate life they could be living, safely ensconced in the city center, were they not pouring every available peso into leasing more and more server space. The robbery, then, was a blessing in disguise. It strengthened their determination to see all their sacrifice payoff.
A revitalized Jopin was able to convince some of the country’s largest brands, including the telcos, to advertise with PinoyMail.com, with one catch. Most companies would not pay in cash. They would do an x-deal—in exchange for providing the banner ads on PinoyMail.com, the founders would get merchandise, as though they were lifestyle bloggers reviewing the latest trends in beauty care. From Garters, Briefs, and Shirts, for example, the co-founders were each given enough underwear to last through several nuclear winters.
While the underwear was comfortable, Dominick could not pay for server space in increments of panties and briefs. PinoyMail.com needed cold, hard cash, and if their partners would not give it to them, they would find other ways to leverage these deals.
At the time, the endorser of Garters, Briefs, and Shirts was teen heartthrob Jericho Rosales, and Dominick incorporated his likeness on PinoyMail.com in such a way that it appeared he was also promoting their brand. “It made us look like we were mainstream,” said Dominick, who must have saved hundreds of thousands, if not millions of pesos in endorser fees through the liberal use of Jericho’s image.
Such victories, however, were few and far between. Dominick and Jopin could do nothing to convince companies that advertising on PinoyMail.com was worth actual money. He doubted they would even be interested if PinoyMail.com obtained their target of 200,000 users, a full 10% of all Filipinos online. For comparison, an equivalent slice of internet-connected Filipinos in 2017 would be about 5.4 million, a number that advertisers would drool over.
In more ways than one, PinoyMail.com was ahead of its time. While the first mover advantage enabled the webmail to acquire users and fast, they had to contend with companies who did not know what to make of this digital subscriber base. Most critically, PinoyMail.com missed the advent of Google AdWords, which was released the year after their acquisition on October 23, 2000.
“AdWords was very easy to do. You just register as publisher and they pay out based on click-through. A lot of people made a lot of money, even on their own little web blog,” Dominick said. As the main webmail for close to 100,000 Filipinos by then, PinoyMail.com could have made significant cash with AdWords.
Yet even if advertisers would pay in nothing more than underwear, Dominick still believed in the future of his product, as illustrated by an incident in the summer of 1999. He had been calmly working downstairs in the living room of their two-story apartment, the rain pit-patting against the windows. Then, in a finger snap, tragedy struck.
“All of a sudden water began to flow into the living room very fast,” Dominick said, his speaking rate quickening, as though the floodwaters from the Pasig River were surrounding him once again at that very moment, “and I dropped what I was doing and looked at the server.”
As the local server contained all of Dominick’s code for PinoyMail.com, water damage would effectively hit the reset button on all product developments to date—the webmail interface, the automatic registration process, the ad server.
“The server was this tall,” Dominick said, indicating it was about waist height, “and it was very heavy, but I ran over to it and lifted it without thinking.”
Bear hugging the server as though he were a strongman in a new kind of competition and propping it up every few steps with a boost from his knee, Dominick staggered across the living room, his bare feet splashing in and out of the floodwater. At the foot of the stairs, Dominick took a deep breath, before lurching up the first step, repeating the process for the second and the one after.
“He managed to lift the server up to the landing between the first story and the second floor, just high enough to escape the water,” Jopin said. “That’s adrenaline.”
That Dominick’s car sat forgotten and flooded outside, as Dominick panted beside the rescued server, was as poetic as it could get: Even during their worst hours, he clung to a faith that PinoyMail.com would be the one to take him places.
Though Dominick and Jopin could not monetize PinoyMail.com, the market did not seem to care. For a period of six months, the co-founders were approached almost on a daily basis by prospective investors or acquirers. They had only the first wave of dot-coms in Silicon Valley to thank for the interest.
“Dot-coms were the new thing,” Dominick said. “We benefitted from that hype—the idea that anybody who didn’t get into the internet would die.”
One of the first to court the PinoyMail.com founders were Hong Kongese businessmen who planned to list them on the Stock Exchange of Hong Kong Limited (SEHK), or so they said.
“There was really no way to check. It’s not like today where you tell me you’re blank from blank blank venture capital, and I can just search you online and know your reputation right then and there,” Dominick said. “In 1999, it was like ‘Who the hell are these guys?’ We didn’t know if they would be buying us with drug money, or what.”
The co-founders had only gut feel to go on, and to them, the businessmen at least looked the part. “They appeared legitimate, like people who could really list us. We were young and we were scared, but we thought this was it. This was going to be our moment,” he said.
Amor put the breaks on the deal with two words: due diligence. And not just due diligence in terms of vetting the Hong Kong businessmen and their offer, but in duly and diligently casting a wide net for everyone who might be interested in acquiring PinoyMail.com.
For their next meeting, the co-founders could at least relax that their would-be acquirers were not drug traffickers. As a journalist at The Manila Times, Dominick was acquainted with Lisa Gokongwei-Cheng, who owned the newspaper along with Summit Media, and she invited him to present PinoyMail.com.
After doing so, Lisa’s brother, Lance, who now serves as president and chief operating officer of JG Summit Holdings, the group behind Robinsons Land, Robinsons Bank, and Cebu Pacific, offered his take. He said that PinoyMail.com did not have the kind of toll collection model that he wanted, where every user paid immediately, like a tollbooth.
“You’re banking on the fact that people will want to advertise. There’s too much chance involved,” Dominick said, recalling Lance’s assessment, which he did not necessarily disagree with, given their struggles with advertisers. “I like your idea, and you’re probably going to have a great future, but this is not for me.”
Dominick and Jopin soon spoke with the Ayalas, Lopezes, and other family business dynasties, their schedule resembling the list of wealthiest Filipinos from Forbes Magazine. Though Dominick and Jopin were excited about these developments, PinoyMail.com was not moving fast enough for one person: Vernier.
On a day the co-founders would not forget, Vernier told them that he wanted out. He was exhausted from all the development work he put into PinoyMail.com alongside Dominick, and he felt the corresponding return, either via revenue or acquisition, was a long time coming.
Jopin called Vernier’s quitting a dark day, and the pall it cast was wide. Given how much they trusted Vernier, it was only natural for the remaining four to now have their own doubts: Did he make the right decision? Would PinoyMail.com never see traction with advertisers? Would none of these acquisition talks ever pan out?
The shares Vernier forfeited were redistributed oddly enough to his girlfriend, Sherry, who had always helped the group for free, dating back to when they still had to manually activate PinoyMail. com accounts. From then onward, Sherry became their fifth Beatle.
The co-founders had no choice but to carry on. One of the next meetings they took was with Rey Vea, then the dean at UP Diliman’s college of engineering and now the CEO and president of the Mapua Institute of Technology, who was acting as an intermediary for his brother, Orlando “Doy” Vea, the founder of Smart Communications.
If the co-founders had come to the dinner meeting expecting to be grilled on their business model, their user acquisition strategy, and their plans for monetization, as all of their previous would-be acquirers did, they got none of that from Rey.
“There were really no formal questions. He made us feel like he was a familiar uncle,” said Dominick, who praised Rey’s finesse.
If Rey felt familiar, it’s because he was. Like the cofounders, Rey had been an activist, only he had taken it a step further. “During the Marcos era, he went to the mountains and became a proper military guerilla for the New People’s Army,” Dominick said, arranging his hands around an invisible assault rifle. “We weren’t guerillas. We just went to the streets and created trouble.”
Dominick had a positive feeling from the friendly meeting with Rey. Sensing a deal was imminent, the co-founders returned to Vernier. “We asked him nicely,” Jopin said. “‘Do you want to come back? We think we’re going to be bought soon.’ He just said, ‘I’m done.’—He was really burned out.”
According to Dominick, Rey must have given good feedback to his brother because they were turned over to Doy to continue the acquisition process. Dominick and Doy had even more in common. Their resumes were a mirror image of one another’s. They attended the same elementary school and high school in UP Diliman, and of course, became iskolar ng bayan.
Doy’s offer was also appealing. “At the time, if someone is interested in buying you, you would lose the entire thing. One of the attractions with Doy was that he let would us retain something,” Jopin said. The proposal was for a majority acquisition of PinoyMail.com, with the founders keeping a 10% stake and remaining at its helm as its leaders.
The prospect was intriguing, especially in light of what his plans were. “He was going to flip PinoyMail.com to another acquirer later on, and we would get 10% of that sale,” Jopin said. Since Doy was a natural salesman, she felt PinoyMail.com’s next buyer would be an internationally renowned company. As with Hotmail, maybe it could even be Microsoft. Or as with Rocketmail, it could be Yahoo!
Only one thing was certain. “It would be prestigious,” Jopin said, speaking more for her country than for herself: PinoyMail.com could be the first Philippine dot-com sold to an American tech giant.
Sold on this vision, the co-founders agreed to the deal. They were given 100 million pesos in cash for 90% of their equity in PinoyMail.com, which by then had 135,000 users. Doy would also fund PinoyMail.com for the next few years, including the salaries Dominick and Jopin would receive as executives.
In the race to get to 1 million users, Dominick and Jopin would crisscross the Philippines, promoting PinoyMail.com in ways they never could when it was only their own, such as by distributing posters to internet cafes and sponsoring concerts. They would learn as much from their missteps as their successes.
Some they saw coming, as in the migration of their servers from abroad to the Philippines (this would lead to more downtime); others are only clear in hindsight, as in the case of Chikka having a better solution in Chikka Text Messenger than with their own Web to Text. Some they smartly avoided. When someone floated the idea of giving a PinoyMail.com address to every prisoner in the National Bilibid Prison to increase their user base, Jopin shot it down.
PinoyMail.com peaked at 300,000 users, before fizzling out as Gmail rose to prominence. This led Jopin to quit in 2001 and Dominick in 2003. Their most important lesson may have come in the immediate aftermath of the acquisition. As the first tech startup to sell in the Philippines, the news of PinoyMail.com’s exit made waves in the business headlines, leaving Dominick—and his co-founders—left to deal with the newfound trappings of success. “All of a sudden I had a lot of relatives,” Dominick said. “They would be like, ‘Hey cousin!’”
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