Chikka: The Garage Dotcom days

Chikka (http://www.chikka.com) founder Dennis Mendiola (http://www.mendiola.org) playfully recalls the beginnings of Chikka.com.

It was indeed at his garage in San Rafael, CA, he confirms. San Rafael Street in Capitolyo, that is.

Capitolyo in Pasig City is that rolling residential and industrial district that went up right outside the Capitol of Rizal, before the encroachment of Greater Manila. It is a walking distance from the Ortigas CBD and a ten-minute drive to the Makati financial district.

"We would have actually set up in my garage also, if only to romanticize our project the more. But this was Metro Manila, on a particularly oppressive summer day in 2000, as my co-founders Alexandra Roxas and San Francisco-based Chito Bustamante noted. And so I relented: okay, okay, okay, O-kay, my living room it is," Mendiola recounts.

Mendiola was parodying the trend at Silicon Valley, center of the Dotcom Bubble that emerged in the mid-1990s, where real-estate prices would reach unprecedented levels as engineers and venture capitalists converged to push the proverbial technology envelope around innovations in software and Internet services.

But it was no accident that Chikka was being founded at the height of the dotcom boom. And by no means was the project a parody of anyone at The Valley. Mendiola was a VC himself, whose career as a management consultant and investment banker spans service in such companies as McKinsey, Morgan Stanley and Bankers Trust. One of his twin degrees from the University of Pennsylvania is in Electrical Engineering. He also tucks a Harvard MBA under his belt.

Mendiola was already partnered with Roxas running e-Regalo.com, a gift site. Bustamante meanwhile, was one of those actual Silicon Valley engineers often mentioned in any early history of Chikka.

Its version of Code Rush powered just the same by caffeine and pizza, Chikka was as serious and ambitious as any tech venture could get. Its immediate objective was to beat world players in the race to build an instant messenger that would integrate with the functions of a mobile handset.

A parallel revolution was in fact happening in the Philippines – with text messaging. The Culture was so well developed that by January 2001, the two major telcos who were promoting it, Globe and Smart, would have no grander showcase than a second People Power revolt that brought down a Philippine President, mobilized in no small way, via SMS. This was the social milieu wherein Mendiola’s Chikka was being brought to this world.

Months later in April 2001, Chikka Text Messenger went on beta release with its first network operator partner, the Philippines’ Smart Communications. The growing operations had by then, moved completely to the Philippine Stock Exchange Centre building.

Un-Dotcom

Meanwhile across the Pacific, Silicon Valley was seeing a bloodbath. The Bubble had collapsed after the dramatic decline of the NASDAQ beginning April 2000.

Mendiola relates: "Investors became so cynical we actually dropped the "dotcom" in our name. So much for the fashion, we said, from now on we were simply Chikka."

And yet Chikka’s business model displayed such resiliency. The community would indeed grow virally, and with it a steady stream of revenues, courtesy of brisk PC and mobile messaging.

Two of the pitfalls of dotcoms worldwide were: one, expensive marketing seeing some of its most ostentatious displays in Super Bowl exposures; two, a revenue model fixated on ‘eyeballs.’ Venture Capital thus went down the drain.

Chikka on the other hand found a sustainable revenue model -- in the mobile use of its service, with subscribers accustomed to paying for a communications utility.

Chikka’s insistence on the inter-operability of its services has been an important factor. They marched into town at a time the ethos among applications providers was to align with one mobile operator, exclusively.

"The belief was that this assured successful business," said Mendiola.

When Chikka Text Messenger subsequently connected to subscribers of Globe Telecom, it was met with cheers by the whole community.

As for competitors, "they would brand us heretics," according to Mendiola.

Thus enabled Chikka to survive where many didn’t have the foresight. Over 40 million have since registered to use the service. In the first half of 2008, it signed up 5.25 million new members to the Chikka Text Messenger community alone.

Thus enabled Chikka to spur a whole mobile applications development industry around Philippine telcos, at first. Today, its mobile messaging innovations are in popular use in over ten countries including the US, Japan, India, UK, Spain, Thailand, Indonesia, Hongkong and Singapore and as far as Latin America in markets as unique as Peru.

Chikka also holds one of the most formidable portfolio of patents around its messaging solutions. According to Mendiola, the company invests in patents whenever resultant technologies are deemed innovations and whenever their applications posed huge commercial potential.

Internet Renaissance

As Chikka persists, connecting more and more communities worldwide, so has The Valley been resurgent. And how.

"It’s a Google world. Yahoo is Yahoo. The web 2.0, social networking, and user-generated content (UGC) movements are empowering ordinary folk in a more profound way than we think," according Mendiola.

Chikka’s chief imagination officer believes that convergent web and mobile properties and utilities represent the new and limitless frontier. According to Mendiola, Chikka itself is the first commercially successful integration of Internet and mobile utilities.

Of late, visitors to http://www.chikka.com have been greeted by an "All-new Chikka," web 2.0-powered, featuring a Chikka Messenger that is compatible with other major instant messengers.

"Think Meebo with Chikka Text. You get the drift," offers Mendiola.

Back to the Future

When Chikka was but a gleam in Mendiola’s eyes, Internet penetration in the Philippines was a measly 1%. Precisely, Chikka sought to make Filipinos, cellphone in hand, become part of an instant messaging community anyway. They were instantly embraced by the on line community.

Today, Internet penetration in the country stands at more than 20%, at par with a majority of Asian countries, and simply growing whereas mobile, it appears for now, has slowed down.

Mendiola was a high school student at the Ateneo in the Eighties, when Time Magazine’s Man of the Year was the PC.

"Many of us had not even seen one (PC)," says Mendiola, "Me, I had a Citizen’s Band Radio for a gadget, and improvised antennas to connect me to folks out there."

Some two decades ago, that’s 17-Male-Capitolyo, for you.

Post Script

In the tradition shall we say of many storied dotcoms, Mendiola recently handed over CEO duties to co-founder and COO, Chito Bustamante (http://philippineinternetreview.blogspot.com/2008/09/chito-bustamante-engineer-takes-charge.html). Dennis is currently focused on product development and on realizing shareholder value (http://www.influentialblogger.net/2008/09/dennis-mendiola-imagination-knows-no.html) for Chikka.