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Ztek,
Inc: Creating Value
By Michael Alan Hamlin
August 29, 2002
One of the goals of Filipino venture
capitalists like Paco Sandejas, a Stanford PhD who came back to
the Philippines to do his part by setting up BGN Ventures and funding
startups, is to establish centers of excellence that will develop
original value-added research that can be turned into practical,
and appreciated, products and services. It's common to associate
IT research with sexy things like software and SMS services. But
Sandejas wants the Philippines to be a hardware powerhouse as well,
designing chips and boxes that do new things. He calls this "pure"
research.
It will take awhile to build the
centers of excellence that should have been set up in the 60s when
Taiwan and South Korea were building theirs. The Philippines was
so far ahead of everyone else in Asia it didn't think anyone could
catch up back then. Of course, we know differently now. But fortunately,
Filipinos are forging ahead on their own. Ten of them, in fact,
came by my office just this afternoon. And they do both hardware
and software.
The company these ten entrepreneurs
founded, Ztek, Inc., grew out of a thesis written as a requirement
to graduate from Don Bosco Technical College. Their average age
is 23, and despite the dot-bomb, over the past two years they've
managed to find funding for the company and develop and manufacture
its first product, which they've just released.
Ztek was formed to design what its
president, Gauvin Repuspolo, calls telematics solutions - a sexier
term than telephony - that provide man-machine, machine-machine,
and machine-man communications. It ultimately intends to make money
not by manufacturing the communication devices it designs, but by
licensing the technology and the solutions it develops to third
parties.
Originally, funding was provided
by Ayala Corporation, and the company beat out around 500 other
technopreneurial organizations for the right to be incubated, or
nurtured into a viable business by the conglomerate. The product
Ztek developed is called Sentinel i. According to Repuspolo, Sentinel
i is a telematics device installed inside a car that allows owners
to query data directly from the car, control certain functions of
the car, and probably most important, originate distress calls for
drivers during emergencies. The device was designed to meet four
objectives: aid in securing passenger safety, aid in vehicle security,
provide navigational data and assistance, and provide customized,
"trendy" functionalities.
Leveraging GSM technology, the device
enables a driver to call his car and command it to do certain things.
Sentinel i includes a pre-paid GSM SIM card, that allows a caller
to access the control functions built into the device. The device
recognizes the phone that is calling it, so mischievous third-parties
can't access the automobile or the functions that Sentinel i provides.
So perhaps for the first time, a car can be said to know its driver,
or at least its driver's phone.
Basic functions are straightforward,
such as locking and unlocking the car, and confirming that the system
is on and armed. One basic feature that does come in particularly
handy for people who forget where they parked their car - which
is just about anybody over 50 - is a command to tell the car to
honk and flash its lights. Typical alarm systems don't have the
range to do this across a crowded parking lot. Sentinel i does because
it utilizes the GSM network.
The device is commanded by keying
in a coded text message on the driver's phone and forwarding it
to the car. Keying in "Q" for query and "ST"
for status tells the car to answer back to confirm that the device
is armed, for instance.
Well, that is cute. But the advanced
security functions are more than that. For example, if the car is
broken into, it will phone its driver that there has been an "illegal
entry." The car's location can then be determined using the
GSM network, making it relatively easy for police to intercept the
thieves. But the system goes a step further to make it even easier
to rescue a stolen vehicle. The driver can send a command for Sentinel
i to turn the car off, forcing the thieves to abandon the vehicle.
To make sure they do, the system
has "soft" and "hard" stall modes. In "soft"
mode, a signal can later be sent restoring systems and allowing
the car to be restarted. This is useful, I would imagine, for parents
who want to kill any prospect of a joy ride by unlicensed teenagers.
But if a determined thief somehow hacks into the system and restarts
the car, "hard" stall will disable the car completely.
Only Ztek's technicians can get it started again.
The system also provides security
against kidnappers who take the car and the driver. A small hidden
button - like those supposed to trigger bank alarm systems - can
be pushed by the driver that tells Sentinel i to call a pre-arranged
number with a message indicating the name of the driver and his
need for help. Authorities can then be alerted, and the car pinpointed
and eventually stalled when police intercept it.
The beauty of the system is that it relies only on the phone network,
not on a third-party security outfit. It's cheaper, it's fast, and
it's reliable.
And it's original Filipino technology.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). He can be reached
at mahamlin@teamasia.com.ph.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
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