Russ Malangen is a renowned investor and economic management development consultant based in the Philippines. He is the lead strategist and investment director at LAB.PH, a firm focused on utilizing a proprietary triple bottom line approach that balances the financial, ecological and social impact of various activities within a community. This methodology, better known as Community OS, was developed by Dr. Sixto K. Roxas, a former Chief Economist of the Philippines.
Russ has been instrumental in driving sustainable growth and development across the country, producing tens of thousands of jobs and establishing industries in previously unexplored regions. In this interview, we’ll explore his thoughts on venture capital investments, his work with LAB.PH, and his commitment to making a real impact in underserved communities.
Can you tell us a bit about your background and how you got involved in the technology industry?
Russ: I’ve always been interested in technology and innovation. From an early age, I would dabble in programming, which eventually led to my passion for hardware based engineering. I started out with doing hobby projects at home, and later on I attempted to pursue a career in this field via the traditional route, however I found that the educational curriculum fell heavily short of my expectations.
This forced me to turn my attention to using my existing skill set to become an entrepreneur, and even with no connections, no wealth, and no influence to rely on prior to embarking on this journey, I never looked back since. Several years down the line, I was recruited to become one of the program managers for the largest startup accelerator in the country, Launchgarage, which solidified my foundation and allowed me to gain multiple levels of oversight on how companies operate, raise funds, fail, and succeed.
In 2019, I was trained under the Roxas-Kalaw Foundation, and was later appointed as the Chief Strategist of its technology consulting arm, LAB.PH. I call this the point where I would reach the current peak of maturity in my professional career, as I went deeper than I ever have in the finance and development sector, gaining a much more nuanced understanding of what it really took to create meaningful impact. It was here where I learned that technology would not necessarily proliferate because of socio-economic factors rather than just the quality of companies and lack of quality deal flow in the country, which many still overlook.
What is your investment philosophy?
Russ: I think there’s a running misconception that returns are all that matter. To the neophytes in this space, this may be their approach as most LP’s mandate them to utilize specific strategies in order to maximize profit in the soonest time possible. I’ve been fortunate to be given a ton of autonomy to make decisions. Under the tutelage of Dr. Roxas’ group, comprising some of the greatest minds in the country, I’ve been taught that there are avenues where you can create a winning situation for all stakeholders without sacrificing profitability.
I learned that creating an ecosystem with positive symbiosis based on real data produced by our framework over a simple portfolio is what has allowed me to attain my desired targets, speaking from the numbers point of view. At the end of the day, fundraising is just one component of my work at the Lab. I believe that everyone deserves access to economic opportunities and that by creating more jobs, we can help drive sustainable development.
With your talent and influence, why are you focused on the Philippines market rather than bigger ones in the west?
Russ: This country is riddled with problems, and many entities, including those I’ve previously worked with, have such a narrow understanding of why many things don’t and can’t work. It’s taken years of mastery over various domains to get to the point where it only takes a lick of a finger to accurately point where the direction of the wind blows.
I’m also doing this in order to build my own legacy and to live up to those of my mentors and advisors from the LAB.PH group. I’ve always been told that working in the Philippines is like being a big fish in a small pond, but what they don’t realize is that this country’s market is a vast and endless ocean that only few have really dared to traverse. I’m dead set on being one the country’s main drivers of its development, just as my predecessors have done to set the table for future generations.
In less developed countries, the lack of infrastructure is a recurring theme. Can the same be said about the Philippines?
Russ: Yes, that’s a significant challenge that we face in the Philippines. The lack of infrastructure outside of Metro Manila can make it challenging for startups and technology companies to reach underserved communities and create new economic opportunities.
We’re addressing that issue in a few ways. First, we’re working to develop new technologies that can help bridge the gap in connectivity. In this day and age, not having access to the internet means not having access to mobile, and not having access to that means no access to commerce, and further diving into it, this means that things like identity and credit are sorely out of reach especially in poorer provinces.
Second, we’re partnering with local communities to identify and develop new economic opportunities that are tailored to their unique needs and resources. By working closely with these communities, we can help create more sustainable and locally-driven economic growth.
And finally, we’re advocating for more investment in infrastructure outside of Metro Manila. We believe that by investing in things like roads, bridges, and high-speed internet, we can unlock tremendous economic potential in underserved areas of the country.
What do you see as your main competitive edge as an investor in the Philippines?
Russ: I have immunity to the ‘kool-aid’, as I would put it. Many people have such a narrow view of things and are quick to dismiss certain factors simply because they aren’t as exposed nor as knowledgeable. For example, many investors will focus on market variables and completely overlook how the deeper-rooted technology side of things could come crumbling as an entity scales, and how fast markets can change because of the turbulent nature of the Philippines. Not many are good at seeing these things because they have never written a single piece of code or developed a product from scratch in their lives, much less worked directly with actual consumer bases, relying solely on the skill of entrepreneurs to make them their prized returns.
Because I have practical experience in running and scaling businesses as an entrepreneur, a highly sophisticated understanding of the macro and micro economic variables that play into the Philippine market as an economist, and a deep-rooted passion for understanding intricacies as an engineer, I’m undoubtedly one of the best and most well-rounded individuals in my space.
I have a deep understanding of the Filipino market and the unique challenges and opportunities that it presents. This allows me to identify promising companies that have the potential to create real value felt by generations to come, beyond just financial returns.
Looking to the future, what are your goals for LAB.PH?
Russ: I’m focused on partnering with more communities and sensible government leaders across the country in order to deploy resources that can help stimulate their local communities, with the end goal creating a set of interlinked industries that will create balance in the supply and demand chain.
As our mission is to serve the Filipino people in the truest sense, identifying and investing in companies that are aligned with my values and have the potential to create real impact in their communities is my priority. I’m not exclusively looking into technology-based companies to drive sustainability, however, as I believe that combining these with more traditional entities with proven models to fill the demand are the investments that will have the greatest long-term impact in a highly complex environment like the Philippines.
Any final thoughts or advice for aspiring investors or entrepreneurs in the country?
Russ: Question everything, be curious, and don’t be afraid to ask questions. I’ve made my way to this point by simply being bold enough to defy expectations. In order to be great, you have to be a thousand steps ahead of everyone else. In the Philippines, many have surrendered themselves to mediocrity at an early age, and in later ages, many tend to categorize themselves as being the best just because they’re a little bit ahead of the curve. Whether or not I’m at the top of the pecking order now is of no importance to me as this can change overnight. I’m constantly learning new things and exploring every single angle to gain a holistic overview of particular subjects, trying to become the best version of myself each and every day.
Another advantage you have here is that if you aren’t putting yourself in certain buckets or categories, other people are. They may form an opinion of you based on how they know you, but may not necessarily understand how big of a gap there is between yourself and them. Pay no heed to these and instead focus on widening that gap, and you will definitely see the difference.
Mastery of skills, mastery of people, and furthermore, breaking past your own limitations is what makes you great. If you can live by these words and exemplify results, then you need to get in touch with me because I only work with people that have the same mindset.