Pakistan’s Instant Payment System What I think Ive understood about Raast (so far)|Developing story.

TL;DR: All the items below are based on publicly available info that you are too lazy to Google, so if your understanding is different than mine, leave a comment.

On Jan 11th I saw like many others a news paper announcement for the long awaited MPG(Micro Payment Gateway) project, launched as Raast + The standard govt fare of online PR etc.

It had all the right things in this advert, but not a whole lot of context for the otherwise curious. The rest of the PR also had somewhat vague timelines, a hurried launch perhaps or a final push (also read as IMF/FATF Pressure)

But the need, context, impact and bottom line were fully evident along with the hard work of the partners and the regulator. These things aren’t easy to stand up especially in markets like ours where almost every one is disincentivized to not get any thing into the documented economy or where you are able to add traceability. There will always be some one who challenges the thinking the process the execution, we aren’t here to do any of that. But rather make sense of it all as a consumers, merchants + think through the future role of banks/aggregators and existing payment systems.

Interesting choice of name. Commonly interpreted as straight or in Urdu Seedha, Mustaqeem, Nishanay Par Baithnay Wala, Khara, Hamwar and Theek. Logical inclination to look at if the domains taken. Lo and behold it was registered on the 8th of Jan 2021 per PKNIC.

Raast.com not as much as its been registered since 2005. Unless some kind sole will donate it or they end buying it in the secondary market. Perhaps not as relevant but interesting no less.

I sent an email to the link on Raast.com, apparently for $3300 you can buy it.

I also saw a fantastic explainer thread from Khurram Zafar who is on the Board of Karandaaz, the not for profit that is front and center on this initiative.

Up-until now, what I for one understood, is that a lot of clarification/insights being provided to tell every one that its not just an other digital payment switch or similar to existing transfer mechanisms. Fair point, it is not, then what is it really?

I can fully understand why the big guys, Telcos who have spent billions getting us to this point will not take lightly to the usage of their pipes for “free” in conjunction with Raast esp since they have been used to a “fee” based model, the mechanics of their predatory pricing notwithstanding, but then nothing is built for free. They are commercial enterprises so there must be continued opportunity to make money with consensus and on the basis of “fair value”.

Similarly for 1Link and all the Banks that own it, what a silly way to be marginalised. Goes to show that had they done some transformative thinking in 2017/18, when the tendering etc from MPG was being rolled out, they would have not been sitting ducks in this process, had they even attended the stake holder meetings the SBP ran up until 2019 they would have seen the fault in their ways or perhaps contributed to partake. In dec 2017 1Link was doing an RFP For an OPEN API Platform.

One would assume they would have figured out what was coming. I’m shocked the Banks didn’t gear up to put forth an indigenous solution vs being told what to do now. No less its a +1 for the common man when this rolls out. The elephant in the room will be fees and interconnect, whilst the feature set of Raast make it fully interoperable, the questions that come to mind are many as to how it will actually happen? We will get to those in a minute.

So Whats 1Link then & how does it work?

The following diagram shows the overall architecture of 1LINK with co-networks. There is no direct interaction with Alternate Delivery Channels (ADCs) of member banks. Transactions are received from the Acquiring bank ATM Switch / Middleware to 1LINK switching platform. 1LINK supports all type of cards transaction along with EMV transactions on VISA, MasterCard, UPI and JCB.

Image from 1Links RFP Doc

Pakistani Telco Numbers & The case for digital transaction adoption/or not.

With say around 169M 3G/4G folks how is it that we have under 50M bank accounts? Some thing clearly doesn’t add up. Are the services being pitched correctly, is there a knowledge gap, access gap?

So heres my simplistic take on Raast, these are finally the rails on which all else will be built(for the future) as opposed to 1Link type push only services. For now the assumption is that either by regulation, coercion, friendship or legislation all the existing players in the eco system, meaning banks, fin techs, payment companies will have to connect to this going forward, only then can ubiquity and interoperability become real. Till then it’s any ones guess really. Time lines and availability of the stack and guidelines + pricing will make the difference between mass adoption and success or a theoretical exercise.

What are Digital Financial Services? (A simplistic view)

Digital Financial Services (DFS) include a broad range of financial services accessed and delivered through digital channels, including payments, credit, savings, remittances and insurance.
– Digital channels refers to the internet, mobile phones, ATMs, POS terminals etc.
– DFS concept includes mobile financial services (MFS).
■ MFS is the use of a mobile phone to access financial services and execute financial transactions.
– Includes both transactional services and non-transactional services
– MFS include M-Banking, M-payments, M-money.
■ M-Money is a mobile based service facilitating electronic transfers and other transactional and non transactional services using mobile networks
■ M-Banking is the use of a mobile phone to access banking services and execute financial transactions.
– Often used to refer only to customers with bank accounts.

What Problems exist in the DFS space in Pakistan today?

  1. Inadequate digital ecosystem and processes to drive digital payments adoption(also read lack of incentives and in-expensive access to drive change)
  2. Difficulty to integrate with existing financial and non-financial systems (laggard and myopic view of the payment/scheme operators, local and international both)
  3. High cost of digital transactions (not suitable when you want bottom of pyramid inclusion)
  4. End user experience, limiting convenience vs cash (consumers, merchants, etc.)
  5. No full sector wide interoperability (e.g. USSD-branchless banking)

Why Digital Financial Services?

■ Reach larger audience of customers untapped by the existing banking
infrastructure
■ Increases financial inclusion
■ Increase efficiency of delivery
■ Improve quality of service
■ Revenue growth
– Reaching new market segments
– Offering new products and services enabled by technology
■ Cost reduction to companies and customers
– Operational cost by reducing branch costs and manpower costs
– Reducing transactional costs by being accurate and context aware

So How does Raast Really work & What does it do?

Thats a loaded question with a loaded response. The first thing to understand about Raast is that it is built on some thing called the ISO 20022 Standard. This is key. This will keep on coming up so pay attention.

In the financial services industry where trust, interoperability and resilience are
key requirements, the quality of data exchanged between parties, closer and closer to real time, and between increasingly diverse stakeholders in the value chain, is of paramount importance. So to keep this quality up and running there had to be a standard to make sure every ones on the same page.

This is why financial services industry experts have developed ISO 20022, a global and open standard for information exchange, that is being adopted by a growing number of users in various domains: securities, payments, foreign exchange, cards and related services . . . notably for end-to-end straight through processing, components management or regulatory reporting. We are neither alone nor the first to adopt this but clearly in the right for doing so.

The ISO 20022 standard provides a methodology to describe business processes and a common business language, which can be rendered in different syntaxes enabling implementations for messaging and application programming interfaces (APIs). It is
supported by a central repository, which includes a data dictionary and a catalog of messages – and is accessible to all.

This is ground breaking stuff because it removes the need for the user to be “payment context aware” or like edge computing takes the processing to the cloud from the device. The onus or burden of responsibility to decipher inter scheme or inter payment method operability moves from the users domain to the systems (Raast’s) domain using the addressability feature. In short, from what I am seeing, between a combination of your phone number and your NIC there is little to nothing else you as a user need, to transact with any one irrespective of their bank or wallet of choice.

From a business point of view, the usage of this universal messaging standard, improves efficiencies in delivering products and services. In my mind ISO 20022 is essentially:

● “A single standardisation approach (methodology, process, repository) to be
used by all financial standards initiatives”
● An international standard for communication between financial institutions
● An Introduction of a dictionary of business terms used in financial communications, (catalogue of messages ) so that everyone uses the same vocabulary
ISO 20022 is a standard to develop standards
● A Super structure that has Three layers:
1) key business processes and concepts,
2) logical messages or message models,
3) syntax (XML)

Syntax and semantics, Why they are important?

To be able to eliminate the need for human intervention to interpret data, the financial industry needs message definitions – that is, agreements on how to organise the data they want to exchange in structured formats (syntax) and meaning (semantics). Based on such message definitions, Raast will exchange messages thus being completely different from existing payments system in the country.

If you are really inclined here is a snap shot I found of an example that helped me better understand the transaction/msg flow and what really is happening.

What can we hope to see when the above is executed?(SBP/Karandaaz view)

Image adapted from SBP Decks online, by Aun Zaidi

  1. Real time transfers: Instant availability of funds and near real time settlement of low value payments
  2. Sector wide interoperability and open governance: Connectivity across all licensed & other entities (Banks,MFBs, PSPs, relevant government entities) removing need for bi-lateral tie ups|NO MORE FFING MOUS & Mutual Admiration Clubs|
  3. Simple, account-agnostic payment forms: Alias-based (e.g. phone number) simple payments, standardised across the industry
  4. Drive new product introductions and innovation: New message standard, request to pay, sector wide bulk payments) supported by a dedicated testing environment
  5. Easy and cost effective participant on-boarding: API architecture allowing quick and efficient on-boarding mechanisms and integration requirements
  6. Low to no transaction cost for end-users: Cost recovery model, maximising benefit to end-users and participants
  7. Built in security and authentication: Robust end-user data verification and security


What does this translate to, for the ecosystem of players?

How does Raast/MPG solve for the above?

Image adapted from SBP Decks online, by Aun Zaidi

If all goes to Plan then what happens?

Image adapted from SBP Decks online, by Aun Zaidi

What could be some Initial Challenges particularly for Incumbent Banks?

  1. Ensure 24×7 real time processing in core banking (some can barely get their core banking to work internally)
  2. Ability to credit and debit within 5-15 seconds (Again, for banks used to doing day end processes, this will be akin to landing on the moon)
  3. Adjustment in reconciliation procedures (See above)
  4. Adjustments to business process (More mind set than process, but both will need a re-set)
  5. Figuring out pricing.

What could be some Initial Challenges particularly for Incumbent Wallets?

  1. Pricing
  2. Pricing
  3. Pricing
  4. Re configuration of settlement basis
  5. Re think on internet payment gateway and mobile top ups
  6. Re think on inward payment /settlement systems like items with Payoneer etc.

Where to next & by when?

Image adapted from SBP Decks + Published Interview of CDO Karandaaz, by Aun Zaidi

Step 1:
Every one must connect to Raast for Raast to be useful (Think regulation)

Step 2:
Raast Usage will be priced nominally, so what happens to the existing Players and use cases? (Think lots of resistance to change/to connect/to forgo fees/or let others use pre built wiring for new use-cases for free)

Step 3:
Will Raast deliver technically and on time?(The time lines are vague see image above)

Step 4:
Will the industry wait 1-2 years for all the underlying use cases and tech to opened up or will some one come in and do this better faster cheaper?

Step 5:
Will the regulator successfully be able to build an internal organic payment scheme on top of Raast for ecom-merchant-internet enablement use cases to work? What will the likes of Sadapay, Safepay, Nayapay, Foree do to pivot when Raast is up and running? And Visa + Mastercard. This is a sure fire way to stop FX settlement offshore for onshore services.

Net net, this is development in the right direction. I feel this has to be done in a consultative fashion and with all parties working towards solving for the citizenry whilst keeping healthy economic outcomes for self & others. Onwards and forwards, Karandaaz + The Gates Foundation + SBP + Policy makers all seem to have gotten the premise right, let’s just hope the economics makes sense and leads to adoption vs infighting.

Budgets.Ministries.Digital Pipe Dreams & Tweets that mean nothing. A look back at MOITT for 2020.

Let’s start with the fact that we have an entire telecom corporation that is responsible for providing ICT services to the government. Likely well intentioned in a different era, but what caught my attention was a tweet that was taking credit for video call that a kid with a laptop and a zoom connection could likely execute. This ladies and gentlemen is the output of tax rupees & well intentioned dreams.

This was not enough on its own. I then happened to visit The Ministry of Information Technology and Telecommunications (MoITTs) website. First things first, I wanted to see the projects of the ministry, as a citizen with interest in such matters. Not only is the site nearly non-accessible on a mobile device, none of the projects are hyperlinked to any details. Not to mention items 8-10. A publicly facing listing that lists “expension” vs “expansion”. The urban dictionary offers some help.

It defines expension as

A bitter sweet realisation that all we are likely doing tax payer money is expension as most of this makes no sense. I then came across a treasure trove i.e the various projects and their likely budgets.

The list is nothing short of impressive. I shall try to break down the familiar, the not so familiar, the absurd and the moonshots. The first item here is PKR 786M for “Certification of IT Professionals”. Thats about 4.9M$ if I didn’t mess up the conversions. What expertise does the ministry have to train people? Why not take the allocation and hand it over to those with a track record in the space. I am more interested in a break down of use of proceeds of how the allocated “spent” money was used, where it went, who was impacted and how many people did we add to the value chain as trained/certified professionals or that we will in the future if the money is not yet spent.

Further what Certifications were selected, what criteria etc? Then we have an item of PKR 338M or 2.1M$ on holding boot camps. If the bootcamps were any thing like the certifications the ministry has been touting on twitter with no detailed info. I am already mourning the loss of this public money.

Every thing is coming soon but not soon enough. But I digress, let’s go down the list and evaluate some other items of interest. Like the criteria for selection the purveyors of the bootcamp. Essentially no local player can participate if you are looking for a training business with revenues between 5m$ to 10m$. Is it to soon to ask which international partner of a local services firm this tender was drafted for and who is likely the net beneficiary, because it most certainly aren’t the youth or public of Pakistan who are listed as claimants of this.

Next we have the expansion plan for NICs. Yet an other government initiative that has failed to resonate with the people it’s targeted towards but created high paying jobs and lot of Photo of Ops fo KPK(in recent times), well because KPK needs our love and the ministers love to show the PM that he is worthy of this post to make sure KPK comes out on top. PKR 751M or 4.6M$ at large for NIC.. Crazy allocation/use of funds with no material output. Some glimpses of recent NIC twitter content ala KPK love.

Even the image doesn’t have a 33% engagement or participation rate of female founders

Next we have the National Freelance Training Program All over Pakistan, for 367M PKR or USD 2.28M$.

Project Monitoring and Digital Transformation Cell 146M PKR or roughly 1M$ PKR. Who the f* is monitoring projects for 1M$ some one should monitor and report where the money is going instead.

Technology Parks Development Project (TDP) at Islamabad (Phase-I) (EDCF
Loan Exim Bank Korea) this is the real nugget. 57M$ or 9.24BN PKR. God knows what going on here.

Blended Virtual Education 5.99BN PKR or 37M$. The questions one must ask who is being educated, where is this money being spent. These things don’t add up, we have a national deficit of education, talent etc.

My favourite, is Construction of SCO Education and Accommodation Complex for Employees Families at Rawalpindi (Phase-I). I mean, was there a doubt in any ones mind that the families need housing on tax payer money given the stellar performance every one has had. Shouldn’t public servants offspring go to the same public schools the rest of the awam must send their kids too? Why an education complex for SCO folks. MOITT is turning out to have a heart of gold. https://en.wikipedia.org/wiki/Special_Communications_Organization .

720 M PkR or 4.5M$ being spent to provide housing for an organisation that could very well just be privatised and the best operators could run it vs carrying legacy issues forward, like PIA and others. Strategic intent well understood of why we would have an SCO but it should be run for strategic interests of the nation vs building an employee complex in Pindi when the stated objective of the SCO is

“SCO is a public sector organization working under Ministry of Information Technology and Telecommunication (MoITT) of Government of Pakistan (GOP), established in 1976[3] to develop, operate and maintain telecom services in Azad Jammu & Kashmir and Gilgit Baltistan”

So one must assume that any one working in the SCO needs to be from Pindi? or does this reflect the current makeup of the organisation where the housing needs are localised to Pindi vs AJK & GB? The irony of it all is lost on the folks running the show.

770M Pkr for a data center which is 4.7M$ for the Establishment of SCO Data Center for Providing Cloud Based Services in AJ&K and GB. How about building one for Karachi first which drives the bulk of economic activity in Pakistan?

The list is beyond interesting. But I will select one last one and move along to other items related to MOITT. President Initiative of Cyber Efficient Parliament (Feasibility) April 6th 2020 is the date, capped at 10M Pkr or 62k USD this is funniest of the lot, given the context below. Pictures, Mutual admiration club and press conferences later. The allocation seems lower than what was spent on the publicity machinery by the President already in nov 2020. This is bizzaro land. We do a meeting to chair meetings on meetings about making meetings digital, about 20 public servants per the photo, in attendance.

It doesn’t end here, this was one small snippet of inefficiency, bureaucracy, lack of domain knowledge, a bloated ministry with no functional output, but better yet a minister who made a public statement on the Digital Pakistan Vision at the GSMA Thrive Asia Pacific on 3-5 November.

I have spent 6 minutes of my life so you don’t have to. to summarise what the Honourable minister had trouble reading from his prepared notes.

Minister reading prepared notes on the vision of Digital Pakistan yet not once defining it.

1.Pakistan is a country of over 200M People
2.Pakistan offers an open deregulated market with a supportive licensing regime fo biz
3.Due to internationally friendly business policies of govt of Pakistan we have foreign telcos operating in PK as a testament to our good work.
4.Govt is striving to improve citizens quality of life and economic well being by ensuring ICT services
5.170M Cell connections 80% teled density 85M Ppl accessing internet via mobile broad band
6.DFS led by telecom sector, Telecom impact = gdp impact during corona
7.45m Branchless banking agents = motivating 158b PKR per BISP disbursement by Digital financial system
8.56bn utility bill payment
9.750m Internet bill payment
10.17bn Mobile top up
11.Govt believes in mass adoption of  emerging digital tech to enable realising the vision of a true welfare state like Madina.
12.SDG goals = Telco is critical
13.Uplift of low income segment is key focus, 
14.We would like to invite GSMA/TELECOM industry for participating with the govt of Pakistan to realise the vision
15.As part of Digital Transformation the government is pursing a pronged program that encompasses
16.Policy intervention for harmonised regulatory environment 
17.Digital awareness
18.Skill development
19.Govt has recognised the significance the imp of digital tech
20.To unlock economic competitiveness, Heavy investment in underserved areas for digital tech/infra Resulted in equitable sharing of opportunities and resources, paving the way for conducive economic growth.
21. USF= Self praise on digital transformation and telecom service revolution and how Minister has involved him self to bridge the digital divide. Working on more spectrum and fix taxation issues. Planning 5g and increasing 4g penetration. Values GSMA contribution, signing of an MOU= is his commitment as digital leader. He for-sees more collaboration with GSMA, to come towards our common objective of  “Digital Pakistan” (5.03 IN VIDEO).
22.Importance of mobile sector is growing = vital to economy (Blah blah)
23.Policy reference without any connects items
24.Speaks about policy formation of spectrum auction as he says in APAC it has helped the economy.
25.Ecosystem needs to work towards solving common objective of digital Pakistan
26. Thank you note to GSMA= Saying “ I am thankful to GSMA to give opportunity to discuss Pakistan vision on such a great regional platform”

So the minister made 25+ Points . Not once does he define the vision, he starts by quoting stats, he talks about transaction volumes on DFS(digital financial services), He talks about BISP without explaining what it is, and he has fully encapsulated the PMs rhetoric about a welfare state. There is a time and place for every thing but these public servants have no idea on how to optimise for audience and messaging.

Also don’t discount him shaking his chair in the first few minutes of the presentation and reading from prepared notes and not looking up. What a “shit show” If there was an only fans for ministers embarrassing nations, this would be as profitable a venture as the budget allocations they have in MOITT. At 5 mins and 3 seconds he makes all but a passing reference. Lest I remind the ministry has been struggling to define “Digital Pakistan Vision” it self.

Lets take a deep breath and analyse this statement ” Ministry of IT and Telecom, under the #DigitalPakistan vision is actively working on mobile phone applications, web portals, e-commerce, e-government, online jobs, digital payments, establishment of IT parks & all other avenues to facilitate our citizens.”

So we have a ministry that is:

1) Developing Mobile phone applications(Stealth startups any one? or competing with the public sector?)
2) Web portals (god knows what for)
3) E-commerce (Ali baba we have MOITT baba coming soon)
4) Online Jobs (What we need is some one to develop a job redundancy platform for Govt)
5) Digital Payments (How so?)
6) Establishment of IT Parks (Are we importing wildlife for them too?)

This circle jerking rhetoric is to a point where some one needs to call this nonsense out. No one knows what any of this means(including folks in the ministry), it has zero impact on our combined digital health or well being, there is literally no vision, just a graphic designer some where deep in the ministry who outsources the content creation to a friendly ad agency that comes up with this consistent yet underwhelmingly mind numbing non sense.

We have these guys representing us at large; in media, in the public sphere and internationally. We are dependent and reliant on them for policy views, public engagement, growth, education and utilisation of tax payer money + aid. Some one should ask the honourable PM, “Do only commerce and finance ministries deserve attention what about the only sector that can truly be transformative at scale?” But PM is busy fighting political items. Who has time for these things?

As a tech professional and a citizen of the land, I would like to know if this our fate or is some one in government ready to listen for a change and truly find folks who are willing and able to lead the change vs babus who cant read a written statement correctly.

Truth is stranger than fiction, you cant make this shit up. The ministry and its budgets in the hands of these folks is a sad reality that we must demand answers for. Or be prepared to witness en-mass, what others in the profession have chosen to do, immigrate and forever hold their peace.

Hopefully there is a better plan of action than that.

Pakistan Inc. “Retiree Entrepreneurs, Saith-a-preneurs, Startups & Failure Dollars.”

What an amazing & resilient country. Even after decades of less than adequate governance, economic progress, security challenges and internal issues; if you ask the average Pakistani how they are doing, their initial response is “sab theek ho jaye ga inshallah/all will be well by grace of god” There is no other way to explain this response but a deep bond between man his creator and the belief that better days are coming. Or the absolute lack of education and access to understanding economic fall out.

In some ways it is this, that keeps us going because our rulers, law makers & security apparatus have not given us any thing to write home about. To understand how Pakistan Inc operates we must understand and evaluate how the top 1% of businesses function in this country & perhaps most developing countries.

Before we go down that path we must understand that the 1% are divided after 70 yrs of independence in two very distinct categories. Those who were Born-rich and those who Built-Rich but most of those who built wealth also had the Born-rich on their side. There is a slight nuance but not a lot because in the end the rich are the rich.

The narrative of wealth and achievement ignores the other side of the coin namely, that the opportunity to build wealth is not equally or broadly shared in society especially in ours. Those who are born-rich typically continue to fund those who will eventually be the Built-rich. The real heroes (far and few in between are) those who Built-rich without stealing, nepotism, politics, power, or being born-rich. But it is a vicious cycle. The children of Built-rich are Born-rich. That creates an all other kind of 2nd generation dystopia.

Part of that dystopia is that The born-rich have trouble relating with the built-rich. Ironically, it’s the built rich parent’s fault their kids are born rich. That has a deep rooted impact on how business , our economy and our political structures work.

Keeping this premise in mind the Built-Rich know how money works and can scale wealth compared to Born-rich. We are at a tipping point in our society that the 2nd/3rd generation that has inherited or underway to inheritance is not looking good from the eyes of the first generation. To manage for that, the system has been further broken down.

Let me share the make up of a “Rich-Family office” in Pakistan. I have seen, interacted and engaged with many. When the patriarch feels that the wealth created by them(who are in the category between born-rich and built-rich) is about to go die behind the family barn once they go to meet their maker, they do some thing incredible.

Like any parent they feel preservation of money = preservation of their offspring. So they go in a multi pronged multi faceted approach of recruiting what I fondly call the best “Retirees of the Country”

We are perhaps in very unique position in this country where post 60 yrs of age people begin some of the best corporate careers any one can dream of having. The price of admission is to have been retired a federal secretary, Judge, some one from the forces, police, ministers and the religious right. If you were average all your life but a product of the system fuelled by taxpayer subsidy your value goes up by 10x post retirement.

This is what startup dreams are made of. The real entrepreneurs and startups in this country are this retired lot. Can’t fault them for capitalising on this as they are the definition of capitalists, the folks hiring them are the real venture capitalists of our society.

What is happening here is the creation of a system that will continue to f*** us for generations to come. Because old money found old stall-warts and created a system that went from separating wealth from creating value vs extracting it (e.g. founding vs rent-seeking).

Any family office over 20m$ of wealth to preserve, has built its ‘Retiree Militia‘. The average day job entails coming to an executive suite perched in the head office of the company around 11 am with the company provided Mercedes + 1M PKR monthly retainer, with the job description to “assist” the kids “assist the ceos of the various businesses” ensuring they don’t fall out of favour with the ruling elite or the law. Using their profiles in the boards of their listed companies, some times with the status of Chairman. A good party trick no less on having cracked the system and giving further and extended momentum to cronyism. There is a reason why the systems or systemic changes in this country the average person desires, will never happen because the rich have built an insulation layer to make sure the rent-seeking behaviour continues past their life time.

Behind this shiny veneer of continuity is a sad admission. People who don’t trust their kids directly with an inheritance or to be self sufficient in running the businesses they created, or to go out in to their own and figure out their own shit, admit they failed to raise good stewards. So besides this retired militia the second best thing to handing over all of the families crown jewels and on Mother Dears insistence that “malik sbs kids are so involved with business” , “chowdhry sb decides to setup an investment fund for their offspring” you can replace malik/chowdhry, with a saith of any ilk, the execution remains the same.

This brings us to act 2. Newly minted Saith-a-preneurs (SAPs) with a fancier office than dads, backed by the Militia and knowing they can do no wrong, fuelled by daddy dollars launch in to Pakistan Inc to make their mark. One only has to be reasonably smart to not f**k this up.

The complexity with this structure is that SAPs/new money spends on trends old money spends on tradition. Creating a conflict because for all their fancy offices, daddy dear and his militia just don’t get startups and tech companies. They only get licenses, quotas, dividends, rent-seeking, tax-evasion and representative monopolies. Even the SAPs that have a good head on their shoulders dont get too far because of this overbearance. The real decisions go to daddy dear, this is a golden cage for the SAPs, with their moms and wives happy that chotu sarkar now has a day job and a line up at the mutual admiration club dinners + events, they have finally come of age. The reality couldn’t be farther from the truth.

We likely wont be able to create the Ambanis or Tatas of our world by doing these things. Only a select few families and rich large local conglomerates have their children fully entrenched, but most dont. Those who dont are actually also killing the real chance any startups have at success by making these “band camp boys” in-charge of VC $s that they didn’t earn to invest in startups and founders who have zero in common with them, but like their forefathers who were at the mercy of the saith’s shitty job for 20 yrs. now they are at the mercy of the same blood money to be invested in to their companies. The trigger of investment go-no-go remains with daddy dear and the retiree militia. Delaying the aspirational target of the founders and most cases, mis leading, mis representing because they dont have the ability to make real commitments without permission. This is creating a slew of hungry startups whose time, effort and energy is being wasted chasing the “house of X” for money or the “X Group”.

This is the circle of life we are faced with in Pakistan Inc. The good news is the inflow of foreign capital, but that capital also gravitates to the band camp boys because they take the incoming money to visit daddy’s industrial estates/parks/fertiliser/chemical/food processing/packaging businesses or bank and the incoming money also feel safe in the company of old money.

So if you are a no-body with some money in the tank, this is how you help break this circle of life by funding entrepreneurs in this country at a low low entry price sans daddy dollars. The concept is simple, you need to enable others to build either your idea, a shared idea or their idea, but with the catch that they deploy the MVP or business in under 60 days. It could be as simple as funding some ones inventory or as complex as a Monetization idea for m-commerce.

This concept is called “failure dollars” You need to be able to part with 5k USD for some one else to invest their time to do a pilot of a business idea/concept/company/product/tool . The thesis behind this 5k is, you can afford to loose it but what if you both win? If the idea is successful the person you funded gets to keep 80% of the idea/equity/reward, but if it fails you pick up 100% of the losses. Why would you do this? Because it’s late for you to retire as a federal secretary or be a judge or be a retired general. Also instead of bit**in and moaning this is a concrete way to steer outcomes for people who otherwise will never have an opportunity to take a bet on them selves because they always need a “job” to run their affairs, create the leverage in some ones life by doing this.

It builds trust. With guys/gals who have ability and the capacity to make time & build but no access to capital. It covers their prototype time and the assurance that the failure funding is yours, makes them work 10x harder. Victory is shared and they own it, you get a continuous residual piece and if you can scale this model, you become a cottage industry equivalent of an aarti without being predatory. We don’t need VCs and Angels we need folks with dry powder who can fund small experiments at scale and bring others to do the same. The only way out of the mess and nepotism we have created, is to create a few 1000 M$ revenue business that generate value vs extract value. It has to start some where and it can start from you. It’s time the Pakistani people and government realised that it’s the country’s ambitious young people who are building the future, not its retirees.

Rich men are more harmful than rich food. But then, who cares for the health, be it ours or the nation’s.

Dreaming in Technicolor

Technicolor: You can use technicolor to describe real or imagined scenes when you want to emphasize that they are very colorful, especially in an exaggerated way

To dream in technicolor one must have some thing worth dreaming about? Right? Given the not so rosy picture(s) down below, what must one do or can do, to be in a position to have big aspirations and even bigger dreams?

Assumed Salaries/Charge-outs By Profession in Pakistan in PKR


Hourly Salary Breakdown in PK – Based on market assumptions

This is a pretty telling sign of where things stand and where we are headed. Not all surgeons and doctors are made the same neither are all software developers, then why try to generalize their salaries in to an average. To give you a snap shot of what you need to do to break the chain of being stuck where you are and explore the options you think you don’t have.

Some thing we value dearly, we protect with 80 US c/h Security. Meaning our lives and our possessions and our loved ones. Yet to protect our selves from the law we are willing to enlist tier one lawyers who may cost around 26$/h. I know not the perfect co-relation on salaries but you get the disparity. Similarly, to increase health outcomes and chances of survival based on the access in say KLI, a person has to a surgeon, translates for the surgeon at $34/h. Again just accept the math as being a good starting position. Next look at what an a sub editor for digital publication makes for example vs a public servant who is starting off at BPS 17. 1$ vs 90 US Cents/h. The irony being that I sourced the numbers from an online publication.

Next we move to our fav category of Software Developers who if they free lance can increase their outcomes to 9$/h leading up to 25$/h whilst their local counterparts if they are lucky to find work will end up between 1$/h to 3$/h.

Given where the population dynamics stand, is it any surprise that our developers no longer want to work for local companies or peg their earnings to PKR? It’s not.

Now comes the exciting bit, given where the cost of labour stands from professional to semi skilled to not, if you don’t find your self between the 8-12$/h comp band and rising the better choice is entrepreneurship. Provided you were smart and have some savings or have a support structure around you that is within that band and can absorb the cost of your being unemployed till you launch. Thus a side hustle till it breaks even is the best way forward. If you were in this band or higher and still want to do it, it only increases your runway and you should go for it.

Next, use the above to judge, where you are likely headed and what that translates in to $ terms for your personal situation. If you are early career and have gotten near double digit growth but still not making the 8-12$/h benchmark then the story 10 yrs out is not any sexier. Rather than slaving away and being miserable its best to have tried and failed vs wishing you did.

An average Master’s degree program or any post-graduate program in Pakistan costs anywhere from 409,000 Pakistan Rupee(s) to 1,230,000 Pakistan Rupee(s) and lasts approximately two years. That is quite an investment in time and money.

You can’t really expect any salary increases during the study period, assuming you already have a job. This increasingly looks like a zero sum game given the lack of jobs and lack of quality education that nurtures graduates to step in to higher potential roles.

We continue to churn out sub-par candidates further the industry is not growing at any considerable pace any way. So where do these grads find work? Likely scenario is unemployment and the other one is being under employed, that is both ineffective for the employer and mental trauma for the employee. Net net, every one looses. So take this money and start some thing instead. Or learn a skill online that you can convert to $ based earn outs even if it is incremental gains. Also incremental gains from profitable businesses or skill based earn outs are outsized in comparison and value to raising cash for $ negative revenue startups with no bottom line.

Your options are to invest in your self. Easier said than done. We have no real executive business coaches or startup coaches that you can go to enhance your outcomes just like one goes to a cardiac surgeon for heart trouble. We need to enhance the outcomes for people who are trying.

Those outcomes wont be helped by members of any MxO(Mutual Admiration Club Officers) or self prescribed public speaking gurus or positive thinkers and or motivational speakers.

This sh*t needs real experiences from the trenches, but unlike surgeons who can flash degrees and credentials the credentials to help some one else’s life/business outcomes cant be encapsulated in a degree alone. Yet the need is real. Even for established businesses to grow to a point where they can dream in technicolor and support growth narratives and better $ hedged comp, every one needs mentoring.

Sadly mentoring like therapy is accepted only by those who are self aware and coachable. The minute you shut off positive criticism or directionality from someone who is at a different station than you in life, you chose to make your professional growth stunted. Choose growth and runway vs limiting your options. Be open. Be critical, be self aware.

Incubators try to do a decent job, local accelerators that charge you to teach you how to pose for a selfie or worse charge you to listen to their American accent typically dispense no real world strategies to enhance any ones outcomes let alone business growth. Choose wisely. Just like you wouldn’t hire a doctor with a fake degree don’t get entrapped by these fast talking types with zero credible personal growth stories or investment $/s that have returned some home-runs if not all. Always speak to their former cohorts, you will sense that your BS detection meter going haywire. The 5 to 10k USD these accelerators want from you, or aid agencies that will give them the money to train u, should you have the cash find a mentor and spend it on one to one time for 100x better outcomes.

Judge, be critical, advice is cheap on the internet. You can ask Google what ever you want. Don’t fall for the posers, you are about to bet your life on making choices that have the ability to impact your your life for good. Choose positive influencers, folks with real world execution and scale grit. Not people who romanticize their personal stories only for standing ovations.

I tell people, you can please a different crowd every night by the same old story but its near impossible to please the same crowd with it every night. Make sure you are authentic enough from the first night to the last night across similar and dis similar audience and with repeat customers. Your DNA never changes but your outlook should. Those who adopt fastest, win over time but maintain their streak the longest.

It’s time you plan ahead to break free of the shackles of being locked in a zero sum employment game in the local context. Hustle on the site if need be, build what you need to till you can break free, but till you tell your self that dreaming in technicolor is possible you will continue to dream in black and white and that my friend(s) is not just good enough for this dog eat dog world.

“Dare to believe in the reality of your assumption
and watch the world play its part
relative to to its fulfillment.”

― Neville Goddard

RISK. Our Unfair Advantage & how to keep on taking risks.

Risk is not driven off a gene, yet it seems to be coded in to our personalities and our national DNA. But it seems there is right and wrong risk, which I will get to shortly. What I want you to consider is the following: Scientists who study the human
mind—say that most risk takers become bored easily. But not all risk is the same, neither are all risk takers the same. Nor are the circumstances that propel to make the choice to take a risk. Plus there are varying degrees of risk it self.

Looking at the above pictures, it seems like most if not all these activities happen around us daily. Are we predisposed to taking risks all the time? that any where else would be the same as Extreme Sports; (driving into oncoming traffic, carrying a Deep Freezer on a bike that could with a slight change in the center of gravity lead to catastrophic results. Or having or riding with your pet Lion or Bear+Goat combo in a Car.

Now think about the global Politicians/celebrities who routinely get caught soliciting a sex worker? Is the risk worth taking when the whole world is watching you? Is it because they are bored? Is it different than the Cutting cables on an electric pole without protection(no pun intended).

At the macro level every one is both a risk taker and a risk avoider, just that our domains and reasons vary. We all struggle with decisions of risk universally, the actions or process of evaluating which risks to take and which to avoid is highly personal. It starts with, is this Risk right for me.

There a tool you can use that scientists use to see what happened to your mojo. Its the Balloon Analog Risk Task (BART), which is not a video game but a research tool used by neuroscientists and cognitive psychologists to assess a person’s proclivity for risk.

BART TEST

In case you were really interested, this is how it works. The Balloon Analogue Risk Task (BART) is a computerized measure of risk taking behavior. The BART models real-world risk behavior through the conceptual frame of balancing the potential for reward versus loss. https://www.millisecond.com/download/library/bart/ (you can get the test here)

In the task, the participant is presented with a balloon and offered the chance to earn money by pumping the balloon up by clicking a button. Each click causes the balloon to incrementally inflate and money to be added to a counter up until some threshold, at which point the balloon is over inflated and explodes.

Thus, each pump confers greater risk, but also greater potential reward. If the participant chooses to cash-out prior to the balloon exploding then they collect the money earned for that trail, but if balloon explodes earnings for that trial are lost.

Participants are not informed about the balloons breakpoints; the absence of this information allows for testing both participants’ initial responses to the task and changes in responding as they gain experience with the task contingencies. Risk taking is a related, but phenomenologically distinct process from impulsivity.


This gives us a great window into seeing how people think and what their thresholds are, our real life decisions around risk also go through a similar mental model and process. But our affinity to take risks is based on a host of things, I believe one can train ones self to increase their risk appetite if they start thinking along the lines of asking them selves which is the right risk for them?

So whats the right risk for the person driving into oncoming traffic. Could the threat of loosing their job if not at work on time result in taking this risk. Yet the same person, doesn’t consider leaving the house 20 mins earlier to make it in time to avoid doing this dare devil feat. So the risk they are willing to take is battle traffic, which by their mental model is some thing that they do any way and have trained them selves to not get worried about. So Job loss is a bigger loss than loss of life or personal safety. Which any where else in the world would be near impossible to fathom.

There-in lies the opportunity. Our unfair advantage, is our mental model for risk just like our biological immunity is shaped due to our filthly environmental realities which are much harsher than most places on the planet. We dont start our exploratory process on risk with asking our selves, “whats the worse that can happen?” I feel, because our starting position is such that the worst has already happened in most cases and any other change to the system will only be positive, so we are willing to do some outwardly crazy, extreme sport level risk items without even giving it a second thought.

Let’s look at the person without any protective gear in the midst of what seems like a poster for a Darwin award by electrocution. He knows there is no protective gear available, he knows he has a job to do, he’s on a car mounted hoist, so likely an official worker of some kind, albeit not just the power companies. How does one even capture what the right risk for this person is? In short, it seems that we do things counter intuitive to even our survival instincts. So in a nation and people that demonstrate this level of risk appetite, how do we translate this to actionable items and use it for incremental, sustainable gain vs using it to win Darwin awards? Its simple.

Many people feel the same urge: the desire to venture past the limits of safety in pursuit of a rewarding experience. The truth is that we are very bad at estimating risks. People are afraid of getting on planes, being afraid of it crashing. Even if they are shown the actual statistics of plane crash occurrences, they can never be convinced of their safety. The person next to the electric pole has an overconfidence bias, because they either cant visualize or process that electrocution is a real threat, where in they are relying on their skill alone to over compensate for that risk. Whilst ppl avoiding flights since they cant see the pilot do not want to hand over their fate to some one else. Whilst in reality if they drive, there is a larger likelihood of an accident. But the right risk for them is to be in control of the car.

We take risks because we want to gain from it one way or another, and think experience is a good measure of its actual risk. When it really is not. We need to harness our ability to identify the right risk and not allow our experience to shape our risk appetite.

Our unfair advantage…

..is that our general risk profile is fairly high, be it society, pressures, ingrained set of values, lack of fear, different perspective of life after death. What ever the case may be here are some thoughts on to harness them better and have a framework for taking bigger bolder work related risks especially for startups once you understand the underlying thought process.

Those who take risks already have a competitive advantage
Since most people and by consequence startup leaders tend to avoid or minimize risk, those of you who are brave enough to take risks have an edge. Just like a first-mover advantage, when most individuals stay away from risk , that means less competition for risk-takers. So use your ability to take risks as a competitive advantage. Push the boundaries a bit more, also calculate the what ifs and the outcomes for sure, but then push a little harder. See what happens, if you get dis proportionate sized rewards, push a bit more. If not, and the tides turn, re calibrate and have a back up plan. Don’t get into this without a plan. Go in it without fear.

You will finally not have to ask your self “what-if” or contemplate what could have been.
The quicker you are regret free the faster you scale and do other meaningful things. Mean do what you must, so when you are 90 yrs old you aren’t regretting you didn’t do it, because regret is not a one time thing, it builds over time and has a crushing effect on your soul. Do it get it over with and if it works you have converted your ability to take risks in to some thing meaningful, if you dont, then you have the rest of your life wondering what would have happened, are u ready for that trauma Get out of the, should have could have syndrome. What ifs like assumptions are the mother of all f-ups. So don’t assume, instead do.

 You learn from taking risks. So Learn faster.
Nothing ventured nothing gained. Some risks may not pay off, but an optimistic risk-taker will always look at failure as an opportunity to learn. Do it enough time, your odds of winning go up. Be a winner. Learn from it. But dont let your former risk profile let you determine your future success.

Learn to live with what you can live with , when it comes to Risk.
We all have some thing we absolutely cant risk. Make a quick list of all the risks. in your space.

1) Credibility Risk
2) Credit Risk
3) Operational Risk
4) Market Risk
5) Legal Risk
6) Technology Risk
7) Competitive Risk

What you think you cant risk, cancel out. And over index on the other and push the boundaries to gain your un fair advantage.

Over time, you will find out that these challenges — distance, difficulty, confusion — are actually the benefits of getting out of your comfort zone.

An other thing or way of thinking that helps is to not have a defeatist mind set. The biggest fear associated with any risk is failure. The possibility of losing money, being humiliated, or making the wrong choice is enough to make us say: “ok lets not do that”

What if you could always take risks, but never fail? Imagine that, all of those things you fear doing, suddenly didn’t have a downside. Imagine that, every time you wanted to go for something — a better product design, a new hire or a new business idea — you would never feel pressured by the fear of things not working out.

Seriously, think about it. Would you still make the same choices you make today? Then re calibrate. Thats what I tell my self. Once I have decided I am going to do some thing(after due process), the chances I do it right are much higher if I believe I am not going to fail. Try it some time. Having faith in your self is the first step in the risk reward journey. If you continue to question your self, you create a bubble of self doubt. The last person you need doubting your actions is you.

Sulking wont fix it.

If you fail once get up and re start. Also fix the vernacular of how you define failure, re adjustment or pivoting is not failure but a way fwd when the first plan doesnt cut it. Those who can identify this opportunity can move ahead faster and have cleaner re-starts as needed. Understand that you are going to keep failing and there’s no way around it. You’re going to keep getting hit, but the only thing that matters in life is how many failures you can take and keep taking risks. The day you stop taking risks is the day you get in to you regret cycle.

Life and Startups without risks suck.

If you keep training your mind to avoid doing little uncomfortable things, it becomes natural to avoid doing bigger uncomfortable things, no matter how rewarding they may be. So live a little, train you self to take risks move away from stupid risks like driving on the wrong side of the road and channel that energy into some thing that give you an unfair advantage. Dont loose that Pakistani streak of venturing in to the unknown, instead of venturing in on dumb things focus and execute better on bigger issues. Find the right risks and the right rewards will find you.

Market Product Fit. Surprises and why founders should explore them.

A single Google search will bring you to gurus of product market fit. This is the exact opposite thinking. I had recently solicited ideas to feature in the blog post. The one below got me thinking.

So how does one go about solving for the non obvious? The basic construct in my mind is to not build products that you then look for a market to sell. It’s a mind set thing. You must look at the market first, product second. Its not the usual way of thinking about these things but its always harder to convince people to buy your sprocket vs the next guys. Look for a market where people are using sprockets with ropes tied to them and no one producing them en mass. Be that guy/gal who adds the rope to the sprocket. The market exists but isn’t either sexy enough or cant be Googled or outside of your circle of immediate relevance but that doesn’t mean it doesn’t exist.

The Small road to big Markets

Think about it as the road to building 1m$ companies vs 100m$ ones(you will eventually get there). There are enough things out there that have things tied to sprockets that we are all missing, whilst we are subconsciously driven by  mental models where founders are inclined to make a product (or get an idea) first and then go out in the market to test it. Failing fast is great, but this sort of mental pre disposition can lead to failing before even starting.

If you start with an idea and in your circle of relevance every one says wow, great idea, it will work, its bound to be a successes. What you have done is gone through a validation process and now have an overconfidence bias because you tested with the wrong demographic and have incomplete information.

If you started with a market and found a product or service that consumers are hacking their way to make their lives easier, as an entrepreneur IF you can improve upon and standardize for the rest of the market you would have a better chance of building a 1m$ company; than you trying to build a product for a market that you didn’t evaluate beforehand.

But the million $ question here is to ask yourself: What’s an offsetting behavior? Would you know it if you saw it, meaning can you identify it? You cant just go ask consumers what they did and take surveys to collate all the info to build a better product, in most cases if it were that easy it would already have been done.

So what are you really saying? What works then?

Look for things with shock value. Look for crazy patterns. Look for Surprises. Look basically for the odd/peculiar/inconsistent things in markets. In most cases people don’t even know that they are compensating for a products lack of features or hacking their way for better efficiency etc, you have to stand tall and observe. People are un aware of the need because they have always compensated for it, by adding their odd solution or signature fix to a problem.  Ways to discover market-product fit is to first define an area or space you like or as passionate about, second you must have some un-fair advantage in the space, either by qualification or experience or both or even having information and having a better way to analyze it. So if you have experience in horse breeding best not to be looking at hydrogen cells as the market to disrupt.  Every morning when you wake up you should ask your self, the shouldn’t questions.

What is happening around you but shouldn’t be happening? What shouldn’t be happening around you but is happening?

Coming back to the initial item, once you have identified the peculiarity, the question to solve for is the Why? Why are people doing things a certain way.. Would your potential clients do it too if it was a) Legal, b)faster c)cheaper. The worst mistake is that you copy a customers behaviors and masquerade it as solution.

You will win when you know their underlying motivation and design based on it. Also note, not every thing needs more tech or any tech or any digital any thing. Some times its better to focus on providing a frictionless experience what ever the channel may be.

This shall give you a launch pad, but it’s key to dig deeper and understand as many angles as possible and whether solving for it it represents a valid business opportunity. Don’t just embrace the 1st idea that comes to mind . Learn how to distinguish between signal and noise. The positive signal is usually an indication of confirmation bias at play. Be cautiously optimistic..

Here is how I think about these things.

  1. What are millennial’s obsessed with and what is it that I don’t understand about it? Is it trying a particular kind of food, fashion? What are they using to communicate, are they sharing/over sharing.Why are they doing it? Is there a better better mouse trap that can be built to accomplishing the same desire? Because I know the market is far and wide.
  2. What continues to piss people off or make for annoyance in their lives, yet people continue to do it? Some thing like watching videos on loud volume in the presence of others?(a habit displayed by boomers of every kind). Cell phones ringing in meetings? Long queues at the bank and now long queues at retail chains. Why are they doing that? Is there a better way? The market is there, can you hack your way into it?
  3. What are people doing that is illegal or not fully endorsed by the law? Avoiding taxes(national sport), buying drugs(rising popularity), speaking freely(massive media bans and the fear of repercussions). What are motivations for those behaviors? How would you address those motivations in a legal manner? Is there a legal manner, could you motivate people over time to cross the spectrum in to legality? Again the market for non-tax payers in this country is pretty much every one. What does that market need?
  4. What are things people need daily/weekly/monthly/yearly that could be solved for by subscription yet people choose the most inefficient way to source them and always complain about it? The way to look at this deeper is by asking is there an Existing community of enthusiasts or people with a need? Evergreen category?Audience that is looking for continuous discovery(niche). Recurring need (grocery/masalas/card re charges), Customers who want to make someone they love happy(Gifting/surprises/support) ?Emotional connection(News papers/childhood foods/ethnic items)? It’s a way of life (think : runners, cyclists, knitters, diabetics, high-blood pressure/medical conditions.) The idea is to understand that markets for these exist. You have to discover/find/identify the market first, because its where they need products. These markets are ready for the taking for those who have the patience to work backwards and introduce complementary products.

An other item that I cant classify, but id like you to think about are communities as marketplaces or Muhallas as Markets. Why do I say that? I now spend a dis-proportionate and likely un healthy amount of time thinking about logistics and distribution.

Every day I see trucks delivering Drinking Water in large bottles to neighborhoods. In a typical setting say in a dense urban area, where there are sprawling buildings and homes alike, I see 10 brands of the water being delivered by 5 different people or individuals hiking the bottles across 1 at a time over the week as needed.

If we assume water quality to be the same and or similar and price points being the same(in a given muhallah), why isnt an entrepreneur going to this market and converting 50 buildings and 100 homes to sign up with them. Then become the distributor by having purchasing power advantage to target this captive market. Similarly in upscale neighborhoods from Nestle to Culligan the bottles and trucks are zig zagging across.

Why wouldn’t some one try to consolidate the market and work on building their own distribution or brand even. In my experience most people call the brand they know and then get a delivery set up, you can invert the funnel, instead of the brand passing the lead to the distributor you can be a captive market player the other way around. What if you worked backwards on this market. Own the Customer and build a better delivery/distribution mouse trap. The idea being, the market is there , you don’t even have to make the product but you will succeed if you make it stand out, either by pricing, frequency of delivery, pre payment, door step credit cards, wallet payments etc. Sometimes all you need is a notepad and the ability to sit down and take notes. No AI needed. Observe the market.

So if you treat your neighborhood and muhallas as market for products and services you will now be able to do a market product fit more easily. Look at what all this market consumes and what advantages you can bring to it (this is just a simple example to start thinking about the process and how to identify markets) Also this isnt the only way to think about a market.

A market could also be where people who are geographically dispersed but aligned based on need (People in cold rural climates nation wide who need affordable winter clothing likely delivered to doorstep sans online). So no one right answer.

In an effort to make this article/post interactive. Ive put out a tweet that you can reply to, sharing what you think are some great market-product fit ideas especially when you think about ,things that shouldn’t be happening but people are doing anyway and how some one can build a better mouse trap or convert that market in a whole new way. So share all the non-obvious opportunities so some where, some how an aspiring entrepreneur can take a crack at that market.


Pakistans Missed FDI Opportunity, Telco + E-com Dreams…

What do Facebook, Silver Lake Partners, Vista Equity Partners, General Atlantic, KKR and Mubadala have in common? They are all partners with Jio in India. This means a total of $12.96 billion has now been promised from seven investors in exchange for a stake of just over 21 per cent. While Jio is building its e-commerce engine and monetising its telecom asset from strength the strength, we cant even get our basic Spectrum licensing items sorted out in Pakistan. Besides that we have no real #DigitalFirst leadership, we have digital thaikaydars like flavour of the government kind. More on that here.

Whilst every one is in lock down the natural outlook should be one that promotes government + regulator + Telcos to use access to internet and tele-density as positive levers and promote marketplace enablement. Save for Ali-Baba Daraz tie up which is also experimental in the way that traction is visible and the brand issues that plague Daraz, no Telco has taken the lead to follow Jio like path.

There are many paths to monetisation, let’s look at the India JioMart model.
They can initiate an order by texting to a Whatsapp number(Same Whatsapp that is owned by Facebook and that has 400M customers in India), which prompts a link that opens a mini store on the browser, allowing them to pick a range of grocery products including toothpaste, snacks, tea and coffee, rice, and cooking oil. This was pre-Jio/FB deal, the integration may grow and likely will.

Once an order has been placed, which currently does not include a way to pay digitally, JioMart automatically assigns a neighbourhood store to them and sends an invoice through WhatsApp. More than 1,200 neighbourhood stores are engaging in the pilot program. Do you see the potential, converting all local retail to be partners and fulfilling orders B2B2C.

Whilst the news of Tajir and Bazaar and other startups who want to disrupt the Kiryana store space(by trying to help them do their own b2b procurement, their pre seed is pittance at 3.1M Dollars compared to the Bn$ plays possible), it takes one strategic alliance with the likes of a Whatsapp/FB Store front to up-end every one else given the captive user base.Not to take away from the domestic raises, they build continued confidence and will lead to more plays in logistics and fulfilment, thereby creating on ground jobs.

Think dark stores operated via local operators and a unified order taking system via Telcos. One may not have to follow the same path in every locality but the captive user base is an advantage that Telcos + WhatsApp both have, how people our companies end up using them is their call.

So what are our Telcos thinking? Likely nothing. I think they continue to be happy with making money on data and voice. No serious value added items are visible. If you count micro finance and peer to peer payments then yes. But imagine if you are a Telco and you can enable 100s of thousands of business in the current scenario, what else would you rather be doing? But I doubt any commercial activities are happening in that space. From what I can see on MOUs and PR notes abound, is oneupmanship of counting product/feature updates.

Let me save you some time. Most are patting them selves on the back to have launched WFH Data Bundles, they are also selling Golden Numbers, Some have agri weather and rural lifestyle services, in using for a week, see a missed opportunity given how cumbersome the services are. Last but not least, one is fixated on how super its card recharge is and continues to market the shi* out of that one idea. Ones busy TikTokking till you drop, or selling bundles to use its most popular bandwidth consumption tool. You can guess which one. Visit all 4 sites and you will see this data/Telco first strategy.

With all whats going on by just visiting their site, the maturity of thought is evident and as it the thought process. Jazz had a DFS Play and a separate CEO, but that didn’t last too long as there was a leadership change at the top. Telenor thinks like a Telco and now more so than ever the Bank and Telco seem like to 2 different strategic plays. U Bank seems to be opening location after location. I think, there the divide and use of data between Telco and Bank is perhaps the deepest. Zong doesn’t compete with Chinese companies as a matter of China first policy so it seems there is nothing new coming from that front just yet. Whilst Alibaba is aligned with Telenor this is a strange mix.

The core issue, that no one will talk about is one of personalities, these Telcos are led by Telco first, forward thinking executives, who have life time tenure(till they don’t), theres nothing bad about it, but they are the Steve Jobs to their own employees, sadly. Hero worship at an all time high and no one challenges the status quo, the amount of money Ive seen wasted since 2014 on CEO Led ideas that teams said, its a brilliant idea sir = equal to Millions of $ that if they had invested in local startups would have given better outcomes. Thus all this FX potential, market place innovation, last mile data , multi party integrations just don’t make sense. I feel, because the lense is wrong. It likely wont, given they even treat the micro finance arms as license vehicles vs fully inter operable command centers that one can use to catapult the payments play + e-commerce play. They are still doing better than traditional Banks, but that tells you how badly the Banking items are lacking.

The employees at Telcos, like the FMCG folks are ‘brand’ people, most of these folks have one or 2 products these 3-4 former Telcos launched, every ones resting on their former laurels. The smart ones left and joined Banks and are trying to make peeer to peer payments sound like gods work.

No net new innovation is happening and every ones out to dick-swing their own peers by being territorial. Most telco and Telco Digital Bank convos start with “yeh hamaray baray puranay xyz sahab/sahiba hain” I am not suggesting we replace the old, I’m merely suggesting what no one else will say due to either fear of retaliation from the companies or their executives. The Owners/Principal share holders of these telcos need to ask, ” is it time for change/infusion of top talent?” When you continue to rely on incumbent leadership, do you think they will ever let any one else flourish, its a human instinct, for all the talk about leadership at all these companies, there is no real number 2, there is no real commercial leadership. Titles and roles yes, depth of talent, likely not.

It is largely due to human nature and not due to personal insecurities. But it is evident across organisations in Pakistan at the Top. Vacuum, even for family owned businesses if the Patron lucked out and has smart kids then it works out, else the hired help is always just that, hired help taking direction from dimwit second/third generation. Sadly our telcos/micro finance Banks and even traditional Banks are operating like saith shops, contrary to India, where at JIO the owner is where the buck stops, there is clarity of vision and massive enabled leadership teams who are duly qualified to lead the charge, they aren’t afraid of which sahib from which Telco can replace them. They are bending the boundaries vs our guys who a building fences to retain what they have.

Its also cultural, the Telenor Principals based on their own pedigree (Nordic) reward loyalty and serious level of non-confrontational personalities. Zong, is all about China first so what ever is prescribed from Mothership comes across is what happens. Ufone is getting more and more inconsequential till it gets prioritised and packaged and sold to one of the three or may be a new entrant. Jazz is interesting , with a mix plate of ownership roots and talent and a CIS + Regional focus beyond PK + Bangla they have made seriously bold bets that have failed. So likely in retreat mode especially during market contraction times by focusing on Telco that has worked for them always.

For starters we should encourage the Japanese example that I read about a few days ago at these companies.“Most people want to become wealthy so they can consume social status. Japanese employers believe this is inefficient, and simply award social status directly.” The best employees aren’t compensated with large option grants or eye popping bonuses — they’re simply anointed as “princes”, given their pick of projects to work on, receive plum assignments, and get their status acknowledged (in ways great and small) by the other employees.” If we did this, we would unlock so much more value than we already have.

It does help to understand whats going around us to then try and diagnose how to solve for it. Jio has an other weapon that I have written about in the past, a feature phone KaiOS Enabled with a voice first strategy. Once they conquer the 400M addressable population size of Indian WhatsApp users/ala Facebook, they will bring on a blended voice based experience to the rest of India through voice. We have 89M non smart phone users that if these Telco start thinking about can offer a host of life altering and revenue generating possibilities for both parties. We barely have the smart phone market addressed let alone the feature-phone migration ready one.

It’s not very hard, given their scale, the Telcos can bring in global partners to do what seems so obvious in India, which btw is also freaking out Amazon, Walmart and all the others who paid Billions in premium to get into the online commerce space. The Telcos in Pakistan have a rare opportunity to be the largest consumption, demand and distribution channel all in one. The only question they should ask them selves is, how long are they happy to only be the data pipe provider to Youtube(highest consumption of data in the country by some measures) or TikTok without owning others pieces of the pie. Sadly in terms of economic impact, all the data they sell, enables content consumption, which enables monetisation, which results in indirect-fx losses via advertising channels to Google and TikTok and even FB. In the absence of locally compelling propositions or deeper tie-ins with international vendors they continue to enable the successes of every one besides their own true potential. The Telcos perfectly manicured PR releases makes one think that they are dreaming big. But it seems like every ones just day dreaming.

“One man’s daydreaming is another man’s day.” – Terri Guillemets

A short history of PVF | Pakistan Venture Fund (Private Ltd)

TL;DR Since most folks in our country really don’t understand the history of politics, military or religion (in the context of the state machinery) and its long term effects on their own lively hood and future, it maybe easier for them to understand the state of play of our fair land as a corporate entity instead of a Country to better understand what the hell is going on in Pakistan. This is a History lesson on steroids on bad corporate governance and uncontrolled growth, unchecked corporate power & its long term effects.

PVF was spun off from India Inc (II) and Incorporated on 14th Aug 1947, a Thursday. The incorporation documents show the LP to be a Mahomedali Jinnahbhai aka Muhammad Ali Jinnah who was over 70 Years old when he took office. As part of the spin off it was marred with a resource crunch from the onset, where by 1/6th of the corporate assets that were to be transferred were not done so by II resulting in a negative equity situation right at the time of launch of this new fund.

PVF was supposed to receive one-sixth of the pre-spin off assets, carefully divided by agreement, even specifying how many sheets of paper each side would receive. II due to its corporate bureaucracy and general malfeasance , however, was slow to deliver, hoping for the collapse of the nascent fund. Few officers of the old company had chosen PVF, resulting in staff shortages, as with any new venture, recruitment would take time.

The division also meant that for some of the farming entities where PVF had a stake, the markets to sell their crops were controlled by their former co manager. From the onset, there were shortages of machinery, sadly not all of which was made by companies where PVF was invested. (Still don’t btw)

In addition to the massive Human Resources problem/(read:refugees), the new PVF sought to save abandoned crops, establish security in a chaotic situation, and provide basic services to its shareholder.

According to economist Yasmeen Niaz Mohiuddin in her study of Pakistan, “although PVF was born in (Corporate) bloodshed and turmoil, it survived in the initial and difficult months after the spin-off only because of the tremendous sacrifices made by its people and the selfless efforts of its great leader.”

Clearly the founding LP was principled, articulate and an exceedingly logical person. After the hostile take over of Jungadh Co an independent firm, by II, part of the management team including but not limited to Sir Shah Nawaz Bhutto came and joined the company, to later launch other joint stock companies under the Bhutto Banner.

In June 1948, the LPs health was not doing well, he went to Quetta, in the mountains of Balochistan, where the weather was cooler than in Karachi. He could not completely rest there, addressing the officers at the Command and Staff College saying, “you, along with the other Forces of Pakistan , are the custodians of the life, property and honour of the people of Pakistan .” He returned to Karachi for 1 July opening ceremony for the State Bank of Pakistan, at which he spoke. A reception by the Canadian trade commissioner that evening in honour of Dominion Day was the last public event he attended. What ensued post his death was nothing less than remarkable.

Likely This was the meeting being referenced.


From the time of the creation of PVF, he was lucky to have an able and accomplished COO. Liaquat Ali Khan had always been a key proponent of portfolio diversification. So from 1947 till his term as COO he did some remarkable things to diversify PVF holdings and provide it with a solid base to get in to manufacturing, education, natural sciences and most of all eduction reforms at the grass roots level so that the future investment prospects of PVF would be better than its historical past. A quick re cap of the key investments undertaken from an earlier fund prospects are as below.

Liaquat Ali Khan called upon chemist Salimuzzaman Siddiqui, awarding him citizenship, and appointing him as his first PVF science adviser in 1950. During this same time, Khan also called physicist and mathematician Raziuddin Siddiqui, asking him to plan and establish educational research institutes and develop an anti II programs. Khan asked Ziauddin Ahmed to draft the national educational policy, which was submitted to his office in November 1947, and a road map to establishing education in the country was quickly adopted during Khans tenure. Khan authorized the establishment of the Sindh University.Under his auspices, science infrastructure was slowly built but he continued inviting Muslim scientists and engineers from India Inc to PVF, believing it essential for future progress.

In 1947–48 period, Ali Khan-Jinnah relations was contentious, and the senior Security folks at PVF and Jinnah the LP, himself became critical of Khan’s as the COO. This was the first time, the internal conflict arose due to the chief security officer having a difference of opinion with the COO. Khan’s relation with Sir Douglas Gracey deteriorated(CSO), prompting Gracey to retire soon after the conflict. In January 1951, Ali Khan approved the appointment of Ayub Khan to succeed Gracey as the first native CSO of PVF.

During this time the socialists block of board memebers gained a significant amount of support. Senior PVF security officers and prominent socialists plotted to do a hostile take over the company under the leadership of the COO Ali Khan. Those involved reportedly included Deputy CSO Akbar Khan and Marxist-socialist active investor Faiz Ahmad Faiz, the leaders of the coup plot. The CSO arrested many in the military services; more than 14 company officers were charged for plotting the take over.

The Rawalpindi Conspiracy, as it became known, was the first attempted Hostile takeover of PVF. The arrested conspirators were tried in secret and given lengthy jail sentences. So just from 1947 to 1951, all these structural items were plaguing PVF Pvt Ltd. Inter company power struggles started in 1950s and are still at play in PVF Pvt limited. A bizarre turn of events happened when On 16 October 1951, Khan was shot twice in the chest while he was addressing a gathering of 100,000 at Company Bagh (Company Gardens). So began the cat and mouse game of power succession, control and corporate espionage and a trust deficit that came to define PVF and all its subsequent management teams and office bearers. 6 COOs came and went, as below.

What happened next, was stranger than fiction. The CSO(Ayub Khan) who was hired to safe guard company assets (by the Board Member & President Iskander Mirza) to provide intelligence and fend of corporate bad guys, assumed the role of self proclaimed thought leader and LP by co-opting either by fear or coercion . Iskandar fired the management team and the COO Sir Feroze Khan Noon in 1958 and was later him self asked to go packing by the CSO. Clearly the Security apparatus of PVF started to drink their own Kool Aide thinking they can run matters of innovation, tech, education, investment portfolios, manufacturing, industry along with the one job they had to do, i.e security.

(As history would prove that some of the gravest short sighted security policies of PVF were done during the tenure of this CSO, Including muddled alliances and picking the wrong JV partners. Some partnerships though came about naturally due mostly to timing and world wide economics conditions. Mr. Ayub Khan did play his hand well on some items related to Privatisation etc and allocating PVF funds in the right verticals. He royally (F**D) up the destiny of so many as the manager of a sovereign VF he did mis-step after mis step, over playing his hand at every step of the way and grossly undermining the operational integrity of the PVF. In between the time he was playing CEO/President/LP etc, a charter of PVF was passed in 1956 proclaiming it to now have an Islamic Banking Window for operations.

Muhammed Ayub Khan.JPG
CSO & President of PVF

In 1965, Ayub Khan entered a board re-election race again to retain control of PVF, the candidate to counter him, the popular and famed non-partisan Fatima Jinnah lost due to wide spread allegations of board member rigging and corporate malfeasance. His legacy as the corporate head who took power due to a hostile take over from an existing management team is fairly mixed; he is credited with decent economic prosperity (whilst we must remember his role was security, so imagine if a qualified COO/President was at play, where would have development been today) whilst his supporters and security folks, with limited knowledge of economics dub the “decade of development”, but in reality it is criticised for beginning the first era of inter-company incursions and re-defining the term “f**ing up office politics.

The major reason why you must remember this corporate usurper is because he was present at the critical point in the history of PVF , that allowed for concentrating corrupt wealth in a few hands and segregated policies that later led to the breaking-up of the companies unity that resulted in the creation of Bangla Inc an other spin-off. Whilst his reforms led to 15% GNP growth of the country that was three times greater than that of India. Despite the increase in the GNP growth, the profit and revenue was gained by the famous 22 families of the time that controlled 66% of the industries and land of the country and 80% of the banking and insurance companies of Pakistan. So PVF essentially only rewarded people close to its management team. In a sad twist, some of the real contributors from the 22 were nationalised and marginalised.

I guess he started to believe his own horse- sh*t after a while. At a great cost to the country because he paved the way to do horse-trading and manipulating independent board directors by exerting raw power & over extending his reach. He is the poster child of how over confidence can destroy a Venture Fund.

Allegations that he led his son (Gohar Ayub Khan) to become a business magnate are enshrined in history, Gohar, during his military service he served as his father’s aide-de-camp, travelling with him on several foreign trips. Upon his resignation in 1962 with the rank of Captain, he established a business conglomerate and subsequently entered in politics in 1974. He partnered with his father in law Habibullah Khan Khattak. Do Google Gandhara Industries. It was nationalised it in 1972. Then acquired by Bibojee Services (Pvt) ltd. in 1992 under the privatisation regime by Mr. Khattak again. Quite a miracle.

We Pause here

To lay the foundation of how this corporation (PVF) was started, what the key events and players were, that created the inertia that shaped the course for the next 60 years. For perspective, GE one of the oldest companies in the world has had 13 Chiefs since its inception from 1892 to 2020 whilst just from 1947 to 1957, PVF Pvt Ltd had 7.

13 Chiefs since 1892

We Fast Forward Here >> (Borrowing heavily from the BBC) so that you can catch up on the other corporate events that lead to the present day. Below is the org chart leading up to 2020.

Present Day PVF

There is a CEO Imran Khan leading the PVF, there is a CSO(Google COAS) that is providing advice on how to steer the company. Times are tough and due to the gradual erosion of the company being run by CSOs (1958 – 1971, 1977 – 1988, 1999 – 2008) and less than competent CEOs coupled with incompetent board members, we are at an impasse. The current management structure is badly skewed, The Board has 25 Heads, 5 Co Heads 5 Advisors most of whom assumed office on 20 August 2018 and most notably 14 SAPMs(Special Advisors to the PM). Classic example of a top heavy management team. There is also one International Executive hired, albeit in an honorary capacity also by the Foreign division of the PVF.

SAPM

What (the hell ) does all this mean?

The CEO cant dispense their duties to the share holders with the management team that was hired, so a lot of consultants were brought in. We all know what consultants end up doing to a VF? We have the example from Saudi Arabia, where the reliance of so many consultants resulted in the locals dubbing the finance ministry as the “Ministry of McKinsey” So right now PVF Pvt Ltd is running in a crazy direction, that also shows the state of the Senior Leadership Team including but not limited to the CEO, COO, CSO, Head of PR, Chief People Officer, Head of Investments, Head of Diversity, Head of Training and Manpower and Head of IT, Head of Alumni Affairs, Head of CSR etc.

Where do I even start, we have Investment consultants working on policy and now using data to do national pandemic Management (drawing severe share holder back lash as seen below)

We have all kinds of sentiments being shared on social media around the state of affairs of PVF and its Governance models.

So if an army general can take over one of the country's highest civilian administrative posts at a moment's notice,…

Posted by Faraz Talat on Monday, April 27, 2020

It(PVF) has investments in overseas items and brought in some one who has never dealt with ex-pats, as SAPM on Overseas share holders and Human resources(whose HR qualification are awaited till the end of the current tenure for the CV to be updated so that he gets relevant experience, meaning it will be applied retroactively ) who has been marred in controversy of causing potential national disasters of pandemic proportions.

We have advisors on Information and broadcasting that replaced elected board members. Clearly people have a right to complain and surely they are. PVF has invested in Airlines but instead of hiring CEOs from relevant industries it has seconded some from the office of the CSO to run the Airline. That had its own legal challenges with the courts challenging the hiring in the first place, with the tragic events of an Airliner crashing under the Airline CEOs command, people expect the CEO of the PVF to bring transparency to the process like any other CEO of a Public Company, by
1) Hiring the Right people for the Right Job
2) Stop randomly assigning Least Qualified Most Desirable people (LQMD- not to be confused with LGBT) into roles of critical national importance.

We have a SAPM on youth, whose degree is called in to question being from a Diploma mill. What is the management team thinking when they bring advisors on corporate affairs? governance? and setting the vision who have so many internal issues to begin with. Whilst we want to lead the youth to greatness yet they are busy taking on various board members online.

The Pakistan Venture Fund Private Limited over the years also spun off Stealth SPVs on which I wrote earlier that you can read about here. Which resulted in 30-40 other Private investments and entities directly under the remit of the CSO and not the CEO of PVF. So for every systemic issue over the years, we have added layer upon layer of incompetence, bad governance and security apparatus in epic proportions in the government, meaning the consultants now have consultants and advisors have advisors. So one wonders, who is doing the work when the management team is so busy playing and managing optics.

But what we missed is a key issue (related to development/growth/investment), that since the setup of PVF Pvt Ltd, it made but one initial investments in land for development between 1960-70, when one if its advisors Mr. (Syed Darbar Ali Shah) envisioned setting up a new town Gulshan e iqbal on April 16, 1966. It was originally KDA scheme 24 which was renamed in the Name of Great poet Allama Muhammad Iqbal.

Since then, no investment has been made in Land allotment schemes for the common man by the PVF but it made investments in to its stealth venture fund which launcheD Housing Authorities nation wide, allowing again the CSOs of the organisation to squarely rest control over who in the country can get land/affordable land for making a home.

Clearly the common share holder of the PVF Scrip has 0 right in that regard. Most shareholders of PVF will die before that dream ever comes true. Yet as I was watching tv following the tragic news of the airline crash The one thing I saw on repeat was that the stealth/spv funds housing projects were open for applications for people of affluence to come and invest.

Can no one else see the tragedy in this. For a city of 20M KHI urban and 10m more if you add all adjacent areas, the only thing that has come about since 1966 is absa-fu*ing-loutely-Nothing. Yet the various CEOs of PVF including the current and the former ones have done Nothing for the TAX Paying Epi-center of the country, namely Karachi besides bringing in top heavy consultants and management.

An other private party has done some thing, given the acute shortage of land/housing/business infra by offering a new scheme after 54 years has graced the shores of Karachi. Bahria Town which came with other land grabbing schemes and corporate pay offs, while PVF CEO stood by the side lines and CSO apparatus countered this by launching DCK which has no cleaner record of land acquisition per the dawn story linked prior.

So skoority should do skoority not land allotment, that is the travesty, just like skoority should do zoom zoom in fighter jets vs being CEO on Zoom of a commercial airline from Isloo, just like skoority should focus on safeguarding national infrastructure vs building its own infrastructure or re alloting PVF resources for its own shareholders and constituents, the issue is that the constituents are not the same in the vast majority of cases.

PVFs common share holders have no land grants, no access to pension, no access to end of term benefits, no subsidised health care and no post retirement second career placements. Yet PVFs, CSO track employees have all these, whilst being subsidised by the common share holders input tax allocations etc. Due to lack of transparency creating an air of dis-trust.

What all this has done, has reduced land available for the growth of industry, entrepreneurship, housing related de-stressing the masses, create conducive living and working environment for the share holders, bringing equality and harmony vs, creating “bridge kay iss taraf and bridge kay uss taraf communities” PVF has failed like a gangster in this regard most particularly in Karachi.

In Lahore and Islamabad and the rural agri belt not as much because there the ruling class is the same as the land holding class and for every one else i.e middle class there is still affordable land to do what ever the f your heart desires. Again the PVF board members in Sindh have been whole sale criminals at large. It had better luck in Punjab, albeit they re-invested part of the stolen stock grants and proceeds back in to development projects where they lived. Vs Sindh where since no one gave a flying F, we continue to pay the price in terms of having Auditors and CFOs whose interests are mis-aligned with the share holders.

The Audit Committee the Governance Committee the CSR Committee are all run by people who should not even run a marathon let alone public infrastructure. The only run they can do, is give people a run for their money, which is what they have generationally achieved successfully. The CEO and CSO also do not have the local Sindh operating entity board sorted. Allegedly a legal bro, who is the current Adviser to Stanford bro on Law, Anti-Corruption Establishment, and information are the two rock stars running the local entity of the PVF in Sindh. Some investigation in to their lineage brings you to the legendary Ardeshir Cowasjee. Who used choice words against the local chapter stalwarts in this web nugget from dawn from Aug 1999.

As of late some of the key managers of the CEO and Trusted Advisors have been found by the state as involved in cartelization etc as reported by Independent Media as having gotten tax breaks and subsidies whilst the PVF did nothing for its real share holders, just for its chosen board members, advisors, patrons and security personnel.

We are back to square one. The company that the founder launched, looks nothing like the incorporation document. Talk about pivoting, this company has fallen off the proverbial tracks and nearly pivoted into abyss. Till the CEO does whole sale reforms, likely take absolute responsibility and charge, park his ego and move from smart lock down to smart working, vs being smartly being run by various share holders and the security teams at PVF, nothing will change.

We will continue to yearn for Roti, Kapra, Makan. At this rate, PVF sadly and tragically has assigned a value to each of its share holders(You and Me and every one who owns one share of PVF Private limited) in the aftermath of the airline crash by the following announcement being made by its board member.

If we the shareholders don’t act even now, our fate has been sealed and price fixed at Rs1 million each.

May Allah have his mercy on the souls of those who perished in the ill fated crash and reward them with the highest level of Jannatul firdaus. Ammen.

May he also make us take a stand so that our Children can be treated like first class citizens in their own land vs being mistreated by the guy behind them in a VIGO with dudes brandishing AK47s. The charter of PVF in 1947 clearly calls for us to re evaluate our priorities and call an AGM at the earliest to course correct.

“Lord, grant me the strength to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

#PakistanStrong

One Idea Can Change Your Life & other things that (typically) don’t work in Pakistan.

Gone Too Soon

I don’t really know what happened to Benlays Doodh Patti. I do remember that for a brief period, all the ex-pat Pakistanis I knew could not live without it. It was some thing so simple yet so profound. DoodhPatti is to Pakistan what Coffee is to Americans. People were willing to pay 14/$ for a 24 pack thats a $1.7 a serving or PKR 272 in todays effective rate. (Imagine the FX impact)

The box even says trade mark protected. Lo and behold it is.

It is registered via a law firm in UAE, which was easy to locate given that PoBoxes seldom change any how will skip that.

The contact info

Whilst I dont know the history of who Benlays was and what they did, their address for SITE and phone numbers turn up Ahmad Manufacturing Company. https://goo.gl/maps/onB8jELzrhue15Dh8 . Same address same every thing. Suspect some textile group had in the past tried to diversify and realised it either didn’t work or the margins weren’t the same as textiles. What ever the case may be it no longer exists.

So what is the point of this history lesson and going down this rabbit hole? It’s fairly simple, that successful outcomes for products and product driven businesses are exponentially low in Pakistan. Have you ever wondered watching shark tank how one good idea, productised, commercialised and launched in retail or franchised results in millions of dollars of wealth creation? Our problem is both of innovation and lack of commercialisation. Lack of commercialisation because we have little to no co-packers, we don’t have the home-to-commerical transition infrastructure, where it does exist it is next to impossible to find. Our existing brands are limited and some are dying too(See thread below). Yet we all know some one who makes an incredible sauce, chutney, mix, rub or some one who has other ideas/gadgets or totkas that can be commercialised. But we rarely ever see any one breaking out and commercialising products.

Now more so than ever both for local consumption and for export we need people to rise to the occasion and start with producing shelf stable products as a start. We need both import substitution which people like Dipit are doing, seemingly a Shan Foods venture.

Shan Foods on Amazon.in

Speaking of Shan they are available on Amazon.in so clearly they have found their way across the pond. Yet from smuggled Goodrej, Dabur and Amul and himalaya all the stuff is available in Pakistan. Why cant we get our iconic brands any where? Besides Shan that is. So coming back to the idea, that one idea can change your life, how does that item continue to work in the US and not here? Why can people be a one hit wonder, take the example of Scrub Daddy not in the food category though or Bantam bagels going from Shark tank to Starbucks. Not like we don’t have a consumption hungry population from CPG to FMCG demand being super high. Yet we do not have domestic FMCG or CPG brands being developed or growing. We have the same players who continue to grow.

Our problem is many fold, from lack of product development expertise, to developing packaging to material sourcing, product testing, sampling, distribution, supply chains. None of these are easily available to most people. If you had the next killer Achaar, how would you go about even bringing it to market so it doesn’t look like it fell off the back of a truck? From perfecting the recipe to labelling to nutrition guidelines to shelf stable testing to getting quality accreditation and sourcing and production. Some thing to think about, is to maybe build the infrastructure to allow fo this to happen. Build perhaps a co-packer? So think Cloud-Kitchen but industrial scale. Having a common core infrastructure so that you get economies of scale. Not just for food services even though the bulk of my examples are in that space. At large we need an enabling environment for people to take an idea/product and be able to commercialise it.

Before we start trying to develop Kombucha , Keifer Grains & Greek Yogurt we must learn to be able to produce Lassan Adrak Paste and or Canned tomatoes ala Italian ones which we pay 170 PKR for, we need a whole sale commercialisation revolution and folks who can help with GTM Strategy for these areas. We have an acute shortage of food services experts. We have no locally branded products that at-least I can name in each of these categories that comes to mind instantly

  • Locally produced Sponges
  • Locally produced Tooth Picks
  • Locally produced Ear Buds
  • Locally produced Phool Jharu
  • Locally produced Poncha/Mop Brand
  • Locally produced Buns besides ( Dawn/Bakeparlor)
  • Locally produced Masalas (Laal Mirch, Kali Mirch , Dhaniya – Besides Shan/National)
  • Locally produced Hair Oil
  • Locally produced Packaged Beef Products
  • Locally produced Cream cheese
  • Locally produced Canned Tomatoes / Canned Fruit/ Canned Mushrooms/Peas
  • Locally produced Cosmetics Brands

We need to give people hope that if they try hard enough and if they have a great product that some day (soon) we will have the infrastructure(process/technology/financing) to allow for them to break out of their social and economic predisposition. It seems like, unless you come from money you really cant or shouldn’t be in the products business/manufacturing etc.

For a nation obsessed with food, recipes and then some why aren’t we encouraging an entire generation of kids obsessed with building unicorns to moving to building recipe mixes or food products at scale. Halaal BBQ add-ins for example. We haven’t gotten past juices that too aren’t 100% indigenous and we continue to not evolve or innovate. So what does it take for us to leap frog so that our ideas can change lives? That for once things start to work for us too. We are caught up in such systemic disadvantages that to break the mould we need whole sale changes in no small part from education to government to the boys in brown and no I dont mean UPS.

Understanding & Building for the Dopamine Generation

Median age by country in years in 2017 (U.N.). The youth bulge is evident in parts of Southeast Asia, the Middle East, and Africa.

There is one App that has taken the youth bulge by storm every where, that is TikTok. At its core its simple short-form entertainment that has some Chinese pixie dust(aka Algos) that bring virality to content by creating crazy in-platform exposure. This generation is all about instant fixes, when it comes to tiktok where videos are sub 60 seconds, these short videos have created and curated a new type of addict and addiction masquerading as entertainment but driven by the consumption economy. When your users are spending of 52m/Day on the app clearly byetdance the 70bn$ company that owns tiktok did some thing right.

Youtube, Instagram and Snapchat have a similar but different consumption/virality vibe and also creating their own versions of dopamine filled experiences. So what is it? That is driving audience to this consumption economy?The way it works is simple, Kids these days look up to influencers(we had national heroes, sportsmen/women, business titans, celebrities who took ages to make their mark in a space), the premise has remained the same but the thesis has changed, those people that have millions of followers and can do whatever they want because they have a pretty good amount of money are all the rage. Every one wants to be like them and follow what they do and are led by them like a cult. This is not really promoting scientists or particle physicists, from the outside in, it may even seem like a steady dumbing down of what passes as stuff worth watching or following.

In short, all you need is one hit to get noticed and the kids know that between their chosen platforms, they don’t need any special skill set and “it could happen to them” The definition of a good piece of content is also changing. Also it just doesn’t need to be mindless content, to test this hypothesis I combined some pre existing content on sufi music, I made a short 55-second video about the origins of it and got 6800 views in a day as a first time tiktok user not even having an account prior to this. Truthfully its not a bad place to be, instant recognition by views? In the end it’s pretty simple, all these kids are trying to do the same. Its like one of those toy claw machines where every one wins atleast one prize, for one coin put in you can try till you win a big prize but if you loose you are guaranteed the the base prize always. TikTok has personified and cashed in on this. How hard can that be? There are short form items which tiktok is good for then there is youtube for every thing else mixed with insta and snapchat.

If you don’t know drops and kiks I suggest you familiarise your self here first. Things are changing fast, as are monetisation avenues and engagement platforms. The new normal was barely normal before Covid-19 came around and forced an entire generation to work from home adding crazy growth in online content creation and consumption and in turn fuelling new brand creation and growth avenues. Their perspectives on consumption, education, work, products, content is miles apart from where traditional businesses and marketers are focused. Locally, regionally and globally the trends have fireballed into an ecosystem that most people don’t have a window into. Heres a starter pack that I’ve put together for you. (of all places twitter recommendations)

New Media – Digital Distribution – Engagement Tech

Nerd Stuff – New Tech – Platforms

Content Creators – Content  Driven Merch – Gen D Collectives – Agencies

Food & Nutrition

Misc Stuff

All these are examples of brands, products, icons, influencers that are creating, making, selling and consuming in their own bubble/ecosystem for the most part without outsiders having a real window into the business of GenD(dopamine driven)++. Some have cracked the nut, there are specialists agencies managing “talent” being run by a much younger crowd, not owned by the existing media outlets and brands, they have developed their own origination and consumption patterns, whereby select “merch” is listed and “dropped” to a select audience, and people can pay to queue jump, these things are not sold in stores.

Do you see the opportunity for the post corona world? Do we have our own local versions? Is any one building a list of these influencers? Are our Sahab based agencies that profited off sleaze-ball agency owners and their cronies in tv channels by profiteering off rack rate khanchas, ready to manage this talent and brace for the new era of consumption and influencer driven advertising? Are our less than adequate news channels ready for a generational competitor? Whilst a host of the media end of this landscape is and will remain a fairly western phenomenon, a large part will be our ground reality as well. Most of our influencers are any thing but, due to a lack of original content and programming the audiences they command are a mix of folks with pent up frustration, aggression and voyeuristic tendencies, so not too removed from the stuff being promoted in LA.

In our case the mass market has a window into other peoples/rich influencers lives and some thing to look up to, they feel like they can relate to them, albeit that sentiment maybe universal. But there are major influencers with audience followers in the millions who are not leading or promoting the glamorous life, they are rural tiktokers with massive fan following. The audiences sizes for example give one an idea that if brands were able to harness the raw power of these following and if these influencers were business savvy they could turn their audiences into an economic power house, from brand building, licensing, product endorsements and perhaps money left over for some education. Its a dystopian view when you go to https://www.tiktok.com/discover?lang=en to discover the latest local videos.

Similarly on instagram the following folks, are being followed from Pakistan most, some of them are not even Pakistani. This gives you an idea around the flavour of the content being consumed and what the audiences crave.

Moving on to youtube and looking at audience metrics we see a different kind of trend in channels driving large section of views(some are still traditional). Whilst most aren’t, yet A host of this content is religious or sensationalist news. Not necessarily targeting just the youth alone but a huge chunk of it is being consumed by them whilst a host of it is being created by younger creators. Interesting trends emerge when you go from TikTok to Instagram to Youtube, the audience mix, the monetisation capacity, the content, the demographic mix all changes completely as the format of engagement changes.

So whats the moral of the story here. We like all other countries with a young population and an ageing population have not only social issues coming up, we also have major societal issues, whereby there is zero adult supervision in what is being created, consumed, distributed. This will bring with it, its share of complexities, issues and also opportunities. There is also a real social divide happening where there is a stark socio economic disconnect between the influencers and the people following them that in the current socio economic condition(s) only lead to a bigger online and offline divide between the citizens of the country. With such chaos comes opportunity and we have a host of pre existing examples globally to learn from on how to navigate this complex dopamine powered web. The real winners will be those who can get ahead of the curve and integrate this new reality in their existing and post corona growth strategies. If you don’t get in the line of sight of Gen Z/Dopamine today you will be irrelevant in the years to come.