Dais nay tum ko chora tha ya tum nay dais ko chora tha ? (Did you leave your country or did your country leave you?)



Before you start reading. I urge you to watch the above first to get the context.

If you cant relate to it. Dont read further.

In the summer of 2017 I put out a survey based on the  request from all those friends, colleagues, family members professional acquaintances and aspirants from the Pakistani diaspora who wanted to find out the real financial cost of moving back. The survey was geared towards finding data points but from respondents all across Pakistan. I spent some time, to build an average cost basis for a potential return relocation back to Karachi, Pakistan. This is transactional cost, not the emotional cost.

This by no means is scientific(and no ones compelling you to use it nor do I care to listen to counter arguments about the variables), but it has had 17k responses that have been analyzed and averaged out as best as possible to normalize the data. If you ask nicely I may give you the data set and you can build your own hypothesis.

The real issue is not the financial cost, this is just a conversation starter. You know who you are.  The ones who say, i’ll move if, ill move when. This is geared towards the Senior executives who are 15+ yrs in to their careers and into CXO roles and who have been dying to do a startup, or dying to join a game changing organization in Pakistan.

The headline my friends is,  that no ones going to build a game changing organization for you, and every ones doing well without you:). Unless you decide to come, no ones going to beg you to relocate, no one gives a shit frankly. You are chicken, you aint coming back. I am trying to do my part to actualize the one component in your decision making process, which is you not asking the tough questions about relocation costs, cuz frankly you’ve moved on, you have grown, you value your independence, you left to create better economic outcomes for your self, so dont apologize for your sucess, people who you left behind are in different economic conditions than your self, your preferences have evolved or maybe they haven’t, may be its tough for you to send your kids to the American School cuz your brothers kids go to their neighborhood  school, granted you dont want to sound like a prick. So heres a first pass at all the shit that was holding you back. If you are one of those who want to buy an Audi in Pakistan and worry about the fuel costs, this guide is not for you.

If this doesn’t kick start the conversation, nothing else will. You are not ready to take the plunge. You tell your self you are. Its ok, we all get home sick, but you have to rationalize if you are home sick or if you really want to do this. Are you fat happy and comfortable with what you are doing with not having to worry about water tankers and the other so called horror stories you have heard. If you are a corporate whore, admit it to your self, thats the first step in the healing process.

Dont believe every thing you hear, some of this shit is worse than you can imagine, other stuff not as much. But till you are ready, no amount of Cost benefit analysis is bringing you back. Its a life style choice. You have to make the choice, no one else can or will.

Yes Fintech is hot, yes digital transformation is hot, yet digital every thing is hot, yes starting a restaurant is hot too, but are you ready? There are some 100k 200k USD jobs in Pakistan, no denying that. But there are dozens of people like you and a handful of these positions.  There are many like you and me, but not enough roles to go around, we are a commodity. So best to leverage all your pardesi store bought commonsense and take the plunge, but not without having a year long runway for life + your startup or your idea. Dont move to Pakistan to “find your self” there is no fucking Starbucks to sip your venti soy lattes here.

This is no time for self discovery. Only the fully committed will succeed. No half ass ideas no me2 shit is going to work. The stuff that will work is when you solve for local challenges or you create IP and or leverage the human capital arbitrage in your favor.

“Be careful whose advice you buy, but, be patient with those who supply it. Advice is a form of nostalgia, dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.”  Baz Luhrmann


Special thanks to the WordPress wizard who built the form.

These figures are net of taxes, if you will against better advice try to land one of those 200k$ jobs then you need to factor in 35% taxes to your operating plan. If you end up being self employed or live off your savings then not as much. Post June 30th 2018 if the new tax plan goes into play that number will be 15% per the new simplified tax regime.

Enemies at the Gate. Bas Kardo yeah pouchna kay PayPal Kab Aye ga?

There’s a lullaby for suffering

And a paradox to blame

But it’s written in the scriptures

And it’s not some idle claim


Every month, every week, every day, someone is hell bent on asking, probing or claiming something to do with a payments play. I say “stop it.” The answer is self evident. Like all good things its linked to patience and has less to do with payments and more to do with “Rails”. Remember that word…

I have read with interest the claims of how Ant/Alipay will redefine the game, how Pakistani Banks need to be scared. Headline news ‘chippy’ is that, Ant also bought into a Bank. Albeit not a 100 lb industry gorilla but the multiples it paid totally make it feel like that.

Minus the inconsequential independent players, not for their lack of trying, product, or smarts, but lack of burn capital, my sense is, that before there is real traction they will be long gone.

We also have the self professed successful entrepreneurs /VC wanna bees also trying to lend their name to other people’s dreams in hope of collecting when they build the user base, but at the moment all those efforts are really just that.  Efforts..

Fonepay 100k+ downloads, please shut off ad monetization, first make your app work. Keenu 50k+ Downloads, can’t find any real places to use the app really. SimSim just wont work, wont link won’t do much.100k+ downloads. Even if it’s in the next band of downloads, and combined the three market entrants in the private space that have prob done the most market dev activities dont have more than 400k Downloads combined, then this really is a non starter as I saw some of the folks discounting products to acquire customers like crazy. It takes roughly 2-3$ to acquire customers online. So 400,000 X $3 =1.2M  so if the aggregate customer acquisition cost is higher than this for the three, the writing’s on the wall already. Simply some one can build a better product and run ad-campaigns target people and in 5m$ if they have the tech they can acquire 1.6M customers give or take. One of the cheapest places in the world to drive online traffic atleast for now.

This is not a naming and shaming exercise but an exercise in introspection on the state of play. But not a single one of the wallets or payments app worked in the first go, some didn’t get a confirmation code, some couldn’t link to the bank account(if i cant add money i cant use it), others aren’t accepted anywhere besides random places where I would have no need to go, let alone do a cashless transaction. It’s just not fun the use case is there, but the traction is missing, because frankly with all the Wallets/Apps and products out there most are led/made/created/engineered by traditionalists(Bankers) in hipsters clothings Or guys who made stuff for the financial service sectors and decided to take a swing at this. We need a mindset shift of speak to the user as opposed to speaking at the user. Some of the CEO comments on FB have been short of respectful. Saying”your phone has an issue” etc etc. That wont win hearts and minds, the Play Store reviews tell the same story from a consumer perspective.

An other set of potential players are the old hard ware guys(Think Unisys, IBM, NCR etc) Some retired some not, they have the horsepower and the connections to the regulators and the old guard, they also have access to old money and access to the policy makers at large. Groups of these rat-packs are also surfacing up in conversations. They overlap in the “services to the banks” segment but they have grey matter and greenbacks. I just hope they speed up the game, some are as usual just busy at “Award Ceremonies/Local events” daily so its tough to tell how much of the real product work has been done.

What about our friendly neighborhood Banks you ask?  Here’s the CliffNotes version of it all:

HBL: Probably best aligned, gets the big picture, has had past failed attempts to do payments and is the 100lb gorilla that will ultimately build a walled garden for all its talk about openness. Is working in stealth on a new play.

ABL: PayPak and back nothing much seems to be going on, at least there’s no public narrative to a payments play

MCB: MCB MCB aye, they got an IPG going for them but besides that not much really happening, they seem to be happy to be a switch and to have a wallet app. 50k Downloads. Not impressive.

UBL: Omni was a confused product with no plans of growing up to be a payments services business. UBL digital is the new banking ++ app again with 100k+ downloads. They are busy building design centers with screens and areas to showcase UX/UI innovation. Too distracted by pretending to be something they are not, also fyi, by adding a picture of your new building to every piece of collateral you produce is just a tad much.

BAF: Monet, Monet,Monet, I guess they have run out of favours with their Sugar DUDS (Dadies under the Desert Sun). The Banks seemingly up for sale based on market “hawa” The MBILL app from days gone by 2014 has 500+Installs. I guess the Dhabi Group pulled the plug. Too focused on the fees driven models at large.

Faysal: Another contender looking for a suitor. Lost the cards lead, did not innovate to catapult in to mobile/payments space.  Wholesale management changes, seems like it had more marketers per capita than cards.

Meezan: Too much cash, no where to deploy, no focus on tech, also time for the foreign partners to exit. No one seems to be bullish on Pakistan long term from the GCC so thats 3 banks confirmed primed for a sale or partial offloading.

JS: Small scrappy, saying all the right big words, API storm up the ying yang, a lot of talk a lot of coordinated PR. Outcomes will determine the fate long term. How open will open be?

TMB: The luckiest F off them all bar some folks who got out too soon. Jury is out, Telenor is telenor its driven by ARPU , ANT could give a lesser F about ARPU. Short term lots of stuff to do to really build out the tech.

The common theme at most banks is a recipe. The recipe calls for one part ex-Telenor/Easypaisa resource + one part internal ADC + Ceo’s New Vision = Digital Play. Whilst Telenor and Easypaisa have helped create the brand and create consumer value, its dis service is that everyone claims to have been the “key” person at Telenor as they fish out to other banks. That combined talent pool barring a few extra ordinary people 5th , 6th level down staffers with no idea of the big picture.

From the looks of it, there is no promising marriage of masters of big data and global finance happening any time soon in Pakistan. There are unions yes, but not marriages yet. That needs a lot of work. I bet you, Google is eyeing this , even if from the sidelines. There is too much FOMO at Google. They missed so many markets in so many verticals, but they got into India on time. Their wallet is “THE” Wallet. Tez.. They have crushed Paytm which is backed by Ant. So now you get who the enemies at the gate are?

Let me spell it out for you, Its Google and Ant. Tez had 7.5m Users in India right off the bat. But then something more interesting happened. While the growing user-base is a decent indicator of the app’s early success, Google was even happier with the actual usage stats. At an event, Google’s VP of Product Management for the Next Billion Users program, Caesar Sengupta, said that the app has now processed a whopping 140 million total transactions. Not only that but the average transaction today is now four times higher than during the app’s launch period. In addition, National Payments Corporation of India (NPCI) data suggests that Tez accounted for 70% of all UPI transactions between October and November. Sengupta also proudly announced that there are now over 500,000 (“5.25 lack”) merchants on Tez, with more and more small businesses making and receiving payments through the service every day. Scale much? Caesar tweeted this on march 1st “From 17.6M (Aug) to 171M trans (Feb). 10X in 6 months! Amazing growth in UPI. “

As I was updating the post to publish, this just happened. To give you an idea of what real scale means. Compare the above data to the tweet below:

Albeit its Google but this is how do shit right. Starts with the “rails”. Google went in early and went in big, Not every thing worked but they had a plan.

So Ants rails are TMB, not any fancy tech, they have enough of their Alipay stuff hanging around to borrow a leaf, a page or a stack or say everything. TMB is the conduit to build AliPay Dreams on top. Ant got an operating license a local player, an astute management team and clearly Easypaisa the most formidable brand in the country powered by TMB. So can Easypaisa do 171m transactions today, probably not. Can Ant make it happen ? for sure it can. So Both Ant and Google have battled this out In India, Ant backed Paytm is doing 30% payments vs Googles doing almost 70%.

Build the rails everyone, so that the last mile delivery/delivery platforms/services/OTT/Biller aggregation/bill presentment/everything you want to be able to do is possible in an app or on a platform.  If some one can dream it they can connect to your rails.(API)

Gotta build the plumbing before you build a fancy house. If the plumbing is great everything flows through. Please dont ask when PayPals coming, it’s almost irrelevant. We need the enemies we have at the gates to faceoff in person so that the real benefit comes to the market. Google has surprised me personally. From its experience in India this market is similar yet they’re not even present on the ground in Pakistan. There is much talk but no action. Just market sensing using their stellar sales teams.

A multi 100bn$ companies only excuses is that they don’t have the might, muscle, man power   to be incorporated in Pakistan given potential legal issues. For all the lip service about inclusion and other things. Ant jumped in, feet first. Ant didn’t have legacy,  legal or taxation issues that Google has in relation to AD-Sales and dollars being exported out of the country(I’ve written about those challenges in the past extensively)

The Google GO-Jek style marriage is great for Pakistan. Google missed Grab but couldn’t miss Go-jek, there’s more to Go-Jek than ride hailing ….Its a Payments play and POS play and eventually rich data from malls, eateries, public domains, travel drop off points, offline to online attribution. If Google knows where you are going, what route you are taking, what transport type you are in, imagine the use case where in,  it predicts your fuel usage routes you to the nearest gas station, does deals with “energy suppliers”, knows that you like to buy candies before you pick up kids on the weekend from practice, it sends you not just digital mail it will eventually re establish direct mail, coupons either offline/online or hybrid, so it control the entire experience and best of all a share of grocery basket by adding those points of data and putting a mental marker/aka pixel on you as a person and your habits and locally predict what comes next in your retail and personal experiences.  You cant accuse Google of not doing its HW. See what Go-Jek is doing:

By going after it(Go-Jek) Google personified hyper local at its best, It had the maps and the online piece it now needs the hyper local pieces to weave the next generation narrative for the next billion users. Google recently got street level addressing in Pakistan also. Just fyi, its location services will allow it better economies of scale now compared to any other map provider.

Now we come to Ant, they have the other end of the spectrum figured out, they have payments and credit scores and lending, 95+Bn$ worth of it. They did what banks couldn’t do in 50 years. Case in Point below. Payments, Wealth Management, Credit & VirtualBank all rolled into one.



So their 150bn$ rock star Unicorn status is well deserved. They are the other party at the Gate. Neither Google nor Ant are our enemies, they are each others arch rivals. For us they are frenemies at worse, and economic agents of change at best. But our governments have been unable embrace or invite either. Ant came based on a strategic need to find consumers for products and expand to support OBOR. They could care less about issues related to opening offices, like Google and FB(I forgot, FB is also the Frenemy here) and their overly protective hovering helicopter parents in (Policy) . Ant has Alibaba going for it and with it, complete and unconditional access to China, its exports and goods and services, there is some talk about to setup a TaoBao style model with the potential acquisition of one of the local players just for ease of brand and export PK made goods overseas. Remains to be seen.

The Chinese came here of their volition they didn’t need to be cajoled and courted, they are entering emerging markets and need new users for their good services, technologies and beta testing. The Americans need to be invited, no one in Govt has gone to the likes of FB or Google and said, we welcome you, but I suspect that’s the expectation, if India is any cue, where in the Google Vps continually thank the Govt as its anchor partner and vice versa. There’s a lot of song and dance. Google employees 5k+ ppl in India. The whole NBU(next billion users) focus is in India. Even though Google won’t publicly admit but as can be seen by data that its Railway based Internet Tie up didn’t really work out as expected no less its space saver app and Tez are doing gang busters. So maybe there is hope for them coming to Pakistan and changing up the mix some what. But you have to come here to play you cant just use Android devices to collect Maps data etc and build services:)

FB is doing Whatsapp payments in India, it came late to the party too, but its a great use case for PK where in every one with a smart phone seemingly is on Whatsapp, no additional app needed for payments and you can get all the hyper local stuff you can with Tez  or AliPay for example. Google had to add messaging to Tez in India from what I can tell in a retaliatory market move with Whatsapp’s payments coming to town.

As of February 2018,  WhatsApp had 200 million Monthly Active Users (MAUs) from India that apparently make up a size-able chunk of its 1.5 billion global MAUs. Because of the numbers and its popularity in the region, India is the perfect location to test a potential moneymaker like the WhatsApp Payments feature.

But with every new modification and addition to the product, WhatsApp Payments is certainly nearing a global rollout.

So as these enemies eye the prized Pakistani consumer, its anyone’s guess what happens next. If PayPal was really smart, they’d beat these 3 to the prize and get started. Just the brand equity would drive it to universal adoption. But that’s just my thinking could be a completely different scenario in reality. The first one to tie up Remittances and ACH+BCH will win hard and fast. The use case to be solved is: an App where a user, say in the the US, adds their credit card or their local bank account and selects a biller in Pakistan(say their parents electric bill) and pays it real time. That will be the game changer, not alliances with the payment transfer companies to do cash-outs, gotta remove as many middle men as possible and in the process build apps that can do real scoring models and get in to the micro lending model, if you can get Islamic finance built in to it, that will be the big differentiator that will make banks and cards completely irrelevant in Pakistan.

Most of all if the regulator was smart they would do away with this PSO/PSP stuff and figure out a quick model to initiate the global/local players.

If the domestic/international investors were smart they would consolidate their assets and see the news happening around them in the hyper local space. I.e Insurance companies making a play for the likes of Go-Jek with follow on investment after Googles. Smart money says, its time to bet now, and bet high.


Its Complicated. The curious case of Fintechs, Banks and Asma.

It truly is complicated, every one just graduated from MAU(Monthly Active Users) to AI (Artificial Intelligence) and now on to Blockchain. (Formerly known as Block Chain). We are still catching up on financial inclusion.

Before we get in to Artificial Intelligence lets talk about basic intelligence or due diligence. With news daily of X “local” company meeting Y “foreign” company and productive and constructive meetings + now news of strategic partnerships etc is very interesting, but has any one really looked at the fundamentals of taking financial services to the un banked? Or to grow financial services access beyond where they are.

To this date as an individual I cant plug in to any National Registry API to do citizen lookup or verification. So If I/any one else wanted to build an app to verify some ones ID, we cant actually do that. Happy to pay a service fee to do that lookup(Binary, Y/N). Why is that not possible? Why is public data not publicly available? For a fee of course, if it is, why isn’t this info public and being advertised nationally? Forget big data, we cant even get small data sorted out.

Data is going to be king even in Pakistan soon enough, so as a paying customer of the National Registry why can they offer enterprise services and access control and bio metric services? when I cant build my own, especially when as a citizen I’ve paid for the cost of building that system by taxes and fees. What happened to my right to access information and build services on top? Basically the state has decided it wants to be in that business hence it will not be good for the ecosystem long term(Discussion for a different day). But what that means is, innovation beyond the state paid actors and Telcos and Banks is really limited because the average App developer cant get to it via API or build innovative services that linked to identity in any way. Banks may/maynot allow you to interconnect with their APIs to run some of these verifications but that’s a walled garden approach. Rest assured, Scammers and the other lot don’t need API access they have and will continue to thrive by figuring out simple exploits. That truly is why its complicated, because it is fairly simple to counter these exploits but no one seems to be paying attention.

No less the real issue is with the floating copies of ID cards every where, god knows what happens to them when you give them to you bank or to you mobile operator or to the travel agent or where ever else you use the hard copy version(Schools/Clubs/Real Estate/Wills/Contracts, etc). Or what they can be used for.

Fintechs and Banks cant grow up and expand till there is absolute consumer confidence that your information is secure and a consumer protection agency is on the hook for it along with the regulators, because at best their (Fintech/Banks) tech is dated more so the mentality. There are good people every where. Every time I had the mis fortune of going into a bank branch and or try to open a domestic “wallet” account the experience is less than pleasant. My opinion will change when my experience changes.

Maybe the bottom of the pyramid market where they(telcos/fintechs/banks) intend to service customers is not yet aware, but soon they will be, and if this(financial inclusion) grows at any exponential scale, then the problem will become bigger to rectify.

My confidence in third parties is at all time low, you should try to do the following test, borrow a secondary phone number from a friend (say from Maybelink, UffPhone, CpecMobile) then take your own ID and try to open say an account in the most popular recently 45% strategically partnered branchless banking product. A little birdy says you will be pleasantly surprised that you will be able to open an account as the SIM to ID check is not where its supposed to be.

(Again all this is hypothetical and no one is encouraging you or any other member of the public to do some thing they shouldn’t and this is purely an academic hypothesis)

Meaning if you took say a number from the other 3 Telcos, used your own NIC or some one else’s, likely you could open a brand spanking new account, that you could use to send “Asma” as many loads as she wanted or you wanted. Because the Sim + ID combination seemingly is not being validated by Asmas service provider.

Do you see a problem with that? No “Asma” is still single and will gladly take your money. As will any one else who has your ID and an unused phone #(on an other network), they can open a (insert “Asmas” favorite product here) account using your name and hypothetically make transactions, receive payments.

You can potentially reverse the experiment and the carriers and the products but the central idea is, Asma remains single because the suitors all addressing the wrong problem(s).

Maybe with all this hype and PR is just in time, may be there is a dire need to bring in vilayati(imported) tech to fix digital payments/fintech/banking because truly its not ours to solve. Maybe Asma is also tired of all the local suitors, maybe its time for her to get serious and thats why she looked Eastwards to her Ant*.

Get. Set. Go ; Stupidity Avoidance Filter (It’s a real thing)

Every day when people wake up in Silicon Valley, they get up , set eyes on their mission and get going to deliver on their vision. This btw is not only limited to California but from Tel Aviv to New Delhi and from Jakarta to Sao Polo all the places that are going places have their GSG synced to some inter galactic clock.

But California is perhaps more special. If you step through the pages of history from Steve Jobs to Bill Hewlett to Vint Cerf there was always some thing in California that seems to be missing from every where else.

At 12, Jobs wanted to build a frequency counter, but he didn’t have the parts. Ever sensible, he suspected that Bill Hewlett, then the CEO of HP, might have some extras. And so, with the bizarre confidence of an 8th grader, he found Hewlett’s number in the telephone book and called it. How many 8th graders do we now know who demonstrate those chops? For example most 8th Graders in our NA250 demographic are making tough choices on what to order on FoodPanda vs building a FoodPanda. Its not their fault, generations before them are to fault for this.

Vint Cerf was born in New Haven, Connecticut, the son of Muriel (née Gray), a housewife, and Vinton Thurston Cerf, an aerospace executive. Cerf went to Van Nuys High School in California along with Jon Postel and Steve Crocker; Both were also instrumental in the creation of the Internet .

None of this happened by sheer luck, it happened because the galaxy came together in some mysterious way every single time each one of these events needed to place and connected a host of un-connected folks to achieve greatness, their unifier was the state of California or rather the mix it offered for success .

This is not a history lesson about California. This is a very primal review of why when you nurture people by having the right mix of education, industry and the dream to win big you continue to produce effective results.

We are ways away from replicating the success and my confidence continues to be eroded by the patrons of industry at large. On my return trip home the first tweet I saw was this:

Elon Musk is sending cars into space and the collective intellectual horsepower of the Neslte advertising/brand gurus could only come up with building the worlds largest saucepan. I am just shocked how in this day and age a corporation of that size comes up with such stupid publicity stunts. If that money was spent to make just 1 Nestle powered school it would make for better a cause.

But I digress, if you’ve ever met the brain trust at these organizations at least locally; the highlight of their career is to get to Thailand to shoot an ad. Given that kind of mis guided sense of achievement there is no wonder why their aspirational target is building F**ing saucepans. At least its moved on from buying fake likes to appease their middle managers to having promoted tweets.

This continues to happen and I don’t mean just at one brand or an other but collectively in society because we have completely missed the boat on building a conducive ecosystem.

We all get lucky. Once in a while we do something really stupid that could have resulted in death, but didn’t. Recently I saw someone who was texting while crossing the road on to oncoming traffic , narrowly avoiding the car whose driver slammed on the brakes. Post event, we realize that was not an ideal way to go about doings ones business. What can we do? We can make the most of our second chances by building margins of safety into our lives. We need to build that into our country and our ecosystems at large, ranging from education to industry to just the way we operate as human beings.

Ever notice how your fuel tank indicator goes on long before you’re really on empty? It’s the same idea. The difference between waiting until the last minute and refueling comfortably early gives us a margin of safety. We need to add that principle to our lives else the GSG dream will remain elusive for generations to come and next we will be building the biggest Karahi(wok).

Charlie Munger, the business partner of Warren Buffett and Vice Chairman of Berkshire Hathaway, is famous for his quote “All I want to know is where I’m going to die, so I’ll never go there.”

That thinking was inspired by the German mathematician Carl Gustav Jacob Jacobi often solved difficult problems by following a simple strategy: “man muss immer umkehren” (or loosely translated, “invert, always invert.”)

Jacobi knew that it is in the nature of things that many hard problems are best solved when they are addressed backward some things just cant be solved backward and our predicament seems to be the same, be it companies that operate in our midst our government or policy makers and even citizens can use thinking for the net benefit of society.

Simply, if you want to improve innovation in your organization. Thinking forward, you’d think about all of the things you or others could do to achieve that goal. If you look at the problem by inversion, however, you’d think about all the things you could do that would discourage innovation. Ideally, you’d avoid those things. Sounds fairly straight forward. But I bet your organization does some of those ‘stupid’ things today? Just like our saucepan example proved, thinking forward/innovating is not easy, but looking at the same problem from inversion should dissuade future generation of brand marketers in avoiding these kind of idiotic moves.

Despite ones best intentions, thinking forward increases the odds that you’ll cause harm especially in our context. But thinking backward, call it subtractive avoidance or inversion, is less likely to cause harm hopefully.

Inverting the problem won’t always solve it, don’t get me wrong but it will help you avoid trouble or at least spot it from a mile away. You can think of it as the avoiding stupidity filter. It’s not sexy but it’s a very easy way to improve. For us to foster an ecosystem like California we need an industrial level Stupidity Avoidance Filter. Its an uphill task but it must start with the realization of what we are individually and collectively doing wrong as part of the society we make up. We are all at fault in some ways, saucepan guys more so than others.

So what does this mean in reality?

Spending time thinking about the opposite of what you want doesn’t come naturally to most people. And yet may of the smartest people in history, have done this naturally. So we must borrow a page from history. Hearing Vint Cerf recently the central theme of how the internet came about started with avoiding things in the past that made it difficult for communication to happen between machines, Lo and behold the invention of packet switching or the TCP/IP protocols that power every thing on the internet today.

Inversion will help improve understanding of the problem(s) at hand. By forcing you to do the work necessary to have an opinion you’re forced to consider different perspectives. We need to have opinions beyond watching talk shows and regurgitating what we see as our own brilliance. We must get into the mind set of GSG and for that to happen we need some serious inversion in our thinking.

To all the startups out there specifically, if you want to have one key take away: Spend less time trying to be brilliant and more time trying to avoid obvious stupidity. IMHO avoiding stupidity is easier than seeking brilliance.

Brilliance comes over time, avoiding stupidity shouldn’t.


The next 100 million users are ready? Are you?

TL;DR; NBU(New Bankable Users) + E-commerce + Payments + Logistics. Did the big guys really miss this? Move over ad-tech, the ride hailing guys may just have a better handle on this one.

Here are the thick big published statistics.

An addressable population of 210M+. Roughly 125M people under 30 years of age. 60M smart phone users and 50M Internet subscribers. 140M bio-metrically verified Sim cards and telco subscribers. A projected middle class of 160M in ten years. We see these statistics flashed every alternate day. What is the big deal, you ask?

Combine them with the following gems:

Total domestic ad-spend of $650M.

Total digital ad-spend of $100M.

Existing M-wallets transactions at $2 billion.

Branchless Banking transactions at over $6 billion.

Two big players in the digital payments space (Jazz Cash & Easy pay) who are riding momentum of existing market share, ATL and BTL campaigns and a single decade old acquisition.

One of them, a case study of how little it takes to move the needle in Pakistan if you have cash, infrastructure and timing on your side.

Incumbent Banks with no net new innovation over the last decade that translates into a dramatically new, better or more profitable business model. They just can’t break out of the box or get anything with a real bite done.

Ability to get an e-money license or tie up with a Payment systems Provider (PSP) to launch new services.

A new universal connect in the works that will allow any telco network subscriber to connect to any other telco network subscriber breaking down the walls and the moats Telcos have hidden behind for two decades.

How do you monetize this army of young willing plugged in dis-satisfied users? Users who are ready for a better customer experience and for instant fulfillment. If you are still thinking ad-tech or ad-sales both your game and your mojo are out of date.

For a cash driven market like Pakistan there are only two words that you should be thinking of when you see the above stats. One of them is payments. The other is networks or systems. Take your pick.

60 million smart phones users doing a single m-wallet transaction every day for the next 40 years of their expected lives. What if its ten transactions per day? You do the math.

The incumbents, whether banks or Telcos have already blown the opportunity. Their best efforts over 5 years of product launches and onboarding initiatives translate into 2 m-wallet transactions a year on 50% of the accounts. The remaining 50% are in zombie mode.

Time for GO-Jek, Grab or Ant Financials to look at this ecosystem as there is a world beyond South East Asia where others are distracted or dis organized. Given the ride hailing guys have already made a play for POS/delivery/last mile/ad-on services and payment mechanisms all they need is a new market with a similar product market fit and go crazy with growth.

Essentially an ecosystem play.

The ride share boom has shown already that the Pakistani folk have an affinity for these services. If someone can build an ecosystem play it will only enhance that position. Careem to date has sadly missed out on payments, given the amount of “transactions” passing through its system (locally and regionally), it has either intentionally over looked or delayed getting in this space.

They won round one in raising half a billion dollars in funding and outsmarting Uber and the transport mafia in Pakistan but rather than building on that success, have gotten fat and happy. Round two, when it comes to scale, execution, consistent service quality and customer retention has been a disaster for them.

It may just be cheaper for their larger regional rivals to buy them out and do this right. They are already making all kinds of entries to build bolt on services on top of their respective platforms.

The Indian Story

For vanilla payments, the India example is a case study on the advantages we already have when it comes to building this out. The Indian market had to build out UPI (Unified Payments Interface), we are already ahead of the curve and by just a little tweaking could enable this using 1Link.

The key in India has been a PSP backend that maintains customer information, manages and issues virtual payment addresses (VPAs), resolves VPAs to user linked bank account for an incoming payment, maintains history of transactions, logs etc. Note that currently only banks and approved technology partners of banks are allowed to run their own PSP Backend in India.

The approved Technology partner is the golden nugget here. Same/similar holds true for Pakistan yet no one has capitalized on this in its true sense.

 As of now, only banks and approved partners can operate PSP Backend. 40 Banks currently operate their own PSP Backend, which is connected to NPCINet. (National Payments Corporation of India (NPCI) the settlement agency).

In our case 1Link could arguably do this today. If only a mature, willing hungry partners builds an OTT service. The Asians seem hungrier for scale, so much so, Google made a bet on one of them just recently.

Three non-banking entities, PhonePe, BHIM, and Tez, operate as technical partners of the banks in India. In addition to building user facing apps, players operating PSP Backend can also provide business solutions to enterprises by means of exposing PSP APIs/SDK. A replicable model, with most if not all the components existing today in Pakistan.

Our banks and PSPs are not going to expose anything, besides their admission that they are late to the party.

There may still be time so that the industry reorganizes it self and get the Central Bank on their side or at the very least start building open API stacks where third parties could deploy services today.

You ask why?

Because if only the likes of GO-Jek or Grab look west from SE Asia or the Ad-tech companies look east from Mountain view or Menlo park they will realize that based on the demographic stats and the market access numbers above it is a no-brainer to enter this market.

Actually if they had been paying attention to actionable intelligence on Pakistan’s payment dynamics they would step back and first look at the money movement stats/volumes alone and then decide if they too may have missed the boat on this.

Sometimes, people don’t know what they don’t know. It is time to change that. It is great to look at Pakistan as a net 100% growing market for ad-sales by everyone, but the bigger opportunity lies in payment, commerce and the logistics space.

Think about it. If you grow commerce and logistics, it is just natural that ad-spend on line will grow. As an ad platform what more can we do to seed growth for the next two decades?

Moving from JUST payments to e-commerce

Jazz has shown, how little it takes to move the needle in this space. All it takes is one well funded player that has platform and tech experience, they had the funding part down atleast.

This is not even taking in to account the fact if some one would roll out a service and then enable in-ward remittances; potentially every android phone becomes a vessel to ship cash back instantly.

We take this one step further. Imagine if an Ali Express type service rolled out on the back of this. The ecommerce – ecosystem has already publicly proven how well e-commerce works; when executed correctly. Imagine if GOSF (Great Online Shopping Festival) or some type of Express market place was a permanent feature and the payment method always worked.

In one clean sweep, the entrant will displace most of the bad press around              e-commerce, yet still use all the underlying e-commerce partners and help              e-commerce grow leaps and bound but have a guaranteed payment system powering their own store and could work with banks and others to build loyalty as opposed to discounts to incentivize users further.

It should be a position that the folks at GO-Jek , Grab and maybe even Careem should be lining up to exploit. They already have a lot of experience with both stored value systems and services and large consumer facing apps.

Now look at this from the point of the average e-tailer not funded by corporate cash, they would get guaranteed electronic payment/settlement and less reliance on COD, thus potentially reducing returns and increasing reach. If Walmart and Target think it can work, I am sure a lot of thought has gone into this. It also gives rise to the notion of Market place of market places, allowing localized/hyper local shipping and rural access to products and people and cash and to the player who comes in an opportunity unrivaled any where else. If they happen to be in the ride hailing space it gives them last mile logistics too.

Realistically all it takes is to stitch the pieces together. Ant financial continues to be in the news, no one knows for sure what will happen, their approach is to buy a financial service provider and enter the market that way. Our South East Asian friends could take the easier route and tie up and do a technical partnership. No government with half a brain, during election year would say no to expedite some thing like this.

Sometimes I wonder with all the mental horsepower that the big boys have, what happens to the in country intel going back to Menlo Park or Mountain View? It probably gets rolled up as an ad-sales number somewhere and then rounded down due to being insignificant as a subset of the region.

We just need a fresh approach that Grab and GO-Jek have capitalized on in this region. Kudos to the Central Bank for putting out hard data all it takes is to take some intelligent views on this to be in line to capitalize from a multibillion dollar opportunity.

The next 100 million users are ready? Are you?


Annexures – Sources and Methods.

Branchless Banking Transaction Volume total was 746,569,386,455 PKR or 6,734,055,865 USD. (Six billion seven hundred thirty-four million fifty-five thousand eight hundred sixty-five USD)


M-Wallet transaction stood at 228,810,886,060 PKR or 2,063,874,192 USD (Two billion sixty-three million eight hundred seventy-four thousand one hundred ninety-two USD).


Ad-Spend Data from an earlier post

Special thanks to Jawwad Farid for his input, additions and corrections plus all the other nice bits.


Tech bandits come to Pakistan: Economic Hit[wo]men in Startup land

Pakistan has many internal and external aggressors. We cant blame every thing on external elements, as we are, ourselves to blame for letting things get out of hand. A strange thing is happening in Pakistan, in the race to the top of Tech stardom.

Before we dive in to the details, to understand what’s going on; a brief history lesson is needed. What we read in Confessions of an Economic Hit Man an autobiographical book written by John Perkins published in 2004, provides us with Perkins’ account of his career with engineering consulting firm Chas. T. Main in Boston. What we are witnessing is a page right out of the book and a chapter out of history. The aggressors are a different breed, but the methods and mandate almost similar.

 According to Perkins, his role at Main was to convince leaders of underdeveloped countries to accept substantial development loans for large construction and engineering projects that would primarily help the richest families and local elites, rather than the poor, while making sure that these projects were contracted to U.S. companies. Later these loans would give the U.S. political influence and access to natural resources for U.S. companies.[1] He refers to this as an “economic hit man.”

 In the 5 years I have been part of the larger local tech community we have seen a transition in the tech ecosystem. We went from a largely BPO and Hire-to-Build narrative to a startup hungry nation. Which is a fantastic transition to witness. Every one and every thing under the sun, progressing towards startups. The goal; to attain economic freedom and break free from middle-class shackles. That is the fantastic bit of this story. The desire, drive and success of Pakistanis trying to use the power and reach of the Internet in pursuit of their dreams is commendable. What a time to be in Pakistan.

 The not so fantastic part is, that is giving rise to a new type of technological colonialism. In the absence of domestic funding or at the right scale or without the right appreciation for the startups at home. With that, its open hunting season for foreign VCs , Funds and Angels. It is this Angel category, that is not so Angelic , once you peel the layers of the onion. (We want all the reputable VCs and Funds to come and excited by the ones reaching out to do due diligence)

Imagine this scenario: If you are a cash hungry startup, with limited access to domestic capital and un-realistic demands local of investors to take a 50-80% bite out of your equity. You are out of luck. Well typically you were, but not really. My self and many others, who are involved with mentoring the young startup community, started getting calls from eager beaver startup founders, who couldn’t contain their excitement. Just weeks prior they had given up on their dreams, they resented being in Pakistan, they thought they were being dealt with unfairly, calling into question their belief some times. A vulnerable lot. Emotionally, mentally and financially. We need to nurture them, that is where we have failed miserably.

 So what was getting them so worked up? They were calling and unanimously repeating a few names and offers of 10-100k of patient capital. They had all found their savior(s). Formerly un-heard of Angels(in the Pakistani ecosystem), mostly foreign origin(migrants them selves in their now chosen lands) and with some really prominent yet cryptic back stories. (As in you could Google them but to the unordained, they would seem fairly legit)

 Slowly but surely, seeing & seizing this opportunity from Silicon Valley and beyond, a new breed of hit[wo]men started emerging on the scene. Friendly and at first glance harmless men and women, typically multimillionaires/trust fund babies/ inheritance Angels – empathizing with the cause of Pakistan and our youth. Oh how they “believe in them” how in their own native land(s), they are the champions of causes that are challenging our Pakistan and our youth. How they want to help, “oh just do a little some thing”. I tried to ignore the misgivings I had for these types of Angels. But your “gut” is rarely wrong.

 Then an other interesting thing started to happen; this lot started traveling to Pakistan. They started identifying and socializing with what I call the bottom of the pyramid Pakistani IT folks. Not to demean any one, but the scum of the earth types, who have no real jobs, have no technical background, have never done a startup, never written a line of code, but some how show up every where and get their pictures taken. You get a fair idea, every industry has these “kalakars” we have ours, this Angelic lot started finding these “idiots” and started harvesting relationships with them. This did not happen over night.

 This too is entirely our fault, take the example of a parent who has 5 kids and plays favorite with the smartest two, the other 3 are susceptible of being naughty or just play into the hands of the less than welcome “outsiders, neighbors” etc etc. We should have watched out for our own, but we didn’t. They have 0 background in to what’s going on but they are on Whatsapp. They are living the dream, getting their pictures taken, creating and making industry events and presenting awards on subjects where they sometimes cant even spell the underlying technology let alone understand the ramifications of how they are being played. The other lot being played are CEOs from our Telcos to our Banks to our FMCGs and Govt IT bunch. You ask how? In the effort to feed the beast which is their “ego” they are championing the cause of these “kalakars”. Truly we have been trumped.

These Angelic Cyber Colonials picked up on the weakest link of the chain. They spent the better half of the last 2 years harvesting Pakistan’s cumulative equivalent of “Donald Trump supporters”. I raise my hat to them, they have single handedly with their money their gravitas and the free trips become masters of this circus of “IT Dimwits”. Given the lack of hero’s an entire breed of these folks are hero worshipers. As soon as some one familiar, reaches out to them from the West and wants to meet them; they put on their 2 sizes too small Valima Suit and show up. Slowly and gradually these “Angels” started getting invited to industry events or the lack their off, started creating with the “IT Dimwits” new events, new groups, new forums, new Whatsapp groups. With that came the condescending dis-information drive, the playing down of Pakistan and Pakistani startups along with every thing else in their way, whilst our own “village idiots”** cheered them on. Saying stuff like “Mashallah we now Have IT GURUs in Pakistan” (I am quoting from a whatsapp group). These imported gurus are cashing on the frustrations of our most vulnerable and its not just to create an “arab spring” equivalent.

These Angels are some of the worst type of people out there, they have the money the motivation and now the access to our youth to destroy and entire nation worth of rising stars and entrepreneurs, whilst leaving in their trail a sense of low self worth, self esteem and apologetic mind set. The sad part is that the one who can call out this bullshit fear the isolation within the ranks and cant live without their egos being stroked, they are the first ones to get in line to get their pictures taken, so the “Angels” are thriving.

 This proves that any one with money can get access to our most vulnerable. In this case young startup founders and the “village idiots of IT”, they are able to shape the narrative and their own glorious past stories and not a single person has fact-checked these people or their bullshit, they continue to spew hate and an agenda backed with “showing Pakistanis the way”.

 I thank them for taking the time to partake in our ecosystem. But whilst I must agree that they bring stories of and steer conversations towards building sustainable companies and ecosystems, their intent is perhaps exactly the opposite. Them downplaying Pakistani and Pakistan origin mentors and offering sage advice on domestic challenges and on mentorship is borderline arrogant without knowing the ecosystem. By flying in and meeting some folks and perhaps getting second hand info, its quite naive to think that the only veterans are the likes of them and their own friends, who actually aren’t even based here and are mostly inheritance millionaires, which no one needs to apologize for, just call a spade a spade.

 The worst part is, there are some within this lot who I am sure mean well, but they got tied up with these shallow arrogant and useless types, and are basing their view entirely on their self-hating Pakistani social circuit friends. As a participant in the ecosystem it is glaringly evident that they are cashing in on the insecurities of the “village idiots of IT”, given the fact that most their comments, engagements, awards ceremonies and media appearances are weaved around the same group of 8/10 common folks. Imagine all it takes to fuck over a large segment of our startup and investible companies, can be fuelled by 8-10 people and a few outside Angels.

 What these “Angels” are doing is not helping the ecosystem with their passive aggressive comments and observations, Facebook posts, Whatsapp rants and tweets about “oh how glorious Pakistan and Pakistani startups would be , IF only we could fix X or do what Y is doing ??? Btw we haven’t even gotten to the part where they are doling out money and advice on religion. The toxic mix gets worse, we will only focus on the money for now.

 They are talking down an entire fraternity of Pakistanis who are working very hard to build up the ecosystem by offering cheap cash in exchange for their even cheaper values.

 So like the Perkins’ account of the years gone by here’s what’s happening. These Angels are coming to town, they don’t need to convince governments any more, they need to just write checks to the Startups, before that they ensure, that they give board seats to their so called friends in Pakistan. So that their interest is protected. Their friends along with the Village Idiots, slowly but surely are government folks, people of political influence and any one in a position of power happy to take funds in exchange for favors or to be invited to Amreeka or elsewhere for “good time”. Cheap..Really cheap.

The reality is, where this money is going is in 3 very well calculated places. Grants to startups that would typically find it tough to scale, To them I say take the money and probably more. Use it to your benefit but don’t get driven by the Angels agenda.

 The second lot is the scary one, companies that have the potential to sit on and collect oodles of data on youth and youth related preferences (So startups in the hyper local and data space).To them I say, you have your entire life ahead of you, don’t sell short.

 Last but not least, retired so-called Pakistani veteran CEOs of Tech/Banking/Obsolete Multinationals and their “NEW” so called startup companies and ideas. These hit(wo)men have the right idea, they are trying to get into a parasitic relationship within the right constructs of society. The young, the under-funded and old guard, all where they can play to ego, cash or one final shot at making it big.

Startups, consider you self warned. If you see some one or some thing that looks to good to be true, it probably is. Fellow ships and foundations are the new tool of this economic warfare, run as far away from those as you can. If some thing is free, always remember you are the product.


“village idiots”** are those individuals who are perpetually free and clear to do any thing but work, not to be confused with the hard working startup entrepreneurs. But rather the free loaders at every award ceremony.

How dysfunctional Ceo’s/founders destroy great companies

I have been taking time to extensively evaluate what makes companies tick. Besides the central idea, that there is either an amazing product or service; that solves a need at scale there is more to it. It took me just shy of working for 2 decades to really figure it out.

You might be thinking that I ran of topics to write about, But having spent a week at a global accelerator program; meeting startup after startup, I couldn’t but help focus away from the idea/service and on to the founder(s). The ideas were solid, many before me had evaluated them to be at a stage where they were getting advice from tier one mentors who are at the top of their game globally.

Hence I kept on mentally classifying each founder, albeit based on my own experience, if they were going to amount to some thing or not? meaning would I read about them in the papers? I had a bench-mark, a fantastic CEO who built a great company then ran it in to the ground compared to the potential of the company. As I applied my template to each of those conversations based on the experiences I have had, I could literally see who Id read about in the papers. You can see them from a mile.

Founders who are lucky get to live scale, founders who are really lucky get to live scale and make money and founders who exceptionally lucky get to live scale, make money and retain their core team or their co-founders. The really unlucky founders f**k up and loose every one along the way as they explain to them selves that change is inevitable and people move on.

They are also the same ones who are operationally hands off, because, scale is new to them, they try to hide behind people to make key decisions.

This(the people need to move on concept) has to be the biggest founder lie known to man. I agree some times its needed, most times its not. Most times founders just hide behind it when they make emotionally underwhelming decisions. Its self actualization for them. They tell them selves, “hey I made a great company, I raised funding. I have so many people working for me. I must be doing some thing right”. This is where CEOs/Founders put on a reality distortion field. I call it “i’m all the shit syndrome” it eventually leads to making the startup into shit.

I have lived through my share of startups. Once as a funded founder (what they now call pre series A) and other times as an early stage employee or at leading turn-arounds at struggling startups or corporations.

Every situation has been different. The common thread for success has been only if the CEO was not a prick, selfish or insecure, every time there was a mix of this. The scale took a hit.

I worked with a founder, who had a great idea, made a great company, but was a fuc**ing train wreck when it came to dealing with emotional depth of decisions. Some people are good at ideas, some are good at sales, some pare good at starting companies some are simply great at being lucky. He was a mix of luck and perseverance.

The same people are not good at leadership or getting their hands dirty and getting into the weeds. They do have one fantastic quality, they pick amazing launch teams, they know who to empower but never learn to let go. They confuse empowerment with ownership and that’s when it breaks down. I have seen it one too many times.

Some times the same people should be replaced as the CEO, as they destroy the very company culture they wanted to build. Its actually not their fault. Their investors must be shot as must their board members for not seeing though this.

If you are an investor; let the CEO go, good shit happens when you do. Know a company called Apple? They once let their founder go. (Agreed that kind of stuff is once in lifetime but it does happen and then they make movies about it.)

If they stay they destroy the essence of growth and scale with their own insecurities and immaturity when dealing with scale. The co relation of ones title vs real experience and on ground expertise is not the same thing. Lots of CEOs get delusional with they first become millionaires. Boards get it wrong daily. So do investors. Its really not the CEOs fault. Typically it’s the first time, a founder is such a role and they royally s*rew up.

Research has shown that when you take some one who lives in a 1200 sq foot apartment and move them to a luxury suite of a hotel with full turn down service, they still continue to clean up after them selves. This holds true even weeks in to the change of their surroundings.

Initially its about the guilt of “being middle class”, its almost surreal to have people wait on you. Worse, judge you? Its naturally difficult for the brain to take on scale or change in scale. In this case the scale of ones surroundings changed, yet the brain is still living in the 1200 sq foot apartment. This is what it distills down to.

They may have grown from a 2 person or a 10 person company to a 1000 person company but some times they still cant deal with turn down service. This is when the CEO completely f**ks every thing up.

The good news is, there is always time to fix it.

They are in a dark place, every time there is investor pressure, they want to tweak stuff and they cave in to making bad decisions. Their mind is flourishing in the luxury suite, which is their new scaling business, but their soul is stuck in their 1200 sq foot apartment and their body is deteriorating.

Tweaking is the worst thing that happens as an outcome of board pressure. If you see your founder doing stupid shit, call them out. Some tell tale signs are being passive aggressive, lack of trust, gradually firing the teams that helped build the company, under the guise of “change”.

Its typically a death warrant when CEOs hire “buffer” “adult” staff to fire the other founding team members. Its like the Mafia, the God Father has others doing their dirty work. Sadly the dis-connect is, that in the Mafia you only make God Father after you have been personally responsible for making “people offers they couldn’t refuse” not hire Capos to do the dirty work and make God Father. You have to pay your dues to society. But in the tech/startup world, you can have the illusion of doing this back words and making it work. Typically it does not.

The change is already under way, it’s the founder who cant deal with it. A lot of good people and good companies get fu*ked over by a founder who cant distinguish between fear and the need to execute.

Also with your first few million $ you feel invincible as a consequence, I’ve seen most founders family lives take a turn for the worse after a liquidity event. Their lack of emotional maturity destroys the fabric of most relationships they had prior to being “wealthy”.

Whilst Key Man clauses are all the rage, some times it’s the Key Man who is no longer required. Let them hold on to their shares, let them be Chairman of some audit committee or a comp committee, but get them out while you are still ahead as the investor. Ive seen great companies loose their hockey stick scale when the key man was acting like a key a** hole.

Such CEOs and Founders are in a bad place, they are going through the best and the worst time of their lives, they need every ones compassion and true advice. The ones that deal with it, lead awesome companies. There ought to be syndrome similar to imposter syndrome but not really the same; that the founder is going through so that they get the care they need.

They are victims of their own success. Help them, help them selves and save great companies. **




**investors and board members the only people who can influence this are you guys.

Bhai Thora Sa AI bhi dikha dayna. Aur koi acha digital samaan bhi.

Middle class Pakistanis should not be given credit cards. Because it gives them access to the business lounge at airports. Whilst I do not mean to demean any one, given I’m part of the same hypocrisy. I was blown away recently by a conversation.

So let me put some ground rules down, I am curious by nature, I had an hour to kill and the whole lounge could hear what I’ve put down as the title of the post. Now its time to fill in the blanks for you so you know the events leading up to that monumental day.

I was minding my own business actually catching up on some pre read before a meeting. With my headphones blazing some Ustad Pathanay Khan. I could hear 2 super loud folks in the lounge going at it. It was like a dinner conversation yet they were at a fair distance. Just couldn’t ignore it any more.

After listening to their conversation it become fairly evident why banks are getting hacked. In 2 mins of listening to both of them I got 2 piece of information. Their names and that they work at some bank. So as with every thing in life, I Googled “Person 1 Name + Bank + VP”

Then I Googled “Person 2 Name + Bank + IT + Payments”

3rd image on Google search bought both these clowns at the famous bank signing ceremony pictures our industry takes. Guys with dis proportionately sized ties awkwardly above their bellies, typically red. Some pastries and yellow cake sitting on the table. I was aghast. This was too easy. What was worse, one of these dudes was a CIO. My next instinct was to make sure by next banking day I had no money at this Bank.

I wanted to mind my own business but the nuggets of wisdom being thrown in the conversation at a pitch and volume would make it seem like that “person1” the younger of the two. Wanted his presence to be felt. New pair of Jeans, check. Brand new fake Tag, check, Requisite 3 phones. One Iphone 2 andorid devices, check. (Don’t ask it’s a new thing, it’s a form of external importance affirmation)

He called some one. From memory this is what I remember. That’s when this got beyond interesting and border line retarded.

“Beta, Sir aur main aa rahay hain bas tou laadlay, VIP service honi chaye. Demo bhi lush karwana. Aur bhabi bhi aa rahi hain, full ghoomnay kay bandobast karwa layna”

Then he turns to his boss, says, sir wahan whats app nahin chalta, aur unka apna google hay. Buddu. (Whatsapp doesn’t work there, + they have their own Google/Baidu). Music to my ears, only one place on the planet that rhymes with that. Its called China.

So boy wonder, Boss and Mrs Boss were going to China. What I couldn’t figure out for the life of me was, what the fu*k for. It seemed like one of those vendor sponsored trips to buy hard ware or some shit.

No less, then he asked them to get Wechat, both mr and mrs did so or struggled with the setup. Mr was VP at the said bank and operational leader for Digital(per his bank profile). He had to be shown how to download the app. It was an other 20 min ordeal for all three to make an account. Then using the said Wechat, boy wonder got some tea and started pacing in front of me and said

“Haan beta, fit chal raha hay. Ive told every one that whatsapp etc wont work. Acha sun. Bhai Thora Sa AI bhi dikha dayna, na yaar. Aur koi acha digital bhi. Bahut door say aa rahay hain, Aur koi video unlock type scene bhi to dikha day na. Yaar suno time lay lo, we will stay for 4-5 hours, sab item achay dikha day na. Yaar Pakistan main sab bank Artifical Excellence laga rahay hain. To tumharay solution bhi AI honi chaye. (FML).”

I died a little inside, the bank didn’t matter, the persons “Attire/otherwise known as dressing” didn’t matter, the fu**ing conversation killed me. Here we had two reasonably senior guys, well senior enough by designation and access to have their profiles in the about section of their bank.

It made me laugh at first, then it made me sad a whole lot of sad. This whole f*cking hero worship of “puranay loag” especially at banks and hiring under qualified clearly “parchi” type CIOs is not going to lead us to innovation. These guys don’t even have the fu**ing background to innovate, the only know how to f**king buy hardware and software given this demonstration that too is debatable. So if any of you are counting on these guys to build Pakistans first indigenous bank fired payments or settlement solution, this fucker thought AI means Artificial Excellence. I would have not been compelled to write an article had it not been for the next step.

His boss the old man finally got a wechat account going, he asks the young guy, yaar password kia rakhna ho ta hay. He said sir, who apni bank wala dal lain “************” . Clearly im not going to put it there. But trust me a friend told me, it seemed like a universal password across devices, accounts, platforms, services.

Not all banks or people are made equal and im not trying to diss banks. But clearly with this kind of public display of stupidity could have resulted in serious consequences if the audience had some creative people and not yours truly.

Whilst your credit card like mine may give you access to the lounge, don’t give others access to your Bank or to your lives by publicly being stupid.




The Game of Assumptions. Road to Pakistan’s GMV

This is joint post by Jawwad Farid & Faizan Siddiqi *

Before we start let us all take a deep breath and try to ascertain what GMV means.

Gross Merchandise Volume

From Wikipedia

Gross merchandise volume or GMV is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame. Site revenue comes from fees and is different from the dollar value of items sold.

GMV or gross merchandise value for e-commerce retail companies means sale price charged to the customer multiplied by the number of items sold. For example, if a company sells 10 books at $100, the GMV is $1,000. This is also considered as “gross revenue”. In this case, the business model is based on a retail model, where the company basically purchases the items, maintains inventory (if need be) and finally, sells or delivers the items to customers. It does not tell the net sales or actual amount of audited services as GMV does not include discounts, costs involved and returns of products.

GMV Estimation

  1. In order to estimate GMV we could use three possible methodologies.A top down approach that starts off with a single piece of data from an authentic and well respected source and builds up an educated estimate on top of it
  2. A bottom up approach that tries to piece together the market size based on what we know of local market participants. We pick the top 20 players, add up the sum of their GMV, scale it up by a factor of 30% to 40% and voila we have estimate number .
  3. A forward looking approach that ignores current data looks ahead 5 years to see where our market is likely to be and work backwards from that figure for estimate number 3.

With all three approaches the objective is to keep the assumptions (moving parts) to a minimum and base the model on at least one authentic, publicly reliable data point.

In the absence of transparent market based disclosures, the true answer will likely be found somewhere in between using some exotic mix of all three approaches.

To illustrate the mechanics for purely illustrative and educational purposes we will use one approach to make a simple point. Any analysis we do at this point is going to be completely irrelevant a year down the road. Perhaps even sooner, but to have a conversation and to understand the real potential of the scale of what is to come.

Given the direction this market is going and given how this specific movie has played in other developing markets before us, the current market size or efforts to estimate it are useful for educational purposes only. You can’t put them to work or use them for deal making, acquisitions or valuations given the disparity you are likely to run into when it comes to projecting the next 5 years. Nothing is constant over 5 years let alone what we are about to project out. It can no less be a basis for getting in on the action.

Model One. SBP data set

Let’s begin with a look at the most basic of our collection of known documented facts. The source for all three statements below is the State Bank of Pakistan Annual review report of 2017.

  1. E-Commerce in Pakistan has 571 merchants offering their products online. During FY 17, 1.2 million transactions valuing PKR 9.4 Billion were processed through ecommerce[1]. Using the current exchange rate of 105.25 that translates roughly into USD 89 million – the share of the local ecommerce pie captured by credit and debit cards.
  2. There are 17.9 million debit cards and 1.2 million credits cards issued by the banking system.
  3. The 9.4 billion and 1.2 million transactions suggest an average ticket size of USD 74 per transaction.

Remember that these are all unadjusted figures. We can use them as is but its best to account for and adjust some items that may impact local market size estimates.

The likely case

We take the USD 89 million figure and trim it to account for local ad spend on Google/Facebook platforms. This trimmed figure then get scaled up since a large chunk of local e-commerce pie uses cash on delivery or COD. We put in a range of values for the distribution between COD and cards and generate our final total market size estimate.

There are two key variables.

  1. The adjusted figure that represents the share of credit cards in local ecommerce sales. We can round this up to total ecommerce sales using the second variable below.
  2. The share of COD in local ecommerce sales. If we know the dollar amount of card sales, we can use the COD component to scale up total sales.

We can plug in a range of values for both parameters and see the possible range for total market size. When we do this we end up with the grid below.

Here is how you read the grid. There are two bands that represent the two parameters. The row on top (US$) and the column on left (%) that we use for navigating to the estimated value.

The row on top gives the trimmed down estimated figure that represents the share of credit cards in total ecommerce sales. It ranges between values of US$ 30 to US$ 80 million. The column on left gives the percentage share of COD in total ecommerce sales. It ranges between 25% – 95%

The table below has 5 distinct colored bands. The one that we are interested is the light green 3×3 matrix with bold figures that represents values on which consensus can be built. Primarily because these are values that we see across vendors we track and talk to. Anything outside the grid is certainly possible but is not supported by credible, authentic, publicly available data points. If you have data that contradicts these points and are willing to share it, we will be happy to update this analysis.

The range in this specific grid is between US$ 100 to US$ 500 million per year. The likely answer for estimated GMV is somewhere between US$ 333 million to US$ 500 million based on this model.

Which implies that our trimmed down estimate for credit card share is somewhere between US$ 50 – US$ 70 million and our estimated COD share of total sales is between 85% – 90%. Market feedback suggests that the COD share could be as high as 95% but we are happy with our 90% estimate.

Now that we have these two values, we can dig a bit more and see if we can find additional data points that would support or challenge these assumptions.

There are also two new questions that we need to answer. Both deal with growth.

  1. At what rate is the ecommerce market growing?
  2. If it keeps growing at this rate for another five years what would be the total market size? Would it be large enough to be of interest to serious money?

These questions are of interest because they allow us to tackle the same problem from another angle. Where will things be 5 years down the road? From that specific perspective how attractive or unattractive does the current market or market valuations look right now?

This is the question we should really be asking ourselves. How big will the total pie be in 5 years? Using the midpoint of US$ 400 million from above and a 30% annual growth rate for the next 5 years we end up a rough estimate US$ 1.5 billion.

That is the limit of our current analytical tools. We are bound and married to data in the visible spectrum. When we stretch the visible spectrum our numbers become questionable.

Time to throw this analysis and this model out of the window for one simple reason.

We used a similar logical rational step by step model to estimate the projected future share of smart phones in the local market in 2009-2010. The objective was to project actual smart phone in use in Pakistan in 2015. Two of our smartest analysts and a data czar took part in the exercise. With hindsight our estimate was off by about 97%. It was good thing our analysis was not released for public consumption.

Model Two – The alternate forward looking perspective

When compared to our nominal GDP basis the figure of US$ 1.5 billion is not exciting. It looks great compared to your current size but it is actually quite depressing and unlikely for reasons that we will just highlight.

One hint is the metric that measures the size of the internet economy as percentage of total GDP. The G-20 benchmark[2] for this metric is 5.5% with some economies seeing values as high as 12%. Given the availability of 4G data, the affordability of smart phones, the increasing share of data enabled phones in local phone sale and the growth of online retailers in the local economy, our benchmark figure is likely to rise.

Before you flag or question the G-20 metric let’s take a look at G-20 membership. In addition to the developed world, the G-20 also includes the following countries – India, Indonesia, Argentina, South Africa, Saudi Arabia and Turkey. We are not just talking about North America or Western Europe, some of these markets are quite similar to our own in terms of cell phone penetration, population demographics, data usage and middle class growth trajectories.

Now back to the GDP. Our estimated GDP figure on a nominal basis for 2017 is US$ 304 billion. 5 year later in 2022 this figure will hit US$ 380- US$ 400 billion using the current growth rate of 5%.

US$ 1.5 billion in ecommerce sales represents less than 0.4% of our current nominal GDP. The G-20 benchmark by 2022 is estimated to be between 7% – 12%.

Our actual number 5 year later is likely to be at least 2%. Improving logistics, lower reliance on COD, higher consumer confidence, removal of payment system frictions, better service quality, more polished players, better supply chain management, higher fulfillment rates, growing middle class, increasing prosperity and spending power are all factors that will play a part in increasing the base rate.

Some of us in the analytics world think that since we have already skipped a few steps in ecosystem evolution, our actual share may be even higher.

But let’s not be too greedy. Let’s stick with that 2%.

That 2% translates into a market size of US$ 7.6 – US$ 8 billion in 2022.   At 4% you are looking at US$ 15 – US$ 16 billion. Our current “hand waving magical wand in the air” market size estimate is US$ 400 million.

What happens to a market when it jumps from US$ 400 million to US$ 16 billion in 5 years?

When a market jumps from US$ 400 million to US$ 16 billion do you really care if your original market estimate was US$ 400 million or US$ 650 million?

If you sold out at US$ 400 million and the market jumped to US$ 16 billion… Let’s not even go there. You would be what we would define as a sucker.

If you have the staying power for 5 years, I think it’s time to buy some online real estate. If you had the foresight to buy it and have credible business management skills, it’s not time to sell, it is time to hang on to it because you are in for the ride of your life.

In English, please.

So here is what all of the above means in simple English. In case you don’t like spending too much time with tables or on numbers.

The current numbers out there, made popular by the usual suspects range between 110$M TO 170$M. The state owned official nice to have figure is 1 billion by 2020[3] subject to usual qualifications.

The question to ask your self is, if you were pitching those numbers because you work at an ecommerce store/ allied business, would you really be dumb enough to get out now or do you just need an exit valuation so you don’t get past the hype cycle you created yourself? Bonus pool? Contract renewals? End of the line?

The time is now. Raise capital and stay afloat. Sit down and plan out the long game. There is no point to get out now, as you are in the driving seat or at least have a shot at it (you know who you are). If you are cash rich it is time to diversify. Buy some of the really crazy plays out there. 500 odd players is not large enough for a country of this size and the volume we are talking about.

Imagine getting into DHA Phase 8 in 1997-98. Everyone was selling, the city was on fire, valuations were crap, sentiments and basements were both underwater and people laughed at you if you even mentioned buying real estate in Karachi. And then to make matters worse dollar account were frozen and sanctions were in place.

If only you had listened we wouldn’t be having this conversation right now and you wouldn’t need to work today.

This promises to have the DHA/Bahria style returns the average saiths are looking for – Not 10X but 100X if you call it right and have staying power. If you know what you are doing and you have the right people on side to help you scale and sustain. This isn’t for every one. Most people will die due to inexperience, greed and timing challenges. Only a few will survive.

Here is another kicker for my many friends shopping for exits and posting pictures with our esteemed friends from China. What we must all realize, is that if a Daraz type transaction goes through, it does zero for the ecosystem.

Most if not all the money exchanges hands out side of Pakistan and no value is created till such time that a new operator/player is fully involved domestically. All they buy is a brand and a functional site, albeit well known and mostly with other sister properties regionally. A regional/geographic play for the buyer and if the price is right, a fantastic one in 5 years.

Yayvo and the lot, if a transaction does go through, the buyer actually buys a really big tongue twister. A race to the bottom with out VC money to burn. Race to the bottom (cutting price) type outfits are really not needed.

The data in its true form shows that you don’t need to underprice to deliver. Investors must ask what is the rocket science in selling product at steep discounts funded by their dollars? It is the oldest question for sales team – anyone can sell at a discount – why do we need you?

The market has the appetite for real players with real service. More so if you own data, fulfillment, delivery, service quality and warehousing. Beyond self-promotion on social platforms and hashtags the substance is lacking or lost in translation. If hashtags were GMV all these social media types would be billionaires.

All others who aren’t in a race to the bottom or a rush for quick exits in the end will do better. Write this down on a piece of paper and look at it when people mention exits. Just two words, two syllables. Long Term.

A small slice of a US$ 15 billion dollar pie goes a long way. Not everyone will make it to the table or have the appetite to sit or stay on it. Those who do will all have one thing in common. A healthy respect for other people’s money and the ability to play the long game.

* All the nice informative bits in this piece including the easy to read tables in color were crafted by our resident numbers guru Mr. Jawwad – ask the right question – Farid. I would recommend a google search, if you haven’t met the gentleman or crossed his path. He is even more polite than his prose in real life as long as you don’t mention funding or short term exits in his presence.

All the other nasty, waspy, brutal parts that will eventually piss of the ecom/bankers/transaction types were crafted by yours truly.

[1] State Bank of Pakistan, Annual Review, 2017. Page 25. This is the first year that this number was tracked and reported by the central bank. That by itself is a market action trigger.

[2] The Internet economy in the G-20, Boston Consulting Group, 2013-2014

[3] Source PTA Annual Report, 2016/17

**k your Accelerator / Saith Investor & get ready for an IPO

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We aren’t interested in Me2 apps unless you have the users to prove us wrong 🙂 , we aren’t interested in “to be built” products or ideas, this is not a VC deal to fund your dreams, this is to take your dreams and add growth capital and fuel to it. If you are in business you better be incorporated, ideally a Delaware corporation, if not, then you must be ready to take the right advice.

If you don’t have audited books and a clean tax bill of health esp if you are post revenue, you better have a very compelling reason to get in touch. If you are pre revenue but 100k MAU and are happy to be compliant with all taxation/incorporation items do connect with us.

This is patient capital, we patiently hope that for our connections, advice & fund raising to help us earn out : we take a rev share to capitalize the value of our time in the books of the business. Any incoming financial transaction is valued in relation to our capitalized value in addition to a max 10% equity sweetener. No we aren’t greedy, we are just plowing back the time we will invest with you. Nothing is free in life not even our time and advice. We will only take 5 mandates a year, we already have 2 for 2018. So we decided to change things around for the new year and share this as a post.

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If this excites you and you want to work with real people who have grown shit to 10-15x growth and have IPO, Exit and real world experience in tech deals and whose names dont end with Sahab or Sir. Please leave a comment with your email address and a url or initial details about your business, some one will get back to you and share detailed next steps.