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 If you are still thinking ad-tech or ad-sales both your game and your mojo are out of date.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)

http://www.sbp.org.pk/acd/branchless/Stats/BBSQtr-Apr-Jun-2017.pdf

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).

http://www.sbp.org.pk/publications/acd/2017/BranchlessBanking-Apr-Jun-2017.pdf

Ad-Spend Data from an earlier post

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

 

Wireless Carrier – Spammer or Innovator ? Leading from the front.

Oh Telenor I have now relied on you for 5 years why must you ruin my experience by literally spamming me daily? On an ill fated day, 27th Aug, I decided to trade in my 3g sim for a 4g sim and some how Telenor decided it had a right to offer me 100mb daily with a youtube link and then tell me my free quota had expired.

For all the things Telenor has gotten right this is making me rethink my decision.

This is brutal. 5:42 AM Spam. I dont know what tech is messed up but seemingly every time I go in and out of a 4G zone I have to deal with a text message. What is a consumer to do? What the hell is wrong with these companies? Nahin daikhney mujhay apni man passand videos on youtube. Not sitting idle all day to go view on your que especially not at 5am.  Cant fathom what is wrong with these guys. But always ready to market random acts of kindness when they cant even get basic service right.  Even without underwater trouble they seem to be smoking some really good stuff.

This only added insult to injury as over the summer(June 19th) I wanted to get voice mail, a very basic service else where in the civilized world, one which I had used off an on in the past but I called the call center and after a 15 minute activation ordeal I was told we no longer offer this service. But I am not sure, your account rep will call you. He called and asked me to share what measures id taken up to that point. So I responded via text msg as below:

On que, 30 mins later I get a call “Boss, kaisay hain aap, yaar I was told apko voice mail chaye hay” I humored the gentleman as he had taken the liberty of calling back and seemingly wanted to help.

He said he will “inquire” and let me know. True to his word, he calls back and says “Boss, we discontinued the service, magar aap kareen gay kia voice mail ka?”

Fantastic customer support no less:) The guy went from being my account rep to being the average Pakistani phuppo. Why must I defend my desire to use a service.  More so https://www.telenor.com.pk/help-support/faq/voice-mail is still out there albeit void of any info. I am struggling to understand why the disconnect across channels. Perhaps I expect too much. Or perhaps these guys have gotten fat and lazy. Or they are too busy focusing on other initiatives as opposed to basic customer satisfaction.

It didn’t end there, I also realized on a recent visit to a franchise in my desire to get an other number for an IOT device, that once I ran my bio metric, I could not access any other feature/update/sim replacement prior to 8 hours because the Nadra verification had a time lock. So I am standing there dumbstruck being told I need to come back. It was a rare treat for me to be there in the first place the thought of dragging my self back still doesn’t appeal to me.

I am struggling with the back end systems lack of design and untested use case of authenticate once and keeping the session live while the customer is on premise and ensure all their transactions are complete before the authentication key is let go. Who in their right mind would come back in 8 Hours and continue to keep on doing so if you happen to be one of the lucky ones with multiple sims/numbers.

I wonder where the technical innovation is?  why is customer service so difficult? why are the systems untested? I guess like every one else Telenor is caught up in the startup frenzy.  They got lucky with easy paisa and it truly revolutionized an industry. Credit where its due.

The next guy with greater marketing muscle to come in, can and will disrupt even that space. It seems most companies here are one trick ponies, just because they did some thing right once, they have a right to consistently delivery crappy services for life.  With Google payments(supposedly launching) in India this week. It takes one market force of change to destroy the status quo. Cant wait for a real payments company to come out of the domestic talent or to show up with VC money to put all of the telcos in place.

The larger challenge is why every one puts up with shoddy service and how the CEOs of these companies parade their CSR and Best Employer regimens to un suspecting Facebook users. These guys should be made to use their own service with out preferential treatment and go stand in line at a service center to understand the plight of the consumers that fuel their growth.

If these copycat CEOs must borrow a page from a play book, I encourage them to go read this and try to emulate 5% of  what this guy is doing:

http://read.bi/2x32kfT

 

 

 

 

Pakistani banks have nothing to fear when it comes to Fintech!

You read that right, but what you missed was that they are barely mobile and or digital to really fear the paradigm shift that is essentially Fintech.  Fintech wont take down Pakistani banks, they will try to totally blame that(in time), but what will take these banks down are the 50-60 Yr old CEOs lack of understanding around what digital is or means and the industry hero worship around “aray falanay sahab to baray puranay IT kay admi hain” 🙂 .

Exactly my point, you cant teach a “Purana admi” new tricks.

This lack of understanding also extends to the board members of these banks too. You ask why? because these guy do not use their own services digitally(ever), they are not the net new consumer so they can never understand why it sucks so bad. They call their admin, who calls the bank manager…you get the picture.

The first step to solving any major problem is the recognition that a problem exists. In the case of these mis guided banks and many other tech centric businesses in Pakistan is that they compete with each other and do not get out of their own comfort zone. Or they buy technology from global vendors without knowing what it is, because every one of their peers are doing the same.

When you compete with at the bottom rung of the ladder in terms of innovation and technical innovation all you end up with is a site/app/system whose success is measured by how many times your CEO sees the AD on TV about his/her product. Mis guided benchmarks about mis guided items demonstrated by more misguided people.

The best story I ever heard as to why the chief digital officer of a bank refused to buy online ads was as follows. He told me, that they wanted to go and acquire female customers between the age of 25-45 and ran an online adwords and fb campaign across the networks in Pakistan. Their CEO called and said you have spent 50k USD on this, I have browsed every major site in the country all week yet to see a single ad online but I see ads for “unani nuskhas” all over the internet, any site that I go to. The irony of targeted marketing was lost on the CEO. Where in both Google and FB delivered on those campaigns the CEO didn’t understand why he didn’t see the AD because he always saw it when he spent 50k USD on TV. Has any one ever measured how many millions of customers have banks signed up after every major TVC?

I will stay away from acceptable service levels of the technical initiatives of the banks but what I will talk about is the thinking behind digital and what is an acceptable baseline  by way of mobile banking in the year 2017. I will further not go down the security exposures rabbit hole,  because that doesn’t warrant a public disclosure of the weakness of the systems in place (of which there are a few dozen examples if not more). We will focus on the basic nuts and bolts of their front end customer sites/ digital customer engagement and the evolution of mobile banking or the lack their off.

I am selecting these banks in no particular order. Lets start with the mind set of digital and servicing banking customers in the age of technology.

Let me demonstrate how UBL is handling customer engagement on the Google Play Store.

 

This has to be a world first, an Eid Mubarak message within play store comments responses. Before the trolls start about oh we should be proud of Eid and whats wrong with wishing people on Eid, absolutely nothing. This just demonstrates the mindset of the person replying to these messages and the mind set of the folks who run or comprise  the digital function at UBL. Perhaps its not their fault either as the strategy arms of these banks are forcing down digital as a department vs trying to instill digital across the enterprise as an activity of transformation.  The image that comes to my mind is that of a an uber sweet 50+ uncle at UBL who has been assigned the task of responding to these messages after 30 years at the bank(BCCI Era) and with a view to give him his final pre retirement role. You dont believe me? See the an other example below.

A lovely message before Sehri. I mean talk about keeping it professional. What I am trying to get at is the fact that before Fintech destroys traditional banking in Pakistan, the traditional banking IT/Digital/Strategy guys would have already helped the cause fueled by their respective CEOs desire to “be digital” without knowing what the hell it means.

In the year 2017, the least I’d like to see is a functional mobile site. Lets see Bank Al Falah’s latest and great foray into this space. First of all half the text on the site is not legible due to bad font selection and sizing. Secondly the site barely cuts as a responsive site. Let us not even get started on thematic and lay out mistakes and the color red.

 

Trust me there is no way you can read the font the arrows are pointing towards. In this day and age of responsive, this design in it self is circa 1998 at best. Who makes sites like these? let alone banking site, where consumer education is key and information clarity is the difference between engagement only and engagement + conversion. This truly sucks.

One could over look a few UI/UX items but this site is riddled with them. No call to action any where, when a consumer comes to the site they come online to BANK or to Interact with the services. The drones who are building these sites are using them as a corporate/marketing site. There in is the issue, these rock stars of digital have not figured out the difference between a corp site and a consumer site.

I think a basic pre-requisite should be spell check.

But I digress. See this:)

In the year 2017 it should be a crime to have an info scroll menu being cut off (see the arrows).The slider box contents have to slide right to be displayed on mobile. I rest my case, if you cant pass on your information on a mobile platform let alone in a single interaction, why are you even in business? Is no one asking what the cost of rolling out these sites + the cost of the digital departments is, in relation to the online conversion and reduction to 1st level call center support. They should be directly proportional, first call resolution services should see a decline of 20% if an online site is capable of doing that for consumers.

But the best is yet to come.

The award for sloppiness, and lack of imagination goes to this main page, which has not one 1 menu, but see the arrows, 2 menus. Had the bank like a billion new exciting digital features that they wanted people to discover I’d get excited about this cardinal design sign. But it even the content is the same/similar in both menus.

Head of digital much? This is a question for basic common sense.

This stuff didn’t happen over night, nor can it be fixed over night. Banks give rise to  the most un imaginative breed in this country. To look at mobile evolution, you have to look at web evolution. I couldn’t resist going back to way back machine and look at HBL. I will let you decide, how far they have come in their evolutionary journey.

 

From 2008-2013 literally nothing changed online for HBL.

Lets look at 2017

Not much has changed either visually or operationally, same center image construct, with a menu on the right/in this case its kept with technical advancements:), same/similar top menu. So since 2013 what is the innovation that happened here? How can the largest bank in Pakistan innovate if the custodians of digital cant even get the basics right.

They arent doing any better on the Mobile banking side either.

As a consumer, when I come online to the Banks site the first thing I should be able to do is login to my account. Every single one of these so called digitally innovative or leading edge banks have failed at the first call to action(Login). I wonder how their CEOs judge the KPIs of their digital folks. How can you in this day an age build a banking website that doesn’t have a logon item front and center.

Interestingly as I browsed through various banking sites in my effort to find one decent example, I wasnt let down. Perhaps there are many others, but in terms of size scale and resources Summit bank actually had a call to action/LOGIN and an URDU button visible on mobile + their UAN and email address.

Alfalah and HBL both had it post one click meaning within an other menu. Summit also had the 2 menu problem(see next to the Urdu icon) but luckily one menu is just a CSS mistake and doesn’t do much on responsive:) But clearly there is no QA any where.

Coming back to UBL. They seem confused, their site opens up with a site selector on mobile to select region. It clearly doesn’t look responsive, it looks like a mobile ready site no less:) from 2001.

It should pick up your ip and take you to where you need to go, that stuff is free to implement and reduces one click.

When you do get to your so called mobile site, the following disappointment awaits you.

I mean look at the dead space. This has to be criminal in this day and age to have a mobile site that looks/works like this.

This stuff is followed up by the following stunts and I quote from the Banks own PR. http://bit.ly/2y0YIKt

KARACHI, PAKISTAN – 21 August 2017: IBM (NYSE: IBM) today announced that United Bank Limited (UBL) has selected IBM to support its digital transformation journey by establishing a Digital Design Lab, the first of its kind in Pakistan, to weave a seamless digital banking experience into customers’ daily lives. The lab will provide an environment for UBL’s interdisciplinary teams as well as its network of start-ups, fintechs, ecosystem partners, and academia to develop personalized and engaging digital customer experiences.

I dont know who should be more ashamed, the Banks CEO, IBM(for being an opportunist) or the banks Head of Digital, if they have one. For a bank that cant make decent responsive website the above sounds like hot air at the least and misguided adventure at best.

I hope the bank sees the irony in the disconnect. IBM Pakistan must be lauded for their foresight to make some money off folks who are clueless about what the digital journey means. This market and these banks are ripe for the taking.

In the same spirit. Lets talk about speed and some basic form of technical serviceability bench marks. In the mobile space to leapfrog from mobile to fintech to consumer fintech the one thing every one must get right to get the unbanked on to your platforms and services is speed and delivery of your technical site(payload)/service in the least amount of data streams as the consumer is conscious of their data spend. Lets look at how most of the banks in the country perform on the speed to performance co efficient. In no particular order.

 

 

Lets not go too far to compare. The first bank that came to my mind in India ICIC bank. I ran the same test on.

 

It has a 30 + point lead as compared to our banks on average. Its a mind set thing, you don’t have to be 100 on the scale to be great. You just have to work towards improving. What I have seen so far is a lot of mis guided non sense labelled as digital strategy.

I dont claim to know every thing, heck the intent of this blog post is from the point of a consumer who wishes to use mobile banking, I am happy to sit down with any one who has the wherewithal to recognize that a problem exists and then work on trying to find a solution so that this eco system of Fintech’s can actually benefit from the banking players(due to regulatory hurdles), who at this stage first need to get their own house in order to even remotely be competitive as banks let alone against Fintech companies.

Its a matter of time only, as the regulations ease out, the Fintech’s wont need the banks, the banks will be a dying breed looking to partner with Fintech’s to stay alive. Right now the banks have an unfair advantage viz a vi regulation, it is their hour to exploit it to their benefit. Sooner rather than later all this Digital strategy stuff will go down the drain and shareholders of these banks will be left without knowing what hit them.

If you are the head of digital at a bank, hopefully the CEO of your bank doesn’t read blogs and you can dismiss this as what ever you want to dismiss it as, if you are the CEO of any of the banks I mentioned, you need to sit down with your chieftains and figure this basic stuff out, before you are mis led in to believing numbers and indexes and kpi’s that were invented to make these digital types look good, you have a real issue on your hands. If you dont innovate fast enough its over.

 

 

 

Hello Developers….Are you building for the Onavo mindset?

So I was wondering how Facebook identifies upcoming companies, startups , products and competition. How did FB decide to acquire Whatsapp? How does it see traction? What tell tale signs is it mining for? Beyond trends there has to be hard data and user attribution that is allowing it to completely destroy the competition or rather either acquire or copy them.

The secret weapon is Onavo. They came to FB via a 2013 Acquisition.

Onavo was founded in 2010 by Guy Rosen and Roi Tiger; it raised $13 million from Sequoia Capital and others. It provides mobile data usage analytics and helps companies see how their usage stacks up against other companies.

So the stated acquisition goal was to help bolster its internet.org initiative as the underlying sorcery Onavo was doing at the time was measuring and controlling data usage etc. Simplistically speaking, plus it gave FB its first office in the Holy Land, not that they couldn’t go to and build an office in Tel Aviv.

But the added value of the data apps that they built, was what was under its belly, the analytics biz, which gives app makers the ability to gauge how their apps fare on the open market, as well as giving more insight into how people actually use the apps after they’ve downloaded them.

Imagine, Facebook can use that download and user activity data to spot trends in apps that are up and coming, potentially spotting at a very early stage the types of apps that are gaining traction with the public and what the end intent of that app or service or network is.

FB is doing a great job at it, they are approaching potential threats faster, doing more acquisitions faster and also they are not shy any more of copying features once they identify them.

From a Corp Biz Dev standpoint that’s the nirvana of information dis partiy. Facebook’s corporate development team can then check out these companies and enter partnership deals early on in the game — or perhaps just outright buy and hold them .

So my fellow developers from Pakistan, what you need to be working on is stuff that scales and build traction, FB is apparently watching. So instead of focusing our time on Meme Forwarding, we need to figure out how we commercialize a 56m+ internet audience + active daily users to satiate FBs interest. Remember it doesn’t have to make money yet, it only has to have an audience and active user base at scale. They could care less if it makes money. So stop. Pause , calibrate and think. Perhaps you have an idea that by design you can make-work.

Today when I look at Onavos, new and improved app and check out their privacy policy, I can be certain that they are enjoying the oodles of data we are all providing them.

We do not share or sell your personally identifying information to third parties except if we have received your consent or given you notice, or in limited circumstances described in this Policy. For example, we may share personally identifying information with third parties and “Affiliates” (businesses that are or become legally part of the same group of companies that Onavo is part of, including but not limited to Facebook, Inc.) to operate, maintain and enhance the Services, or for other purposes as described below. 

Pretty freaky stuff if you are paranoid about privacy. But if you use FB today you already gave up most of those rights.

Some argue the market size is not large enough and FB really isn’t interested in Pakistan. On the contrary, FB at the moment has product teams working on analyzing the data and insights its getting from FB users from Pakistan as is evident from country specific items showing up within FB. Small subtle hints like Urdu text appearing in shared FB links, the FB OG tags them selves have new undertones supporting some product localization efforts.

Rest assured they are trying to figure out all kinds of sharing habits, they have enough meta data. I wouldn’t be surprised if they become the largest (original) news/information/content source in Pakistan in months and years to come given they have exacting level details on every target demographic and their sharing and consumption habits. Keep this in perspective, every time a marketer sets up a FB campaign for a client, FB has access to that data, they can almost in real time track the full lifecycle of that activity. Similarly the single biggest nugget of information FB has is access to political sentiment data. We will leave it at that, but the Trump campaign apparently relied on FB to Swing voter sentiment. So just saying, imagine the real power FB has with this data at play.

FB like Google has no office in PK perhaps they don’t need to. Their recent VP level engagement with the government shows that they are intrigued enough to come out to protect their interests. They just don’t know with the political climate at play, what side to join. Like Google they can get most of their stuff done remotely. Or hire third party contractors to provide local context to data without actually telling the poor data analysts what the end outcome of this data collection will yield. If they were smart(which they clearly are) they would be pairing psychometric and demographic info an adding a contextual layer to it to basically understand both market trends and growth opportunities. Given at their scale the total market growth opportunity for them in Pakistan is probably worth investigating but not action up on yet.

If they were to launch their marketplace feature in Pakistan, they would wipe clean every single Craigslist variant in the market, Kaymu etc folding in to their parent are fairly good examples of times to come. It would also completely clean house on the private seller groups on FB as there would be a natural tendency for people to move to the market place model, as you add secure payment on top of it, it would essentially clean up the mid market e-commerce folks also. Don’t know what FBs grand plans are in that space but clearly a lot of hustle is happening. Facebook is getting stingy about Pakistan based content producers accounts to be verified also, in its mind as the smaller guys who own large market views will become a big challenge if they are verified. Hence there is no clear policy on verification and based on market sentiment, private small publisher who have 10-20M Page views are constantly being denied the proverbial gold standard, albeit the blue verified status.

I am sure from mom and pop sellers to folks selling scorpions on FB are clearly trends worth exploring. The moral of the story is, there are many ways to stand out especially if you have a product, service or content play that can attract X-Million active users in Pakistan. The larger the scale and larger the active user demographic, with a compelling idea or product, you will be noticed by FB. Make sure you have a Delaware corporation that your are tied to, else the legal formalities of either investing in you or acquiring you will be a larger pipe dream than actually building a product that gets acquired. Lots of good things are happening in this space, keep your eyes out, build products that scale fast build market traction and will remain locally relevant. FB will come calling.

Why you should care about Allen and Company & not Raiwind and Company

You can and will be forgiven if you didnt know any thing about Allen and Company before today. But only this once. It tells me a few things about you, the amount of online hours you are spending need a new cause, as what ever you are doing online is clearly not half as bad-ass as you think it is.

Every summer, the the tech, media, and business titans assimilate in the resort town of Sun Valley, Idaho. You ask why, they are there for investment bank Allen & Co.’s week-long conference which has been an annual ritual for 30+ years. It took them 30 years to be an overnight success no less.

This year too,  brought some of the wealthiest and most powerful people from around the world to Sun Valley once again.    Deals forged at the event in the past have included Amazon founder and CEO Jeff Bezos’ purchase of The Washington Post, and Time Warner’s ill-fated merger with AOL.

To give you an idea, the billionaires summer camp attendees’ parking lot is Friedman Memorial Airport, which was packed to capacity with 100s of Millions of dollars’ worth of jets as of midday Wednesday as the event was kicking off .

With around 85 jets, many of them Gulf Stream G650 and Bombardier Global Express models boasting wingspans of almost 100 feet and prices of $45 million to $65 million each, the airport is a private gateway to Sun Valley for most attendees, whose nondescript aircraft typically carry no logos and are often fractionally owned. Did I say this was an invitation only event?

This time around the two that stood out were  Nike and Sprint , their jets’ flashy graphics featured company logos and left no doubt as to who was in attendance. I guess if you have your own Jet you can be forgiven for this type of opulence.

The gathering is put on by the investment bank and is closed to press. It attracts an impressive array of moguls. Warren Buffett, CBS CEO Leslie Moonves, Snap Chairman Michael Lynton, Viacom Vice Chairman Shari Redstone, and Discovery CEO David Zaslav are among the names who have flocked to the resort and in the coming weeks many many more names will surface.

The gathering  included panel discussions on the state of the economy, the political divide in America, the drug epidemic, and scientific breakthroughs. Bill Gates spoke on  philanthropy.

Other speakers include Nike co-founder Phil Knight, Colombia President Juan Manuel Santos, King Abdullah II of Jordan, and General Lori Robinson, who oversees North American Aerospace Defense Command and U.S. Northern Command. (So yes it is a big deal) Past gatherings have included talks from the likes of Argentinian President Mauricio Macri, Canada Prime Minister Justin Trudeau, and former Secretary of Defense Ash Carter.
While in a parallel universe the entire machinery on our side of the planet is either trying to prove or disprove who is innocent or not. Where is our Allen and Co? We have industries and industrialists that pre date Allen and Cos 1922 foundations but thats exactly the problem.  The industries and industrialists  lack smart capital and an even worse we have a lack of companies, tech or otherwise who have either the scale or the gravitas of what is required to be globally competitive. We have some great companies, but we must not fool our selves of their paltry success against the S&P 500.
To give you perspective, here is the list of the companies with the highest Revenue Per Employee of 2016. Yes this is the revenue one employee contributes in that firm (hypothetically total revenue divided by employees). Some of our largest companies do not have total revenue equal to RPE of these firms let alone tech companies.

The table above shows the top 50 companies by Revenue Per Employee in 2016 in S&P 500.

 

This is why the Allen and Company Billionaire camp is note worthy, a host of these companies were represented there. We need our own camps, we need to start some where, it most certainly cant be f***  Raiwind. We have to get past our national obsession with “small people”, be it politicians or the forces or media personalities, we have to create our own billionaires club and not one which is created on the back of *allegedly looting innocent citizens.(* matter being           sub judice) . To create such a club we first need to dream and have ambition, that too kosher ambition , the halal variety that is not an outcome of robbing some one.

Also we have to park our national obsession of saving money vs generating money, these people did no become billionaires by saving X% of their income, they did amazing things that lead to amazing companies that led to amazing fortunes, you can not save a  7 or 8 or 9 figure net worth.  The best return on your time if you invest it in making money instead of saving money.

I see startups, people, businesses,  moms and dads, spending 30-40  hours per week doing simple household tasks, looking for deals, driving all over town and working their asses off to save  Rs 15000. Before you write me off as heartless, lets look at the flip side of the coin, If they would spend that same time and ingenuity working to generate money, they could easily lock down a potential promotion at work, if self employed add money to the bank by growing revenue using the same ingenuity and time, as I said before we need to be hustlers. All of us. Thats whats missing from our DNA, we have enough “juggar” hustle, but its real economic mind set hustle that we need.

That’s the real difference between a scarcity mindset and abundance mindset. All our lives every thing has been so scarce in our life that we have become hoarders, we hoard water, power, fuel, food and every thing in between albeit due to the likes of Raiwind and Co types, leashing economic hell for decades,  we have to totally and completely stop working so hard to hold on to a tiny slice of pie. We need to start  working on making the god damn slice bigger.  But we cant be blamed entirely as we have been conditioned this way.

The number of technology companies in the Fortune 500 has steadily increased since 1955, and this sector saw the second highest revenue growth during this period.It is also no surprise where companies are from. Take a look.

The  table above shows the growth rates of the 47 companies in this sector.

 

We need our California, we had it once in Karachi, but its been pillaged and run dry. We need a place that fosters growth, the arts, music, literature, tech and a general sense of freedom and an open and tolerant mind set in what we do and how we do it. We need to move away from minding others peoples business to using our minds to grow our own business.

We need to move away from thinking when the power going to be cut off to worrying about if our AWS account will be cut off . Its a paradigm shift that wont come, irrespective of how much electricity Raiwind and Co generate. We still have a Minister who thought Calibri like Black Berry was was a phone and not a font on national television and still kept on arguing to make his point. He is presently Minister for Law, Parliamentary Affairs and Public Prosecution.

They say a picture is worth a thousand words so for a change Ill share some for you to make up your own mind as to why the Allen and Co camp matters and why we need our own rival.

Rupert Murdoch, executive chairman of Fox News, and Lachlan Murdoch(son), co-chairman of 21st Century Fox
The Wizard of Omaha Mr Warren Buffet
Apple Ceo Tim Cook and Sr. VP of internet software and services Eddie Cue
Amazon founder Jeff Bezos
Mark Pincus CEO of Zynga
GoPro CEO Nick Woodman
SNAP Chairman Michael Lynton
CEO Ycombinator Sam Altman
Twitter COO Anthony Noto
Former Ebay CEO John Donahoe
GM IBM Watson David Kenny
CEO Discovery Communications David Zaslav
CEO GM Marry Barra
Stewart Butterfield CEO Slack
Kleiner Perkins Partner-Bing Gordon
Ceo RRE Ventures Jim Robinson
Mr Facebook
Ceo of Warner Bros Kevin Tsujihara
CEO of NextDoor Nirav Tolia and Wife Megha
Jerry Yang of Yahoo Fame

Want to know what was happening in Pakistan around the the same time whilst Allen and Co sessions were kicking off. Raiwind sessions were kicking off. Ill leave it at that and one picture to sum it up.

Raiwind and Company

Interestingly enough with all that was happening in the White House these two still made it and were taking calls from the sidelines.

Ivanka Trump and Jared Kushner on the sidelines of the Billionaires Camp

 

This is how they make sure that the show must go on. Not like our Raiwind and Co who are  obsessed with their own Incestual shit to give a damn about the rest of us. So its time we step up to the plate. No one will come and give us our Allen and Co it must rise from within. In the process clean the ( tax evading, bank loan defaulting, ECL listed, under invoicing, duty avoiding, politically motivated, morally bankrupt) filth that occupies the seat at the table in the corridors of business today and hand the reigns to those who will treat Pakistan and her subjects in a better state than they got them.

 

 

 

If Tendulkar ran CNN : The State of Media in Pakistan (Cliff notes version)

I profess, I know nothing about Cricket and I am sure Tendulkar will say the same about running an enterprise, for arguments sake CNN. There is a crisis of professional leadership within the realms of Media enterprises in Pakistan. It is any thing but professional and not aligned with strategic growth objectives of the people employed within.

When Genworth Financial broke off from GE, their Ad Campaigns spoke about heritage and legacy. Its worth a watch.

Where is the heritage in our media industries lineage; where the entry point and dominant factor in starting up, is not really being a startup it is actually the anti thesis of a startup. The lineage is that of running mills, being in the tobacco and ghee trade along with being gold smiths (not to be confused with Imran Khans, children’s Gold Smith lineage). Nowhere else in the world can I draw parallels to this sort of lineage in this sector. Alas I digress.

Lineage does matter, because if you come from the “trades” you treat your people like you would treat blue collared individuals. It is a departure from how you would treat white collar and professional managers. The death of this industry will be due to the slow paced nature of the people at the helm and the unrelenting desire to not change and professionalize the culture and the setup of the industry. With the reach that Media now has in Pakistan, if some one tactfully connected the dots, between digital, social , print and electronic- clearly their dominance would be felt further than the shores of Pakistan alone.

This industry is not concerned with building talent, where the old guard is dominant (refer to earlier article on the Old Guard) and where the pursuit of profits comes before the pursuit of professionalism and in many ways ethics, accountability and commitment to the work force employed within.

Nothing has changed since these Media groups propped up and nothing is destined to change unless the people who work here demand their rights and the audiences they cater to also hold the enterprises accountable.

It’s a classic problem “don’t fix what is not broken”, from the Media enterprise owners perspective, their “boss” is the “audience” the audience has an unrelenting thirst for consuming “marginal” to “sub-par” content.

You guessed it, these Media outfits specialize in churning that stuff out, hence when their ad-revenues don’t take a hit, they continue with the way they build their organizations and how they scale, with 0 regard for professionalism and sustained growth for the pillars who run the business. The 100s, if not thousands of people employed in the profession are marginalized every day. They fear that today they are employed and thanks to the post Musharraf era where these Media enterprises grew out off , they are happy to be employed. Given the balance of power being in-equal, these employees are left with no option but to work in a grossly non professional, dis organized environment.

The opportunity is ripe for the taking, for a singular or multiple individuals who can change this balance of power, who focus on building consummate business professionals and re distribute the wealth generated from the media ecosystem. All we need is a true, disruptive startup with access to capital that by virtue of its treatment of its employees and holistic content can capture the hearts and minds of the audiences.

The barriers to cost based entry may be high, but barrier to distribution and access is minimal if done right. Hopefully some true, smart entrepreneur sees the opportunity and sizes it. It would impact the lives of thousands of people who for once are in dire need of that change. Perhaps some one from within the industry also sees the need of the hour and takes a leap of faith and starts to believe in Karma.

Vertical Growth by Horizontal Partnerships

“Real generosity towards the future lies in giving all to the present.” ― Albert Camus, Notebooks 1935-1942

No one exemplifies this trait better than two brands who have seemingly taken the market by storm over night. It takes a lot to be an over night success. Both Meat One and Day Fresh have gotten the formula right. Looking at our demographics and subsequently our culture and cuisine trends in relation to true demand problems, these two have slotted them selves in to being on the supply side of that demand side problem.

What makes this even more interesting is that in Milk segment Engro Foods, tried its hand in a one year experiment with a large budget and 20 odd stores and failed. Both on the uptake of the service and market acceptability. The franchise model didn’t work out for them and they concluded the experiment having spent half of the allocated funds and graciously bowing out of a space dominated by the local player Dairyland . Some times its not a matter of scale or being in the business already its about execution and a well thought out strategy.

So whats next for Dairyland and MeatOne, in an ideal world one would like to think beyond individual companies and dynamics and look to build synergies. To that end a natural distribution point for Dairylands product would be at MeatOne and it would help drive foot traffic which would increase same store sales for MeatOne.

But some one has to take the imitative to review such corporate partnerships and alignment. It also builds a strategic barrier to entry to other Meat or Dairy players who would then think twice about entering the market as they wouldn’t be competing with one strong brand but two and both the incumbent players would have a larger safety net when a new competitor tries to enter.With other large local and foreign conglomerates planning to enter both dairy and meat markets it would be a very interesting mix if these to got together to come up with same store concepts.

With ICI now ironing out the details on a tie up with Unibrands to market the Japanese infant milk brand Morinaga, the writing is on the wall for people to tap in to the milk nutrition market space.In the Meat section there is no substantive information yet but both Engro and ICI are rumored to be exploring these segments, which tells a telling tale around the potential and market size. There are a dozen if not more mid sized, traditionally export oriented brands that are looking to solve the puzzle of cold chain, logistics, distribution and building consumer brands. Much like Meat One did.

Given our shopping habits and an emphasis on fresh consumables, but given the time/traffic and other pressures of not being able to go out to the corner store daily, A multi concept food store that has Milk, Meat, Produce and Bread could be the next retailing phenomenon in the local urban/metro space.

If some one were to build a store footprint that would cater to the consumers basic needs they would most certainly create a new market entry point for them selves, their brand and distribution channels. The market has already shown that people are willing to pay a slight premium for hygienically produced and packaged products in the dairy and meat space, the likes of Hyperstar have proven the same for fruits and vegetables, fresh baked goods at middle market bakeries also prove the concept of paying a premium for a healthier preparation of the same product. The combination of all four should result in an ideal mix for a new relating concept.

These items already exist today but in their own distribution channels if there were horizontal partnerships in the space, the vertical gains would essentially give the non-branded, lower end of the spectrum and traditional producers a tough time. Its time for Pakistani companies to look beyond the obvious and explore avenues that increase their footprint and share holder value.

 

 

 

Mind The Gap – Khaadi –

Gap Inc was the formidable US clothing retailer that was always relevant and wildly popular. It literally came from no where and then grew to having Banana Republic on the high end of the spectrum and Old Navy on the lower end. But some where in the middle it lost its own brand identity and it became too vanilla in a category it had created it self. Where others were giving it a run for its money on its own turf, it was a crisis of confidence, leadership and missteps.

We have our own, perhaps even better version of the Gap success story. Khaadi. It is the one brand that has done every thing right, from customer service, to designs, to branding, to placement to creating its own niche and beyond. But the question is what happens next? 2015 is very different from 1998, staying fresh over a 17 year run is not an easy task for any business, let alone fashion retail. Khaadi has to be commended for what it has done so far.

2014 saw it expand to online a few years after its expansion to the Middle East, Malaysia and the UK. Compared to other retailers, Khaadi has had a decent plan every time when it came to expansion but at a global e-tailing or retailing level there are some things that are strikingly familiar to Gap. Lets start with the Malaysian expansion, the target market there cant possibly be Pakistanis or South Asians alone, just by pure numbers it wouldn’t make sense. What would make sense is to target the local Malay population. They frankly don’t know what Khaadi means or represents.

What they do know is social engagement , their love for trendy clothes and bright colors(even the men). No less Khaadi does not have a Bhasa Malay media campaign. Id caution on taking the billboard and tv engagement space. Malays are pretty digitally plugged in, so a social media campaign or two targeting engagement and brand development would have most certainly helped. Khaadi is too big now to not think about these strategic missteps and it puts it in a similar space like Gap should it continue to not address these items.

Then we have the online store, a great leap into international retail without the physical footprint. But to be a serious player and to beat the “aunties” who are buying Khaadi product from Pakistan and stuffing suitcases and taking them to the US to retail or sell to friends or family, Khaadi has to re evaluate its supply chain, production, fulfillment and delivery logistics. Else it will be beat on price on its own goods locally procured and hand carried to the US and beyond.The first thing that has to change is the online experience. It is harrowingly slow, the site needs to be updated to a proper e-commerce portal with multi currency and multi location shipping. The site just doesn’t need a refresh but instead needs the Khaadi touch to make the experience special like the brand it self. The potential of the e-commerce store at some point would outweigh the sales volumes and FX earnings if executed properly.

That has nothing to do with Khaadis core business, which is to manufacture top quality product. Here in lies the problem similar to GAP, reach out and get the help you need as opposed to trying to do every thing in house or based on the advice of people you know.Its time to get professional advice. At a globally competitive level. Not at a mom and pop shop level where by having COD in Pakistan and shipping enabled to USA you start to think you are the best thing since slice bread. The shipping and checkout process is short of horrible. Khaadi needs to emulate its in store service equivalent to remain relevant. Enough said.

You have the potential, but you aren’t there yet. Its easy, you pay for what you get. In Khaadis case it has the cash to fund this growth. The question is, does it have the foresight and willingness to not die in an industry that it created, the signs are there, it needs a product reboot along with an online reboot. It has to innovate to stay relevant and grow. It would be interesting to see its in store year or year growth ratios.

Then we have the Khaadi Home and Khaadi Khas and Khaadi Kids phenomenon? Any one see similarities to GAP yet? Khaadi is a niche player that needs to go wider and deeper in its expansion strategy, just like Max out of the UAE. A home grown “value fashion brand” that has over 1.2bn$ in Sales and eyeing 3bn$ soon. Now that is ambition, fueled by growth, a stellar management team and not an army of one. They are focused, albeit their niche is a little different but they are doing all the things they need to do to stay on track.

Khaadi in its purest form is limited by the ability of its CEO/Entrepreneur/Chairman at large to wear many hats. The same person that brought it this far. That’s where a Senior global management team comes in to play to go beyond the current state. The CEO should have the wherewithal to see the shape of things to come and realize that he has done an exemplary job in building one of the smartest, well managed, high growth brands in the country. But to play at a global level, re-define the niche and build distribution and logistics capabilities along with production uplift, he needs to now move up to the big boys table. Commit financially, mentally and in principle to lead the charge to make Khaadi into Pakistan’s true first Billion-dollar brand. This can be achieved with focus on the brand it self and not diversions and distractions into other ventures just because you are cash rich.

Stay true to the core before diversification in to other lines of business. Khaadi has had an admirable and phenomenal journey; it can go further but only with the right strategic outlook and plan. The mix is good, but the leadership beyond the founder is questionable for a global expansion charge, that fuels growth 50X from where it is today.