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One thing across every major mall in America is the presence of Thai food. Whilst Mexican and Chinese restaurants might be more abundant that also has to do with population dynamics. With over thirty-eight million Mexican-Americans and around six million Chinese-Americans, it’s no surprise that these cuisines have exploded on the American foodie scene.

Comparatively, there are only about 300,000 Thai-Americans—less than 1 percent the size of the Mexican-American population. Yet there are an estimated 5,342(today) Thai restaurants in the United States, compared to around 54,000 Mexican restaurants; that’s ten times the population-to-restaurant ratio.  It just got me thinking, why is it so. Is this really new age “gastro diplomacy”?

Remember Arthur Anderson? I do. In 2001, I read a WSJ piece which I recalled recently, and was amazed at the far sightedness of the Thai Government. They were raising 10M$ to bring between 1000-3000 restaurants in 5 years to the US and 8000 globally to serve authentic Thai Cuisine. Back then I wondered why?

 This didn’t happen overnight. Since the 1990 the Thai Government methodically sent qualified chefs all over the world, they also setup in-country institutions for culinary arts. They set up manufacturing lines across the nation and re-tooled old utensil factories to deploy neo-modern cooking utensils fit for a new class of yuppies, enthusiasts and professionals alike.

The global movement of McDonaldizing Thai Food. Now that’s an idea and something to be proud of. Something we need to still copy and emulate as the government of Pakistan. Instead of making insanely dumb committees and task forces, with a vast majority of dumber people and has-beens who besides self-enrichment have done nothing at scale in this country or any other. The yes sir, ji boss, bull$hit is back.

Without being side tracked, in 2001 or there about the Thai were exporting 6bn$ in food related exports worldwide, meaning ingredients, herbs and spices. In 2017-2018, Pakistan is struggling to export rice greater than 1.3bn$. Spices and other Pakistani-ethnic foods don’t even show up on the radar. You want to see the kicker? Thai exports to just their foreign restaurants were as $1.5bn in 2000…

Some one really needs to just copy this model and get started. Its been tested over time and given dividends in all the areas our current government aspires to draw in-bound dollars. Tourism, Tech to name the two top of mind items. But it should be exploring entire ecosystems of industries as opposed to one offs.

Just to re-cap, in 2001 or there about the Thai were exporting 6bn$ in food related exports worldwide, meaning ingredients, herbs and spices. In 2017-2018, Pakistan is struggling to export rice larger than 1.3bn$. Spices and other ethnic foods don’t even show up on the radar. You want to see the kicker? Thai exports to just their foreign restaurants were at $1.5bn in 2000… Some one really needs to just copy this model and get started. It’s been tested over time and given dividends in all the areas our current government aspires to draw in-bound dollars into. Tourism, Tech to name the two top of mind items. But it should be exploring entire ecosystems of industries as opposed to one offs.

Why did the Thai government do this?

The predominant motivation for the venture, according to the government, which was to hold a stake of less than 30%, was the frustration caused by the fact that people cooking Thai food abroad just weren’t doing it right. There are too many western distortions in what purports to be Thai cuisine.

The restaurants themselves were to be established with start-up funds of over US$10m and split into three price bands, upscale, mid-price and fast-food, and be called Golden Leaf, Cool Basil and Elephant Jump respectively. Experienced franchise partners would run the companies on a day to day basis, but according to the then, Thailand’s deputy commerce minister, Goanpot Asvinvichit, the government will be playing a “strong role” in the conception of the menus, and overseeing quality. How ever mis-guided that sound(s) then or today, It catapulted an export revolution.

Knock-on effect in export markets and tourism

Market watchers had expressed concerns as to just how much Thai food can be digested in the west, but a glance at export figures shows that as the taste for cuisine in specialist restaurants grows, so did demand for “authentic” Thai ingredients – both for foodservice sales channels and home consumption. Clearly this has been a global winner by way of execution.

Indeed, the government played this right, they had intended and made sure that at least 70% of the foods used by the Global Thai Restaurant Co. are exported from Thailand.  As stated earlier, the country already grossed over US$6bn from food-related exports annually, and over US$1.5bn from supplying restaurants with both food and cultural merchandise, and the Thai food industry gained a significant boost from the venture and continues to grow to this day. An idea well played out.

As well as the profitable growth in the ethnic food sector, and the related export boost, Thailand also gained from  the intrinsic link between exotic food and its destination: the tourist trade is booming even when the politics was at all time low. During 2000, the country welcomed nearly 10m tourists, double the amount that arrived in 1990. In 2018 those numbers were at 22M. The increasing availability of long-haul flights is a major factor of this, but so too is the advertising provided by popular local restaurants. Imagine the mix at play, all well thought and executed correctly to now stand in 2019 at the top of the game. It did not happen by accident it happened by deliberate planning and by way of some thing every Pakistani feels strongly about. FOOD…

Over the course of this exercise it has been fairly evident that People who enjoy Thai food are more disposed to visit the country, and tourist officials are widely distributing leaflets and brochures in eateries. Its an ecosystem of one. One mission, one drive, one end result, brand Thailand.

Further evidence of the close link between Thai food and the country is in the establishment of cooking schools in Thailand to cater for the tourists’ desire to learn more abut the cuisine. One such example is the Samui Institute of Thai Culinary Arts on the popular island of Koh Samui, but similar centers have mushroomed in the tourist hotspots in recent years. We need to learn from this. Whilst Indian food is on the up and up in the West, similar examples of Pakistani food are far and few in between.

What have we been doing and what should we be doing?

We continue to focus on the wrong thing, set in motion by the wrong set of people leading self driven agendas. We need to think outside the box. Pakistan doesn’t have a PR problem, we have an “Idiot” problem, we are taking our versions of political idiots and putting them in charge of solving economic problems. Actually this whole model could be copied by any half decent so called local group or company that has the where with all to think beyond its table stake businesses of being a rent seeker.

The Thai Govt didn’t import the London Bukhar equivalents to dream up these things, they didn’t invite other patrons of high-business and high-friendships to devise new ways to save the Thai Economy. Do remember they have had 12 Military Take overs; yet continue to be perceived as a safe destination, rampant with ease of doing business, tourism and now a center of high tech innovation.

Whilst Facebook goes through its own set of challenges from data, privacy, security, hacked elections and congressional outings. FB in Pakistan especially in the new year poses a very clear and present danger and strategic challenge to its users in the country and their in-ability to understand its basic constructs around privacy and security.

Many if not most folks using Facebook in the 1% neighborhoods of Pakistan, at large, do not secure their profiles. More times than none, FB is a huge vanity play, where Madam wined and dined last year, what her social butterfly calendar leaves no room for mere mortals is a must see for all.  This leads us to the less than secure privacy settings on the profile and most importantly images.

Which brings us to the brave new world of proximity, filter bubbles, wifi-signatures, Friends of Friends and other algorithms at play. In a social experiment done a little over one year I have come to the conclusion that this a very poorly thought out vanity play of not knowing and not securing your privacy settings.

Even if you are a tech noob, you must pay attention to this one of a kind, non-business driven post, because you are most certainly putting yourself, your information and your family’s social movements under the eye of people you have both met and most certainly will never meet.

So you have a rotating stock of security guards in your house, the average house has a trusted old cook/driver(substitute the person you rely on) and in the current day and age you at a base case give them your wifi password, if not verbally you enter in on their device. Which is a good thing to do, 100% giving access to free internet, to make calls, consume video, if they are so inclined learning new things is a social good that comes out of this activity of making sure they are also connected to their loved ones.

The lesser known fact is, if they don’t have your password in writing, your internet will now be shared by using their mobile phone within their social circle. It takes about a week of using the same internet connecting/wifi location and geo-location for FB to magically start showing you people you may know in your feed. Plust folks who have your mobile number saved or may have a text message from you. (Now imagine the circle of interaction, your delivery guy from last night, your last Careem or Uber text exchange, your call to reserving a restaurant etc etc)

You may be one of those who never looks, but the opposite is also true, your un-secure profile is now visible to every one using your common/shared internet as a base case or with text/phone interactions with your self. FB has denied this for ages, but let congress find the answer to that. Not you and me.

So all of a sudden all your December night parties and Qawwalis and your cute pictures with your BFF are the proud hyper local Vogue Magazine outside your house at the daily congregation of all your employees and their friends.

You may be ok with this and have an initial reaction, akin to calling me names saying, that your house hold help is like family. But this family has an extended family and now all of begum sahibas friends and in turn their friends and everyone who is tagged in any picture is on the front page of the neighborhood daily. So long as their vanity play is turned on and privacy is set to off.

Now look at both the social and scoio-economic impact of this, as much as you’d like to tell your self you are fair to your staff, imagine their plight when they see you sipping a cold one on the Amalfi Coast at the pool side. Clearly this stems all kinds of social , cultural and economic issues over time. There is a sense of dis-content, further inequality and alienation when the life style they see couldn’t be further from the truth they deal with daily.

This post is not to vilify domestic help in any way or marginalize those already dealt a hand by fate, that is not easy.

As part of turning on a free Wi-Fi for 200+ days the #1 traffic source after 9pm was Facebook. It took 3 days net, for every one to realize that there was free internet. Looking at traffic data, landing pages (traffic it self being encrypted) high end phone would rarely connect to the Wi-Fi and if they did they would stop using it, most of the connection was from sub 100$ devices. FB was king at 9pm and YouTube around 10pm. Total bandwidth being consumed was in the 100s of gig quotient(particularly high for Youtube).

Lets now look at the safety element on this, once people know who you are and really do want to target you and track you, your FB timeline/pictures are a good place to start. Given basic skills if they only continue to watch and you continue to post they will know your kitty party locations and spots, times of day, week of month and time of year type info, where you are , who you go with. If like most normal people your images are tagged, all they need to do is copy paste the name in to FB and then latch on to your friends etc. Done with enough compulsion over time, this a starting place for people to start stalking in the digital age.

FB has graduated from old colleagues and high school sweethearts from tracking you or checking out how well you are doing, there is an entire underbelly of folks who are tracking and trading in the business of FB driven personal content. In and around you and in and around where you live and go to work every day. The level of sophistication varies and will only continue to grow.

In most cases your vanity play is allowing them to do this, all you have to do is hit the privacy button and make your content available to only those in your network. That would be a first pass at making sure, the Culligan water delivery guy is not sending friend requests to begum sahiba on his next trip to your place.

Further there are entire WhatsApp groups that then trade the links to Madams pictures and parties, being shared from say your Gali Cluster to the next cluster one street down and one street across then across towns and nation wide. This is a serious cause for concern, you may be ok with people admiring your looks, but with your profile links also making it across, it now adds a devoted fan following larger than some celebrities. The groups are trading content via links as most do not use the app to go to the site, they use the browser. Plus they also use screen shots and pass these pictures around.

This not just true in the case of groups and group members trading in begum sahibas pictures or her friends, even though that is the prevalent category, there are categories of sahabs cars, his houses, his vacation spots his “daru” collection etc all being circulated in groups. Most groups have 0 conversation and only message exchanges. People use voice notes to comment on the pictures and the vacation spots or putting annotated voice prints adding their meta tags so other group members can quickly catch up. Whilst most of this may be sans a criminal intent(like more voyeuristic), but truly people do not realize the likely implications over time. You are putting your self, your family, connections and almost any one else that’s tagging you being exposed to an ecosystem completely outside your own comfort zone and you have no idea what it is.

Startup idea for this would be a FB health check and help to those who want to keep their mimosa outings to not be outed in places they didn’t even know existed. Sort of like a wealth manager but for online health check and privacy management.

 

“Who would you impress if the world was blind?” 
― Shannon L. Alder

The fear mongers are out. The verdicts are in. In 100 days supposedly every thing was to be fixed and the generational crap shoot we have been down should have been reversed. A round of slow clapping and applause to the educated class who continue down this path of not accepting that, this shit storm has been in the making for decades and that if they are the beneficiary from past governments and contracts and “concessions” they have to for once, for the love of country and not greenbacks get off this bullet train to disaster. Clearly self interest reigns high. I meet the so-called investor types, industrial money and old money. The only thing common across most of those, is ill-gotten money. I will loose some so called friends and associates over the post, but I am happy to loose friends and gain a flourishing country, by calling out the BS.

No doubt there is economic decline, but it didn’t start and finish in the last 100 days, the current government is fairly silly in even having such a yard stick and talking when they should be working and nation building as opposed to optics building. With the sad state of FX reserves, free lancers and the tech folks who can actually contribute to fixing this national crisis are looking to bail, so it would seem. Given all that’s going on and with payment aggregators being unable to send money across to PK this situation is only going to get murkier. Unless the Banks and the regulator steps in. This is a crisis of confidence. We need to get some seriously competent and confident people guiding the government and not the generational multi-party idiots we have always had.

Let me illustrate why such is the case. We supposedly have an IT Minister and now also an IT/Tech Task Force of turning around the state of affairs of the industry. Couple of things to point out, this body whilst it has some very competent people also has others who may be competent in other facets of life but clearly a “wasta” inclusion is so evident in this group. We have a Retired(R) Naval individual perhaps I missed the memo on the Navy doing some block buster Tech Innovation and National Defense Sales and Commercializing stuff for export. To the best of my knowledge Arms Sales are in the Range of 300m$ a year. The free lancers in Pakistan are doing about 1bn$ or more in work, net-aggregate. So who should be advising whom here? We continue to include irrelevant people in these real time conversations, who have no role to play.

Then we have a representative from the Pakistan Engineering Council. Allegedly they represent the graduate engineers from across the country. All I will say about them is a reference to the Image below making the rounds from their 2018 elections.

We also have some has-been box pushers and CD/Software sellers who have never done a days worth of honest entrepreneurship and or value creation domestically. If you worked for a fortune 500 Company per se in Pakistan, whilst you made out well for your self, the only thing you have done or are good at is working for your sponsors to take their product(Namely Software or Hardware), sell it domestically and export the resulting revenue back to them. Meaning your net contribution in life has been at the expense of the Nation and a net FX loss. So why the state or these committees continue to idolize these folks is beyond my imagination.

This is not a laundry list of knocking down people and or individuals, it is a walk down memory lane of how we continue to F*k up things whose intent is generally good.  As a side bar the Task force has not yet met up since the mid November announcement and formation. Some of the government efforts are mis guided on this front they continue to deploy good people in bad positions.

In short, get some folks who know what they are talking about who have done demonstrable things in the space and can make impact at scale. If you wanted to make a real task force you would invite real change makers who understand  technology, scale commercialization, payments and growth.  Id like to find out the median age of the Task force, you do not have a single millennial in the task force. If digital is your way out of this mess, than at-least get some digital natives to be a part of the narrative. Some of these folks struggle to use a smart phone. We are trusting them to drive the national narrative on technology.

We should be done with the Sahabs and the Bureaucrats and the Academics. We have held on to that formula for the last 50+ years, that shit has not worked. There are very many respectable people in these groups and committees but that doesn’t mean they will have any impact. Starting with the overqualified minister in charge this ship needs a new steward.

So what is the way out? Clearly I do not have an answer, but if any of these government types and task forcers had their eye on the ball they would be using the public money already (wasted/applied/used (depending on where you stand on this narrative) on all these nation wide incubators to stop doing these dumb hack-a-thons and force-creating startups that wont amount to much. Some will but they would have done so any way, most wont. We aren’t in SiliconValley we cant continue to fund these Starbucks conversation at the cost of the tax payer at these various Incubators. As a tax payer I have a serious issue with these locations not being optimally used, optimally staffed and optimally run. If nothing else turn them in to co-working spaces, people need space to work, stop hosting events to fill your social calendar again at the cost of the tax payer. What is one good commercial product to come out of any of these state funded incubators? Whats the benchmark of their success? Who is the net beneficiary in these setups? Do the people who are tasked with running these have any credible experience or success to be imparting advice and mentorship?

Sadly, mentorship is the most over used and least understood concept at these incubators any one who can speak fairly fluently or by virtue of their connections or recognition by virtue of their employer and job, literally show up and start imparting advice, which has no basis in reality and is of very little to help these incubatees. But no one seems to call this out. Perhaps a topic for a different day.  The one good thing is nationally ready infrastructure to be repurposed for the good of the people.

So public money has already been spent how do we reclaim what we have spent and done? How do we move in to cash-in on the next wave of tech. How do we think past BPO and force creating me2 startups or incubating them. Because we continue to emulate what we see vs innovate at scale.

Some time back I wrote about the Onavo Mindset, luckily we have an other chance. Seemingly a wave is coming, not too many people are ready for it, but its a wave that likely on-boards the Next Billion Users. Luckily you can build for them and cash-in and cash-out in a big way.

Right about now, you are going, Wtf? We all know about Android, and whats the point of preaching about building android apps, actually the world is slowly moving in a different direction. Its the voice driven revolution fueled by feature rich phones that work and feel like smart phones. Its a revolution fueled by your imagination and building services for the first time internet and “device” users. So what is it?

Its KaiOs, if this is the first time you are hearing about it, trust me it wont be the last time. In India the revolution has already started, powered by voice and free data. We aren’t too far away, realistically what you build for Kai, powers any one and any where and you can continue to make money independent of your location. Don’t hold your breath on our committees and our regulators and our leaders and our ministers. Go build, be ready for the revolution. There is a reason Google invested 22m$ in KaiOs. Go to your incubator, knock on their door, they used public money, most are smart enough to recognize they have an abundance of space, politely ask them to use this space for working on your next KaiOs idea. Or any other idea. The time literally is now, you do not want to get into this space once its too late. Googles working on localization across India, meaning local language support. If we were to venture a guess, Urdu is likely not too far away. Try to understand the space, most particularly voice. On its own and tied to KaiOs that will be the future that drives the next generation of growth and services.

Looking at the data we are doing well in the gig-economy space. A 2018 study by the Oxford Internet Institute re-affirms the fact that we are on to some thing good here.

We need to capitalize on this trend, we need to put our minds and our resources to good use. We need to learn from the success and mission driven narratives of people like Yasser Bashir who have built worth while national narratives around putting good tech to good use by being great corporate employers and investors in growing the ecosystem by virtue of things like  PyCon .  I can cite many many examples at the risk of people saying I’m biased. Full disclosure I only know of Yasser’s work and do not know him beyond interacting at industry events. But I do not need to know him to know his work, thats what I am getting at. Its a mindset thing. Thats what we need to focus on.

A lot of good things are happening in and around us, we need to get past the petty and focus on the real stuff. We need to work on giving ideas and opportunities to those who can translate them in to growth and FX, we need to highlight and make inclusive committees and offer their memberships to people  who can do good at scale. Not because of party or personal affiliation as is evident presently.

There is a reason old money hasn’t scaled in to tech because they worked in the “rent seeking” economy and model, they have no desire to create wealth across the nation, so why do we continue to include them in our national narrative around tech? The most tech, their kids(second third generations) know are iphones and ipads. Not like, they don’t  have the money or the access to replicate global success in Pakistan, they are just not comfortable in allowing the creation of wealth that transcends their own families.

My question to all those who aspire to change their own fortunes and the fortunes of their teams, colleagues, their country. Why must you spend all your collective energy in complaining why not take charge and try to do some thing different. Aisa Kai ko nahin Kartay?

 

Hook line and sinker, you will have to wait to get past a few lines for me to reveal the biggest VC that is operating in plain sight. Actually, it’s a very phenomenally setup corporate structure, that I’ve written at length about in the past, using a different angle.  But its time to revisit it as it continues to accelerate economic growth and directly employees over 30k People, it should be an example for aspirational types to emulate.

Let me first list the verticals this VC Fund  is operating in, by way of Independent Private Limited or Listed /Unlisted companies where it is either a 100% shareholder or a large shareholder.

1. General Insurance Co
2. Life Assurance Co
3. Lubricants and Distribution Co
4. Investments Co
5. Securities Co
6. Aviation Services Co
7. Weapons Ammunition, Defense Services Co
8. Security Services for Corporations Co
9. Development & Holding corp for Estate Co
10. Diversified Real Estate Projects Co
11. Projects (Woolen & Shoes) Co
12. Farms and Seeds Co
13. Sugar Mills Co
14. Full Service Restaurant Co
15. Fuels Co (Aviation and Jet)
16. Fertilizer Company 1
17. Fertilizer Company 2
18. Mineral Extraction Mill*(Foreign Investment in Morocco 250M$ in 2008)
19. Cement Company 1
20. Cement Company 2
21. Petroleum Company
22. Power Company 1
23. Power Company 2
24. Wind Energy – I
25. Wind Energy – II
26. Energy Limited Co
27. Power Company Limited Co
28. Oil Terminal And Distribution Company
29. Marine Terminal
30. Transfer Terminal Co
31. Securities Co(#2)
32. Bank in Pakistan
33. Foods Distribution Packaging and Manufacturing Co.
34. Fresh n Frozen Vegetables Co
35. Meat Packaging and Farming
Co
36. Pasta Manufacturing
Co
37. Gas and Services Co
38. Sugarcane Experimental & Seed Multiplication Farm Co
39. Overseas employment Corporation

Further in in 1977 the Principals of this VC decided to set up an other trust for an affiliate of theirs which now includes:

1. Airport Services Co
2. Knitwear Unit
3. Building Complex, Karachi
4. Building Complex, Lahore
5. Medical Services 1
6. Medical Services 2
7. Advertising Company
8. Education School System
9. Aviation College
10. Aviation Academy
11. Scheme, Peshawar
12. Air Charter Company
13. Mall Business & REIT
14. Insurance Corp
15. Wind Power Co
16. Bonded Warehouses Co For Defense Clearing

This is right out of a fairy tale, in a country marred with lack of access to capital how did one group so successfully enter every single vertical there is. Interestingly enough their website lists further ambitions of upcoming projects also.

1. Medical Service– A PPP to create affordable health care & Repatriate funds into hold co
2. Private Airline – Commercial
3. Hydro Power

Its just amazing to see how much innovation and access to capital deployment and operational efficiency exists for this group to be successful over everyone else in this country. Arguably they are one of the largest Independently controlled groups, whose financial data across their operating companies is actually not public, besides their listed companies and that, which they choose to publicly disclose. With what’s in the public domain they have 4.2Bn$ In Assets and 1.3bn$ Net worth as of 2017. Turnover is $1.6bn in 2017. Net profit was 307M$ in 2017. That’s a very good run rate. Again this does not include the 40 or so companies just the ones that are reported.

This has been such a progressive group of individuals and former CEOs worthy of being on Bloomberg and teach courses at Harvard because it didn’t stop there.  They also got into doing public good, and by the mid 1950s also got into co-operative housing societies. Which ballooned to being the top real estate destination in the country. They have these housing projects in

1. Karachi
2. Peshawar
3. Lahore
4. Islamabad-Rawalpindi
5. Bahawalpur
6. Gujranwala
7. Multan
8. Nawabshah

Arguably their best project in Karachi is now known as Millionaires row owing to the fact that 500Yds home is a Million USD$.

We will get in to the real estate commercial side of the business in another post time permitting but right now its just amazing to see the scale and growth of this amazing Venture fund and its associated entities.

There is one catch, they only provide jobs typically to a “certain” type of Pakistani. They were formed on the basis of doing and providing welfare. In 2017 Their publicly reported welfare spend was 102M$.

In a country where the youth are under employed, un educated and under educated, where most people can’t get a first job, this VC has made a business out of providing jobs to a select few post retirement. So economically speaking it ensures that over 200k New jobs are not created but re-circulated annually ; Another way to look at it my tax Rupees fund this VC that decides to then get into protected businesses like its real estate or defense businesses via a complex web of Trusts, Welfare Foundations and Specialized Bills passed in Parliament where its financial data, and other items are not open for public review. This has to be one of the most brilliant businesses to get into in the world. Why talk about global trade wars and protectionism we are going through a similar situation domestically.

This is an example of monopolistic competition that is operating almost un regulated. Its an age old thing, this VC used Public Money to setup mega corporations, structures and trusts that actually discriminate against the average Pakistani youth.

So here’s a cleaner view

1)Employed person pays taxes at source

2) Their taxes are taken by the Govt

3) The largest chunk of the Govts Tax allocation is given to 1 Entity(Lets call it FundingCo)

4) This entity(Funding Co) is a Public Good State entity, so It needs to be funded no less it provides security and is critical to the countries existence at large.

5) This entity has setup at an-arms length setup with its retirees at the helm and created an SPV(Special Purpose Vehicle) which acts as a Venture Capital Fund.(VC)

6) In this case the SPV was a trust, then it made other investments thru the SPV in to foundations that deployed the capital provided by this public goods entity to get in to 20+ Sectors with over 40+ Companies

7) The original remit of setting up the trust was to re-invest in the community of the (FundingCo) company that provides security but whilst that’s happening the SPV has turned to a Mega VC, the Mega VC controls every major industry, business, vertical and impacts every facet of every average Pakistanis life.

8) Yet the average Pakistani cannot get a job with the VC in top Positions as they are only for retirees of the Funding Co or with connections or lineage to them. Its an open secret.

9) The Irony is, all this is funded by TAX rupees giving for security of the nation, not to setup entities that rely on our National resources and other items and create significant employment at the top for 1 class of people and at the bottom for another class.

10) The fear of retribution is so real that this entire article uses no names or individually identifying data for those who have in the past have been F**ked over immensely.

So a startup that got funded in in 1950 with My parents tax money has no place for me to ever have a seat at the table. This is true for every middle class Pakistani, that for all their qualifications and tax contributions over the years can never be at the helm of affairs of this VC which evolved from being a startup it self.  The story no less is phenomenal as is the growth the corporate resilience.

Interesting enough the data since 1950 is not public. No one knows the real numbers, every thing is conjecture and speculation at the size of the real depth of the ventures and their profitability. What’s missing is tech, that’s the whole purpose of this article, the “rent seeking” nature of the past can be turned on its head if the folks who control this VC decided to get into tech. Now that they have had a solid run since 1950 and gotten into industrial items here are some quick and dirty suggestions for the next 50 years of making money from tax payer rupees but returning something back to the masses.

Suggestion 1

Co Working Space(s) across 8 Cities with a universal access passes (all the cities where they have housing developments) for one flat fee or daily, weekly, monthly charges. Much like We-Work model, but these guys also own Communal Clubs in multiple cities that have “dead air” time during the morning in the lounges and club facilities. Having people, a secure place to work with Wi-Fi access, subsidized food, printing and other services. This ideal alone is a home run and could result in a multi-million-dollar revenue source, whilst solving a key issue for the youth and startups of this country to have affordable places to work from and do meetings at.

Suggestion 2

Amenity Plots for Tech Companies, Just like they provide plots for schools and hospitals etc, there should be a new program in tier 2 cities to allow these plots for opening export oriented tech businesses. Perhaps they can get a rev share if the land and cost of construction is paid for, sort of like Land/Office for equity.

Suggestion 3

 VC & PE Fund , given the startup heritage, they need to diversify to tech investments in media, news, healthcare, content development and other growth focused internet industries. The time is now, with available capital and more than favorable capital market rules or the lack their off provide the edge that is needed to totally dominate this space.

Suggestion 4

 NII- National Information Infrastructure, now listen and read closely to this one, this is not as easy as it sounds but perhaps the most profitable one out there. I am shocked that no one has decided to get into this space. So think NADRA, but think Payments + Easy Paisa + CSD/Utility Stores all rolled up into a complete vertically and horizontally integrated supply chain and e-commerce play with full payments in tow. Given you have your own bank, you have your own stores, your own production facilities and you have folks retiring all the time, you can build your own worlds first fully integrated NII that provides economic benefit plus employs 100s of Thousands in the logistics space across the nation because you have presence everywhere. This will create new employment plus re employment at mass scale. How will this run, well obviously I didn’t forget that you also have your telecommunications infrastructure across the country, imagine if you could integrate everything. This could truly be Pakistan’s first unicorn. So time to get out of making corn flakes and move up the value chain. (This solves the dirty politician problem also , when you control the money rails no one can send or hide or transfer money without the guy(s) /gal(s) controlling the NII. Food for thought. This is public good at scale.

Suggestion X

For now we will leave it at that. Given how the current situation in the country has the principals of the FundingCo busy with their day job we will take a more detailed look at the diversification angles possible and the potential Nominal GDP Impact if this VC turned its sights on to Tech at large.

 

“Life, Liberty, and the Pursuit of Happiness… but only when you pay your taxes? That means your freedom is rented, leased, & not unalienable.” 
― Steve Maraboli

 

 

 

 

A lot of talk has been on going and various claims have been made that Cashless/Mobile payments will lift the economy into its renaissance and document a lot of things that are in the grey today. All great banter, but concrete steps seem to be missing as to how the various 100 day actions or larger actions will be accomplished without focusing on the crux of the issue.

Even a betting man bets on multiple horses to diversify their odds but it seems we as a nation are focused that the Finance Minister some how; with so much other pressing items in tow, will over night wave a magic wand and things will self regulate. Had that been true, we would have had better sense prevail much sooner in the governments of the yesteryears.

Clearly we have the Central Bank, we have the Securities and Exchange Commission and we have some other players that if better sense prevails would enable by the flick of a switch(or in this case by sensible regulation or de-regulation) enable giants at our door step get into action.

On the one hand we have the likes of ANT who have already established their market lead/foresight by acquiring a Bank to get into the mobile/cashless payments race. Clearly they are giants in the space. But with all things regulatory and fit and proper tests and what not have you the time it takes from the day of the announcement to when the transaction closes, its just an engaged waltz between the investors and the investees, whilst the celebrity status seeking CEO of the carrier has spared no social media play; in the book to some how take credit for the transaction or make bold claims of when the AliPay services come to town.

It would be misguided to take these claims to be 100% on the money, most importantly because the Bank is not run by the carrier or like the carrier. The carrier commodity business, is fairly mundane and even the established folks are looking to come out on top by angling for the future. Nothing is wrong with that, they can have  Pictures with Jack Ma circulate in local and foreign media, it only helps the image of a nation struggling so hard, but clearly to those in the know or those who can see beyond the optics that the Telco doesn’t drive the destiny  of the Bank per say and the counterparts in China whilst they own the smaller 45% have this business down to a science and the real action will come from the Bank and their Chinese brethren. Every thing else is just noise.

I share the above not because I care about the optics or who is doing what, but because of the opportunity it presents. There is no way the Telco gent is over committing, he’s probably put in a buffer of sorts end of 2018 is fairly vague. Today in mid September all it takes for some one else to do this or get some interesting FDI going beyond people buying a Bank, takes very straight forward regulation that allows all the existing banks or at least the 11 or so Banks that own 1Link to be a stakeholder in the race to Cashless.

Change is coming, change is here, ANT did the industry a solid favor by going down the banking route, it made others(Banks and Telcos) uncomfortable and out priced most of the domestic competition, maybe along the way they or others buy one of the local wallet plays just for shits and giggles, but given their war chest, they could admittedly spend 2m$ and build 8X the user base in ½ the time its taken every one else. Its pure customer acquisition Math.

So here’s what worked across the border. Universal payment gateway/interconnect/interface. Its not rocket science. It exists today, it could be the rails that every one needs and wants, but no one is willing to get behind. Cant believe why with all the economists and banking evangelists and others advising the government, no one has put pen to paper on this yet.

The Banks are big and boring, they collect 10 Rs to X rupees per IBFT transaction and others, 1Link is the god send they all have that made them “Online” Meaning the shit that you don’t have to go to your own branch to bank any more. + You can transfer money via atm/web to other accounts. This gives bank additional “channel revenue” they don’t have to work hard for or perhaps never really worked for. No one wants to change a sure thing. True for the retail channel minons at the banks as well. Change has to come from the top.

But instead of every one building their own products and failing fairly miserably, to the Banks with an interest in 1LINK the best thing to do, is to call a Board meeting, invite both the regulators, the Central Bank and the SECP sit across the table and agree on a frame work to do inter bank transaction across the banks initiated by either party(Meaning Interoperable across the network). Further more have the Central Bank pass regulation to make sure this interconnect available ASAP and give 1LINK and its CEO the mandate to publish an OPEN API for any one to enable financial transactions following stringent fiduciary guidelines and KYC measures. Which BTW are fairly robust for any on with a SIM Card. SECP to make sure every one else plays ball and enabling a corporate structure that allows 1LINK to make good on said ambitions.

The Banks may loose money in the immediate short term, but as owners in the only service provider in the country that provides the rails for all future financial transactions, they would have taken the bull by the horns and made good on many fronts. 1^ST would be to launch a service before the end of the year, second, sit back relax and let all the global players come in (if they don’t have the ambition to cash in on this them selves), like they did in India to use UPI and make a pretty penny when the value of 1Link grows leaps and bounds.

But first hire the requisite talent and take ownership of 1LINK across the Banks to really make it a world class institution. DO not please go out and hired a 60 some thing Banker past his prime to head 1LINK, or a box pusher or typically available talent in Pakistan, just because you are comfortable as the BANK to hire such talent even in your own roles. Do the country a service and not a dis-service, hire a professional global head hunter to recruit the talent to build these rails. There is no shame in being out of your comfort zone and asking for help.

You really want to do some thing transformative? take ownership of 1LINK buy out the other Banks if they don’t see the vision. Imagine listing the company down the road(yes further regulatory approvals will be required). Imagine the likes of Google and Whatsapp payments deciding to use these rails, you would provide the channel to them to compete against AliPay, or even allowing AliPay to strengthen its position by riding on top of these Rails. All situations point to a happy ending, only if the CEO and Boards of the banks try to understand what this means beyond building digital studios and doing asset backed loans. Where’s the fun in that?

There aren’t many sure bets in the world, this clearly looks like one. This opens the space for all the small tech/fintech startups and e-commerce companies that are forced to do COD, or those businesses that need, identity or trust issues to be managed, with 1LINK coming on side the way described above, it could be further integrated with Nadra to provide those Identity solutions as the SIM is verified today, Imagine the business applications that would be made possible if every one played ball.

The OTT services and their possibilities are endless, the Banks and their large institutional and family based shareholders must take their management teams to task and ask why no one has proposed this in any board meeting thus far? When was the last time, the Bank as a shareholder in 1LINK devised a strategy or met with the other owners to figure out whats next or have the CEO of 1LINK provide a strategic document around its API play.

Why does it take a 3^rd person with admittedly very little background in Banking or Payments drag every one to discussing the possibilities?

The Banks today have this gift in the form of 1LINK, there are plenty of other quick start methods that people will bring to play and 1LINK will be made as irrelevant as it is today, if other interconnect or multi party rails come and they sure will, its just a matter of time and market need.

If the Banks don’t play ball the Central Bank should pass regulation to make the inter operably mandatory, and either Privatize 1LINK or give it to an independent Vendor or 3^rd party Operator to run and manage with a clear Mandate or a new non-banking consortium that is able to buy out the shares at todays fair market value so as to not do a dis service to the population of the country, which is not even remotely touched by the foot print of all the banks combined.

The solution, what ever it may be and I am sure more financially sophisticated ones exist should be considered as long as they allow the country to unlock the value from this gift that we have and allow the startups and the youth of this country to benefit from having a level playing field where they can build out their companies and solutions and services to their hearts desire, whilst being able to exchange and transact in real time.

Here’s to hoping the Banks get their act together and appoint amongst them some one sensible enough to take the charge and similarly for the regulator to sense this opportunity and make it ever so easy for international or domestic parties to ride the rails to better financial inclusion and more transparency and larger taxation when every thing rides through documented sources of money transfer.

Last but not least, if an international player comes to bare, remember that the undocumented IT-Free lancers to the tune of XBn$ who use all kinds of un official tricks to bring in money back to Pakistan could use this and all of a sudden you’d have XBn$ of inward collections, only helping every one involved in the process being happier, richer and safer whilst appreciating our Bankers fondly.

 

“Remember when nurses, carers, teachers and students crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither.” 

― Fuad Alakbarov

 

Think of it as the Uberization of mmmm Content. (Sorry Careem, you still need to build Careem Food Delivery and some other things to play catchup or out Uber, Uber in some other regional/clever ways.(Payments??)

The average media company will not be able to compete with Uber or Careem given the war chest of funding these 2 have. This story gets more interesting and exciting in the region(GCC/ASIA) where the 24/7 Breaking/Live culture and an average 50% population being under 25 yrs old, there is a huge potential to build a content ecosystem within the apps and beyond, with a special emphasis on “ride time enabled” content. Meaning make the most of your ride time and focus on the user.

Google, FB, Go-jek and Grab in their ways are figuring out plays outside of Pakistan and GCC in this space, as is Uber. But what about Careem?  There is no news on any partner API or ecosystem opening up just yet for content. If we look at whats happening around us, aside from related partner services, Grab is also bringing news, games and other content to its app, which got a getting a design facelift to reflect the change. In the past, Grab’s app had opened to a ride-booking screen, but now it will load a list of services and content to reflect a more diverse set of options. There’s actually nothing new there. That approach is very much similar to Go-Jek, the  Indonesian rival to Grab and is expanding across Southeast Asia and first pioneered the concept of on-demand services in Southeast Asia. Meaning Grabs ME2 approach is fairly visible. The Grab refresh also takes cues from China’s Meituan, a super app company that invested in Go-Jek and is going public in Hong Kong, and blockbuster Chinese apps WeChat from Tencent and Alipay.

Woaa. Back up one second. We already have Ali Pay coming to town with Wechat and the likes not too far away our market + the greater Middle East(Careems home turf) is in for fun times for the consumer. So its an amazing time for content service provers also, not to be mistaken for the Click-bait variety but folks who have a handle on contextually aware services and geo fenced offerings.

All this will only happen when the likes of Careem have open APIs for the content providers to work and suggest how to partake and build service offerings. The availability of “said” Api will also help any one else to offer a Careem booking from within their APP or service for Example. Careems too busy (hopefully not) with the engineered news of Uber buying them and their folks being involved in their own fund raising and keeping up with valuation fever that It seems like the agility is dying down.

Dont get me wrong, on its primary service, Careems value proposition in Pakistan has been so compelling to me that It forced me to downsize car ownership. For my travels in the region, its the goto APP as well. But beyond that there is nothing compelling to grow the user base, engage with it, provide additional services and or use the “network effect” for content or any other type of delivery. (Albeit all these services will have to be opt-in enabled)

So heres a very simplistic view, as opposed to buying other peoples content. Careem can basically build or buy a media company to focus on this demographic or buy multiple ones to get into the Media content production business. You ask why, because their target demographic is fairly clean. Unlike a traditional media company they have the ability to cater to their audience mix because they know in real time who they are.

Out of the 14 countries it is in, Its primary market is Arabic speaking + English and Secondary Market is Urdu + English. They do not have localized language items(topic for an other day) not to forget an other goldmine that they are sitting on which is the Women demographic.

Supposedly just in Pakistan 30% of their rides are to women. The largest growth segment in the Middle East and Pakistan is CPG, thus the CPG Women Audience is what the likes of Google and FB have been un-able to crack in our part of the world due to sketchy data. This brings captive users to that ecosystem. What better than your own content delivery network to monetize this? Especially if there is an IPO coming soon. Millenial audience based Media/content plays could be had for 10-50-100M$ and  for sure add more revenue than the supposed 175M$ revenue Careem is grappling with in this primary service line. Its burning more cash and the content space can prove to be a true monetization channel coupled with an ad-network + partner content & service delivery. Uber may be out of SouthEast Asia but there is no end in sight in the Middle East or Pakistan for them. Their success may be limited but their check books aren’t. Over time if they come out with more services that engage the users more, its only a matter of time they will outspend every one else.

You may say Careem already has fashion/retail ambitions via Dukkan Careem or the acquisition of Round Menu being indicative of launching a food delivery service. Both are a bit late and without Careem Pay launched really dont complete the ecosystem. The content play can happen in parallel or even before.

Uber already experimented with Info Cards and Hyper local info and timed podcasts per ride, but it can go much farther and deeper. Media companies will suffer in the region at the hands of the super apps coming from our Chinese friends, already traffic to media sites/content is down to all time record lows and the advertising giants will have a tougher time down the road trying to monetize that content. But our Chinese friends are winning that race. Careem and others have an edge, they know demographic and geographic location and if they viewed their app/or future super app as an audience engagement tool they could arguably in the short term add more value per ride to the users and advertisers both, whilst bolstering their profits. Maybe its not profitability they are after and all they care about is market share. What better way to use the same network to build larger market share? Its like monetizing your captive user base multiple times a day, even when they aren’t taking a ride. Talk about down time monetization(DTM). No one has tried to crack that nut yet. Careem could.

Go Jek and Grab already have plays in the space, Careem doesn’t have a visible play. No one to the best of what I can gather has a media play or captive content development strategy. The former are in services/payments/and APIs already. Careem needs to also be in the Rails Business , perhaps it already is and will surprise us all.

Some thing I never understood that could help build out an insanely profitable content business has not yet been done by Careem.  Imagine this use case, Careem today is relatively exclusive to the smart phone based user and those who can use the app via english interfaces(mostly) in Pakistan at least. That leaves the other non-smart phone users out.(100m+) Why doesn’t Careem use the likes of Shop owners and Easypaisa guys to book rides from their location for people who show up to a location bearing a sign “Careem Ride Stop” or             “سواری دکان  ” any one can come, wait for the store owner to book a ride on behalf of the patron, if they had an API, send a txt msg to a dumb phone of the user, who could respond back to accept the ride terms, once they did, car showed up, once ride ended their easy paisa account could get charged or they could pay cash.

Seems like some thing fairly logical, the ride booking agent could get 5/10 Rs to book a ride. Imagine the kind of mobility this would add to under developed areas and what range of entrepreneurs this would sprout. Supplemental Income also. Similarly guys with smart phones in densely populated bazars doing real time ride bookings and pickups, outside of schools, universities, hospitals, airports…

With this level of interfacing with offline customers, they could get accurate user demographics(happy to explain the nitty gritty to whom ever is interested) and by working with carriers and having in car devices and zero rated or free internet run video/other content to every user even those without a smart phone. Imagine a Careem powered TV network or news network or content network, entertainment, cooking, food/lifestyle and  a captive daily audiences. Its some thing the Media companies only wish they could do. Monetize eyeballs you already have and open your audience for others to monetize.

Its time to think outside the box to really capitalize on this. Perhaps buying  a media or content play is too ambitious at the moment. Or maybe they have too many things going on like launching payments and food delivery to really evaluate this. But with their South East Asian friends already getting hot and heavy in the space and with the coming of the Chinese to Pakistan, disruption is coming.

Googles already hedging its last mile bet by investing in Go-Jek, I hope Careem is doing some thing similar as it would be a pity if they eventually went bust in the region.

They have done a great service by way of creating direct/indirect employment but there is potential to do a lot more. Democratize access to news/content across the GCC and Pakistan, 2 regions that need it the most. Its also a public service of sorts, imagine as Careem grows and its youth centric audience grows, it would become the largest Media Influencer in the region. Especially if they produced localized video content for incar/hyper local use from reviews to restaurants already in its menu business and then do deliveries and drive sales for its ancillary businesses. Heres to hoping that all these guys stop copying each other and figure out new use cases and build fast and build strong. All this applies to Uber too but since Careem bet on Pakistan wed like to bet on Careem.

 

 

I suspect you know what the top 20 free apps are on the Pakistani App Store? Go on, guess. WhatsApp? Uber? Facebook Messenger? All solid guesses – but there is a surprise entrant, at least for me  and  is already wreaking havoc on the charts. Its 20 on the Apple App Store and 9 on the Google Play Store.

According to SimilarWeb, top spots in both stores are claimed by Bigo Live – a live-streaming video app made by a Singaporean team. During the first week of June NASDAQ-listedd YY Inc  announced that it has invested $272 million in the Series D preferred shares of Bigo Inc as its lead investor. For perspective the AntFinancial Telenor deal was circa $180M.

Other investors that participated in the round include YY chairman and acting CEO, David Xueling Li, who invested in Bigo using his personal funds. Dont be mis-led by by Nasdaq etc,  YY is a major Chinese video-based social network with over 300 million users. It features a virtual currency which users earn through activities such as karaoke or creating tutorial videos and which is later converted to real cash.

Launched in 2005 as duowan.com (NASDAQ: YY), it originally targeted gamers, before broadening to include video streaming and chat features for uses such as concerts, fashion and sports. Users exchange “virtual roses” as a form of currency, with top users said to earn as much as $20,000 per month.

What does this have to do with voting or polling stations? Not much today, but heres the surprise kicker, this is what most of the youth of our country and countless pervs/stalkers are busy doing online. It has a few thousand listings under Pakistan meaning thousands of people are running live cams and men and women alike are cashing out using virtual currency. In a country that bans paypal, kids and pervs alike have figured out a way to circumvent the system or build on top of it to use the app but payments off platform to “talk/engage with” others supposedly like minded people.

Youd think its the same as snap but its not. Its impact is so far reaching it is pulling hordes of domestic internet/mobile traffic. Thats how I stumbled upon it looking at whats causing the seismic shift in online traffic and who after “true caller” in Pakistan was taking the lions share of traffic. Lo and behold we have Bigo.

Forget Snapchat, this app is the next big thing with teenagers in Southeast Asia and countries like Malaysia are having serious ethical moral debates around its usage and lack of controls and potential harm that it can bring to the youth if they come across unsavory individuals and the exploitation kids can face if adults are not aware of whats going on. No one is saying or implying that it is being used for explicit stuff. But since its almost growing underground not many people are even aware of what it is.

Users range from teenagers to twenty somethings and the broadcasts mostly feature them going about their lives, just with a camera pointed at them. Conversations go on between users and the broadcaster. The desire to spontaneously share details about your life that drives millennial juggernaut Snapchat – and, consequently, the desire of others to witness that – looks like a key factor to Bigo’s appeal.The content runs  from surprisingly mundane to mildly racy. Unsurprisingly, those accounts get showered with virtual gifts. That is the kicker here. Get paid to share/broadcast your life, your moments, your voice, your actions etc. Not to forget full video if you so please and depending on your fans.

So what do people do with the app why is it so popular?

The Bigo app relies heavily on game-like elements, where the more you participate (following other users, broadcasting, and so on), the more experience points you get. Experience point, kind of oxymoronic, get rewarded for nothing.

You use those to climb levels and that seems to help push your streams to more viewers. According to the app, “the best way to get [experience points] is to send more gifts.”

This is where it gets complicated. Bigo virtual gifts, Some of the virtual items available for purchase. There’s an internal currency represented by “diamonds,” which the user can buy directly through micro transactions.

You can “gift” virtual items to the streamer, from rings to tiaras to sports cars – items you buy with your diamonds. The items you gift are translated into “beans,” which the streamer can stock up. The more popular the streamer, the more beans they tend to collect. You see where this is going and the potential for exploitation. Surprisingly listings from Pakistan that have high beans are supposedly women broadcaster accounts.

The streamer can then cash out those beans for real money. The current bean exchange rate on the app is 210 beans for US$1. To cash out, the bean hoarder must have at least 6,700 beans in their account. That translates to about US$32.

Not a bad payout for mostly sitting around and talking to your phone’s front-facing camera –  Could be I didn’t analyze all the points systems and missed some thing, but clearly this thing is wildly popular and has huge demand and the Chinese have beat every one to the punch.

Imagine when Chinese payment companies come to town and those who are already integrated in terms of payments will increase the transaction potential for every one involved thus raising the stakes further and making this phenomena even more wild.

The Malaysian Communication and Multimedia Commission has been urged to probe into the ”Bigo Live” application and to take action.

Senator Datuk Mustapa Kamal Mohd Yusoff when debating the motion of thanks on the royal address at the Dewan Negara sitting  said the application was deemed  a a threat to the development of young generation, especially schoolchildren.

The kids are busy with this stuff and thus further involved in their own reality than the reality around them to do with politics, elections, votes and or to participate in a joint future given that more than half the population of the country is under 25. If the download rates are any indication and the type of channels and engagement is representative of whats going on, then clearly we are mis-directed if we feel these kids with participate in their own future.

Right now the data points to them wanting to become social media darlings aware from the peering eyes of their FB/Twitter family and friends in a cocoon that is seemingly not mass market yet so they are ok for now being on here.

Like true-caller, that no one suspects on the amount of traffic it draws, this is going down a similar trajectory. (More on TrueCaller in a future post)

Whats actually going on in the app?

The users’ young age lend an inherent creepiness in the core concept. Obviously, no one is forcing all those people to broadcast but the combination of overexposure-happy attitudes and transactional nature of the app makes watching those streams (and the accompanying chat messages) a little uncomfortable.

Google searches of popular streamers from other South Asian countries(given they are most popular on the leader boards), make this seriously worry some as you see forums pop up dedicated to sharing pictures of popular streamers (mostly female) with people who seem to know them or where they live or work in real life.

This has less to do with the app itself and more with how people tend to handle their online presence nowadays, this doesn’t make this any less creepy, Bigo has apparently cracked the nut where its incentivizing people to share en mass.  The app it self is not doing any thing wrong, the same app can be used to run video tutorials.

Whats the potential for businesses?

Given that this a product that has already displaced online traffic away from traditional online publishers and content producers not just in Pakistan but across South Asia, perhaps its a good medium to use for content distribution from print/news/tv to the millennials given thats where they are.

Huge payments play to be had especially if in-country payments are added for real services and not just beans for your face on screen. Further its time for domestic and international businesses to figure out how they will compete with this and many others to come.

The one thing that is positive is that there is still time to get in line and figure out what else is coming to us by way of CPEC and OBOR and if these are the signs of the direction stuff is taking, we must have digital equivalents to engage our youth in some thing productive. For a country that makes every ones Footballs and software, its time for some thing indigenous to come up that is good for all.

Or if some one had the Bigo logo on a ballot paper and a campaign on the app, Id bet they’d stand a decent chance to win. Perhaps we have been solving the wrong problem all along?

The camera makes you forget you’re there. It’s not like you are hiding but you forget, you are just looking so much. Annie Leibovitz

Our friends from across the border are carefully rolling out a well thought out strategy for growth in Pakistan. Whilst they have access to human capital at scale in China, yet as they come across the border some surprises await.

No one buys into e-commerce plays and banking(payments) for letting it run on welfare. Clearly looking at the acquisition costs in Pakistan vs other developing economies they have acquired assets pennies on the dollar. Before you point out that they paid millions, let me assure you their game plan calls for turning it in to billions. Look at how many X returns their valuations have gotten them with Paytm etc.

The reason why they acquired and continue to acquire and should, is because the businesses are not only undervalued but under their current management mix, they could only grow it out this point and not beyond, else the current owners would have extracted large premiums had they been able to scale past the Hundreds of thousands of SKUs and shoddy customer service plagued by un-happy customers at large. (Just do a google search to check the sentiment for the ecom play).

There are a couple of reasons why for example they bought in to Daraz, it is because Daraz did a good job of bringing the business up to a point ready for an exit at an X value that its orignal investors needed. Daraz’s long term ambition was not to become an Alibaba, far from it, their ambition was to build enough traction where it became a conduit for a real player to enter the market, cash in on the operational setup and have a vehicle ready for growth but for some one else to get in for the hockey stick numbers. I feel bad for those who thought otherwise.

Had they equipped them selves for Alibaba style growth, they would have built the human capital to go with it. Either they couldn’t find the requisite expertise or their ambition had a cash-in date. From my vantage point it seems like its a bit of both.

Alls not lost, out with the old, in with the new. For Baba to scale, they will need to inject, groom and scale talent across the enterprise(s) to do the following:

1. Split/reorganize the current Daraz into multiple verticals ( from TaoBao to Tmall to Fliggy to Lazada to Ali Express to 11main meaning category growth and expansion, in some areas, virgin market entry domestically)
2. Quickly solve the last mile logistics problem by acquiring a domestic player or maybe a few (The cleanest deal would be TCS and/or  a long over due consolidation of the excess capacity all the local players built by leasing planes) The bonus with TCS will be sentiments express as a conduit for quick growth once the tech is scrapped and the brands cashed in. Yayvo is just that, yayvo.
3. In parallel build out an Internet payment play/gateway and rolling up AntFinancials Alipay to a homogenous country wide platform and system beyond what EasyPaisa is today.
4. Figure out how easypaisa grows up to cash in on every thing its got going for it right now and evolve from the clutches of binary thinking
5. Make sure the “telco” led thinking is parked some where and true operational excellence and growth hungry metrics are put into place. Not the kind that focus only on TVC led market building, but fundamentally UP the game in every aspect.

The Chinese didn’t come without a plan. I am sure they have a solid one. The only thing missing from my point of view is exponential human capital growth. Whilst these acquisitions need to be run like startups and they will, no one better than Baba to know and understand that,  but how does Baba manage its partners and integrate its acquisitions and its raw man power?

The super hierarchal nature of the Baba types wont play well with any/most existing corporate setups they have acquired. Yet they need the agility to scale, just money and tech wont cut it, nor will the language challenge help. Dont get me wrong, they will get it done, but where-in you and me and the market  is looking at this in terms of 2 acquisitions down and maybe one coming in logistics, nothing could be farther from the truth.

This is the quickest most familiar way to get in and get mind share. What we are all forgetting is what else Baba has to offer. Namely:

Cloud computing and AI technology:  by way of Alibaba Cloud (Aliyun) and AliGenie  and AliOS .

Entertainment services:  AliMusic , Alibaba Pictures , Youku Tudou

Others plays: Aliwangwang , AliHealth, AliSports , AutoNavi (Mapping) , Laiwang, South China Morning Post  and  UCWeb.

Baba has more diverse tech centric companies with both revenues and human capital grater than our entire countries technical output. As an outsider what I see missing, is the speed at which these transactions instituted top tier management post close.

Seemingly they have a lot of patience and are shopping for the best talent. Perhaps time for them to get in to HR in Pakistan and build out their own systems and recruitment portfolio. Like all others that came before them, including but not limited to Daraz, where surrogate leadership was injected, the jury is out if they had found real domestic leadership would they have done a better job?

But the clash of cultures and the execution strategies at Daraz show, things could have surely been better. But perhaps Daraz was happy with its implanted leadership and its horizon was exactly this, no way of knowing that, but for Baba to be successful it needs operational expertise at scale, industry agnostic preferably so they can quickly take new leadership through their process and find people who dont have to un-learn other crap to be successful.

Some natural things that will follow suit, that should scare the bejesus out of Google and FB are simply: UC browser and Content plays. This should be equally scary for publishers of every kind. With a near dominant browser, their own advertising platform + having the background and wherewith-all to be in the news business by virtue of  already owning the South China Morning Post, all they have to do is do a find replace and build domestic content or acquire it.

This would also mark the near end of players like iflix etc and other 3rd parties, because if Baba decides to bring capital to the space it will essentially be no match for mid-sized regional or local companies.

With pro China sentiment and open access to market they can in 12-18 months start replacing Google and FB as the dominant players in the ad-monetization space. Once they weave payments, banking, lifestyle, shopping, retails and content in to a universal platform, the next billion users will be too familiar with every thing they use already to transition to Google or FB products. Remains to be seen whats Babas vision is for Pakistan, but all these are plausible actions. They also play well into the One Belt One Road stuff. One Platform.

All the country-teams FB/Google built should be open hunting season, the many years of market access built by systematically working with Pakistani audiences, publishers and others will be good prey for the taking for Baba in terms of human capital. Plus it would give Baba, insights into or the lack-thereof of its two global rivals. Easy pickings. There will be border crossings across company lines soon. Fun times ahead. Retention managers beware.. The summer of your discontent is about to start.  Ex employees of Pakistani origin will be prized commodity, but buyer beware, those who dont have domestic operating experience will be tactical artillery with no strategic use, in the short term. Each re-location comes with a honeymoon period and that is not a robust strategy to play with. Unless Baba will outspend and outlive its competitors. I also see serious Chinese led lobbying coming to Pakistan to keep out the Western players. only time will tell.

The thirst for market share will see a lot of ad-dollars come up, the biggest race to the top will ensure $$s being spent in print and tv, there is likely going to be less reliance on rival ad-networks to access market share. Thats where if the telco assets are used properly Baba should get into building its own ad-network with pin point accuracy and re-marketing ability using its browser and AliMama assets. Not be confused with the crapshoot Telenor was trying to build. Also Zero rating its sites/apps/services on telco networks and doing it right. What “lal duppatay wala” carrier wanted to do by way of VEON, which turned to the Venom that poisoned its ill thought out and strategically shoddy strategy, Baba can borrow a page from the strategy but use common sense and do the exact opposite in terms of roll out and execution. Some ones already made an all too big expensive mistake.

Transition from Lal to Peela, really was just that, a piss fest of spending ad-dollars that made networks and ad-people rich. I digress, but clearly Baba has more smart people to understand that crap like  that doesn’t work here. I use the Lal Peela example to demonstrate that ideas dreamed up outside the shores of the country and entrusted to people who believe their own bullshit(getting fb likes and paid reach to satisfy their inhouse KPIs) eventually leads to result we all have in front of us. Its total Global downloads = 1,000,000+ as per the play store. I dont know any 2 people who use it religiously. Perhaps a tell tale sign of things of how it went down. Wonder how this was sold to the board as a success.

Baba has more sense than it, I would assume.

The next best thing after these two acquisitions would be to get in to the capacity and bandwidth game, you want to buy your biggest upcoming bottlenecks and fine tune the roads that will become the highways of information exchange on which all of Babas(Pakistani) fortunes will be built.

Also in a single move crush Googles Next Billion/Google Station/free-wifi ambitions by getting in to the space in parallel. Googles arguably too busy in India and the way its leadership incentives are structured, Baba has nothing to worry about. By ensuring ubiquity of apps/services/data, it can also trivialize any plans or ambitions FB has by way of Whatsapp payments. The time is now. Its good there is a third leg in this competition.  They should no less, not under estimate Google or FB, they have been here longer, they understand the market dynamics better and they have one thing that Baba doest yet have; Pakistani folks who to some degree understand the operating market. Baba is exporting Made in China talent and trying to retrofit for a Made as Pakistan dynamic.(If you are not a 70s/80s kid you wont get the reference-Image below to illustrate)

 

The good news is, Pakistani consumers win in the short term. Better access to products, better prices, better services and global competition. Not to mention a world of opportunity for those who can make the Pak Cheen dosti work.

 

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.

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”

3^rd 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.