Author: Chinook Strategy

Every one wants to be an omni channel retailer. Some will evolve but most cant, not because they don’t want to, but because there is a foundational basis missing in understanding the journey it self.

Let’s step back, if there is no “documented engagement process” in your organisation today, within the process(es) that lead to or generate sales; meaning if things are not codified & repeatable, the likelihood in digitising them is very slim. It may feel digital but you continue to loose all attribution data over time. Just collection of data does not equal $$$.

The SME/Startup Conundrum

Imagine your journey. You are an SME that runs targeted ad-campaigns with great ease and even better results. You attract people to your Landing Pages, or Check Out Pages. The Journey up-until then is digital as is your sales funnel. But when you take people off-page,into a WhatsApp chat or a twitter response or an Insta DM your omni channel dreams may seem to be fulfilled, but in reality you are creating noise in the channel by doing “hand overs” especially if they lack traceability.

You may argue that, all these are digital channels. You would be right in stating the obvious. These are all digital channels but any channel in the absence of traceability is just a Messaging Channel for Fulfilment (MCFF) vs a Pure Digital Channel for Fulfilment (PDCFF). Not some thing your Bachelors degree in marketing or your 2 internships at “insert leading Pakistani FMCG name here” have taught you, yet.

In our desire to push content and sales via any means possible we have veered away from mapping our internal and external journeys. Take the example of a founder who reached out recently, lets call her Ayesha in the interest of privacy. She has a 20% conversion on her FB Ads, but her order completion ratio is 8%, her online repeat customer ratios are even worse at 3.36%. She has an amazing product line up of pay-as-you-consume meal plans and her product reviews are phenomenal. Her Gross Sales are about 1.33M Pkr a month. But the potential, if she were to increase her order completion ratios + get repeat customers would be 4x without doing much. That was my working thesis. So I challenged her to critique her own process.

So what was happening? FB/Insta Ads were bringing people to her social media, where there was “no clear call to action or CTA”, there were prices mentioned but no unified menu of services. The interest in her meal plans was great, based on her views and engagement as far as I could tell. But where did it all break down?

The User flow was as follows:

1. User discovered the product
2. User came to Instagram
3. User spent about 4 minutes narrowing down plans and mixing and matching what they needed (in their head and computing prices)
4. User then messaged her on Instagram
5. She then asked them for their Whatsapp number
6. If they were interested further, they would provide it
7. Then they would engage on Whatsapp
8. She would then screenshot the Whatsapp conversation and send it to her order fulfilment team (aka one of her 2 employees)
9. They would transcribe the order in excel and create an invoice
10. They would then reach back the customer via a new Whatsapp Number (theirs)
11. If the customer confirmed, they would send bank details for payment collection
12. Customer would typically IBFT the funds between 2-3 days
13. They would then fulfil the order
14. Then an employee would reach back out 3 days later for a review post or feedback
15. What I missed to tell you, was Ayesha has a retail location as well, thats how she started
16. The process/workflow for that is when A customer walks in
17. Has a person that greets them, there is a sampler menu to see the wares on offer
18. The person signs up
19. They pay in cash or via credit card (minimum signup is 2 weeks) online you can do it even for a day
20. Her store sign-up customers typically stay with her for 7.2 Months
21. Her online customers stay for under 48 days
22. Interestingly most of the people that walk into the store discovered her services online
23. She also has a gift card service
24. Those gift cards are sold as vouchers and every time she’s run an ad-campaign for them her sales conversion is over 28%

Im sure it is getting evident, where the fault lines are.

Lets re-calibrate, in her mind she’s doing all the right things, FB Ads, Insta Ads, Whatsapp real time communication, multiple payment options, personalised services. Yet brick and mortar sales are higher as are the gift card sales. The first thing that was evident in the journey was, that a true customer experience is predicated on great faultless payment options, that have low to zero friction.(Cash/Visa/Mastercard). Hand over between multiple sales/company people from un-branded phone numbers adds delay and hesitation. The business seems like a mom and pop shop operation. Whilst the product reviews were fantastic, we did a poll on the users purchase-journey. The results were horrible. Most people said, “love the product, hate the hassle to order or cancel”

So we looked at the in store model. Fast payment, potential product test, curated menu + pricing and multiple options on the checkout counter. We replicated this by building a landing page, that had a big-ass CTA, Click here to sign up. Once you clicked, it displayed all the menus and provided in-store days if you wanted to test the samples + nutritional information (and real video testimonials). As you went through each menu item, it displayed FB/Insta reviews from real folks, You add your selection to cart, select the days of delivery then you go to integrated payment or IBFT etc, 10 seconds later you get a confirmation response email and a WhatsApp link + all other channel links to chat with the vendor if you so desired + a BIG BRANDED PHONE NUMBER. They combined all these channels, phone, WhatsApp, Insta to a single online managed help desk response agent service. With near real time FAQ and a bot to service the customer + Live help.

With the order process automated and a workflow digitised the most useful information they got was customer information, with every delivery at day end they instituted an SMS or WhatsApp bot, based on the customers preference. They got feedback from the customer digitally vs some one calling them at 2 am asking how their meal plan was.

In the 6 months since these changes were instituted gross sales are around 7.63M, 80% of them are via online channels now and they have moved to a store in store model to reduce brick and mortar expenses during Covid.

As they scaled they learnt a few new things:

1. Category Management is a lost art (SMEs dont think about it a lot, we will get to this shortly)
2. CRM data is king yet SMEs don’t capture it till its too late
3. What the customers say they want vs what they like are 2 very different things
4. SMEs are top candidates for Digital Transformation
5. Process & Workflows are key, Whatsapp and FB are bad at this inherently
6. Customer segmentation analysis allows for better AD-Targeting & Hockey stick growth
7. Gift cards with fantastic checkout options bring in the highest margin if you have a video testimonial library

I took the above example as a starting point as its atypical but growing in relevance as online sellers are mushroom and not typically in the FMCG/CPG space and away from the current hoopla around B2B Retail and B2B2C Retail or even our favourite Kiryana store. But this is poised to grow and if the FMCG/CPG brands are smart they will keep an eye on this space and acquire the upcoming D2C brands. If you are a startup think about UX of Omni channel retail and keep adjusting for growth.

FMCG/CPG & Retails Moment in the Spotlight

Shifting gears, let’s look at the FMCG, CPG vertical as its very relevant and increasingly unique. It only operates on the periphery of data, because of one key component that has been missing in our market up-until recently. Product Information Data (PIM). Along with that, what has been missing from on-line and off-line channels both is exacting data on category management and consumer trends in near-real time.

Whilst it would be totally unfair to the say that, Shan, National, Unilever, P&G, Reckitt, IFFCO, PTC, Coke, Pepsi, EBM, Engro, Vital, Nestle, Hamdard, Qarshi and the rest aren’t aware of this, I would venture to say that most if not all are relying on international best practices(for the global brands) and local derivates from transient employees(X Sahab, sr brand man as an example) when they shuttle between firms vs concrete defined, data-based strategies and nuances derived from on ground data and the ability to take “small data” and piece it into execution material. I could be wrong but so far in my experience, the talk around digital transformation and omni channel is much larger than the execution.

Why would I venture to make such a claim? Simple. I will list the questions that come to my mind that I would pose to brand teams locally.

1. What if any category management framework do you use?
2. How do you consolidate, curate, house & distribute your product information?
3. Do you do universe planning?
4. Do you have an-asset refresh policy?
5. Do you have Marketplace SLAs for product information?
6. What industry benchmarks do you codify your digital process against?
7. What is your digital transformation journey and who owns it?
8. Does your organisation have digital champions?
9. Do you have a a 3PL or 5PL strategy? Are you as a brand custodian involved with it?
10. Do you work on or execute retailer equity programs?

If you aren’t using a category management framework best to start off by looking at this webinar series on CatMan2.0 an industry standard for CPG/FMCG companies & beyond world wide.

We are an evolving market with X 100K Kiryana stores, they aren’t digital nor is their sales data, a great situation to be in. Why you ask? Because if you digitise a few 100k stores & their footprint across retail you will, for the first time get actionable and real time data compared to previous long standing guesstimates and market sizing power points handed down from generation to generation of brand managers.

Yes we have the likes of Salesflo and others who are operating in the distribution management, digital merchandising and in-store marketing and data analytics space, but that is still a mouthful and whilst great services no doubt they are working on a different part of the supply chain. As are the likes of retailo and tajir etc, raising millions is validation that this space is about to get interesting, making money will be validation that we are choosing to solve for the right sub-area. In the Kiyrana tech space this wont happen with non-feature rich East of the border copy cat products in Pakistan. At some level copying the model would be acceptable but when we cant evolve past the same name moniker from India along with colour scheme and UI, are we really innovating, granted some times a good copy does better than the original, time will tell.

Im generally not a fan of ME2 products, unless they are engineered to local specs with unique USPs and helping solve for real local issues. Valuation driven copycat apps, that lack ingenuity even in their look and feel wont likely solve for local problems because their prime motivation to build is not to solve for a unique local problem, but to follow the RocketInternet Model of cut-copy-paste and exit(CP&E). Granted it has worked in the past but I am more focused on sustainable local growth and companies and products that will make a true impact on the ecosystem, making the lives of Pakistanis better. The B2B players have it pretty tightly locked down in the value prop space and there are some formidable players in the b2c space as well sans copycats.

The jury is out, on when they become profitable ventures. In the intervening time of price wars and VC funded dreams, this should be cherry picking time for Brands/FMCGs/CPGs to really play their hand vs being locked in by technology players.

Just because most of these CPG/FMCG brands do not have the technical, operational and industrial supply chain bench-strength beyond what they have seen domestically they continue to have FOMO. Also this is not a swipe at them, its the reality of the items at hand. What this opens the space up for, is true digital transformation within the FMCG sector so they start to un-learn the Suzuki from warehouse to distributor model and go deeper in the value chain by understanding the step change in their own valuations that will come if they were to actively participate in owning “the digital last mile of supply chain data”. Whilst there is a massive push to be the “digital supplier” to all or most retailers, in the end FMCGs will win big if they get their act together as they have new buyers with likely better documented sales and order histories & reach. But as this grows the lack of proper 3PL & 5PL understanding on the distribution side and the harsh reality of unit economics on the instant fulfilment / retail side, will pose challenges at scale that are new, but solvable.

I feel:

Supply chains will be king, people who understand them will be king makers, people who use the most efficient ones with a keen understanding of real time data and traceability will be the prophets of retail.

But do we understand enough besides the press releases? Yes we do, to a fair degree, but can we operationalise it?

Not as much. So that a first time buyer of X brand sachet of shampoo in Parichanar shows up both as a first time consumer, has attribution data stored, is primed for re-marketing, aspirational spend, has language localisation elements built in, have native voice engagement available to them and for the first time be visible to the brand as User-X vs (Shipment 1 of 5000 sent to distributor in Kurram District in the province of Khyber Pakhtunkhwa) and based on census data have a likelyhood of being part of a 30% female cohort. This is the tough ask.

Every brand, FMCG, CPG, CEO wants and needs this data, but they do not have a clear cut strategy in place to make early bets to fund the growth in this space. My view is, most will be late, will try to make acquisitions in the space, will fail with integrations and then blame IT:). Best to note, IT ≠ Digital Transformation. Far from it, we continue to confuse the narrative at the top, thats why we have seriously dis-functional organisations. If digitization doesn’t have a clear owner and a mandate, you as the brand custodian should go some where, it does. If the CFO of an organisation has this mandate, short their stock if possible. Here is a model for you to keep in mind when thinking about the elements of digital transformation in any organisation.

Mindsets & Change Management, How to Transform Digitally?

It is a journey, that traditionally started with an ERP mind set that has to evolve.While a PIM system helps businesses consolidate, manage and enrich product information in a centralised repository and distribute consistent product information to every customer touchpoint, an ERP system carries out everyday business related processes like accounting, compliance, distribution, project management, supply chain operations, risk management, etc. We have to have an organisational shift from transactional to operational and understanding the building blocks around the digital infrastructure required will help organisations transform digitally. It has to have board room sponsors along with people who are willing to stay up nights in corridors holding doors open for the funnel of change to flow through in the right direction vs guarding their doors and not letting change management through.

Following the same thesis, its easier to measure things digitally but when your end product is being sold in an off-line first model for decades how to do you collect this info?

Well one traditional yet digital method is to work with the B2B startups who collect distribution data. But the better way is to own your “asset streams” across market places and digital channels, then use the same streams to enable the Kiryana stores to start selling via online channels. If any thing don’t think of becoming a shopify service provider. Think Instant stores backed by the brands them selves and deploying marketing and sales incentives to start “capturing” the offline footprint that goes online. Use local tech where possible vs jerry rigged foreign tech. Till you start the enablement of a digital first store, you cant do much around brand equity surveys in near real time. This journey is based on a thesis and you as the CPG/FMCG must build your view on the thesis vs the eyewash being sold in all segments of b2b/b2c/b2b2c enablers and tech. Tech only solves part of the problem at hand. It unlocks a channel, how you unlock it starts with an evolved digital mindset of having both a short term and long term strategy. This is not a race, but a cycle of growth, invest in the right tools, systems, thesis and products. Ensure your teams are trained. Getting outside help for training, consulting and advisory in

1. 3PL/5PL
2. Distribution
3. Logistics
4. Fulfilment
5. BrandEquitySurveys
6. Offline2OnlineAttribution
7. Online Payments

Will be key tools in your future success. You cant do it alone, but you can go further faster with subject matter expertise.

Let me leave you with what a Brand Equity Survey’s starting position should be. Similarly you could work with experts to carve out tool-kits in each area as you map your digital journey.

The Fast Fashion + Affiliate Opportunity

Oh I didn’t forget you Khaadi & Sana Safinaz, Elo, Limelight and Bonanzas of the world. You have an outsized opportunity. You are all fairly digitally inclined but with people copy-catting lower end version of your brands, I am caught thinking to my self why you haven’t co-opted the mass market yet? Beyond taking out copycats, why not enable your retail partners to sell further and wider?

Granted not all of you have retail partners since you moved in to the flagship store in every city model. But what about tier 3, 4, 5, & 6 cities? Why put out your infrastructure when you can work with others who already have the distribution channels. Why not enable them to go digital and become fulfilment agents or go drop ship? Why can I in 2021 not build a drop ship store for Limelight in Bannu?

Digital mindsets like all other mind-sets are transformative and happen over time, you cant do what you haven’t experienced even if you copy very hard. There is a massive opportunity to think about digital transformation beyond having a website and thinking about the cheapest delivery rates. Over time all those things are commodities, if you aren’t strengthening your supply chain by building resilience & reach, you your self will loose the opportunity to digitally enable new markets and thus new consumers.

If all your brand marketing is focused at, is one Target Segment are you even really digitally inclined? Agreed that not all products are mass market, but there is a market that you haven’t explored yet. Very likely, because you have not unlocked all your data.

Fast fashion has the most potential to grow, with the right world view and investment in digital transformation, beyond just lip service. Because most of these businesses are not run by boomers, there is a real appetite to scale the digital channels, which is great news for all. The roadblock is in human capital. Leaders within these organisations beyond the “saith” or “solo-preneur” are a line up of yes men and women who agree with the know it all brand masters(aka owner) and thus a sense of fresh thinking and experimentation is vastly missing. I could be biased, granted, but when was the last time an online or in-store experience in fast fashion, left you begging for more? That is because the rest of the industries standards are so shoddy, that when we get a package in time for the right price we are grateful and we as consumers haven’t evolved either to what can be, yet the same consumers have a very different mind-set when they order via Amazon.

Coming back to affiliate stores, both digital and offline, the data capture and inventory consolidation opportunities are plenty. Even before that, accurate product shots, the right handling of merchandise and a fast outsourced PIM could reduce 1000s of $s worth of photoshoots and product cataloguing every week. If I was the owner of these brands, I would do a multiyear planning and strategy session and build out the internal asset classes. AKA what to outsource and in turn allocate marketing spend on distribution channel experimentation. There is so much to do, if they were really smart they’d look at local shopify models and build affiliate on boarding for people that bring on & offline traffic and given them a digitally enabled sales tool kit.

Repeat after me, there is no shame in outsourcing, there is no shame in working with startups and even incumbents, there is no shame in accepting that you don’t know a lot around the digital value chain. If you accept the known unknowns and the unknown, unknowns your brand will evolve faster. Take comfort in knowing you built a power house of a brand-now rely on the experts to Scale it 10x.

So what is Digital Transformation in our Local Context?

The what!

First of all take stock of where you are in your digital maturity/e-commerce maturity. Especially before you embark on the how. You must define your what statement. Again no one size fits all but this should give you a better starting position than if you haven’t aggressively thought about it recently.

The How?

This is the tough part, knowing what needs to be done is listed above, since not all companies, organisations, brands, teams are made equal, the kick off process is extremely challenging. Ive spent the better half of the last decade working on framework and models that help companies and individuals more so, navigate the challenges of change management and transformation. The How to do it, whilst seemingly easy needs a lot of perseverance to execute. So I’m borrowing an excerpt from my (soon to be published book on digital transformation) to help guide you in how to even get started. I write extensively on the FAS-T Methodology in my weekly news letter here.

The When?

Not soon enough. You are already late if you are asking this question. Some Retailers/E-tailers, Brands, CPG, Managers, Product folks will read this and think they already have on-line presence, they are exploring partnerships with startups and have MOUs in place. You sir/ladies are the ones that will be left behind by a generation of execution mavens who truly understand the transformative power of actions. It is on the shoulders of such folks that new brands, D2C and otherwise will be built. If you rely on your “agency” for guidance on all things digital, I am already betting against you.

I don’t have any or most of the answers, but what I know for a fact, is that if you are the Owner, CEO, Partner, Change Maker, within any of these industries or verticals and you are struggling to frame “where to next“? Then let the hand written note above be the starting point, in having an honest conversation with your self before you embark on your digital transformation journey in the retail world – (or any world).

I wish you the very best of luck. If you want to operate beyond luck alone, I can be reached via Twitter and typically reply to all questions if you say please!

COD “cash on delivery” and “collect on delivery” mean effectively the same thing and have been used interchangeably since 240 yrs or so. At least based on the oldest published newspaper clipping available(1781) on newspapers.com as evident below.

Myths busted by the above

1. Asians invented COD
2. Brown people popularised it
3. Credit cards came before COD
4. Its a developing world innovation
5. Its time has come to be replaced

Before postal systems came into place, delivering goods basically required a cash-on-delivery approach. This even pre dated credit. So COD has been here for ages, all other systems methods, even the postal services system came after it. Historically speaking it was in 1864, The year that Congress passed a bill establishing a system for money orders. This law, championed by then-Postmaster General Montgomery Blair, allowed the U.S. to replicate a popular British system for sending the equivalent through the mail.

Whilst across the pond the money order system was established by a private firm in Great Britain in 1792 and was expensive and not very successful. Around 1836 it was sold to another private firm which lowered the fees, significantly increasing the popularity and usage of the system. The Post Office noted the success and profitability, and it took over the system in 1838. Imagine our public postal infra taking over any thing even today.

Fees were further reduced and usage increased further, making the money order system reasonably profitable. The only draw-back was the need to send an advance to the paying post office before payment could be tendered to the recipient of the order. This drawback was likely the primary incentive for establishment of the Postal Order System on 1 January 1881—but helping to prevent theft in the process by not sending actual money through the mail. Money orders enabled cash-on-delivery systems to thrive in the days before credit cards.

USPS’ collect-on-delivery system

A Harry H. Charles, of Quincy, Illinois, deserves most if not all the praise for doing something very important whose impact can be felt on the modern use of e-commerce even today: In 1899, he successfully pitched the United States Postal Service on the idea of collect-on-delivery. You don’t hear about Charles, but maybe you should know, every time you get a COD delivery that some one some where many moons ago had an original idea in relation to a problem; yet he didn’t go on Twitter creating content or talk about how hard it was he instead solved for it. Granted there was no twitter then..But you get my drift.

Charles had 900 reasons to celebrate. He didn’t give up, as outlined in the document of the Proceedings of the National Board of Trade from 1901

A little more than a year ago Mr. Charles decided to send a few of these parcels through the mails, collect on delivery, in exact accordance with the plan heretofore outlined. In every case the parcel was promptly delivered and the collection made and returned by the postmaster. Then Mr. Charles presented his plan to the attention of the Department officials at Washington, and was advised by them to give it still further trial. This he has done. In the past year he has sent over 900 “C.O.D.” parcels through the mails, to post-offices in every State and Territory, and in every single case, save one, has received prompt returns, the remittances being made in all cases by money order, registered letter or postage stamps. On investigating the single failure for the year, it was found that the postal car containing the “C.O.D.” package was ground to pieces in a wreck, and not even the wrapper of the parcel could be located.

Judging from the extended and satisfactory experience of this manufacturing concern, this feature seems in a fair way to work out its own salvation.

We got here in the present, in the today because, USPS was willing to experiment which led to innovations such as registered mail and the use of the money order, two features that Charles’ test took advantage of.

Perhaps a lesson for our postal service as well. So before we credit the Asian economies or the Indian e-commerce segment for revolutionising payments and bringing services for the masses, it has/had all been done before, for decades, this was a primary use of money orders, only to be changed in 1987, when checks were allowed into the system.

Please note, whilst you can still send things collect-on-delivery even today, the convenience of credit cards had killed the segment in the time of amazon prime. Id go so far as saying that Visa and Mastercard should thank Charles because had it not for been a problem he faced credit cards would have likely not come about in their present iteration.

The Western world may have given up on C.O.D., but many parts of the world have not, they are just getting started..

To be able to disrupt some thing, we must first try to understand its origins. A key missing component with folks/disrupters/wannapreneurs around us where 80-90% of our domestic ecom delivered are done via COD. Most folks have no idea about the origins, versatility, need or the shift that it brought when it came about.

Unless you have an acute understanding of the domestic market; & understand the challenge of low credit card usage in Pakistan and realise that customers prefer to pay cash only if they were satisfied with the delivery you cant really disrupt the model.

We have a credit card problem/credit problem. We also have a larger fundamental problem in understanding who we are transaction with. Lets try to understand this further.

Person A, Sees some thing forwarded to them via a friendly whatsapp. With a picture + price. Person A decides this is a good deal. Person A places an order with “friendly whatsapp/fb/insta, unknown seller”. Friendly XYZ seller uses a reliable delivery service, to send shipment. (they want to get their money in time hence they use a reliable service) The shipment is sight un seen by the messenger. Messenger delivers to Person A. Person A pay for it, takes it inside the house, doesn’t like it.

They go berserk on social media in blaming /shooting the messenger. Because their last interaction was with the only known entity in the transaction, the delivery co. The seller then blocks them on Whatsapp and goes on to sell more Italian dreams made in China at affordable prices sans quality.

Whilst its easy to go online and hurl colourful language at the messenger, this is single most common outcome of buying from un-trusted sources , who in turn rely on known brand delivery agents and thus creating a trust deficit for e-commerce, not for the delivery partner.

The underlying issue is of trust, till the public at large becomes savvy to not be conned by folks or check credentials or give in on their urge to buy PKR 600 Gucci slippers and then be shocked that they didn’t come from Italy is less a function of COD or E-commerce failure but more a function of a market whose time has not yet come(fully). You get what you pay for, if folks screened better they would do better over all, but element of greed on the side of the sellers, fake representations and instant gratification on part of an aspirational/millennial crowd with disposable income is adding jet-fuel to this issue. Its literally a communal problem but we fail to recognise it.

What are we really trying to disrupt then?

The first thing to understand is that e-commerce/sales/online startups/insta sellers/fb sellers/whatsapp sellers/wfh producers are all a microcosm of the country. People forget before they transact what the environment around them looks like.

Its like for a short while people really do step in to a magical place and consider their shopping journey online will be different from a real life experiences. Therein lies the “trust deficit” but it only kicks in post transaction.

Most people also lack the basic background check hygiene, or their guard is lower for e-commerce. Cant really say. But for all the payment companies, digital channels, marketing mavens, startups, etc solving for “e-money” there are other pieces to this puzzle that need to be solved equally hard. I see a dozen payment players come in to existence thanks to our regulators kind/timely approvals, but the question I struggle with, what are they all going to disrupt? If they are all solving for COD. I also don’t understand what they think, having the ability to pay electronically will do to move or create seismic shifts in a system and process thats been around for over 240 years. I am rooting for all yet cautiously optimistic only.

Questions every disruptor must ask them selves? What is the problem?

Looked an other way, away from payments alone, What are the things that must align for COD to work:

1. The consumer needs to be physically available to receive the goods in order to provide payment. (That could very well be “credit/digital payment on delivery if you choose a card”
2. Often times the consumer is not available, which means that multiple delivery attempts are made for one order
3. The average number of delivery attempts per order is 1.24, (say an educated industry approximation normalised across similar markets).
4. This translates into an extra 8-32% of labor costs in last-mile delivery for the seller depending on the size of the shipper/the delivery co the network/urban density

Furthermore, e-commerce retailers with high/exclusively COD orders potentially also face higher cancellation rates due to the consumer refusing the order. For example, the consumer may not be satisfied with their purchase & upon seeing it and refuse payment. They have nothing to loose…In such a case, the seller is responsible for all costs associated with the return of the item, increasing logistics costs.

Do I still have you with me?

So COD is not just a payment vector problem. Faster check outs will help the existing install base already familiar with the e-com world, more product range or established retailers can not also solve for buyers remorse leading to refusing parcel on arrival. So COD in isolation may seem like a large cash problem but in reality it has many complex layers.

D2C Brands starting off now, don’t believe what you hear. Payment gateways alone wont make this go away. Trust will. Build audiences, tell stories, content marketing is king as is a community. The future of COD will be increasingly in favour of those who take these steps.

There are lots of reasons C.O.D. goes on and on and on and on in e-commerce in the modern day, one of the largest being digital security weaknesses in developing countries. Also in an all cash economy, consumer preference are equally hard hard to shake, especially in Pakistan and especially in tier 3-4-5 cities.

Tier III,IV, V and beyond.

COD has a mapping problem as well. As recently demonstrated by our dear friends at Google nothing remains free for ever and with the lack of google being able to map beyond the major cities and the utter lack of any local mapping solution being up to scratch, what we need and I shudder as I verbalise this, A Nadra for Maps. COD, ecom, payments, KYC are all part of the same hypocrisy. That in my mind gets closer to being solved with an indigenous mapping solution, system & service. Cloud based systems are bigger larger than machines running in foreign lands, they are platforms and services that allow businesses to scale. We really need to understand that there is 0 indigenous stuff commercially available today that helps any startup play in the beyond KLI market at scale for years to come. We can’t be hustling backwards(saying use local when they are not up to scratch) because of faux patriotism.(line credit my dear friend https://twitter.com/asemota)

Focus on one big thing and solve for it.

Startups in the d2c, last mile, payments, fin tech, insurance tech space, mapping etc are all solving for different pieces of the equation. Yet the equation has been broken down into small parts above. In your area(s)/realm of experience you can only help solve the larger COD item or innovate if you focus on ONE BIG THING at a time. Every one seems to want to solve for the other “channels” core issues without first solving for their own. Mapping companies want to build payment gates ways. Bro first build a better map. Payment companies want do QR implementations, Bro first fix the mdr issue. D2C Companies want to solve for “locally made, better than imported” Bro first focus on quality and scale…I can go on, but I will not win a popularity contest. Banking regulator wants to use “Western successes stories” Bro focus on regulation and let the free market come up with the solutions instead. Buyers want to go online and shame the “delivery cos” Bro focus on ordering hygiene….

COD is not going any where….

This is the good news, it shows the ecosystem is thriving and self regulating, there will be progress and many will contribute to it. The next revolution is being shaped and fuelled by aspiration buying, smaller niche ticket items and staples. The biggest seismic shift will come from TikTok. There I said the T word. As the creator economy grows, so will the consumer economy, there will be more and more focus on locally sourced, locally available instant gratification, a merger of Home Shopping Network and Live Stream fuelled by Local Commerce. If you are not a stake holder in either of these, you are likely going to loose hard. COD will evolve, the transaction structure will evolve, the creator economy will give rise to lower end, but trusted community based commerce. Be ready to evolve to CDCOD*(Community Driven COD). Just like micro finance banks give loans to people who can bring in 2 references, shopping and consumption based on TikTok community based activities will give rise to trust models we don’t know today but are bound to come and will only favour those who are ready to play in the new evolving world of COD.

From 1781 to 2021, we are only just getting started.

“Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.”
― Rumi

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

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

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A world-class payment system launches in Pakistan "Raast-Pakistan's Instant Payment System" which will be a huge leap in the digitization of the country’s financial mechanism.#RaastBySBP@StateBank_Pak pic.twitter.com/cch05N2mEJ

— Government of Pakistan (@GovtofPakistan) January 11, 2021

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

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

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

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

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

1/ Still lots of questions about #RaastBySBP and how it's different from current online transfer mechanisms. People keep insisting it's the same as current digital payment switches, but it's NOT in a huge way! Read on and share so there is clarity…

— Khurram Zafar (@kayzafar) January 14, 2021

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

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

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

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

So Whats 1Link then & how does it work?

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

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

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

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

What are Digital Financial Services? (A simplistic view)

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

What Problems exist in the DFS space in Pakistan today?

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

Why Digital Financial Services?

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

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

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

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

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

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

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

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

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

Syntax and semantics, Why they are important?

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

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

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

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

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

How does Raast/MPG solve for the above?

If all goes to Plan then what happens?

What could be some Initial Challenges particularly for Incumbent Banks?

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

What could be some Initial Challenges particularly for Incumbent Wallets?

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

Where to next & by when?

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

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

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

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

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

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

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

NTC, being the official ICT service provider has successfully arranged PM’s address to World Economic Forum (WEF) on 25th Nov, 2020 via video link.@PakPMO @MoitOfficial @RashidViqar pic.twitter.com/PXVjYbo97x

— National Telecommunication Corporation (NTC) (@NTCPakistan) November 26, 2020

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

It defines expension as

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

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

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

Bootcamp training on Cloud Computing, AI coming soon…#ArtificialInteligence #CloudComputing https://t.co/F2QMxK8FMh

— Ministry of IT & Telecom (@MoitOfficial) January 28, 2020

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

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

A group photo of NIC Peshawar staff & graduating students of 3rd and 4th session with Federal Minister for IT and Telecom Syed Amin Ul Haque at National Incubation Center Peshawar on 21-12-2020.#ICT #digitaltransformation pic.twitter.com/XZJrAzkgqN

— Ministry of IT & Telecom (@MoitOfficial) December 22, 2020

Federal Minister for IT and Telecom, Syed Amin Ul Haque hails 33% Women among the graduating startups of NIC Peshawar.

NIC Peshawar is an initiative of Ministry of IT and Telecom, funded by Ignite, and operated by LMKT in collaboration with PTCL. #Startups #ICT #Innovation pic.twitter.com/KUggJ8UZgV

— Ministry of IT & Telecom (@MoitOfficial) December 23, 2020

Federal Minister for IT and Telecom Syed Amin Ul Haque addressing the 3rd and 4th Graduation Ceremony here at National Incubation Center, Peshawar on 21-12-2020.#Startups #Business #DigitalEconomy pic.twitter.com/HJ8eLIVl4e

— Ministry of IT & Telecom (@MoitOfficial) December 21, 2020

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

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

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

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

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

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

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

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

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

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

President Dr. Arif Alvi @ArifAlvi chaired a meeting on President’s Initiative for Cyber-Efficient Parliament. He underscored the need for digitalization of Parliament to ensure efficient secretariat and Committee management as well as decision making. pic.twitter.com/EqLJoMXibO

— The President of Pakistan (@PresOfPakistan) November 25, 2020

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

H.E. Syed Amin Ul Haque, Minister of IT & Telecom, Government of Pakistan discussed Digital Pakistan Vision at the GSMA Thrive Asia Pacific on 3-5 November. Watch video https://t.co/kP2zmZKN8L@MoitOfficial @SairaFaisalSyed #GSMAThrive #digitalpakistan pic.twitter.com/I0S4n2wetb

— GSMA APAC (@gsmaapac) November 9, 2020

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

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

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

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

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

ڈیجیٹل پاکستان ویژن کی تکمیل کیلئے وزارت آئی ٹی کے منصوبوں کا بنیادی مقصد پاکستان کے ہر علاقے اور تمام لوگوں تک موبائل فون رابطوں اور برڈ بینڈ سروسز کی فراہمی ہے تاکہ ڈیجیٹل ورلڈ سے منسلک ہونے کے ساتھ ساتھ عوام ٹیکنالوجی کے ذریعے تمام سہولیات کا بہتر انداز میں استعمال کرسکیں۔ https://t.co/SyTvSkFV61

— Ministry of IT & Telecom (@MoitOfficial) November 20, 2020

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

So we have a ministry that is:

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

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

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

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

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

Hopefully there is a better plan of action than that.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

― Neville Goddard

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our unfair advantage…

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

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

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

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

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

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

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

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

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

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

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

Sulking wont fix it.

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

Life and Startups without risks suck.

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

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

Overview of non-obvious opportunities for founders in Pakistan along with high level industry analysis.

— Mubariz Siddiqui (@MubarizSiddiqui) August 3, 2020

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

The Small road to big Markets

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

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

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

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

So what are you really saying? What works then?

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

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

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

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

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

Here is how I think about these things.

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

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

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

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

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

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

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

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

https://t.co/05HQXYkYCz
Market Product Fit. Surprises and why founders should explore them.(Share what you think are some great market-product fit ideas especially when you think about things that shouldn’t be happening but people are doing anyway) @MubarizSiddiqui

— Faizan Siddiqi (@faizansiddiqi) August 5, 2020

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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