What it takes to be Successful in a Frontier Market? A sense of Humor at the very least.

Wikipedia tells us that “A frontier market is a type of developed country which is more developed than the least developed countries, but too small to be generally considered an emerging market. The term is an economic term which was coined by International Finance Corporation’s Farida Khambata in 1992.” Pakistan is on the S&P, MSCI, Dow Jones and Russell Investments list of Frontier Markets.

By the above measure most Executives, westerners or otherwise, have very limited exposure to a frontier market until they are relatively senior and set in their ways. (Let me also point out that going to China/Hong Kong etc does not remotely constitute any viable frontier market exposure or experience). Late in the careers of western executives, their view of the world is largely formed and they are typically winging it in the end. They typically misjudge or simply pretend to draw parallels to their own experience, which are vastly different from any authentic experience on the ground. Not to say their own experiences aren’t valuable but clearly not in this context.

Spending time early in your career in a frontier market has a lasting impact on all your subsequent management decisions and it typically avoids you eating humble pie in the end. Not only do you get a birds eye view into the markets, but it also sets you apart when thinking about markets at home. I strongly believe, now having lived and built a relatively small operating frontier market company that the flow of human capital should not happen from the Frontier Market to the West, but more importantly the other way around at least in the beginning.

In Pakistan, consider the exposure to corner stores and small kiosks selling air time for mobile phones, or the small vendors who make up the agent network for branchless banking at the heart of Pakistans most visible money transfer service. They reflect a decentralized, de-institutionalized commercial structure that’s now clearly part of the US/Western economy (think Air B&B , Uber, Square etc).

Unfortunately those who research frontier markets on Google and seek tips online have a huge void of experiential learning; if they haven’t spent time in those markets, falsely believing they are rooted in an era gone by. I believe that young executives, entrepreneurs and generally any one who wants to be successful in the future should spend time in a frontier market even if it’s for a short duration. The life lessons, challenge and ingenuity of how markets evolve when resources are scarce are equally valuable if not more when I look back and compare it to economics courses I was fortunate enough to take at LSE.

So what does it really take to be successful in a frontier market? At the very least a great sense of humor, because there is no Walmart to run to or a Home Depot, alas neither is there an Ikea typically, nor is there a Better Business Bureau to redress any complaints you may have. All you have is your sense of humor and hopefully the perseverance to manage through any and all challenges. Challenges in the frontier market space aren’t like your utility company over charging you or you loosing your credit card, the challenges are real and typically “left field” that any where else you’d almost think you were in bizzaro world. It not all bad. Its just different.

So for comparisons sake on an average day in Karachi I would be dealing with a limited strike, logistics and transport issues and trying to figure out how to get teams into work safely. Nothing less than a master class for urban warfare planning. Whilst my larger challenge was never bringing in people safely or on time, it was to bridge the gap a few thousand miles away where a strike is some thing unions do, or you see at a Yankees game. Dealing with that, is a master class that doesn’t exist any where. Perhaps time to start one no less.

Entrepreneurs who are starting off in a frontier market will have an edge over the rest, they are forced to innovate due to lack of resources typically, in trying to solve the same problems as the rest of the world but their solutions need to go further and deliver longer. The moral of the story being, no time better than the present and no place better than Pakistan to exploit the bounties of what a frontier market has to offer, just make sure you bring your sense of humor to work every day.

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

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

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

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

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

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

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

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

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

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

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

Q: So How is Pakistan treating you?

A: Where there is chaos there is opportunity, can you handle the chaos? If not then read on.

That is what we call a loaded question with a more loaded answer. Pakistan for business is like going out on the street and finding them lined with gold bullion. If you know which streets to walk on. If you don’t, then you have an other thing coming.

Like most markets which are under developed or developing, the balance of power lies in the imbalance of information.

But chaos is not for every one, we have simple reasons in front of us which make it ever so hard to want to stick around and see if the balance of power turns out in our favor. The environment around us in general is negative and stifling, entrepreneurship, innovation, outside the box thinking or even dreaming big are crimes punishable by the sentiments from friends and family that question your mental state of mind.

When there is a general sense of hopelessness every where, not just in government or political circles but in and around our every day lives, from employment opportunities, law and order to the “in-bred, closed mindset” of every one around us, its almost impossible to break free of that thinking.

But you must do your self a favor, you must leave, you must give your self the opportunity to experience normalcy, apathy, moral courage, humility, civility and being human. All the things that seem to be drawn out from within us the day we enter the adulthood fold in Pakistan.

It wont be easy, you must therefore be prepared to “leave”. One has to open their eyes, see new things, learn new things, garner new experiences, understand how people co exist and how people debate ideas and build consensus. All it takes is the act of going away and experiencing it, without that, you will never figure it out, even though its not astro-physics, you will only see it if you remove your self from the daily rut of where you are today.

Once you have given your self the runway to see what else is on offer in the rest of the world, you then bring those learning’s and try to disseminate them, by coming back. Don’t try to solve big problems that ail the country, try to di-sect and solve problems that will bring meaningful change. Start small, from you neighborhood, to your self , then perhaps national and then potentially regional and from there on global. You cant solve things that have an internal inertial longer than your years you have to break them down first.

The worst kind of Pakistani, is the remote analyst, when you learn what you think is enough, don’t become a TV Preacher equivalent and talk about change and revolutions on FB and Twitter. No one likes or wants any one who doesn’t have skin in the game. Decide, if you want to have skin in the game and if you are committed to change, then by all means be a commentator, but with out being a competitor ever, those commentators generally don’t have a following of any kind and yield no influence.

We have the NY Times the WSJ and CNN who do a decent job at taking a stab at Pakistan every day, we don’t want to see more of our own doing it without offering solutions.

Remember the time when you left and dreamt of coming back and to inculcate change?

Never think, that one person cant change a system. The very crux of local, social, societal, corporate change is typically driven by one person. We need more people to leave and then come back to drive that change. One step and one person at a time.

 

Pakistan awaits your return.

The Old Guard of Industry | Sahab, Sir, Boss, CEO, Chairman, Head, Member…..

After being away for a host of years from Pakistan and then returning back about Three years ago(full time). The biggest most positive change I saw was 20-30 some thing years olds at Multi-nationals and other large corporations were finally referring to their bosses on a first name basis. Thankfully no more Sir, Sahab, Boss etc at least that’s what it seemed like.

Far from the truth no less, across the industry as a whole. We some how misconstrued respect with ones title, designation and link it to their intellectual status in society. How badly are we mistaken and who is to blame for the ruin of the working class where professionalism has gone down the drain due to the Saith Culture on one hand and the false title inflation culture of corporations on the other hand.

This problem actually has to do with the old guard. Let me explain; I recently met an old friend a good 10 years after high school. She is very well settled but doing some thing professionally I’d never expect some one of her intellect or background to be pursuing. No less she said some thing to me that fit in so well that opened my eyes to why people make the choices they make. Its all about circumstances.

She was introducing me to her family and her husband and I was a little taken aback when I found out her husband had barely even completed high school and then had some vocational qualification, but the cover story was that he ran a textile export group(by virtue of inheritance) that was valued over 300m$. No doubt the gentleman in question was a businessman par excellence and a phenomenal person in his own right.

Knowing my friend to not being the type to marry for money, I asked how this relationship had come about. The answer I got was a the best I’d heard in a while , she said, whilst most of the people who were likely candidates for marriage(from an intellect/education/background /affinity for the same things perspective) had gone abroad for either education or work, her choices were limited to those who either didn’t need to go, or couldn’t. So she picked the one that didn’t need to, as opposed to the ones that couldn’t.

That to me is the old guard, people who have hung around for no special purpose or have continued to outlive the system(s) in place and just happened to either be in industry or got lucky by virtue of timing, presence and happenstance. Their current success or excellence has nothing to do with their skills, neither does their dominance in the sectors where they are considered vanguards or pioneers. What I Value about them is their perseverance.

They were basically hanging around, not knowing any better and filling a vacuum, when most of the real talent got sucked out of the country or didn’t have the ability to compete with respect to un-even allocation of resources, timing, access, family status , social status or business status, these old guard are the ones that made out. Essentially they were well placed societally to take advantage of a system, their fore fathers left them (in the case of the saiths) or in the case of the corporations and their local chiefs (70/80/90s) their principals didn’t know any better, the principals cared only about the bottom line. Minus a few rare instances and people most of these executives who rose from the cadres of these domestic corporate programs essentially stuck around for 2 to 3 decades, in some instance long after the companies had packed up and left. What they were successful in doing, was to get legitimacy from the brands/companies they had represented.

They are still floating around, patting each other on the back, showing up and doing industry events where they give out shields and mementos to each other. For gods, sake we have to put a stop to this. If they really want to contribute, they must retire from the social circus and elevate them selves to genuinely giving back to society. Id love to take names, there are dozens who are doing this, but a greater majority who are not and continue to be involved in the circus, misguiding the youth and rising stars of the entrepreneurial ecosystem. Crushing dreams, one day at a time, with their cynicism and know it all attitude and without the background and wherewithal of what it takes to build and scale enterprises in the year 2015. In a country where 21% if not more of the population is between 15-25 years of age, they need role models from at least within the same decade. Just like packaged consumer goods, CEOs and Saiths from the Old Guard have outlived their shelf life.

They continue to cash in on that association and we continue to hero worship them. We must put an end to this Sahab/Hero worship culture. Whilst we must celebrate true success from every decade gone by, we have to engage and educate our masses to tell the difference between real success and engineered success. We must break the fold of the lingering Mafia of Saiths/CEOs, self appointed vanguards of industry and trade, the know it all’s.

We must start by making sure in our own individual capacity we help guide the rising talent of the industry and level set the playing field. The first thing that can help with that, if you really mean business, drop the Saith or Sahaab in your organizational culture, be a mentor to the ones that need you to mentor them and lead from the front as opposed to hearing from behind. Our people are smarter than this and we OWE our kids a better shot at the future.

The Digital Expert : Phenomenon

Not a day goes by that I don’t come across a Sr. Manager – Digital, Director of UI/UX & Digital, Lead Digital Strategist or some form of Digital Marketing Guru in Pakistan. Not a day goes by that I am surprised by the caliber of people who hire these self-professed gurus.

An industry as nascent as Digital Marketing globally, let alone Pakistan I am more confused than amused on a daily basis. The motivation for this blog post came from a posting I saw via Twitter: (Pasted verbatim, I cant make up this stuff even if I tried )

Required: Digital Marketing Wizard Guru & Expert

 Leading local group needs to hire an expert at making

  • Viral Videos
  • Increasing SEO/SEM
  • Reducing marketing fees paid to agencies on “google buying, facebook buying” other skype and local sites also good.
  • Experience from Agency is good
  • Max 3-5 Yrs experience

 Note: Initially you will be given a short term contract that can be extended into permanent position subject to your performance.

 

Where do I start. You want to hire a Guru and Expert but you want to do a short term contract:).  I mean do you go to any other expert in any other field and say hey I want an expert anesthesiologist but I want to incrementally build up the relationship by trying out the services. I want to faint , but just a little bit at a time, not all the way. Clearly you are hallucinating if you expect that.

What needs to happen is following the same instinct we follow for selecting a medical professional i.e references, the hospital of affiliation, where the person graduated from, what their track record is, do they pass an interview/screening process. So to all the hiring managers, please do our nation a service and stop screwing up on your hiring strategies, we know you don’t have an ounce of tactical and subject matter expertise in the pure play recruitment space. Just because you suck at recruitment and copy JDs from all over the internet and compress them, doesn’t mean that the potential candidates should suffer because of your compressed world view.

Now to the meatier parts of this JD, I want to hand a Darwin award to the genius who came up with wanting to hire an Expert but wants them to have no more than 3-5 yrs of proficiency at the task. This is so bad that I don’t even have an analogy to equate this to. It’s a crisis of intelligence both for companies who recruit like this and the hallucinating candidates who think that a 3-5 yr stint qualifies them for being an expert.

Who am I to judge? Ive only built one of the the largest Pay for Performance, Digital Media and Customer Acquisition teams in this part of the world. This piece is not about justifying my rant or my professional lineage, but I had to give some perspective, on why; I can qualify these JDs as a Joke at best and why every morning I scour the web for these nuggets.

My favorite piece is still to come, “Googe/Facebook Buying” wow, I said, it. Its like a crack addict admitting to the world they need some more of the good stuff. The reason why we are stuck in the “Mad Men” era of media and haven graduated to the digital school of thought in Pakistan is due to the fact that most of us don’t know any better. A 90 second synopsis is as follows, most of the traditional advertising agencies, came of age and decided, hey we need to do digital, they added some nice .Coms and .Nets and did some Facebook campaigns bought a few LinkedIn spots and placed an Ad or two via a banner exchange. Also had a cousin who had a friend who had a credit card and they bought a few Google Adwords, Wow just like that they become (pick one or many) “largest, biggest, media house, company, digital buying house “ in Pakistan. By their own admission, they probably are. They are the “biggest”, I just don’t know what yet. This led them to having their clients believe that they have some special “arrangement” with Facebook or Google to procure cheaper inventory of ads. Just like they did in traditional media, where bulk discounts were more applicable. Poor clients, fall for this every day of the week. I really do mean poor as no amount of money spent here has the ability to drive meaningful returns ever, so the client will be all the poorer for it in the vast majority of instances.

Not a day goes by that I have to resist the temptation in correcting either the candidates I happen to interview or otherwise prominent CEOs of local companies who cant stop talking about how they know how to get a deal on FB/Google Buying.

Next we come to viral videos, I literally have nothing to say there. People who either think they are viral video producers or experts in that space are most certainly not looking for placement ads online. Neither are they reading this blog, they are gifted and a rare breed who do not need to be applying for jobs or have the time to read opinion pieces. They drive those opinions by the work they do.

A quick look at the clients or agencies hiring these digital experts or one/2 person agencies, they only know Facebook, they only know likes. But they haven’t a clue on ROI , Consumer Engagement or Brand building. A cursory analysis tells me that of the vast majority of FB likes driven by such outfits & individuals in PK are store bought, meaning charging’s ones credit card online and buying likes for between 15-1500$ depending on the size, geography and type of fake likes you want to buy.

Its no surprise that the vast majority of enterprising folks I meet these days are in the category of self professed digital gurus, because the market is ripe for the taking. The end customer has no to little idea on what to expect and they are being swindled for the most part. Money spent with these agencies or with such freelancers or others is better burnt, because the ashes have a larger likelihood of being able to turn to compost and nurturing the growth of some thing from the ground. Sadly the same cant be said about their strategies.

The question to ask your self is, when you go to NYC, what does the T-Shirt say? The T-shit that every one ends up buying. Let me refresh your memory, It says “I ♥ NYC” it doesn’t Say “I Like NYC” so don’t go with the guy who guarantees you the likes on Facebook, because there is a huge difference between people Loving a brand and Liking it.

The customer service society, we are not.

The art of customer Service is an art that we need to look at very carefully. Just look around, from banks to telcos, from restaurants to every thing else in between. The common thread is the apathy in how we get treated. It seems that we don’t value the basic tenent of what makes a good customer experience, let alone a great one.

Lets examine the basic act of going to a restaurant. The experience starts from being greeted at the door, being seated followed by a server promptly taking your order. The orders are then written down(one would expect), so far so good.

Without fail, when multiple people are seated together and the server returns with the food, chaos ensues. Typically finger pointing starts as to where each order needs to go, a simple problem that perhaps is not a problem for many, but examine this critically as it sheds light into our customer service makeup.

All it takes to solve this problem is a simple note pad and a pencil and the act of noting who ordered what, so when the order comes through just placing the food corresponding to the person who ordered it. Without fail, every time I go to a restaurant in Pakistan , this is the rule and not the exception it seems. The servers are always scrambling to figure out, what goes where. Else where in the civilized world this is a common practice yet we some how fail to adopt it, frankly most of us don’t even care.

An other aspect of lack of customer service at any bank, utility payment outlet or other service oriented entity where people have to line up to interact and take turns to get their issues resolved, is the fact that we cant get into a line(just like we cant show up on time, or leave early as opposed to speeding and driving on the wrong side of the road to get some where faster). It is further complicated by the lack of training, as the staff that continue to ignore the first in first out model.

Without fail, it leads to inefficiency and more time than it would take to deal with each customer, should a first in first out model be followed. Customer service doesn’t happen by creating “gold” service lines or clubs; it starts by valuing the time of the individual being served. Irrespective of the service tier, basic service is the right of every consumer, but we fail to honor that commitment, sadly we are party to the crime.

We some how believe that technology will solve our customer service problems. Far from it, lets take the Call Center customer service phenomenon in Pakistan. If you have placed an order with Broadway or Dominos Pizza or you have had the misfortune of making a complaint via the PTCL Contact Centre, you are in for a rare treat.

Post the completion of an order, based on some random act of call back the Pizza companies call you back to check in how your service experience was. By calling a customer who didn’t “OPT IN” to be called the service provider has breached the first tenent of customer service “Privacy”.

Secondly the badly scripted or in the case of PTCL spammy or automated dial backs are a distraction with impeccably bad timing. For example on a Sunday morning at 7:30 . God forbid any one wants to sleep whilst they made a complaint to PTCL, till you press 1 on your key pad, that call back is not going away whilst your sleep may already have.

Forced rankings of customer resolution systems are to blame here. The people making the decisions to use these technologies do not or rather misinterpret the need and the deployment mechanisms.

An other big offender in this space are the mass SMS campaigns from otherwise noteworthy retail or service providers who feel that the act of buying mass SMS lists is an “OK” form of telling customers of an upcoming sale or thinking they may need roof insulation, or may have plumbing needs. In their mind, the customer was waiting for a godsend in the form a message with a Call back number.

We have to get our customer touch point data collection right, as opposed to buying carrier phone numbers and spamming them. There should be rules around the privacy of the consumers and strict regulation to manage the providers who engage in these services. The bigger offender are the telcos who now “allow us” to block offending messages by charging us a small fee. Wow, shouldn’t we sue the carriers and ask how the spammers got our numbers in the first place?

All this has to do with the mind set of the business. In an effort to follow the herd mentality of the latest and greatest technical solution, companies bypass common sense. This doesn’t draw engagement rather hampers long term brand value and growth.

True customer service for a brand would be the ability to walk into a store with previously bought unused merchandise and have the ability to return it for a full cash refund or do an exchange.

Typically businesses look the other way post the point of sale and once sold nothing is exchangeable without having a personal relationship with the staff of the outfit in question. From leading mall based retail to other more mom and pop shops the long term value of a customer is some thing we don’t think much about. Without fail people would return back to a brand if they have a unified respectful customer experience that does not involve a shouting match post sale or at the time of a service call or return.

One amazing example of such customer experience (local) is Brands Just Pret and their retail location. It has every thing to do with the mindset of the person running the show. Clearly in this case the founders intent is evident in the customer service that follows. Some others that come to mind who are very much local and getting it right are The East end and Kolachi. I am sure there are a host of others but these certainly come to mind.

We can draw inspiration for great customer service from global organizations like Costco stores, Zappos and Apple to name a few. There is always a starting point for these things and it must start from organizations reviewing who runs their customer service function and if they have real world experience in providing world class service. It’s a mind set thing, any body can get customer service right when you are dealing with higher end products, the real difference comes when mass market product and service companies get it right.

Here is a simple but powerful rule: always give people more than what they expect to get. ~ Nelson Boswell

 

Has Business really recovered from Pan AM 73?

It was 1986 and it was commonplace that nationals from Algeria, Belgium, Canada, Denmark, France, Germany, India, Ireland, Italy, Mexico, Sweden, UK and the US would use Pakistan as a transnational gateway into Europe and USA. On one fateful day they became victims of a hijacking on our soil and Pakistanis became victims of allowing others to conduct what ever business they deem fit on our soil.

The perpetrators supposedly came in via Bahrain, were of Palestinian origin and caused havoc that ended in tragedy. We haven’t recovered since.

The 1986 5th September Guardian ran a piece that had the following “the initial negotiation was started by the Pan Am manager at Karachi airport, Mr Viraf Daroga, using a megaphone. Later, radio communication was established with the hijackers and a command centre was set up in the Pan Am office at the airport. The negotiations were taken over by the governor of Sind province, Lieutenant-general Jehandad Khan”

What does any of this have to do with business? Every thing, the hallmark of where we were headed as a nation and what was to come of our business sector was pretty evident from one class act in 1986. It still remains the same, in some way or an other, we are still run, managed, maneuvered or told what to do by some one in Uniform. From taking over as the negotiator in 1986 to what has happened post 9/11 every thing can almost materially be linked to the decisions of men in uniform, but not the common man. Yet our fate, economic fate is baked in by the actions of those who continue to lead us even though a democratic setup ensues.

Pakistan is a stage, it has puppeteers who manage the stage, set the scene, then sit back and watch their own theatrical performances. We have been every body else’s stooge, and our geo political and tactical foreign policies have essentially ruined our ability to compete globally.

We were more focused as a nation to get to the streets for Palestinian brethren, we allowed the Wahabi Saudis to come in and open madrasas far and wide in our country(yet there are none in their own), we stood for the cause of Iraq and we broke our own national infrastructure protesting for items and supposedly religiously linked events of magnitude that should have mattered to us. The common un educated man was more focused and more obsessed by the optimal thread count of his imams turban as opposed to the message being preached. Some how no one focused on getting our selves educated and setup to take on global challenges and build universities, (whilst we stood in line to protest westernization of universities of the middle east). Sadly, as we didn’t have many universities left any way.

As a country, three businesses have survived the test of time in Pakistan. Politics, Military and Religion. If you happen to be tied to either three you are prosperous. From that ill fated day in 1986, 1$ allocated to either of these professions would have resulted in many fold return. The people who saw that are titans of industry in our country today. Most if not all. Saw the opportunity, created the alignment and have been cashing in. For the rest of us, the best hope is to focus on what we have, optimize it and try to make it competitive.

The other thing we must do is, take charge, call a spade a spade and call out our leaders and so called political apparatus plus the Military. This is our country and we must show all, we mean business. I have never seen a protest in Palestine to show solidarity with Pakistan, neither have I seen one in Iran, Iraq, Libya, Saudi Arabia , you get the point. Yet our masses will take to the streets given the opportunity. That is exactly the point, we waste our opportunities and we don’t create new ones, we are so lost and mis-guided that besides a few nothing new and Innovative is happening. We are so invested in the business of PMR(Politics, Military, Religion) that we have lost sight on how to be globally competitive. We have a Martial law imposed on our intellect and our ability to act. We have to rise above and reclaim what is ours, rightfully. The only way to do it is to focus on building jobs, creating opportunities and getting away from the age old business of PMR. We need to get back to the era of the 80s where Pakistan was open for business with any one who was ready to be fair. Lets not be open for business for any thing else. Lets only export the best products and leave the rest behind.

The Entrepreneur that cant be

With chaos comes opportunity. But some times I wonder if there is just too much chaos in Pakistan for real opportunity to thrive. If there was real opportunity, industries in general would be booming. But we seem to be becoming a poor country with a lot of rich people and economic dis-parity growing every day. With the lack of mobility of resources, personal mobility, funds and access to clean un federated domestic markets the average person can surely dream of being an entrepreneur but the odds are stacked up against them.

Traditional entrepreneurship is dead. Or close to it, it doesn’t have the returns one would expect(any where else in the world), if it has in some way still survived. The only form of entrepreneurship that remains is the “how to beat the system” entrepreneurship. It is some thing that is being uniquely exploited by government officials in the form of “looking the other way when people of means want things done, against a quid pro quo system”

Let me illustrate, you are an importer of sorts, you import items to resell at your fashion jewelry outlet, but the import duties are X, since every one in the eco system is under invoicing the true value of the product and thus not paying full duty, surely you cant succeed if you paid full value of the tax/importation duties, so you work with a government entrepreneur other wise known as a customs official and you figure out a balance that suits your eventual retail prices. This entrepreneur charges a fee for his service, the exchequer looses duties but he makes money as do you( the retail sales professional) since your goods are now a viable product.

What this is doing is that its creating an economy of fast cash and high disposable incomes. Whilst depleting the economy and the system of valuable funds. Arguably if the funds did exist, those left in charge to administer would truly evolve some other entrepreneurial venture to ensure they didn’t get spend on public works or development projects.

There is a simple co relation between just societies and prosperity. When there is no rule of law, no economic crimes related prosecution and no fear of the reach of the system, nothing positive will happen. It wont happen for most of the people. There is no shortage of raw talent, what is missing is the guidance to transact truthfully and with ethics. A country where half the morning conversations with 50%+ of the young adult male working population is muted under the consumption of beetle nuts (aka ghutka) do we really for see change and change for the better, do we really for see entrepreneurs budding every where? We truly don’t, but we should.

We don’t have access to fair markets, legal system, we don’t even have a cyber crime bill let alone thinking about digital entrepreneurship and success in building digital entrepreneurs. The very basic elements of starting a business or registering one, poses a hurdle, every conversation starts with a “masla/problem” but ends with “hull/solution” with the exchange of some pictures of the founding father. How can people achieve true scale or flourish where the entire system is broken and there is no desire or accountability on any ones part to really fix this.

Do we really blame every second Pakistani who has the choice to immigrate or to find work over seas? We truly cant, they owe it to their kids to be able to play out side, go to the zoo, walk to their neighbors or have access to a park. Its not a big ask, but its some thing. The same people when they leave here, they have the skill set typically to end up being entrepreneurs some where else. It seems our system has failed them. They have it in them to succeed but the mechanisms to achieve that success is non existent here for the vast majority of individuals. Yet its interesting to note, its this broken system that teaches them perseverance and the street smarts to go else where and be successful. The whole nurturing part is missing here thus where they have social justice they go and succeed.

It would be great to be an entrepreneur in Pakistan, theoretically speaking. The labor arbitrage numbers are big the access to talent is high(due to high un employment or under employment) but in reality it some how just doesn’t pay off big time. We have some great success stories but you could them on your fingers, in a nation of over 180M if all we succeed in doing over the last 60 years is enable 10/15 people to make it big, then we have truly failed in doing any thing.

The adage, that money makes money cant be any truer in Pakistan. Wealth makes more wealth here, even those who try and get to some scale eventually get shot down by some bureaucracy or red tape, sooner rather than later after a certain scale, people either give up, or give in to the system. Either way, true entrepreneurial success is not achieved. May be monetary success is.

Its easy to be successful and to be an entrepreneur if you have the means to experiment and if you have the financial muscle to take a bad blow, but entrepreneurship as a mechanism for larger economic prosperity is completely missing in our country. A handful few ever make it, most of the rest are entrepreneurs that cant be.

Vertical Growth by Horizontal Partnerships

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

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

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

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

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

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

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

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

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

 

 

 

Mind The Gap – Khaadi –

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

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

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

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

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

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

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

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

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

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