Category: Startups

He Said Xi Said: The looming threat of Data Privacy in Pakistan. The Currency of the Future.

The writing is on the wall. We just got bail out funds from Xi, its not a bad thing. Who else would underwrite the plundering of all our combined leadership or the lack thereof.

“China comes with a lot of money and says you can borrow this money,” Dr. Mahathir said in an interview before the vote in Malaysia. “But you must think, ‘How do I repay?’ Some countries see only the project and not the payment part of it. That’s how they lose chunks of their country. We don’t want that.”

There are 170 million surveillance cameras in China. By 2020, the country hopes to have 570 million — that’s nearly one camera for every two citizens. This should be an eye opener for the Pakistani government and the powers be. Do we think that some one investing this much money will not safeguard their interest? Actually they will get a first mover advantage by way of access to the new digital currency, data on you and me.

At the same time, China is a building a national database that will recognize any citizen within three seconds. Though that system probably won’t be unveiled for a number of years, facial recognition is widespread in China as a single google search will demonstrate.

Thanks to a large sample population and lax privacy laws, police and private companies have led the way in developing surveillance technology that is now being used to track travel, shopping, crime, and even toilet paper usage. While the West is engrossed in GDPR and debates on the ethics of AI, China already has production grade citizen surveillance deployed.

So we already have Ali Baba in town, we have Ant Financial and we have TenCent on the heels of both these companies making a market entry. So what does this really mean? Given we do not have any capacity locally to capture, house, store, manipulate, process, analyze and transmit any size-able capacity of Data, with the arrival of all the Chinese centric companies all our data is bound to be kept in the cloud, offshore in the safe custody of China.

I haven’t seen any privacy stipulations yet around data security, management and storage for Pakistani Citizen data as these companies get access to oodles of citizen data, transactions, internet usage, shopping habits, financial habits and abilities. In short, we are sitting ducks, the currency of the future is not going to be Bitcoin for the Pakistani ecosystem but it will be the access to last mile citizen data from every corner of the country. (Eat your heart out Google and FB)

We need to have a data privacy guideline that are enforced unilaterally else, as the dream of financial inclusion becomes a reality and as the Chinese companies come to shop in Pakistan for under valued deals, they will laugh all the way to the bank.

They would have done what Google and Facebook only dream of doing, getting last mile data or online to offline attribution. That is valuable stuff and we must protect both the rights of the citizens and the economic interests of domestic players by not co-opting all our future digital currency without any thought-out legislation in place.

Key Privacy Facts

1. Constitutional privacy protections: Article 14(1) of the Constitution of the Islamic Republic of Pakistan states that “[t]he dignity of man and, subject to law, the privacy of home, shall be inviolable.”

2. Data protection laws: Pakistan does not at present have direct data protection legislation.

3. Data protection agency: Pakistan does not at present have a data protection authority.

4. Recent scandals: Interception across Pakistani networks is pervasive; some of it is also unlawful, according to investigative and media reports.

5. ID regime: Pakistan has one of the world’s most extensive citizen registration regimes. This is run by the National Database & Registration Authority (NADRA)

The above is a Molotov cocktail waiting to combust on contact.

To share perspective that this is not some Pipe dream, Alibaba has  developed its own systems that will soon be used in Shanghai’s metro to identify commuters via their face and voice.( Paranoid much?)

Alibaba also has a chain of cashless stores called Hema.(See Image Below)

Shoppers use their face and phone number to approve payments from their Alipay account. (Ant didnt buy a bank to streamline their core-baking or to retrofit the bank in a top ten micro finance bank, they were acquired to get entry in to the space, then build scoring models to flush the market with inexpensive credit(which btw typically is very positive for financial inclusion).

The other side of this equation is pattern development and  score attribution  based off existing usage patters of patrons, their sms or phone usage data, without any opt-ins or without any domestically built technology or housed data.

What happens in the future, would be pure speculation, but to ensure transparency and protection of citizen data we must ensure data management and privacy laws are enacted, beyond the central banks guidance on storing data locally and to encompass future integration with NADRA data and to set out clear privacy guidelines before hand.

The above two are already at play. It only grows more interesting as other Chinese and global players show up at our doorstep with little to no regulation in place. This is opening hunting season for any one with a little bit of structured capital to get in to this space and get generational advantage of citizen information.

Tecent is one of the top applicants of facial recognition patents in China.

Below is a Tencent patent on a 3-dimensional human facial recognition method and system.

This is in line with the efforts of Tencent’s YouTu Lab, which provides image and facial recognition tech support to over 50 Tencent initiatives, like its social networking platform Qzone and image processing utility software Pitu.

Take a deep breath thats 50 things they are doing with image processing data alone, imagine the co-relation tables they are building and the amount of raw data being captured. If they implement a 1/3 of this when they come to town, the first and basic question to ask is Where will this data be housed? Will govt have access to its use? Will other domestic 3rd parties be allowed to build rails in to it? Will it be open for use? Whats the national policy on this? Does any one even understand the implication of what this means.

Tencent recently open sourced YouTu to other developers. YouTu technology is also accessible to users via WeChat apps, spurring concerns that this could kill smaller image recognition startups. Now we come to the other side of the equation, with all this tech, raw horse power coming in, will there be a national policy to get Pakistani citizens involved in the use/development and scaling of these platforms as a national security interest, just like we treat NADRA. Because the implications of this much data at scale will be much more profound . NADRA is just a building block enabler(that too the best kind) to come in and plug in all this AI/Facial Recognition etc on top of and build customized scores on citizens and their actions.

With all this computer vision, pattern recognition, machine learning, data mining, deep learning and audio analysis coming to our shores, who will police all this?

China already has social credit in place, where by citizens for various behaviors have been denied flights, or train rides etc, because now “the system” is tracking them and rewarding/punishing them based on their social behavior. We aren’t too far away from that reality domestically.  Btw this has less to do with China and more to do with local policy and structuring items for our self interest. Great technology coming in; is good for all, managing it and ensuring there are laws to govern its use, is on us.

TenCent  is already working with clients like China Unicom and WeBank for facial id authentication.  (Note: Tencent is also a major shareholder in WeBank.) Yea so they own a bank too, no surprise there, The rumor mill puts them on the heels of Ant financial to acquire a license/micro finance bank , they typically go after the number 2 players in most operating geographies if they are late to the party.

So paishgey Eid Mubarak to “Laal Duppaty wala” carrier and their Maybe cash. Its a solid will be at the moment when  DasPaisa (TenCent) pvt ltd comes to town.

In addition to the above applications, at least three provinces in China have announced they’re issuing electronic identification cards for their citizens using WeChat or Alipay’s facial recognition technology. So imagine the scenario where there is integration of all this tech into NADRA. It does wonders to bring social services and lending and identification and management of bad guys. But it opens up a pandoras box of sh*t we dont know and that we are not equipped to manage. We dont have enough data folks and policy folks and watchdogs bodies to administer the use of this tech.

The mobile IDs can be used for authentication instead of carrying physical ID cards – mandatory for citizens at all times in China – for travel booking, real name registration at internet cafés, and other security checks. Plus tracking?

Insofar as my research allows, theres no opt out from this, you cant tell the state to not track you. This tech will have other serious and crazy implications once it arrives on our shores, from tracking of all kinds of PMR(political, military, religious)  activities and players.

Google and Facebook are sitting pretty while all this is happening, their next billion dreams are likely to be managed by all this Chinese competition coming to town, because without a registered entity in Pakistan, unlike the Chinese they have Zero mind share in the local space when it comes to Online to Offline attribution.

Also without a Payments play (at-least for now) they are squarely going through FOMO at the moment and soon enough they will be blaming their policy teams for being too slow on their feet to understand the market opportunity in town. The only strategic advantage the FB/Google have is to take some pray and spray capital and start seeding investment in local fintechs and doing partnerships with banks and the logistics and ride hailing players who are trying to build their own rails.  Local fintechs/banks also have a long way to go, so I wouldn’t blame Google and FB to be hesitant to partner up, also both lack a singular focus on Pakistan as a market because both in their own ways and rightfully so are looking at solving the India next billion items first. Who can blame them they have amazing government traction and they have been welcomed with open arms.

FB and Google continue to be caught up in small bullshit items of tax related matters in a country that has 200+M opportunities to offer. Some times the logic in that escapes me, worse off, the Pakistani origin folks at both and other silicon valley companies continue to be apologetic towards the issue of taxation. I say grow a pair and ask your bosses to read some of these articles or others & stop sugar coating this stuff as the governments fault. That boat has sailed, be ready for the now, if you have any serious Pakistani tech aspirational targets.

WTF? Both of these companies can surely settle the tax mans bill, its an easy one, they need to recognize that they had a good 10 year tax free run, as inconsequential as it may have been, it was free money at the cost of the exchequer, if they stand any chance against the Chinese they need to get past soliciting advice from their ” country sales teams” who they are setting up for failure.

I say that because  if their day job is sales and the ask is to be involved in national level strategic plays or the identification of maters as diverse as tax, market scanning or M&A opportunities, surely with billions in the bank these companies can not be making such rookie mistakes. There is some serious strategic mis alignment. This has opened up the space for the Chinese companies to come in droves to Pakistan and will continue to do so, because they have a seat at the table given they are present physically and serious about doing business. If managed properly with data privacy regimes in place, dont get me wrong, this is the best thing since sliced bread. But if its let to spiral without any adult supervision, soon we are the ones that are going to be supervised.

I sincerely hope the incoming government and policy makers bring-in; change makers who can understand the dynamics at play and instead of still being stuck in the era of PSEB and PTA  they move the fu*k on.  Having folks who have never written a line of code trying to decide the future of our generations to come is going to be unfortunate at best and disastrous at worst.

This “Sahab” bullshit has gone on for too long and its time to unilaterally vote in public servants who serve at the pleasure of the tax payers and not serve at their own pleasure at cost of the tax payers. Some one needs to engage with all global players unilaterally and get the ball rolling, we are already late to the tech party in many ways so we need to get the data protection rails in place as we look East and West for partners.

 

Sometimes we stare so long at a door that is closing that we see too late the one that is open. 

Alexander Graham Bell

 

 

 

 

 

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

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

If you cant relate to it. Dont read further.

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

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

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

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

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

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

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

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

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

Special thanks to the WordPress wizard who built the form.

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

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

There’s a lullaby for suffering

And a paradox to blame

But it’s written in the scriptures

And it’s not some idle claim

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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