Digital Bank(s)/Bank(ing)/Fin-techs & The People Who Lead The Charge In 🇵🇰

As a consumer who is marred by sub-par digital banking services, let alone delightful experiences. I always wonder(ed) who are the anonymous faces that gather on our behalf and come up with experiences in the digital realm? Also why are most, if not all of these experiences so shitty? And why has not one single bank/fin tech etc really done any thing significant in the space. I have tried very hard to like the apps, services, user experiences, digital journeys, but they are generally illogical, badly thought out, detached from good user experience design and then some.

Look every one has a right to build their APPs/Online services the way they want to but given that these ones specifically impact the way individuals and arguably SMEs do business, they are helping no one. I would argue that the reason SMEs really don’t scale in this country is because of the horrendous lack of focus by the Incumbent banks and really consumer-intellect heavy products, that are neither intuitive nor shelf-stable.

Why did I add SMEs to the bucket, because that is the real value unlock of any of these players and their organizations understood stuff besides receiving trophies and accolades from circle jerk clubs of peers and attending paid conferences to evangelize the 1996 level websites & services they continue to crank out. No hard feelings, if any one took an objective look they would tend to agree.

Let’s start by identifying who the players are first. It took Some time, but it had to be done. *If you’d like an interactive copy of the file, subscribe to my newsletter or engage with the post here/retweet the original post

Incumbent CDOs/Leaders

So looking at the incumbent banks and their Digital Chiefs/Custodians, I decided to look at their digital footprint and their digital engagement.

The exam question being:

“Can some one who is not really digitally first/native, them selves, (based on cursory information online) lead/develop/build/guide/manage, the best digital experiences for their banks audiences?”

You can be the judge of the answer to that question & if you agree or disagree that their designed experiences come up to par with your basic expectations. Some of it has to do with the culture of the banks, some of it has to do with the background and experiences of the people leading the charge.

This data cant be used as statistically accurate; as its part, fact, part opinion part conjecture, part wishful thinking part frustration with the shoddy services as an end user that I have to endure daily.

In the spirit of generalizations, barring a few of these folks at incumbents, most have been moving around between banks locally, some, arguably have foreign experience, some in relevant fields, whilst others not. The issue is, when banks locally continue to hire people who have been learning only from “vendors” & their so called “conferences” in Dubai, the collective sum of the output is in front of us.

Please recognize that person with the latest IPhone or the tightest jeans or turtle neck , pinstripe blazers or socksless shoes is not the only or ideal CDO candidate. Nor the ones who talk the loudest or make the most noise are those who are the most ruthless politically at the bank(s) either. Its these traditions that have continued to F**k the consumers and continued to challenge the central bank who really wants to support digital first services and products, but they get disappointed by their babus of digital at commercial banks. Interestingly the regulator has more gravitas with digital vs the incumbents. So really need to highlight their efforts and digital stewardship. Good on you SBP…You know who you are.

Show me one key player in this list and show me some thing of value, significance, they built in this role or their former roles working domestically or abroad that can be attributed to being a local, regional or a global success in the digital space? Most if not all follow the same mentality, how many people report to me? How many days will I take to respond back to vendor/client emails? How busy am I pretending to be this week?

These digital leaders cant be faulted alone for the way things are, they are just victims of their own roles and self perceived success. Some humble pie would go a long way.

The issue is, what new “doodad, thingamajigy” is the flavor of the month that some one forwarded the CEO of the Bank.. The way that journey works is; the Banks CEO or Sponsors rely on some thing called the “down ward shit-sandwich” which is essentially to reign in the stooges, they find some thing from an other market, send a Whatsapp forward to the person in charge, and then ask “do we have this” (DWHT). This is how most strategies come about at Banks. Pleasing upwards..

Fu** the customer essentially, what the F**k does the customer know they want… Let’s build what the CEO or the Saith is asking for. So can you really fault the employees?

Job security, brown nosing, one-upmanship , big titles with no execution gravitas, zero technical and infrastructure understanding, is what brings us to this. This is not an attack on the employees of the incumbents, but more of an empathetic stance, “I understand your plight bro(s)” Also missing in no small part, is the fact that not one BANK in PK has a Female CDO or Tech Leader. Please do point me in their direction if I missed some one.

Looking further down stream on why some ones digital foot print beyond LinkedIn namely on Twitter/X is a good representation of their digital credentials, I couldn’t possibly point you to a scientific reason.

No less if you aren’t even some one whose end users/product participants cant even tag online, are you really proud of what you are building or leading? Or are you hiding from the work behind layers of obfuscated handles, company accounts, call centers etc. Basically if the buck doesn’t stop with you on digital journeys, where does it really stop? So you want the title, recognition, awards, salaries but not the responsibility? Again more a systemic issue than a role/person based one.

There are serious exceptions to the rule, none that I’ve seen at the incumbents but many at the upcoming fintechs/new banking product leaders etc. We will get into that list shortly.

So coming back to Twitter or even LinkedIn perhaps, the only thing most of these executives are experts in doing, from a community engagement perspective is taking stylized images of their business class flights, expensive wrist watches and the occasional “How do we fix IT exports” type debates. Clearly focusing on the wrong KPIs.

There is zero building in public, zero public apologies, zero feedback, just hyperbole and bullshit posts/copied from other places and most recently completely mindless ChatGPT output. Yes I’ve spent some time reading their posts last weekend. The most interesting ones are those where they write posts on GenZ and Millennial POVs, and you have 50-60yr old bankers & internal employees commenting on their posts, “great boss”. Talk about the Irony…

If you were a large share holder of these banks, a board member, a saith, a sponsor, or even the CEO, you should be asking: “How qualified are these people really to lead the single most important factor in your future growth as the challenger banks and fintechs come to town?”

You are about to be toast if either your banks goals aren’t aligned with your digital leaders skill set or you do not empower them, all the faults don’t lie with them, they are the output of a highly politically astute chess match that typically got them to where they are. But human instinct is survivalist at best and these guys have perfected it.

Digging further down, since we are being honest, some of these guys have re-branded their failed mis-adventures in to juicer titles/roles in their new companies and roles. My favorite example from some years ago is that every one in every bank who ever worked at EasyPaisa was “founder team member” of easy paisa or head of payments or “chief some thing”, I identified 7 of them at various banks using LinkedIn. Not my data or analysis just what their titles state. Gross inflation of designations leading to sub-par journeys for customers and no real traction in the digital realm. Forget financial inclusion, these folks cant even have a cohesive online conversation on the functions they are allegedly leading.

So far we have identified 5 Core issues

  1. Lack of Digital Channel Engagement on part of the CDOs/Leaders
  2. Title Inflation & Celebrating Fake Former Milestones
  3. Pleasing Upwards
  4. Being first for all the wrong reasons & products
  5. Limited Exposure (domestic market job cycling) or horizontal movement from the region

We move along to the challengers next and their CDOs/Leadership.

New-co Banks/Fintech Digital Leaders

There is some traction in this space(Thankfully). Whilst these were the only folks who showed up on minimalistic LinkedIn searches, before you come at me, that there are many more fintechs and many more new licensees. Trust me I am not getting paid to dig out the folks here but genuinely interested in comparisons. With Sadapay and Zindigi we have seen the leaders engage heavily with the community online tackling questions answers, complaints. both Omer + Noman take to public engagement and hence I am aware of their community first approaches because it’s online. With Hugo, Atyab is seen as trying to build in public so thats a +1 for some one entering the market and clearly a lost opportunity for incumbent digital leaders who have insane brand recognition and distribution. So Kudos to these folks for trying as new-cos and new brands. But time will determine how successful they end up being, from the looks of it, they are trying a different approach and being mindful of their audiences.

The Easy Fix:

  1. Bring in teams with digital transformation, expertise hire from adjacent industries
  2. Build real talent on your boards with folks who have multi vertical digital experiences
  3. Shed the sahabs/babus/relatives of the sponsors or their touts in positions that can change the fate of the banks Vis-à-Vis the real potential of real digital rails
  4. Stop hiring McKinsey
  5. CEO of banks need to really really really hire digital advisors or board members not just internal committee members. CEOs understanding of digital is really superficial barring 2-3 banks. Sorry guys, you may not agree but it’s the truth.
  6. CEOs of Banks Need to Focus on SME/SME solutions think growth $s
  7. Be very careful, that your brightest talent is going to be, and is already being hired by regional players. If you do not promote the right talent from within they will leave because they are sick and tired of working for your non-digital, digital leadership
  8. For the CEO/Boards/CDOs, please start using your own apps vs relying on your CDOs for feedback
  9. Take action vs making claims(CEO/Digital Leaders)
  10. KPIs are your friends, not fake awards

What is really missing?

I continue to feel that the intent to build truly digital solutions is missing. Apps, websites, hardware, etc do not replace intent. Since 2007, I believe, when branchless banking regime came about, has any one really put out a comprehensive digital banking product, experience? Bi-weekly the industry continues to do MOUs, drive FOMO at their leadership cadres and the most successful digital pundits continue to get outsized internal funding allocations. Till there is intent nothing will change. With this, I wish the new-comers to really make a difference and lead with intent & for the incumbents to try one last time.

Net, net stop talking about digital and start innovating and putting in the right talent, leadership and KPIs with a view that most of your future customers are going be in their 20s & 30s and they are brand agnostic, only service will determine the success across your digital platforms and dreams so lead with intent or these new audience will move along.

This is a consumer driven view, I feel every time I write an opinion piece some one comes out of the woodworks and threatens legal action. Consider this a free audit instead. Focus on using litigation dollars for bringing about change instead. Consider this a public service for our collective growth. No CDOS were harmed during field research.

The ‘real cost’ of the 2+ Part Canadian Dream & Everything in between.

Canada is a fantastic place. It has great public infrastructure, friendly people, amazing natural beauty, and a wide variety of cultures and traditions. It’s a safe country where you can live a peaceful life if you follow the rules. But Canada is not immune to the economic pressures that the world is facing. Food inflation is above average, and the real estate market is completely unhinged. Rental prices are high, interest rates are high, and there is a shortage of housing.

As migration trends increase, the supply of resources like housing is being stretched to its limits in major cities. Public infrastructure is also being taxed.

If you are thinking about moving to Canada, you need to be aware of these challenges. You need to do your research and make sure that you are prepared for the practical realities of Canadian life. But don’t let these challenges discourage you. Canada is still a great place to live. It’s a country with a lot to offer, and it’s worth making the effort to overcome the challenges.

This is not an economic break down or a political one. This is a reality check for those who need to understand the facts and need to get their house in order before they embrace the Canadian life.

Because the minute they land they will face some thing called :

“The Canadian Experience”

“Canadian experience” for job seekers refers to the experience gained by working in Canada, specifically within the Canadian job market and professional environment. Many employers in Canada often mention “Canadian experience” as a requirement or preference when hiring new employees, especially for certain roles and industries. But a lot of folks are compelled to ask, after 20 yrs of global experience, how hard really is to do the same thing in Canada?? But let me clarify:

Having Canadian experience demonstrates that a job seeker is familiar with the Canadian workplace culture, norms, communication styles, and industry practices. Ive worked in over a dozen countries, trust me, Canada has its own pace, norms, quirks and assimilation criteria.

In part, just my observation alone, it is a small economy thing. With 38M people and being the 38th most populous country, it is not as Large as the US, (some thing most immigrants confuse it with), it’s also neither as ambitious as America as a homogenous population group (if i can take the liberty of saying as much) nor is it in any race to create millionaires and billionaires. Don’t get me wrong it will give you every opportunity if you want it so.

The drive in Canada for most Canadians from a work perspective is to “break even” on the effort and reward. It took me years of living there to understand this. It is not a bad thing, it makes the people happy, it drives them to doing other things in life. Their measure of growth, success and happiness is not related to work place success, some thing that at least I feel in over a decade spent in the US, as being part of most peoples identity. Not the same in Canada by a long shot.

It’s not just about the technical skills and qualifications, but also about understanding how things work within the Canadian context. This can include understanding workplace etiquette, customer service expectations, teamwork dynamics, and more.

For newcomers to Canada, this can sometimes present a challenge. They might have relevant skills and experience from their home country or other places, but employers may still prefer candidates with Canadian experience. This can create a catch-22 situation where newcomers struggle to get their first job in Canada due to the lack of local experience. The expectation of most employers due to immigration programs etc, is the fact that most people coming are either low(er) skilled, or without relevant (contextual experience) or both. This really skews opportunities for those who do not fall in that category.

Part 1.

If you are highly skilled and under 40 you have a fighting chance to make a good living which would entail that your skills translate directly, that there is no major waiting period to find work or re-certifications or the “Canadian Experience” ** requirement. That you can start plugging away to a 100 to 150k CAD$ role in sub 3 months from when you arrive or can actually start work remotely.

In my experience this can happen in a host of professions but typically Ive seen it happen for (Not a comprehensive or exhaustive list or perhaps even accurate)

  1. Digital Transformation & Strategy Consultants who have global experience as part of say a big four role in their home country
  2. Software developers with command over the english language and a Github repository and equal parts community advocacy that is searchable online
  3. Specialists in Mining, Oil Production, Chemical Engineers and wait for it…..
  4. Folks who have extensive freight, logistics, 3PL Chinese shipping lane experience
  5. Lucky few who work for Global Companies and can do an internal role search and swap out to Canada
  6. Free lancers who are solopreneurs who already make 5 to 10k USD a month who do not need local employment but can now access domestic payments, credit etc infrastructure to grow their own business and or add remote workers whose front end they become
  7. Specialist consultants who have direct experience in Energy + Distribution business, folks who have industrial and mechanical experience in large public infrastructure roles on standardized plant equipment etc.
  8. Automotive engineers who have hands on manufacturing experience with globally recognized certifications and work experience at a Toyota, Honda, BMW etc.
  9. Entrepreneurs who use Canada as a new base of operations to target the US as an export market if their products and services allow
  10. Influencers who can work from any where (never thought this would be some thing, but its real, I know a few influencers who have moved across and continue to produce content for completely different markets but use the Canadian backdrop and access to professional studios etc to 2X their business)
  11. Digital Marketing specialists ala — Paid Search + SEO + SEM + Influencer Marketing, b2b, DTC + agency background is a god send especially if you have relevant platform level certifications and a demonstrable portfolio where you have been directly responsible for hands on execution and growth.
  12. Cyber security specialists with modern tools + hands on experience
  13. Industry specific Client relationship specialists (like hazardous waste handling or nuclear medicine etc).
  14. Low code, no code specialists with demonstrable automation projects + platform certifications
  15. AI, ML + Data science folks with demonstrable application of their work, models or outcomes.

Part 2

You are in the low income category without any directly relevant skills today and can take full advantage of government benefits or can stay happy even if you don’t earn a lot.

This is both a mind set and a reality. I am not listing this to expose some scam you can run to take advantage of Canada. On the contrary, this is for those, who feel that they are able bodied, they are willing to go the extra % and in any shape or form take their god given ability to do any thing, to get out of their present circumstances.

Canada will welcome you so long as you are willing to work hard. Canada continues to need folks with emerging skills, but recognizes that they may not pay enough beyond a working wage. That is off set by the government programs, access to public services and infrastructure. A roof over your head, and typically having the safety and security you did not have access to where you migrated from.

The world is a tough place, people have varying degree of circumstances so there are always going to be folks who are just starting off. If you find your self in that category, you are definitely going to be in a better shape in Canada. But you must understand the reality of that. It is going be hard, it is going to be no savings, not much entertainment but it will lead to you building the life you want, need, deserve and work towards.

The government will give you a hand for sure, but you need to come prepared that it is going to be a tough, taxing, mental and physical ride. There will be dozens of assimilation challenges, work challenges, lots of good bad and ugly people, lots of sleepless nights, lots of lost opportunities, lots of missed memories with loved ones, but if you have a goal in sight, you have the ability to do well for your self. Nothing will come to you, you will have to identify, enlist and avail the government support made available whilst working towards the goals you have setup for your self,

At every step of the way, what you will discover is the beauty of Canada, be it access to fair education, certifications, placements, subsidized programs, access to government backed loans for business etc. But this is a privilege not a right, use it wisely.

& Everything in between

If you have say, 20+ yrs of experience, or are in your late 40s , or mid-career or in a profession that needs; re-certification, local accreditation, additional degrees, very specific Canadian experience, licensing from trade bodies, associations, consumer groups etc. Let me be honest, you are perhaps in the toughest spot from a work perspective in Canada. Your initial time will be hard, it will go slow, the Canadian winters will make it harder. There is no other way to cut it.

Not because you cant achieve those but because the time value of money needed to go through this journey would typically mean that unless you are a 2 income household, where one income at least falls in Part 1 , only then will you have the ability, stability and mental wherewithal left to pursue the things you need/require to become a contributing member of society from a financial earn out perspective. Not to say that is the only way this can come about, it just gets easier if that is the case.

Heres my list of professions, professionals and trades that really need to understand and research what it takes to re-certify, re-apply and be recognized locally to be able to pursue their professional careers because it will take from months to years to be able to do this at a level that most established folks would like to see them selves at:

  1. Teacher
  2. Social worker
  3. Therapist
  4. Doctor
  5. Clinical Researcher
  6. Pharmacist
  7. Dentist
  8. Radiologist
  9. Professor
  10. Electrician
  11. Plumber
  12. Car Mechanic
  13. Veterinarian
  14. Accountant
  15. Lawyer
  16. Tradespeople
  17. Building & Construction specialist
  18. Private Investigator
  19. Financial Advisor
  20. Wealth Manager
  21. Food Technician
  22. Lab Technician
  23. Law Enforcement
  24. Human Resource Professional
  25. Traditional Marketer
  26. Supply Chain Professional
  27. Shipping + Logistics Professional
  28. Truck Driver
  29. Chefs
  30. Barbers
  31. Risk Management Professional

+ Real Costs

Beyond finding work, finding sustainable housing and being aware of the many costs, that most of us/some of us may not be accustomed to is a key thing to figure out upfront. Whilst this may not be a scientific post, its definitely a realistic post from the point of view of the reality of what to expect as some one who has seen both ends of the spectrum.

Happy candidates for migration, (typically) become un happy migrants because the reality distortion field at the time of their acceptance to relocate was so high, their (relocation) objectivity suffered.

This is my plea to all those considering availing any migratory process to dig deep; deeper than hearsay, friends, associates, friends of friends, neighbors and least of all touts/ ala immigration consultants that have never lived in Canada or are not Canadian citizens nor are their firms operating from there.

Most people only see the YouTube accounts from people who are pushing to get views vs helping people out, whilst others are too deep and entrenched that they provide little to no value to a new comer who does not have an objective over view to benchmark against.

Heres a beginners guide to Real Costs as shared by my good friend Aizaz.

This is neither scientific nor arbitrary, it’s some where in between based on experience and prevailing market dynamics for the Extended GTA Suburbia.

The prospect of a better life gets better with planning and with the least amount of surprises. If you do your home work, if you understand what it takes, the likely hood that your outcomes will be far better than those who went without a plan is higher. Much higher.

The declining state of play in many countries and regions is definitely fueling migration globally. Migration may not be for every one, but for those who have decided that this is a step they must take and are about to go across, I hope these are things they consider carefully as they kick off what will perhaps be the biggest transition and commitment they have made in their life.

The parting advice I have is 3 fold:

Be willing to start at the bottom. If you don’t have Canadian experience, you may have to start at a lower-level job than you would in your home country. Be mentally ready for this, if you are not, it will not be pleasant.

Don’t be afraid to ask for help. There are many resources available to help immigrants find jobs in Canada. Don’t be afraid to reach out for help if you need it as there are dozens of government programs, services and aids available. If you do not ask you will not receive.

Bring a transferable skill that allows you to build an export oriented business. Imagine if you were in the business of processed food before you migrated. Now think about all the raw ingredients that went into making your product. Evaluate how many of them were Canadian origin. Since you already know the business it becomes much easier for you to source those products in Canada and export to similar businesses globally.

If you want to enhance your outcomes and move towards those in the list shared in Part 1: Subscribe to and read my weekly news letter on personal transformation and entrepreneurship at

The Ambition Tax: How Corporate Culture in Pakistan is Robbing Graduates of their Professional Growth

The country is facing a number of economic challenges, including high inflation, a large trade deficit, and a growing fiscal deficit. This has led to a challenging business environment, with high levels of uncertainty and volatility.

In such an environment, it is important for businesses to attract and retain talented employees, who can drive growth and innovation. However, the high levels of employer dissatisfaction among the potentially qualified, young professionals make this difficult. As employees are more likely to leave their jobs in search of more challenging and rewarding opportunities for slightly more money.

This creates a vicious cycle, where high levels of turnover reduce the productivity of businesses and limit their ability to drive economic growth. Also not serving the GDP in any significant way, as they are part of a rotational pool of marginally skilled and sub-optimal resources.

Valued only, between players of a closed economy. Meaning that most of their value is not globally competitive and typically doesn’t stem from innovation or growth related skills. It comes from”beating the system” longest.

At the crux of this issue lies the much larger issue of corporations based in Pakistan. Be it local or foreign. The DNA over time for both, is nearly indistinguishable from the perspective of the Ambition Tax placed on the young graduates who join them with hopes and dreams.

So what is this Ambition Tax?

In my mind, ambition tax refers to the idea that the corporate culture in Pakistan is stifling the professional growth of graduates by limiting opportunities for advancement and hindering their ability to fulfill their career aspirations because at their core; these corporations are thinly veiled monopolies or oligopolies protected by subsidies, generational wealth, influence, political leverage and national security related items. Essentially any where else in the world they would not be able to compete. Let alone get to the scale at which they operate in Pakistan.

This is due to a number of factors, including a lack of transparency, stagnant growth, and seemingly large corporatized businesses being run like family-owned businesses vs globally competitive ones. Or large foreign owned businesses run at the whim & fancy of their local leadership who typically are in entrenched roles for decades on average. They serve the $ earning potential of their principals/foreign masters, by dealing with the dirty work in Pakistan and only reporting back on the growth.

These parties are almost also over in the Telco space and some Foreign FMCGs where billions spent to build brands, built many millionaires, setting the wrong work culture and success benchmark of colluding with advertising agencies and television networks to harvest hordes of cash. (Every one f**ing knows this, they just don’t have the courage to call out the insane level of corruption and lack of morality at these organizations)

Under the don’t ask don’t tell principle, what happens at Large Telcos/FMCGs and others in PK is glossed over by printing and sticking FCPA (Foreign Corrupt Practices Act)Rules by American companies and Value statements by most others.

In a crazy development, the local corporate groups have stopped pretending; they now consider their growth ambition linked to breaking the law and consider the speed monies paid as a natural symbiotic relationship between what they do and what the government has to do.

Like kids watching their parents and learning their traits, young graduates watching their employers, their companies, their peers, their bosses all being involved in 5 activities at large

1)Look Away

2)Control the flow of info to retain your job

3)Please the bosses/society by resigning to your fate (much like this kid who who got mugged)

4)Play Politics

5)Do what you are told vs doing any thing extra

In a society that over indexes on “juggar” and under indexes on “ingenuity” and doesn’t know the difference, the only war we are at, is a war with our broken selves as one guy tries to pull the other down, in an attempt to take a piece of the available pie, vs growing the pie.

So whats going on? (At Large Companies)

One of the major reasons for the ambition tax in Pakistani corporations is the lack of transparency in the hiring and promotion processes. Often, positions are filled through nepotism or connections rather than merit and practice of not letting the old guard retire, look at the PSX 100.

You would be hard pressed to find directors in their 30s and 40s who are not family members of the listing sponsors, leading to a dearth of opportunities for young, talented professionals.

Major banks like HBL and others recently announcing they will retain their above 60 staff? The jokes write them selves, it’s a self rewarding club of boomers. They have to be retained because their counter parts operate in the government and its not worth the hassle to train a younger person on how to evade the system.

This creates a vicious cycle where the most competent and qualified individuals are overlooked, and the least capable are given positions of power, hindering the growth and progress of the company as a whole. The few who are capable and make it to some where, spend their time politicking vs focused on professional growth.

Cant blame them either, they went from, “I wish I had a job, to I have a great job, with most creature comforts, I better not f**k this up” when they hit this level, they are married to the roles job security, its monthly check, their nice offices a settled family life and a family co-dependent on their work outcomes.

In such a setting, the ambition is over, it is traded for longevity by subservience to those in charge. Large Pakistani corporations are where hope goes to die.

Banks how could I forget banks….oh Pakistani banks …

When I have taken it upon my self to put out the going ons at most if not all telcos and FMCG companies, Banks along with saiths, also deserve our attention. They are the epitome of ambition killers.

Let’s look at a young grad who gets into an operations role at 35k PKR. The Banks CEOs driver by then has a better total comp package including fuel, meals, and interest free loans. The driver is un skilled but the young grad is skilled. It would take 5 career jumps over 10 years to bring this person who enters the Bank at 35k to make a salary of 250k if they are lucky and suck up the right way and tolerate inhumane treatment from the public at large and their “seniors”.

By this time they are in their forties, have a family, and the charm to stick around, is the servitude the bank buys by offering a house loan. Lock stock and barrel, this 40 year old who looks like he’s 60, traded his caged existence for a loan because the state has no f**ing system to enable this. The banks, the saiths, the Sindh club biradri wins every single time. At the cost of the ambition the youth are trading for basic survivability and life events.

The CEOs wear tailored suits, typically enjoy a good bottle of single malt, I can name a dozen or more such gentlemen but thats not why we are here. Who by no professional conviction have gotten where they are.

They too are security men, who love their jobs and the security it provides to sit in well guarded homes, with their friends over single malt and build the courage to curse the politicians, their very own Sindh club peers, whom they lend to and wash away their sorrows into the night by complaining about the same. Do you not see the hypocrisy?

Most of these bankers/ceos/leaders, their numbers 2s and 3s are has beens, they wouldn’t be able to find globally competitive roles for the shit they deliver to the masses daily in PK. The only reason banks worked in PK is not because they are innovative, but because the government is stupid, and the awaam is land locked from access to debt and loans.

All these details not because Banks and Bankers have issues or me with them, it’s to paint the sorry picture of what is happening at the top and how worlds apart, the growth trajectory is for the young chap who joined the branch. To ever making it to the single malt club(if they so desired, not endorsing they should). They watch from a distance and their lips run dry in the delivery of the word “sir”.

Each Business unit head, each Management Team member runs a fiefdom in these corporations. Their fiefdoms are a microcosm of Pakistani society, where the most marginalized is the most subservient, but since he gets a pay check at the end of each month, he’s conditioned to make the most of the misery of being a personal slave to the business leaders. What do you think this daily torture does to ones ambition? It dies a slow but certain death.

Saiths, their children & the “principal, sponsor” drama….

Next we have the established saiths, their families, with alleged “professional” CEOs. Running large diversified but subsidized businesses because of concessions, cheap real estate, rebates, tax evasion or other such premium deals.

Saiths are winning because they have rigged the system, a system of corrupt politicians and bureaucrats. In a closed economy like Pakistan they win, they compound their wealth, they pretend to care for the people who work for them. They have learnt from their foreign counterparts very well, the only motive is profit at the cost of ambition.

Most of young graduates trade their ambition for job security and a fighting chance to get close to “management” some make it, most don’t and a vast majority die trying. The tiered system ensures, no one learns any thing new, companies don’t need innovation to win, they need legislation, lock-ins, essentially a machinery of inside men.

When you are not playing at the global scale, all you are doing is re aligning the chips to win locally. When you give up global competitiveness you only optimize for local pettiness, in doing so you ensure the learning outcomes of every one are stunted. When you don’t have to compete but rather co-opt your ambition also gives up.

Saiths and sponsors who build and list companies also manipulate their stocks. Every one knows it. We can also name the 4-5 brokers who do this, have been doing it for years, yet we don’t, my post is equally critical of all but the reason for writing is to make the youth aware of the principal/sponsor problem, for them to recognize they are being dealt a short hand. For them to have the fortitude to focus on their growth vs growing into roles that have no meaningful impact on their lives.

Another contributing factor is the stagnant growth of many local corporations. This lack of growth is due to a number of reasons, including poor management(as the saith aren’t some great operators, most are petty crooks in pretty suits), a lack of investment in innovation and research, and a lack of focus on expanding the business. When they make enough money their second generation comes in from Harvard and Yale with bright ideas, who are handed over to family advisors to be brainwashed in to “Abba jis” ways. Therein begins the second wave of more of the same. If kids don’t comply, Abba ji identifies some hired executive “munh bholay bataays” who are more than happy to carry out his wishes.

This can make it difficult for young professionals to find opportunities for advancement and can result in them feeling stuck in their careers, unable to grow and develop their skills when they look outside of Pakistan.

So what can be done?

In order to tackle the ambition tax and create a more inclusive and dynamic corporate culture, it is important to focus on implementing transparency in hiring and promotion processes, investing in growth and innovation, and encouraging the development of professional networks and mentorship programs.

By creating opportunities for young professionals to grow and develop their skills, we can help to create a more dynamic and competitive corporate culture in Pakistan, one that encourages ambition and hard work and not short-term-ism.

Additionally, it is important to support businesses that are run like real businesses, and to encourage a shift away from the traditional preference for family-owned businesses. This can be done by providing incentives for companies that invest in growth and development, and by highlighting the importance of professional management practices.

I have seriously high hopes with the newer generation to take a stand and do whats right, report your crooked bosses to your foreign owners, call a spade a spade, you owe it to your self and to Pakistan to not let this brazen miscarriage of negative outcomes shape your future. You owe none of these people any thing, you do not need to be subservient to any one.

This lack of initiative and innovation can be traced back to the fear of failure and the need to maintain job security in the face of economic uncertainty. This results in a culture where people play it safe and do not take risks, opting instead to be loyal to the owner even when it means making bad or wrong decisions. You owe it to your self to not do this any more.

How this re-wires the brains of the young grads and Why thats a bad thing…

From the perspective of young professionals who remain in safe roles for several years, the major disadvantage is that they miss out on opportunities to learn and grow, both professionally and personally. This can limit their career advancement and lead to a feeling of stagnation and frustration, as they are unable to fulfill their aspirations and reach their full potential.

Compared to their peers globally, young professionals who stay in safe roles for extended periods of time may miss out on opportunities to develop new skills, work on cutting-edge projects, and take on new challenges. This can make them less competitive in the global job market and hinder their ability to advance in their careers. Additionally, working in a stagnant environment with limited opportunities for growth can lead to boredom and disinterest, making it difficult for these individuals to remain engaged and motivated in their work and in their lives, leading to seriously un happy outcomes at home.

How does this Ambition tax destroy the country?

The high level of dissatisfaction among young professionals in Pakistan, where nearly half the population is under the age of 25, is a major concern for the country’s economic growth.

A lack of opportunities for professional development and growth, combined with the fear of failure and the need to maintain job security, can lead to a feeling of boredom and un fulfillment among young professionals. Leading to mass un productivity.

A non productive workforce that has nothing new to contribute, has significant economic consequences, as it increases the cost of hiring and training new employees, and reduces the productivity of businesses. Additionally, when talented young professionals leave the country in search of better opportunities, they take with them their skills, knowledge, and experience, reducing the pool of available talent and limiting the potential for economic growth.

The current economic situation in Pakistan further exacerbates these challenges. The country is facing a number of economic challenges, including high inflation, a large trade deficit, and a growing fiscal deficit. This has led to a challenging business environment, with high levels of uncertainty and volatility.

Unless we take ownership of our own issues and come up with a plan to tackle them. We will continue to shape our outcomes like our past, “stagnant with a high chance of extreme lows”

If you are young and motivated do your self a favor and read the thread below, today. Hard work alone is not going to change your outcomes. You knowing history will help. You deciding to change it, has the potential to change your outcomes.

Historical Context that I covered in my News letter

Made in Pakistan (Pre Nationalization Monopolies)

Zulfikar Ali Bhutto (1928–1979) became President of Pakistan (1971–74) on 21 December 1971 after a disastrous end of 1971 war with India. The nationalization programme was implemented for the first time in the history of Pakistan and it was promulgated through three different stages.

I recently came across a fantastic publication. Private Industrial Investment in Pakistan: 1960-1970.

Cambridge Study Purchase Link

Why is this important? It sheds light in to how the economy was structured and who controlled the monopolies before Nationalization eroded economic capital of the country. It also shows some thing very critical, the growth rates of industry by sector.

Far more interesting is that I was able to see for the first time, the interplay between banks, their ownership, the insurance companies and the overall major monopoly families and their directorships across enterprises. It was an eye opener for me. So as you start to build your journey of better outcomes, be mindful of history, understand how made in Pakistan can be extremely successful and the pitfalls you must avoid.

Why share all this. It demonstrates that no-major hands have changed since the creation of the country, its tumultuous nationalization of industries and the present day. The outcomes have worsened for the youngest and brightest. If you still don’t believe that none of the firms, corporation and their sponsors are all in it to win it, at your expense, the chart below fascinated me when I saw it you should give it a read.

What is it?

The inter-connectivity between the groups visualized circa the 60s.

What now?

The first step is to identify there is a problem.

The second step is to figure out what areas are within your control.

The third is to invest your time an energy to not get into this rat race, but instead look for alternates or build alternates that allow you to excel.

Do not be mis-lead by the fake allure of these corporations because sooner rather than later, they will tax your ambition and you too will be a cog in their machinery. Invest in your self by not investing your time and effort to chase a dream that at best is locally competitive and at worse is globally irrelevant.

KE is the biggest Fin-tech/Any-Tech/Data-Tech/Social Network in the Country if they wanted to be….

Love it or hate it, cant live without KE. With all the market making news around KE, there is a lot to be said and done around the assets KE has. Besides the power or energy it distributes, it has data that it doesn’t distribute or use insofar as I can tell.

Let’s look at the bill. Beyond the usual business of having consumer demographic details, their CNIC, it also has past payment history and consumption info.

From KEs Bill Explainer

If we just take the basics. KE has the ability to be single largest fin-tech play in the country. If you asked me, I would have had them apply for a digital banking license bar none. Why?

Let’s deep dive into the theory looking at their standard bill.

What do they know about the connection owner?

  1. Male/Female
  2. Actual Bill Amount
  3. Payment frequency
  4. Usage consumption, up or down co-related to weather
  5. Address
  6. At least 10+ years of all this data is digitally available

What does one need to base lending decisions on typically at a fin-tech/bank/credit co? Most if not all of the above. But wait, it doesn’t end here. This is what is non extrapolated and non implied data.

Now let’s look at what else they could know or use?

  1. They can group people into affluence/segments based on data from a neighborhood
  2. They could club neighborhoods by pay-back rates + timeliness
  3. They also have one super power no one else does or can, they know the channel where the payment was made
    • Online
    • Bank Branch
    • Which Bank
    • Cash
    • Online Transfer
    • Bill Aggregator
  4. Based on this they can build heat maps on
    • Cash based payment locations + banks + centers
    • Time of day month etc when those payments are made
    • Who are the folks that have delinquent payments
    • Who are those that pay for payment plans
    • Can you offer pre paid subscriptions and collect advance cash from Tier one customers?

What else could they monetize for them to be a 10x Valuation play?

  1. Data, data and more (small data)
  2. Make your constituents download your app or consent to giving them their home/commercial connection pin location(more on this later, if you are a KE board member email me and ask nicely)
  3. Push notifications and discounts via app (more on this)
  4. Incentivize users to go beyond the abysmal 500k Downloads today of the app
  5. As an entity KE Serves 2.5M Adult customers(whose demographic/psychographic info is in the system some where but not being used)
  6. KE’s distribution network spans across 6,500 km2 based on their data, imagine the maps applicability that could be unleashed if they actually stored and curated this data

How can a small change in their data/digital strategy make them help consumers pay their bills ?

  1. Once you drive up app installs make it the most useful app, by having video/news/games/content in it. At 1M daily active users and looking at our consumption habits you serve people with ads, if they have the ability to use part of the ad-revenue you make to pay off their bill, you would be the first electric utility company in the world to monetize a completely different channel..But wait theres more..
  2. For the above example we are assuming you turn on some one else’s content and likely googles ad-network. But if it were up to me, you would build your own/reuse some one else’s tech to run your own ad-network. Why, because you have the single most populated cities 1st party user data. Meaning what you could charge for targeted ads, google would pay you to connect to your network. No one in Pakistan(sans the dumb telcos) have this data, who also by the way have no ad-network of their own.(Tried and failed twice, because their chief digital officers are ex marketing mavens, and bad at that too-Historically speaking)
  3. But wait there is more, if you take NextDoors example from the US, the only company that has the slightest chance to build a local communal social network in Pakistan is KE leading to local commerce, payments and monetization of every transaction on that network, dont forget UGC news, health and other use cases.
  4. What KE has is the ability to build a trust network. Granted they have shitty PR, but this is what it takes. Most of this costs under 1M$ to roll out a real working product.

As the corporate changes, ownership scuffles and PE battles enrage, the operating company should be focusing on building value.

If I was a shareholder, which I am not, I would ask, Is this company, with the above data plays, a better monetized asset? When/if the eventual sales happens to the Chinese, does the valuation go up?

Should the government that is 23% strategic share holder and on the board, demand that KE innovate because these seemingly small data plays can increase revenue + reduce the burden of power costs on the end consumer by really doing some thing out of the box.

It is the consumers data, with the state involved perhaps the state can nudge KE into enhancing their outcomes. Who doesn’t want, or need better outcomes. The people of Karachi could most certainly use them and a lower bill potentially. Or have avenues to make additional money by engaging in local commerce.

I wanted to go look up the BOD of KE, sadly their profiles aren’t hyper linked any more but still show up on a google search. Interestingly enough some of the folks whose profiles aren’t on the Bod Page. Perhaps new directors to come or old ones whose links still on Google. But I digress. I wanted to take a look to understand who in this lot would have the courage to ask the Management to do some thing bold. Don’t know the answer yet.

The fact of the matter is, a lot can be done, there is immense potential both to the current share holders, the market at large and any future buyer from a resultant asset sale. The question is, will they recognize what they have? Like most Pakistani asset flips, is this just vanilla for a quick upside? Or with the change of play in the BOD they will actually go ahead and bring some critical thinking besides rubber stamping of votes for an eventual sale. I mean just basing this on historical items and nothing besides that.

I have no horse in this race, besides being a consumer, who would like continuous un interrupted power supply and if by some miracle, these guys are able to do a further turn around on the back of a real digital transformation that allows me and other end user some relief from sky high rates, whilst adding to economic progress of the constituents they serve, I’d be all for it.

**Note to BOD, if you are thinking of or are already engaged with McKinsey or Bain, on the insistence of your management team, you are better off re reading what I shared for free and save your self the same BS they took to every bank, every navigation co, every telco, every food science company in the country. Its one standard deck with whitewashed commentary that sounds better coming from some one whose not of local disposition. Sharing this so you can conserve your FX at such a critical time in the country’s history.

Key initiatives to drive the digitization of the economy and unlocking Dollar Based inflows

We all want good things to happen to us, but not many are willing to go out on a limb to share the things our government and state actors must do. In an effort to start a healthy debate and put-forth some ideas, thinking and suggestions I decided to publish a cliff notes equivalent of what we need our government to do.

As always take the ideas & suggestions with a pinch of salt. Forgive the errors as it is late night thinking translated in to some discussion points that have been shared plenty of times with those who have asked in the past. Its is far from perfect/cohesive, but it’s a starting position. Some thing that enables, mature adult conversations.

Feel free to share your ideas and thoughts here or via the twitter post that led you to this post. All I ask for is a civil and mature discourse even if you disagree with the content.


A Simple Guide to Unlocking 300m$ in Foreign Exchange in 120 Days by Supporting Pakistans Technology Ecosystem.

We all want good things to happen to us, but not many are willing to go out on a limb to share the things our government and state actors must do. In an effort to start a healthy debate and put-forth some ideas, thinking and suggestions I decided to publish a cliff notes equivalent of what we need our government to do.

Take the ideas and suggestions with a pinch of salt, also I am not great at public math. Forgive the errors as its a one persons late night thinking translated in to some discussion points. Its is far from perfect or even cohesive, but in my mind it’s a starting point. Instead of every one suggesting the problems we face, here is an attempt at offering some solutions or a path to solving what ails us.

Feel free to share your ideas and thoughts here or via the twitter post that led you to this post. All I ask for is a civil and mature discourse even if you disagree with the content.


Banking on Data & Stats to eliminate Transaction Trust Deficit(TTD)

VC’s, Valuations, Real Market Numbers & the race to build sustainable e-commerce in Pakistan

Let us get all the data and stats out in the open that every one seems to be using as a basis for FOMO creation in the tech ecosystem. As an angel investor very early on, this is almost advice against my self,

but advice is a mandate that is sacred. So to do right by it, one must give it without any hangups and to the best of ones understanding and ability.

Every deck that every Startup has circulated to every VC and requested not to share, has ended up with every one. Thats the first truth, people have taken screen shots of those decks and circulated to everyone in their circles of relevance. In every whatsapp group where they were circulated, an image/story/narrative started appearing

  1. Pakistan has a young Population
  2. Pakistan has a connected young Population
  3. Pakistani’s crave instant gratification
  4. Pakistans Retail Segment is in the 100bn$ space, angling for 200bn$
  5. B2B + adjacent markets will allow us to get hockey stick growth
  6. By showing crazy trajectory on their MVPs(whilst failing to mention product discounting) in a country hit by mass inflation pressures, every ones on an insane GMV ride.
  7. There is great talent and a fraternity of ex Careem & Daraz & Easypaisa folks who will build great companies (read unicorns) with 2-3 years of experience under their belt. (I hope and pray this is true as it helps Pakistan)

Assumptions circulated from startups who have raised funding based on the above:

  1. Our target market is the $152 billion retail market across Pakistan with more than 2,000,000+ retailers.
  2. “Now Commerce Penetrating 130bn$ TAM”
  3. “Retail Market size is 150Bn$(TAM), Retail market size growing 9% YoY for 20 years. Retail market through mom- and-pop stores, or the Total serviceable market is 91% of that or 137$BN”
  4. 170bn$ Retail Market, 220M- Youth led population, 70bn$ Grocery Retail, 8.2% CAGR since 2016, over 3 million tradition retail stores across categories, 900k retail stores covering >90% of total grocery sale.

Building on the assumptions from above. We have seen the following Emerge.

  1. One Startup with 27m$ in GMV got a 275M$ Valuation
  2. An other startup with 42m$ in GMV got a 100M$ Valuation
  3. Yet an other one with 65m$ in GMV got a 200M$ Valuation

But then I came across Jawwad Farids market assumption note yesterday. In which his data suggests that the market is not remotely as rich and large as the assumptions that have led to these valuations it got me thinking. That there is real opportunity to help Pakistani retail grow, if we look at this problem from a value creation lens vs. a valuation lens.

Jawwads assumption/analysis is simple and points to the direction that “All this talk of informal economy, we can’t sell more than what we produce, what we import and what we store.”

He points us to some thing very interesting and I quote

“If the overall market size is $50 billion give or take a few, growing at 5% – 10% a year, year on year, how big is the market likely to be 5 years down the road? The answer is somewhere between $63 – $84 billion. If through an act of God retail in Pakistan goes completely digital, this becomes your GMV estimate with 100% market share.”

So whats really going on here?

  1. We lack data and transparency
  2. Seemingly there is a lack of due diligence on actual numbers vs perceived based on the 220m population size
  3. Even if Jawwad’s estimates are off, his hypothesis is accurate that documented or not, we cant be selling more than we produce or import etc, some where the numbers have to add up for retail, seemingly today they aren’t and no ones asking why not.
  4. Food for thought we co-authored a blog post on Pakistans online GMV some time back, for some color

Ok so enough talk about the gloom and doom. Let’s talk about the good stuff, the market is large, it will continue to grow, we are barely online and for better or for worse digital payment stickiness is not there yet(there in lies the opportunity). We need to build on it.

Let’s now look at things that help us get scale also look at the single biggest thing thats causing this transaction trust deficit.

Ask your self, what happens in corner store retail today?

A customer has an intent to buy some thing, they make the time to go to the seller, physically, they can touch, feel, evaluate the item then make up their mind, if they want to buy it, they do some price checking from the market by going to multiple folks. They have confidence that if they pay cash they will get the product that is in-front of them. The exchange of cash happens, they collect the product, bring it home. The deal is done.

In an online scenario, for the same product, the customer starts with a web search or goes to an existing online vendor or market place. They see the image of the product, the image varies across the sites, one of them has the label, the other doesn’t, yet an other one has a filter and the colors look off. They all feel similar but not the same because the end user cant determine if they are. The end user, either does COD from 2 stores and physically sees the goods arrive then pay the rider and close the transaction(They have nothing to loose by ordering from multiple stores- As some one who ran the largest COD service nationally, this was a common complaint from my end customers). Or they don’t bother and continue their purchase journey offline, because they are not confident of the products virtual representation and thus hesitant to buy online.

So here is where the Government comes in, from the honorable Finance Minister to the SAPM on E-commerce. Both have a vital role to play. Heres what the data tells us.

  1. Its not enough to document transactions
  2. You need context
  3. Take the line item detail and analyze it, to hold people accountable, you can only do this, if you have those details to begin with
  4. Enforce labelling standards, move toward packaged goods, that are more exportable
  5. Pakistans biggest problem is documentation and discovery of what we make to Int’l markets
  6. We suck at presentation, the government needs to help retail by having basic requirements/guidelines for product representation
  7. Require the Regulators to make Banks have APIs that work and run a local scheme of their choosing to enable digital transactions that do not take a year to apply and get access to
  8. Have Digital KYC enabled by NADRA Mandated by Law or an act
  9. Mandate Instant Merchant Settlement & full and final taxes to encourage movement away from the grey channels
  10. To Promote Startups in the commerce sector, allow Open Banking, Use the  PSD standard or similar and apply to Pakistan. A minimum set of rules, apis, interconnections and published open standards by which everyone can connect and use banking services. 

Seems like we(the community) have been talking for the better half of a decade to f*ing enable payments. Let me not even get started on logistics infrastructure and regulation. The lack of movement on these is the sum of our discontent when it comes to lack of digital enablement and having a clear path to e-commerce growth.

We need to ask our selves and the government:

  1. Do we only want large commerce to succeed in this country?
  2. Do we not want to remove our reliance on imports by creating a discovery mechanism by allowing for vendors to go online first?
  3. Do we want to continue to loose FX to AliExpress etc via credit cards by not having Made in Pakistan be listed in Pakistan?
  4. Will we continue to talk about digital payments and our large youth population or are we going to enable these folks to make money by taking part in commerce?
  5. Will we for a change spend govt/tax monies on enabling the right programs vs enabling for Airtime?

The answers are simple. Some one from government has got to be willing to participate with the stake holders and help enable these changes. We all know what they are.

If we don’t, we will move towards valuation games which are also need for a nascent ecosystem like ours, but the “awaam” will loose out on the value creation piece. There is a massive opportunity for the government to course correct and be on the right side of history. This leads to job creation, digital transactions, growth in logistics, enablement of time/value unlock, second careers etc. One leg of e-commerce are services, that we continue to discount from the narrative of online commerce.

If we do not give people the ability to go online, transact online, and deliver goods and services virtually and physically we are basically doing our selves a dis-service. At a national level, till there is a concentrated movement in tier 2, 3, 4 cities to on board, artisans, service providers, manufacturers, producers etc, we will not be collectively able to go grow domestic trade nor improve our manufacturing services.

The second leg of this enablement is to existing industry, industrial groups, help them come online, help them digitize, when they are able, capable and willing to play in the space, the over all pie will increase, there will be demands on the regulators, the politicians and the ecosystem providers to offer better, faster, more reliable services.

Net net, you can not be online if you are unwilling to accept the ground realities. The ground realities today all point to a transaction trust deficit, which has clear remedies spelled out above, all we need is a willing government to act-for once.

Today commerce is reliant on the Big players, FX losses & a cost of doing business in USD. You ask how? People opt in for international platforms, customizations and spend $s to sell products in rupees?

Where is the common sense in that???

The people we need to mobilize are the ones who have taken the first step. Meaning they are selling on Facebook, Instagram, or via WhatsApp etc. We need to transition them to Digital Store Fronts (DSFs). We need to account for them as players in the industry, we need to help vs talk about helping, we need to mobilize resources vs talking about said mobility, we need to train them to setup and sell, we need to help them get banked, or digitally financially included for real vs talking about it, we need to come up with taxation structures that help them and make the space inclusive for more first time sellers/entrepreneurs to get online vs press events. The time is now, the opportunity is real.

This country does not produce enough jobs for the youth to be employed, we need to create/enable entrepreneurs, other wise the same asset class we are banking on will be our biggest liability.

At the end of the day this TTD is only going to go away with the power of real action from the incumbent government organizations and the regulators at large. Less press conferences, less media coverage, more action.

Pakistan’s Retail Moment(s) & The Power of Digital Transformation.

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

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

The SME/Startup Conundrum

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

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

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

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

The User flow was as follows:

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

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

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

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

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

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

As they scaled they learnt a few new things:

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

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

FMCG/CPG & Retails Moment in the Spotlight

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

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

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

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

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

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

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

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

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

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

I feel:

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

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

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

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

Mindsets & Change Management, How to Transform Digitally?

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

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

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

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

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

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

The Fast Fashion + Affiliate Opportunity

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

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

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

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

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

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

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

So what is Digital Transformation in our Local Context?

The what!

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

The How?

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

The When?

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

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

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

OLP + Establishment|M|ilitary- style executive leadership. Our Un Tapped Potential

We will get to OLP in a second. Let us first define the opportunity. We have many (100s/1000s) of officers retiring or leaving service honourably at a reasonable age (Between say 40-50) Keep in mind most successful entrepreneurs are around the 45 yr mark. We have limited number of employment choices for them post service, there aren’t enough ICIs, ENGROs and Nishat’s or even AWTs, Fauji Foundations, DHAs or CSD Stores that need head of Security, Internal admin, Government relations or HR. (SIGH) this has to stop.

Why? Because we have built a mould that needs to be broken. How many branches does the military have? How many officers are trained in strategy, war games, mission readiness, surprise attacks, logistics, real time assessment, engineering, health, peace keeping, technology, defence systems, secrecy, legal affairs, counter intelligence etc? So the best we typically offer them and extract value is because of the recognition their titles bring? It is an un-fair equation for all. Let me elaborate.

We invest in our officers and they are considered some of the best trained in the world. An officer is trained in adaptability, risk management, motivation, leadership and most importantly commitment and loyalty…all sought after skills in the corporate world and missing from young founders/founding teams. The skills need to be complimented with training in tech, digital and future skills to ensure that we are not losing the best amongst us to admin and security roles.

We are doing them a dis service of epic proportions by making them in-charge of CCTVs and Reference letters. We need to have a far better appreciation of their service, their duty & their commitment to our sovereignty. They have paid for us by their service as they stood in place of us and we have paid for theirs when they did by supporting them. Lets not get emotions get the best of us. Let us try to figure out how to propel this in to a strategic benefit for the country, retired service people and our economy. Yes you read that right. Our Economy.

Since we have a framework of what post retirement means, we do not challenge the status quo or build new channels. Most officers will struggle economically, but they dont have too. If we had a structured approach to on-board them and used their retirement as a feeder opportunity in to the new economic activity and reality of the post Corona World. That funnel is missing and we dont need to really re invent the wheel. But I want to actively build that funnel with others who want to.

Former Army & Intelligence forces recognition is a badge of honour in some countries when people launch startups. Others like the US where I was classically trained in the art of being productive had a great program at a little known company called GE. That program took in fresh grads(like my self at the time) and discharged service people and put them in to training programs. GE is known to have some of the best corporate leadership development and training programs in the world and some of their top internal talent that has come from the program has gone on to run and build some of the largest companies in the world.

Therein comes OLP. We need to have a startup vehicle that does Officer Leadership Programs, so that we train, re train, re launch and re activate people coming off-ramp from the forces to on-ramp in to companies + pairing with startups in the defence/manufacturing and other sectors locally and internationally as SMEs/Advisors/Coaches/Mentors/Operators/Supervisors/Partners/Shareholders. We need to breathe new life and build bridges between Adjudent General, (AG) branch that has the Welfare and Rehabilitation, W&R Directorate. We have to think beyond welfare and think of it more of a Unicorn Breeder. When you have arguably last level data on people their specialisation and service history. Whats missing is “Establishment|M” a for profit entity that on one end works with startups, industry, academia, incubators, accelerators, international partners to source requirement for talent + expertise + also train people in specialised vertical & skills to become chargeable in the corporate world and grow to be an in house incubator + accelerator.

The Three Areas of Establishment|M|

One that would pair existing startups and companies + founders with off-ramp(retiring) talent, for deployment locally.

Secondly, take off ramp talent and pair them with co-founders/talent/capital to launch their own companies add to that those who have immovable and value locked resources like land etc that can be brought in as founders equity.

Thirdly, take a mix of the above and deploy them for international work with partners and platforms needing specialised resources from the many verticals of services these officers are retiring from. So think re-deployment on to upwork but for military/tech/educational careers. There are 100s/1000s of military/lineage jobs online for developing countries where defence /tactical/strategic/3PL/maintenance/ offshore experience is key.

Before 3 comes 1 (B3C1)

So before the three stages, Establishment|M will run a cohort style incubation process for all the talent it intakes. Structured courses/bootcamps of a different kind to up skill and upscale the talent and to define and allocate their user journeys within the three potential streams. By harnessing what our military men and women already possess, and enabling them to be productive building blocks of Pakistan’s digital and economic future, we would have ensured that not only do we honour their service, rather continue it in other forms long after they leave their uniforms behind.

There may be raw talent who want to be entrepreneurs and want to start companies/businesses etc, there may be talent that has hard to acquire skill that want to make it billable, there may be a mix of the two that is looking to be matched to global opportunities but do not have a starting point to locate those opportunities or to engage with them.

Some say that when you are dealing with officers there may be a hesitation to be re-trained or even ego, I say, let me prove you wrong. Every smart officer, which is every officer, will truly work to make them selves deployable and be dependable as they have always been but this time for them selves first.

OLP(Officer Leadership Program)| Not your average Boot Camp

The mission for ESTABLISHMENT|M through the Officer Leadership Program, is to find the best and the brightest of those officers as they are leaving active duty and to transfer their loyalties to its platform and them selves to build a better economic future for all. Most specifically for the officers, their families, their future partners employers & employees.

The goal is to produce executives/talent who can bring the natural leadership skills they displayed in the Pakistan military to the right careers via ESTABLISHMENT|M. This is not a placement service. Far from it. This is a part accelerator part incubator part re-deployment platform away from the already established and scarce roles that are not value additive as they could be.

The pitch to the officers is simple “From this point forward, when you are in any kind of environment, you have to think that the best entrepreneurs are in the room with you, watching your every move. When you are wearing anything that’s got ‘E|M|’ on its label, you’re representing a new company and a new loyalty, to your self, to grow your second career. “

It is an allegiance that the former officers will understand and embrace we just have to create the environment and provide the tools instead of shoe-horning them in to existing moulds and career choices which pale in comparison to both their talent and the availability of said roles. Why not create a new ecosystem a new pie and breed unicorns instead?

How does this start?

Keeping in touch

The program seeks to enlist soon-to-be-civilian officers. The company will not start the formal review process until the officers have filed their retirement papers, but program should keep in contact with interested officers for a year or more prior to their departure from the military so there can be a proper/planned in-take and off-take scenario. So that the skills and aspirations are mapped. Given the sensitivity and privacy the info can be collected but anonymised and kept with the relevant military department but a working system be developed. Those are all operating mechanics. The reason to put all this out there is to socialise the idea and get feedback to making sure any such company, program, bootcamp or service in any form is useful to all the constituents and that others copy it.

How can this be operationalised?

The minimum rank for admission into the Boot Camp is captain, or equivalent and the bootcamp lasts through three to eight-months with rotation to organisations that partner with the program or induction into startup(s), or helping find co-founders and incubating & launching new enterprises or pairing with international assignments and the internal consulting organisation to build our McKinseyesque service. There will be three distinct tracks for ensuring the best talent gets paired with the best possibility for the highest success.

It sounds simple enough but this is Military to Civilian Transformation for Economic Development. MCTED. This also helps us in a host of different areas and removed taboos associated between civil and military interactions at large. If both parties build joint successes that too in new verticals, new services and create economic growth, every one wins long term. The harder we work the luckier we get, so lets work on this together and give |E|M a fighting chance.

Here’s my 2 cents for organisations who want to build just intake programs like OLP minus any incubation/acceleration, feel free to share this idea concept internally and reach out for any help you may need to kick start the effort. For incubators that want to work with retired officers to bring new co-founders to the front, feel free to pick up any thing from this note or to ping me directly.

For officers who have ideas who have retired or soon to retire and in search of the next phase in their life, it would be a privilege and an honour to connect and interact and see how we can work together even before a formal program is launched.

We owe it to our nation to our soldiers and to our selves to work together to build brave new companies with brave people and popularise the idea, so future generations know that post service there a new world waiting to be explored that can scale and monetize their skills. #PakistanStrong

“No soldier outlives a thousand chances. But every soldier believes in Chance and trusts his luck.”
― Erich Maria Remarque

COD |240 years in the making & ripe for disruption ‘again’

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

Myths busted by the above

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

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

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

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

Collect on Delivery tag with three part form, c. 1917-1919. From right to left, the three portions of the form were to be retained by the sender, the post office, and attached to the parcel. This last part also served as the money order application. National Post Museum

USPS’ collect-on-delivery system

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What are we really trying to disrupt then?

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

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

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

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

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

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

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

Do I still have you with me?

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

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

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

Tier III,IV, V and beyond.

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

Focus on one big thing and solve for it.

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

COD is not going any where….

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

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

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