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

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

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

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

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

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

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

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

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

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