Now is the right time to invest in Pakistan startups: repor

[Neo]

Now is the right time to invest in Pakistan startups: report
By Dawn.com
Updated Jul 07, 2014 02:55pm

In a recently released report titled the Pakistan Startup Report, the organisation reveals the potential the Pakistani market possess. — File photo
KARACHI: With Pakistan's population expected to reach 210 million by 2020, experts term the world's sixth most populous country as a perfect place for startups to launch their businesses, says the World Startup Report, a Silicon Valley-based organisation.

In a recently released report titled the Pakistan Startup Report, the organisation reveals the potential the Pakistani market possess. A hypothetical online-market comparison was drawn keeping in view the expansion of the industry at current pace to become a lead player in the future.


According to the report, 136.5m mobile phone users 110m were likely to subscribe to 3G/4G by 2019, with the issuance of license for the third and fourth generation network in the country and the services' increasing popularity among users.

The report also quoted 12,500 Pakistanis working in the Silicon Valley, imparting their skills to technological advancements taking place across the globe.



There is hope that if the trend in working for corporations is shifted to setting up individual businesses, it would act as a booster not only in terms of individual growth but is also expected to effectively exploit a massive 180m population to its maximum, benefiting the country's economy at large.

The report quoted that educational institutes such as Lahore University of Management Sciences (LUMS) and Institute of Business Administration (IBA) encourage their students to become entrepreneurs, deeming it a step in the right direction.

"The target is to contribute to the evolution of a more efficient business ecosystem in the country," the report quotes Jamal Khan, founder of software house Arpatech, as saying.

Many would agree that with the policy shift by the current government air for investment is fresh. The government is offering local entrepreneurs loans of up to $20,000 with a fixed eight per cent interest cost including a year's grace, whereas 50 per cent of the loan is designated for women entrepreneurs alone.

The report also highlights that the Punjab IT Board (PITB) is pioneering in entrepreneurship, m-governance and e-governance by empowering workers with smartphones.

The PITB is using custom apps to report the water levels in canals and monitor the spread of diseases. Utilising robot calls and SMS messaging, the PITB has also implemented a Citizen Feedback Model as a proactive measure to curb corruption, improve service levels and customer engagement, the report adds.

Oliver Samwer of Rocket Internet says that "building a business in Pakistan is like Germany, but only 20 per cent more difficult. But we are in it to do whatever it takes, if we have to build a Pakistani Post, we build a Pakistani Post."

The report further argued that lack of competition provides a great opportunity for entrepreneurs and investors alike. Recently, online classified sections have begun to face stiff competition with the entry of Schibested in the local market to challenge Nasper's OLX.

"There is competition in the ecommerce sector, however this is still primarily limited to the electronics market. For most players to make a dent in this market they will have to enter with significant funds," the report stated.


It also advises local entrepreneurs to approach incubators and accelerators, participate in startup competitions and always remain optimistic.

The report also advises foreign companies to have reasonable expectations as the market in Pakistan is still growing, and asks them to adapt to local norms.

It also reminds foreign companies that there is no intermediate liability protection, meaning Pakistan has no cybercrime laws at the moment. However, a cybercrime bill awaits approval by the parliament and a cybercrime agency is supposed to be established shorty.

The reported established few facts which determine a key potential in the Pakistani market: 60 per cent of the population is aged between 15 to 45, Pakistan has the fourth largest middle class population in absolute numbers in developing Asia — 25m to 45m broadband users are expected by 2020 — and investors in the country are allowed to hold 100 per cent equity and full repatriation of capital.

Future seems bright, Pakistan is generally five years behind India in terms of growth and development, the report estimated, adding that now is the time to start building up startups.

"Pakistan will grow, the only uncertainty is the speed at which it does," the report concluded.


Pakistan Startup Report from World Startup Report
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[Energon]

I'm afraid this is a bit optimistic. The premise here is "there's no way to go but up" given the categorical absence of meaningful commercial activity in Pakistan currently. Unfortunately this optimism does not take into account the fundamental reasons explaining why there is no competition at the present time. The collapse of commerce in Pakistan is due to the lack of basic security in the country in addition to lack of institution building and feudalistic crony capitalism. These are very serious structural deficiencies which cannot be bypassed. Ironically the current head of state embodies the very feudalistic corrupt economic setup that threatens any real progress.

IMHO Pakistan has a long way to go. I understand that this idea of young computer savvy entrepreneurs propelling the economy with their small businesses and leapfrogging the shambolic mess that is the rest of Pakistan is very alluring. However based on the countless other examples in the developing world , I have stopped believing in such pipe dreams. Pakistan will never be a worthwhile place to invest until there's relative security and a functioning social and physical infrastructure that can support commerce.

Also this article contains a statement that says Pakistan is only 5 years behind India. So I expect this thread to go down the tubes pretty fast.

 

[rock127]

Sure... Pakistan is the de facto place for startups... for Terrorist Factories I mean.

 

[Neo]

I'm afraid this is a bit optimistic. The premise here is "there's no way to go but up" given the categorical absence of meaningful commercial activity in Pakistan currently. Unfortunately this optimism does not take into account the fundamental reasons explaining why there is no competition at the present time. The collapse of commerce in Pakistan is due to the lack of basic security in the country in addition to lack of institution building and feudalistic crony capitalism. These are very serious structural deficiencies which cannot be bypassed. Ironically the current head of state embodies the very feudalistic corrupt economic setup that threatens any real progress.

IMHO Pakistan has a long way to go. I understand that this idea of young computer savvy entrepreneurs propelling the economy with their small businesses and leapfrogging the shambolic mess that is the rest of Pakistan is very alluring. However based on the countless other examples in the developing world , I have stopped believing in such pipe dreams. Pakistan will never be a worthwhile place to invest until there's relative security and a functioning social and physical infrastructure that can support commerce.

Also this article contains a statement that says Pakistan is only 5 years behind India. So I expect this thread to go down the tubes pretty fast.

Bit optimistic I agree but not impossible. Without proper security and supply of power its practucally impossible to create a business and investment friendly climate. Yet there is growth, Japans JETRO ranked Pakistan as second best performing investment market for Japanese firms:


Business growth: JETRO survey ranks Pakistan second in world
By APP Published: February 1, 2014

Survey puts Pakistan just behind Taiwan in terms of business generated; leaves behind India and Japan. PHOTO: FILE

ISLAMABADakistan has been ranked second in the world in terms of business growth in a survey, conducted by the Japan External Trade Organisation (JETRO).

The current survey – which examined records of 9,371 Japanese firms operating across the world – put Pakistan just behind Taiwan in terms of business generated; leaving behind both India and Japan, media reports said.

Pakistan's data was generated from 27 Japanese firms doing business here. The results found that 74.1% of the Japanese companies estimated operating profit in 2013, allotting second rank to Pakistan only after Taiwan (81.8%).

Published in The Express Tribune, February 1st, 2014.

 

[ladder]

Two things, for the premise "there's no way to go but up" to be true, the economy has to bottom out. But has that happened in Pakistan? I doubt. The full effect of the recovery of credit has yet to be felt. So, the economy is in transition phase.

So, venture capitalists will be wary of investing in start-ups unless govt. comes out with really good policies.

Though, the flavour of the article is IT. Though it maintains the generic term start up but it really means IT start-ups.

But a simple look at the android and windows app store will serve as an example. There was many instances, non official apps which was better than official app was brought over by the concerned firm and the team engaged in further development.

But, how many app developer and enthusiasts from Pakistan? Even group of undergrad students can mull together and can develop a app and give support to it.

How many app have been developed for PIA,PA bus services Metro bus etc.? Govt. departments and local services?

So, the culture of start ups has to be brought in.

That's true for Pakistan and truer for India. Israel has more start-ups than India ( I don't remember whether absolute or per-capita).

Except a hand-full of universities the undergrad. entrepreneurship project is just copy and paste.

 

[Singh]

Any Pakistani who is doing well would like to "escape"

 

[Blackwater]

Any Pakistani who is doing well would like to "escape"

And who don't still want to escape@neo

I met lot pakis in UK they got good business in UK but don't want to visit or invest in Pakistan due to security situation and fear of kidnapping by their own relatives in Pakistan

 

[Voldemort]

Invest in Taliban or LeT?

 

[Neo]

Is this JOKE section

and give some polio drops to op

STFU Jahil, if you have nothing constructive to add to the debate, get the hell out of here.

 

[Ajesh]

Sorry Brother, I mean you are educated and somewhat decent, different from other Pakistanis but the Only Start Ups going to sprung up in Pakistan are some Off shoot Islamic Terrorist group, something like ISIS offshoot or Jamat - e- Islam or Mehboobe- Katal or Katal-e-Aam or something like that.

 

[BridgeSeller]

This article is laughably optimistic. I would go as far as to call it quixotic, and mind you that's a word that can be used correctly only with great difficulty. @Energon had it right when they said

"The collapse of commerce in Pakistan is due to the lack of basic security in the country in addition to lack of institution building and feudalistic crony capitalism. These are very serious structural deficiencies which cannot be bypassed."

Anyway, getting to the meat of my argument...

Startup Culture:
@ladder said everything I wanted to say except I don't think the culture can be brought in. It has to arise internally and must be self-sustained for it to work. This is not happening. Especially since the environment is not conducive to risk taking, even though ironically in Pakistan, walking out the front door is in itself a big risk.

If you are thinking of investing from the outside:

From a debt based perspective:

Pakistan's sovereign rating is Caa1 or not prime, speculative non-investment grade with substantial risks. This is just another way of saying, you need watermelon sized ba**s to invest in this country because in all probability it will default and you will lose all your money. And the high yield is just your pound of flesh for lending money to an untrustworthy borrower.

In terms of Equity :

Sure, this is safer, find a good niche, invest some money, hope there is demand in the local market, and/or cheap local labor that will let you cut costs, and that the Snackbars don't decide to suicide bomb the shit out of your investment, you will get a decent return which you will swiftly transfer back to your home country keeping only that which is needed for operational expenses in Pa'stan. The actual outcome will also depend on the Forex rate for the PKR and with the CSF funds set to dry up, things do not look good.

If I had more money, I'd short the heck out of the PKR.

 

[Neo]

'Pakistan ranks 10th among failed states' | The Asian Age

take a gift from me....... no where we see small kids taking polio drops at airport

Which country accounts for one third of world's poor?

In which country 29.5% of the population lives in EXTREME poverty by living under $0.78 per day?

Which country has 69% of its population living under $2 per day?

Which country failed to privide basic sanitation for majority of her people?

In which country old widowes are abandoned and dumped in holy cities, left there to die?

What country has large population living under sub saharan standards?

What country calles rapes 'sometines right' and a boys game?

The list is very long to show you failures.

So you better get off your high horse and take a good look around you. Idiot!
Epic fail!

 

[Energon]

@ladder and @bridge seller, great posts; kudos. For some reason a lot of the features for this website don't seem to be working any more including the "like" option.

 

[Blackwater]

Which country accounts for one third of world's poor?

In which country 29.5% of the population lives in EXTREME poverty by living under $0.78 per day?

Which country has 69% of its population living under $2 per day?

Which country failed to privide basic sanitation for majority of her people?

In which country old widowes are abandoned and dumped in holy cities, left there to die?

What country has large population living under sub saharan standards?

What country calles rapes 'sometines right' and a boys game?

The list is very long to show you failures.

So you better get off your high horse and take a good look around you. Idiot!
Epic fail!

all 7 points meant same, y u wrote 7 points..

BTW all 7 points applies to ur 5000000000000000 old pakistan too

 

[fyodor]

Which country accounts for one third of world's poor?

In which country 29.5% of the population lives in EXTREME poverty by living under $0.78 per day?

Which country has 69% of its population living under $2 per day?

Which country failed to privide basic sanitation for majority of her people?

In which country old widowes are abandoned and dumped in holy cities, left there to die?

What country has large population living under sub saharan standards?

What country calles rapes 'sometines right' and a boys game?

The list is very long to show you failures.

So you better get off your high horse and take a good look around you. Idiot!
Epic fail!

O.k but you are talking as if Pakistan is a developed country?
You don't get the point do you? the debate is not that whether India is 100% developed or is the best, because it's not.
Many problems of India and Pak are common like poverty,corruption but India has some things which push it in the upper league like a working govt institution, education system, a liberal culture, judicial system, democratic system etc which though not the best but is of relatively better quality then most other developing countries. It's only because of this, that India has continue to grow at a decent pace and in some sectors like IT at an exorbitant pace whereas pakistan or bangladesh for that matter, countries with similar background have languished.

 

[Neo]

As long as some epic chootiyas keep trolling and derailing every single thread while moderation is nowhere to find I don't care where is this debate going. Lets troll as usual.

363 Million people living in EXTREME poverty, yet some Indians worried about polio in Pakistan. Chootiyas

 

[BridgeSeller]

Let us dispatch this piece of specious tripe one by one shall we?

Which country accounts for one third of world's poor? <-- This is classic false equivalence, you cannot compare magnitudes. Instead percentage is the right measure and lo behold, a nice segue to the next 'point'

In which country 29.5% of the population lives in EXTREME poverty by living under $0.78 per day? <-- India's population below poverty line = 29.5% Pakistan's = 60%. Who's the "Epic Fail" now?

Which country has 69% of its population living under $2 per day? - I'm willing to bet that the Per capita income follows a standard distribution, so it's safe to bet that Pakistan bodes much worse than India in this too, especially since their GINI coefficient is supposedly low.

Which country failed to privide basic sanitation for majority of her people? [I]This is slowly being improved and at least we have water here. Wait for the day we decide to abrogate the IWT.
[/I]
In which country old widowes are abandoned and dumped in holy cities, left there to die? Oh yeah, this is a serious problem. It is a wide-spread phenomenon, much like Polio Workers are not in your country

What country has large population living under sub saharan standards? Repetitive much?

What country calles rapes 'sometines right' and a boys game? Well, how can we beat pa'stan here? There need not be four male witnesses for a rape to have happened unfortunately, therefore we show the real problem and actively legislate towards curbing this violence. Sticking the head in the sand is your way of dealing with it. Plus one assh*le politician does not speak for the whole country.

The list is very long to show you failures. Bahaha, physician heal thyself! And follow your own medicine below:

So you better get off your high horse and take a good look around you. Idiot!

Epic fail!

 

[BridgeSeller]

As long as some epic chootiyas keep trolling and derailing every single thread while moderation is nowhere to find I don't care where is this debate going. Lets troll as usual.

363 Million people living in EXTREME poverty, yet some Indians worried about polio in Pakistan. Chootiyas

"LOL, I was trolling" is the excuse people make when they have been soundly trashed in a discussion.

 

[Neo]

Get your facts right on poverty by international standards, ie less.than.$2 per day. India 69% vs Pakistan 60%

 

[Neo]

363 Million living on less than $0,78 per day (local norm for poverty). That is almost the entire population of USA and Canada. These people have no assurance for a second meal per day and you talk about polio in Pakistan?

Shame on you!