Debate on Startup and Innovation

A few days back, I wrote a post on breaking into entrepreneurship that discussed baby steps for setting up a new business. It sparked a very good and informative discussion that all aspiring entrepreneurs should read.

NASH (Nasrullah, the founder of Pringit ) and Ali Ammar had an interesting and passionate discussion regarding what a startup is and how we should go about creating businesses and innovation. Also  Fahd Bangash founder of Amaana chipped in through email. Before I summarize the discussion, I would like to highlight a few questions that raise from this discussion.

1. Are we over-emphasizing on start ups? Is it disbanding our workforce for the next big idea into smaller teams doing independent businesses ?

2. Does Pakistan offers enough unique opportunities for our youngsters to burn their early years ?

3. How do we rate success or failures and is it too early for tech entrepreneurship?

4. Is startup about innovating only, what value does a freelancer/outsourcing model provide to the society around us?

Here is what NASH had to say on the topic

A startup is all about risks. If you want secure, comfortable life of an employee, stay away from entrepreneurship. If you are too weak to withstand pressure from friends and family, please stay away. If you care more about what your friends are earning, please, for the love of God, stay away from startups. Startups are very high pressure and if you can’t even convince your family you will never be able to convince customers. Don’t fool yourself, you are not an entrepreneur.

A startup is *only* about innovation. It is *not* about a new business starting up. Starting a petrol pump is *not* innovation. Starting a khokha is *not* innovation. They might be first time business for the new owner but definitely not startups.

There is only *one* goal for a startup and that is to find a profitable, scalable & repeatable business model for your innovation. Read that last line again: find a profitable, scalable & repeatable business model for your innovation. That is it. You are confusing the notion of “freelancing” or even perhaps “outsourcing” with doing a startup. These are very different. None of these are startups.

Ali Ammar had the following points:

Are we going in the right direction? When we have a shortage of good engineers, do we need to promote such senseless romanticization? Only in our industry we have average 20-30% annual increment – otherwise developers just switch – do we need that? Yes we need more job creation: however I believe that stable existing companies would grow further and create more job opportunities. What do we need: 10,000 companies with 5 employees or 10 companies with 5,000 employees each? Do we need to win over some medals on trying to create new “business models” so that we can tell ourselves “oh, well we tried but failed. We were too early for the market”. Or “We tried but there was so much bureaucracy” etc.

So why misguide the youngsters and create an impression of a highly romantic world where you are weak if you don’t listen to valid advices from friends, where if your parents ask you to be responsible and stand on your feet, you say: “they don’t understand”, and it’s okay to sit in your dirty basement room and work on the silly projects that make no sense (please this is NOT silicon valley, investors are not going to come and this is not the hotbed of startups!).

We do not need to experiment with startups as our successful companies need more human resources and we need not promote startup culture like Silicon valley.

On top of it, Fahd had this to say.

“Entrepreneurs in poor countries have difficulty doing the next big thing, so they go ahead and do the next small business. I have never inspired myself with entrepreneurship for the sake of small business and I will not discourage it, small business is the way to start for any entrepreneur… what is missing and what I work towards is producing game changers out of poor conditions… a game changer by today’s metrics touches tens of millions of people and turns over hundreds of millions of dollars…”

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4 Comments

  • I found comments by NASH aka Nasrullah a little amusing. Isn’t Pring a shameless copy of chopaal? What innovation? Take advice from real people actually innovating …

  • Thanks a lot Qazi for putting it in perspective.

    @Tami, I disagree. Pringit has a LOT of innovations and they have done a pretty good job landing partnerships with telcos. If we were to compare, I’d say only pringit and mangoparty/ufone sms buddies are the “success stories” in this domain. I will not discredit chopaal either as they have done a good fairly good job too.

    The points we are discussing are what Qazi summarized. I truely believe that IT can be a real and MUCH needed revenue generation source for our country. It has potential of raising standard of livings for the employees as well as provide the precious foreign exchange that we lack so much. It is not threatened by price war with China or other lost cost production countries. This is why we need companies somewhat closer to Infosys or Wipro.

    It may be that outsourcing market is already done/saturated and there is no more growth potential (i don’t think so). We can still innovate staying within the outsourcing/service industry.

    I think we should be building international products like Norway and Sweden rather than local products. There is absolutely no short term potential in local market. It’s not that there is lack of talented and hard working people, or good ideas – there have been many many good ideas from amaana to pringit to ufone sms buddies – but they are just not good enough revenue sources (compared to international product ventures like those of Sofizar). So I will say it loud and clear again:

    1. Pakistani local tech market has no scope. No need to waste time in doing any sort of local venture no matter how exciting it sounds.

    2. Focus on outsourcing industry and think in terms of numbers – 1000s of engineers (no tens or hundereds).

    3. If not outsourcing then products for the global market. There is ABSOLUTELY no need to copy successful international ideas for local market even if it sounds really good (extension of point 1) :)

    Again, respect to pringit, and all the others but you can’t really argue with numbers 😉

  • Thanks Qazi for putting up very good advices in such a nice way.

    NASH has explained a startup’s concept in an awesome way. And I agree with Ali Ammar as well, we shouldn’t be going around telling everyone to go for a startup. Entrepreneurship is simply not for everyone, and it’s a better idea to let it grow from within someone, instead of injecting ‘you can be a millionare, leave your job and start your own venture’. It’s simply not true in most of the cases.

    But yes, in cases where startups are based on innovation, and then more importantly, implemented in the right way, can become very successful businesses. But that too doesn’t happen overnight. As written above, we’re not in Silicon Valley, so a successful startup depends more on the struggle and hardships that one has to go through, after the decision to become an entrepreneur.

  • “1. Are we over-emphasizing on start ups? Is it disbanding our workforce for the next big idea into smaller teams doing independent businesses ?” – Yes we are. The data doesn’t support the value of innovation vs value of cut-paste culture in Pakistan. Ideas don’t mean anything unless you can create value out of it.

    “2. Does Pakistan offers enough unique opportunities for our youngsters to burn their early years ?-” No one is going to offer any opportunity. It must be seized, and yes there are many. But are they being seized?

    “3. How do we rate success or failures and is it too early for tech entrepreneurship?”- There can be a lot of metrics for failure, and it can vary for each start up. However, basically if you go under, you have failed, failure to pay bills means you are dead.

    “4. Is startup about innovating only, what value does a freelancer/outsourcing model provide to the society around us?”- Mostly yes. In the traditional sense a start up is an exercise to explore the business viability of a hypothesis, or a business model, and generate exponential returns. That’s the reason why VCs invest. Otherwise they would just go put their money in a bank where it is safer and gets steady ROI, and hence why start ups fail so much, and need to fail. This is also why risk and failure is such an important aspect in startups. If one just wants to open another mom and pop shop, then it’s not a startup. It’s just a “dhanda”. Freelancing is actually modern day sweat shop if you are not innovating and don’t have a value proposition. Also Freelancing is not scalable in Pakistan. Do the math and 3 years after working in corporate you will be approximately working at similar pay, but in corporate you will get your days off, medical bills covered and lots of other goodies. What will you get from Freelancing, especially if you are not innovating and only trying to line up among the lowest bidders?

    You can’t create a culture of innovation unless there is room for failure. People in Pakistan tend to stick to safe jobs, because if you fail over here, you are mostly on the road. While this may be true for a person who has nothing to lose, people coming from reasonable background do not just want to throw it all away, the life of comfort and affluence, what they are used to. Especially when they don’t have a safety net in terms of “Mama and Papa’s” home who have sufficent funds in bank to support their kids and their grandkids for next 20 years. Most educated people come from middle or lower middle class families whose families have made huge sacrifices to get their kids educated. And when they see the conditions of people on the road,(worse than animals) they tend to stick to what is safe, and what works.

    There is no dearth of innovation by the way on the streets and in the shops too, so you don’t need to be in tech doing innovation. You see people coming out with new things, but that’s just walk on the beach where you get your toes wet only. The real game changing innovation only prospers when it gets rewarded. People can’t be motivated to innovate if they can’t protect their innovation, or the environment does not make innovation path of least resistance.

    Only crazy people who are not afraid to fail and who don’t have any liabilities to support or who have nothing to lose should come to startups in Pakistan Rest please stay away from it and stick to corporate jobs. Trust me you would be much better off in the long run. Your mom and dad and family will thank you for it. (www.carbon4profit.com)

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