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Pakistan Startup Culture

People didn’t get to know about y-combinator through social or electronic media. It was the success stories like DropBox, Stripe, Airbnb, Docker, Reddit that highlighted it. Sidra Riaz, Program manager at NIC, feels sorry for the state of our Pakistani incubators/accelerators. According to her, our incubators or accelerators are failing the Pakistan Startup Culture as these are all merely trying to showcase and take credit of something which was not their’s to claim and pretend that they are offering the best services. She quotes:

In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts. — Jeff Bezos


While monitoring many incubators and accelerators closely, she would like to claim that 90% of the incubators will fail. (And her heart cringes on this thought as she does not want any incubator to fail). She considers primarily two very significant reasons (majorly her verbatim) and we are adding the third:

1. There are too many companies and too little Mentorship:

For most incubators to get off the ground, simply having a portfolio of companies and providing access to capital is not ENOUGH. It’s important for inexperienced entrepreneurs to learn the ins and outs of the game. A great idea will fall by the wayside without being properly executed. I have seen people who just a few days before demo days and pitching events come to know that there are serious issues with their product. So mentorship is everything. It’s how you build products, sell your products or businesses to big corporations, hire, market, do PR, yes, EVERYTHING!!!

Related: Identify Good Mentor with 7 Traits Checklist

2. Graduated, Now what? Any funding funnel after the “Program”?

I can say that there are a few entities and individuals interested and invested in incubation scene for genuine reasons all over Pakistan. If these really want to build a community, then we need more collaborations and understanding among echo system, incubators, and startups. Even after going through not just one but multiple programs, startups still struggle with raising investment.

The simple truth:

  1. Not enough traction: Most of Pakistani incubators are depending on funding and we will have perfect landscape once the tenure is over. But still, it’s better than nothing and we have to start from somewhere.
  2. A valuation that is too high and too much noise. I am more concerned about is, the future of youth. They divert their attention from their professional careers and after a couple of years when they realize, they are of nowhere.
  3. Launching feature, not products, let alone businesses: A lot of tech startups including me (although not going through any of incubators or accelerators) don’t know how to goto market, how to sell. Now I am sitting with my product in hand thinking how to launch my product using this guide. Most of the “entrepreneurs” just show off some features and try to impress investors to get funding. They never try to get proper guidance about business principles and market needs.
  4. Incubators need to focus more on startup’s success than their own publicity. But instead of utilizing these funds on startups or community building, these are investing majority chunk on their own marketing and promotions. Each and every incubator is fighting for more funding and the same they are teaching to their startups. They are trying to compete each other, incubating same startups again and again to increase number in their portfolio. Instead of making startup founders a leader, they are making them managers.
  5. Help each other to improve curriculum etc. Where Innovation, disruption and technology must be the ingredients in the recipe. I will not agree with this statement “Chalo Kuch to horha hy” in this regard. Where is the business sense. I think there is also clear lack of understanding that in order to run a business, you have to implement Business Processes, and there is a clear lack of mentorship that explains this to the young guys.
  6. Interest is something different from professionalism, this system has badly failed in Pakistan. We need to reinvent the system first. Everybody says that execution is everything, but nobody is guiding about how to execute, which results in people just looking to raise money to through at any problem they face, not realizing that without proper execution, not even a lot of money can save your business.

If you are thinking why programs couldn’t help, read point one again

3. There’s also fault  in young entrepreneurs too (Ijaz Ahmed, no not the cricketer!)

Everybody wants is investment for their raw idea. Both incubators and entrepreneurs are immature in Pakistan. One thing incubator must do is start “Request for Startup” like Y combinator does. Do proper research on the problems we or our people in Pakistan face everyday. Instead of asking this from incubators. Start solving domestic problem first like shelter, food, education, skills enhancement, clothing, sanitation, garbage collection, and easy access to technology. Our startup ecosystem is falling because our inputs are of low quality, processes are not reliable or trustworthy, and how can you expect a good quality outputs from all these setups?

Related: Is Your Startup Idea Really A Business?

You have been through the issues, take a pause:

Enjoy Your Bonus: Pakistani Startup Social Media Guide 2017

And now to the solution part!

Sidra also adds that there are hundreds of incubators, but best models are much harder to come by. A few best models that I came across are :

A. Seed Fund:

This is one thing I would like to add that there is more focus on raising investment than the product itself or the selling of it. You don’t have to raise funds so early. Bootstrap until you really need external money because external investment is a heavy chain to run with. YC executed this model brilliantly. Such a model is based on ‘high quality filters’ which eventually lead to best minds, teams and ideas and provide SEED FUND, very important to get to the next stage especially in developing countries like Pakistan.

Related: 5 Things Startups Must Understand for Scalability

B. Bringing Founder Focused Incubators in Pakistan Startup Culture:

They don’t accept business ideas, teams or talent. This model only take in ‘High quality tech founder and uses approach of CONSTANT PIVOT. Incubators using this model focus on incredible hackers & developers, participants get into 1 year program with quarterly approach to showing traction, if they show no traction they will PIVOT to a new idea. If a company find traction at the end of a year, incubators spin out and invest in the company. This second point reminds us of how a great niche product like Nomad List came into being. Its founder, Pieter Levels, built 12 products in 12 months. I think at least 3 of them are profitable, and he was a sole founder.

Related: Profitable Small Business Ideas in Pakistan

C. More than Just Free Space:

As our beloved Tughral T. Ali would say: There are some scam artists running ‘incubators’ now – just build a patchwork of little companies that you can go a pitch to donors and ask for money because you are ‘changing Pakistan’. Zero business sense behind Pakistan startup culture. Followup on KPIs – Close Mentoring – Kick out if no PERFORMANCE! Curious to know if NIC follows model of eliminating the weakest startups?

And again quoting Jeff:

A company (read incubator) shouldn’t get addicted to being shiny, because shiny doesn’t last.

So if 90% will fail which model will succeed?

Here is what incubators or accelerators should do:

i) Incubators to filter the idea only after bootstrapping: Showboating and nepotism are why I stopped watching Idea Croron Ka;
ii) Allow for evolution just like The Incubator from GIKI;
iii) See to it that the startups are making an effort to develop the product and taking to the market – extend help wherever needed;
iv) Do not haunt them with processes – let them focus on the business and securing intellectual property, and all of that comes way down the road;
v) Convince the team when to emotionally and practically detach themselves with their initial idea to pursue a better one as would the fast-growth startups do;
vi) Have dedicated experts who instead of focusing on the incubators’ day-to-day processes, forming competitive buddy-teams with the startups – startups WON’T know how and who to hire, we as startups will need a cost less team in the beginning; and
vii) Focus on sales rather than raising the next round of funding (which is their sale).

On completing this article, I invite you to our Exclusive List of Startup Tools and Technology Directory and thank us later.

Disclaimer: Featured image belongs to i2i Accelerator.

Credits: This post, initially started as a rant, has been arbitrated for appropriation from a thread in Pakistan Startups (A Facebook Open Community Group) to be posted on our blog so more and more people benefit after it becomes viral.

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