Startup Insider Islamabad Session

What a wonderful gathering at LMKR for the inaugural Startup Insider, Islamabad Session. At a conservative estimate, I would say at least 100 people showed up at the event including half of them students. Not bad for an event that was only marketed via blogs and email lists. The attendees included successful and budding entrepreneurs running great organizations, there were bloggers and journalists covering the event and professionals not just from the IT sector, but also from the Telecom, Media and Development sector.

The panel included successful entrepreneurs from BrightSpyre (Cogilent Solutions), Scrybe, Trevorsoft (Bentley Systems), Voxel among others. What surprised me the most was the fact that most of the companies on the panel had secured funding through some Venture Capital Fund. In fact, barring one or two, most of them were funded from the Silicon Valley. And quite a few of them were working on cutting edge technologies and beyond.

We had great case studies from the audience as well. We even heard from an enterprising student who had written a highly popular application on Facebook which today has almost a million users. He successfully negotiated and sold it off to another company in the valley from his dorm room in Pakistan! He is now busy launching yet another application on Facebook and already has offers from potential buyers, again from the valley. He asked a simple question from the panel. How can he now secure a bigger place (than his current dorm room) to build these applications in a more professional environment with a bigger team.

Another surprise from the audience was a budding young engineer who had written a wonderful application on the open source platform and had posted it to Sourceforge. And his application was not only being downloaded heavily but people were paying him money to enhance/customize it for them. Hence, he was running a successful one man shop right out of his home in Rawalpindi. And for payment processing, he was using Amaana, another enterprising application coming out of Lahore, which is Pakistan's answer to Paypal.

Osama Hashmi (Green & White) and Owais Ashraf (Bentley Systems) managed and moderated the whole event quite brilliantly. Thank you LMKR (Atif Khan) for hosting this event and treating us to wonderful coffee/tea and appetizers.

It was really pleasing to see active participation of the students as well. It showed that some of them will probably take up entrepreneurship as a career and will forgo the urge to work for another company. Just one observation. The folks on the panel be requested to provide a detailed personal background (education, work experience and why they chose entrepreneurship over employment) and what is so great about their company. This will further enhance the experience of listening to these success stories and understanding where they are all coming from. Startup Insider Sessions will be held once a month in Karachi, Lahore and Islamabad.

Please check Green & White blogsite for the event details and do attend them if you are in the area.

Starting Out

When entrepreneurs start out, they usually like to do it with in small teams. Usually, a fews guys and gals will get together to do something really interesting and innovative that will change the way things are done.

It is easy to start out with a bunch of friends, but it is quite difficult to last the distance. Especially, when the going gets tough. Here are some basic traits to look for when starting out.

Sharing the same passion:
You and your friends might be excited about a brilliant new idea. But not everyone will be able to believe in it with the same passion as you do. It is imperative that your friends and you are following the same dream, the same vision and have the same passion. Otherwise, sooner or later there will be trouble. In my personal experiences of starting up businesses, I have found on many occasions the startup teams move apart after a few months as they do not share the same passion and have different ideas of how to go about their business. This experience was also confirmed by other budding entrepreneurs.

If the partners do not share the same passion, vision and goals, there is every likely hood that the organization will move apart. Or for worse, will crash even before taking off. This must be cleared up and should be revisited on a regular basis. Visions and goals do change as the market dynamics change. But what ever the case, always discuss and get on the same page and be as inspired as everyone on the team.

Define clear cut roles:
In a startup environment, usually everyone does everything. But still, there needs to be some definition of roles and some responsibility assigned to everyone. One of the team members could take over the software development aspects, the other could manage the sales and marketing. A third could be the finance guru on the team. Defining what one will contribute will bring about major productivity gains for your startup. But make sure that the roles are not just on paper and are actually implemented. A good way to have a check is to have regular meetings and see how everyone is doing and contributing.

There will be occasions when one of the members is not contributing enough. It is imperative at the early stage for everyone to be working over 110%. Hence, help the person move ahead and help him/her understand the role. Maybe, try reassigning the person and give him new roles within the organization. See what he/she is good at and make him do that.

If the person still does not improve, it is time to cut him off. Send him on vacation or move him out. A dead and non contributing partner will only slow things down and will cause the organization to slow down as well. His contribution will not be productive for the organization and can also cause other employees to lose focus as well.

Strong Communications:
This cannot be said enough. There are times, when the teams stop communicating completely. They tend not to share their feelings, especially if they have some wood over others. It is imperative that the members communicate and share all issues and problems openly. Keeping everything inside will not help and will only bring about further cynicism.

Strong communications is the foundation for a strong and growing organization. Have regular meetings and sessions and regular exchanges of emails, phone calls etc to be on the same page. The sales team should know what the software team is doing. The software team should know what the management wants and what are the targets and deadlines. And so on and so forth.

Entrepreneurship in Developing Economies

Someone recently asked me at a conference in the Bay Area, as to how has been my experience of entrepreneurship in the US as compared to the developing economies. My answer, which astonished him, was it is far more difficult to succeed in developing economies than in the US.

There are reasons for that and plenty of them, but I list here the three most important. To an extent they are true for all economies; from Bangladesh to Nigeria, from Philippines to Pakistan, from Sri Lanka to Kenya.

Political Instability:

For one, the political instability can play havoc with your plans. Say, if you were in Pakistan, Bangladesh, or even Nigeria, chances are that the political system is heavily dependent upon military and how it reacts to the highly mischievous politicians. Chances are that there will be one political upheaval every five or so years. Enough, to not make business plans and forecasts beyond five years regularly. In fact, I recently, met up with a Chairman of a multinational corporation in Pakistan and asked him precisely about this trend. He said, they used to make a 5 year plans for the country in the past. Now, they are down to 3 as it is difficult to see beyond that.

Government Oversights:

To an extent, if you are running an IT related business, chances are the government will not interfere much. However, that is just the illusion. The governments are slowly becoming aware of what is the all hoopla about this new technology and are becoming a major roadblock in its growth. Take the example of bandwidth. If you are anywhere in Africa, chances are you are paying by the kilobytes that you are using. Yes, not all you can eat, unlimited packages as we see in the US. Even if setting up a software company is cheap, it is too expensive to connect with the outside world on high speed bandwidth.

In Pakistan, the waters are further muddled, with the paranoia built by the government around VoIP. Now, if you are a call center or a software house, and want to use VoIP then you have to first register with the government (Pakistan Software Export Board), and then get a clearance from Pakistan Telecoms Authority (PTA) and this process could take an average of four to six weeks, if not more. And once you do get this clearance, you are still not allowed to do inter office communication using VoIP. You still have to use traditional telephony for that! Imagine that! And yes, they can raid your offices, lock up your staff and do all sorts of government bureaucratic bullying in the name of protecting you against the illegal use of VoIP.

Financing:

Now, this is where it gets really tricky. Numerous surveys conducted by various agencies including World Bank, United Nations has indicated that Financing is one of the major issues in developing countries for SMEs (Small and Medium Enterprises) to survive and grow. The banking systems are also quite archaic in nature and have not really developed since the colonial independence. For example, it is quite difficult for them to finance anything without “physical assets”. Now that is fine, if you are an industrialist, but what if you are an IT company? There are only electronic assets and intellectual property rights. Sadly, such enterprises can secure no funds from any banking institution on these basis. And there are hardly any Venture Capitalists out there either. That leaves the budding entrepreneur with his/her own money or rely on some angel investor.