In this day and age, how do you “produce” an innovative technology? How do you build a business and company around it? How do you get it to your customers and make money? And on a bigger level, how can you use technology to improve the lives of people around you and make a mark in the world with your innovation?
All of these questions are being addressed by an evolving ecosystem for technology entrepreneurship that has finally started taking root in Pakistan. As 2013 comes to an end, I’ve compiled here a roundup of entrepreneurial developments in the country with the hope that some of you may get inspired to become builders of technology products and services, and not just its consumers and reviewers.
Tech incubators, accelerators and co-working spaces
Plan9 - www.plan9.pitb.gov.pk
As surprising as it may sound, one of the most groundbreaking initiatives to support technology entrepreneurship in Pakistan is a public sector program called Plan9, championed by the Government of Punjab through its Punjab Information Technology Board. The program selects promising technology entrepreneurs from across the country through a series of launchpad events and provides these young, aspiring tech wizards an opportunity to turn their dreams into viable businesses.
Modelled after several successful Silicon Valley technology business incubators, Plan9 provides office space, utilities, furniture, computing infrastructure and monthly stipends to the founders. Besides this, it is aimed to mentor and guide entrepreneurs from the best in the industry, both within and outside Pakistan. During 2013, Plan9 incubated 32 technology businesses and close to 20 have graduated out of it. The third batch of entrepreneurs is being inducted as I write this article.
Invest2Innovate (i2i) - www.invest2innovate.com
Invest2Innovate (i2i) is another new, impact-focused accelerator that started accepting ICT for development based businesses for their second batch. Unlike Plan9 incubator which provides all survival resources for brand new businesses, i2i is an accelerator which expects some level of business model validation before acceptance into the program and then connects the admitted entrepreneurs with mentors and investors to speed their growth. Invest2Innovate is more partial to social and impact businesses as opposed to purely commercial technology ventures.
So if you have a business idea that can make a huge social or environmental impact, head over to their website to learn more about i2i. The accelerator has already helped out five businesses and is working with six new entrepreneurs for its second instalment.
DotZero - www.thedotzero.com
During 2013, DotZero, a Karachi-based co-working space modelled after the Plug and Play Tech Center, commenced its operations with a bang. DotZero is a not-for-profit entity co-founded by veteran Pakistani entrepreneurs who believe that convergence of passionate entrepreneurs and brilliant minds at one location can have a compounding benefit to all, as everyone learns from and builds upon others’ experience, skills and energy. Fully furnished, adaptable, on-demand office space is provided to entrepreneurs at DotZero on a no-profit basis.
Since its opening in the second half of 2013, DotZero already has over 70 entrepreneurs occupying its 110-person facility spread over 8000 square feet. There are a total of six companies that benefit from additional activities like regular mentoring sessions and access to DotZero partners, aside from using the office space.
Islamabad has a couple of incubators as well. Technology Incubation Center at NUST and Cloud9, a private sector incubator, are the prominent ones that caught my attention.
Noteworthy technology start-ups
At the end of the day, what really matters is that these incubators, accelerators and co-working spaces are producing excellent startups that are building great products and services. Here are some of such companies:
Eyedeus Labs – www.eyedeus.com
Arguably the most exciting output of Plan9’s first batch of companies is Eyedeus Labs that launched an exciting mobile photo app called Groopic. The product got rave reviews in both local as well as international media and the company is now working on their next computer vision-based product. They are also evaluating strategic partnership offers from some of the phone manufacturing giants in the world.
Hometown – www.hometownshoes.com
Hometown is another graduate of Plan9 which is building an online marketplace for handmade leather goods. The company started with leather shoes and is now planning to expand to bags and jewellery.
iTrak and Biotech
iTrak, currently incubated at Plan9 and Biotech, recently incubated into Plan9’s third batch, are both innovative companies working on developing products for the physically challenged. iTrak’s technology allows users to control a computer’s mouse with eye movements. Biotech has developed technology to inexpensively manufacture synthetic, mechanically controlled upper limbs that allow users with no hands to be able to manipulate objects based on input received from muscle movements in the remaining biological portion of the arm.
One Step Solutions – www.onestepsolutions.biz/xgear/
Similarly, One Step Solutions has developed XGear, a pluggable device that connects to a car’s OBD port and transmits extremely useful data wirelessly to a central processing server. The users are then guided on how they can improve their driving habits and save fuel. Additionally the device alerts the drivers about imminent issues in their cars as well as providing guidance on car maintenance. The company plans to gamify the driving experience and make drivers compete for better fuel economy, better driving habits, and offer other location and proximity based services.
Popinjay – www.popinjay.co
Popinjay, a fashion brand that leverages the online channel for sales of handbags manufactured by craftswomen in the remote villages of Pakistan, was the shining star of i2i’s first batch of graduates. The company was also the first one to raise capitals from local as well as international investors.
Three Restart – www.3restart.com
From i2i’s second batch, a company called Three Restart is working on gamifying the early childhood education medium and process through the use of hand-held devices. The company is intelligently employing game psychology to improve engagement and increase knowledge retention among kids.
Besides these start-ups, Pentara Engineering has developed an order automation system for restaurants, while Technolsys with its AllSecure product aims to provide a holistic solution for mobile device security to its patrons. Ideacentricity and KamataPakistan have both launched services that leverage the ICT infrastructure to connect low-skilled workers with employers across Pakistan. Most of these startups are less than a year old. There are actually a much larger number of new technology-based local startups that kicked off in 2013 but couldn’t get a mention in this article due to space constraints.
Funding success stories
Access to capital has always been a pain point for many technology entrepreneurs. Although traditional businesses and industries are provided secured debt through banks, technology related intellectual property is hardly valued as viable collateral by our banking institutions. Even the local equity investors need lessons in properly valuing tech businesses that do not include real estate, plants, machineries and raw materials as their core assets.
Despite this pervasive issue, some of the developments are noteworthy. One of the biggest success stories of 2013 is a small Pakistani company named Convo that builds enterprise collaboration software. This 24-person company secured five million US dollars in funding to expand its operations to United States. Although the funding came from US-based Morgenthaler Ventures, it clearly shows that promising businesses with market traction will be able to raise funds through one way or the other. Rozee.pk, an online hiring portal had done the same earlier.
Popinjay is a great example of a company which proves that investors, both local and international, will open up their wallets for promising ventures, even at early stage. The company raised $265,000 in 2013 from a syndicate of investors to commence its commercial operations globally.
Similarly, KamataPakistan raised an undisclosed seed financing round from the founders of Confiz Solutions, a local IT services company.
To my knowledge, there are at least two local technology companies that have turned down multi-million dollar acquisition offers because the founders believed that the buyers were undervaluing the companies. They prefer not to be named so as not to disclose that they are up for sale.
Additionally, a new breed of angels investors and venture capitalists are coming together to tap into the deal flow, albeit limited at the moment, that is gradually maturing in the country. DYL Ventures and Plan9 Angel Investors Club are examples that come to mind.
There is still a lot to be done to make access to capital easier for Pakistani entrepreneurs, but we believe that the seeds have been planted and have started taking root in 2013.
Organisations, events and awards
Pakistan Software Houses Association (PASHA), The Indus Entrepreneurs (TiE), MIT Enterprise Forum of Pakistan (MITEFP) and Organisation of Pakistani Entrepreneurs of North America (OPEN) are three of the main organisations that have been actively working to promote technology entrepreneurship in the country.
PASHA organised its annual Launchpad series of events across the country during summer 2013 to identify and reward promising tech-based business ideas. It also honoured promising startups and entrepreneurs during its distinguished Annual ICT Awards conference. During 2013, PASHA also announced that the next Asia Pacific ICT Awards, one of the largest ICT-sector regional awards events, will be held in Pakistan next year. The awards will promote the local ICT industry and provide a platform for Pakistani entrepreneurs to network and collaborate with international entrepreneurs and investors.
TiE Islamabad chapter collaborated with StartUp Cup, an international program to identify and support entrepreneurs, to hold Pakistan’s first ever StartUp Cup event across Islamabad, Lahore and Karachi. Millions of rupees of award money will be won by the most promising startups after a 3-month long evaluation process. The program is still underway.
OPEN launched its Lahore chapter in 2013, providing a networking platform for all entrepreneurs. The organisation works to connect local entrepreneurs with their counterparts in the United States as well as other Pakistani diaspora plugged into the entrepreneurial ecosystem across the globe.
MITEFP, during its annual Business Acceleration Program Conference held in Islamabad during November, identified some of the most promising local start-ups. Through this program, the organization aims to help accelerate the companies to the next level by putting them through a mentoring program.
In the social media world, there are plenty of Facebook groups that provide a great forum for entrepreneurs to connect with others and network. Entrepreneurs Lunch Group, Pakistan Startups, Pakistan Cofounders Club and Pakistan Innovation Foundation are some groups that outshine. The latter, Pakistan Innovation Foundation, also recently announced the launch of National Innovation Grand Challenge modelled after X-Prize. Through this competition, over 1.5 million in prize money will be awarded to the winners of a high-impact technological or scientific challenge being sponsored by Toyota.
Pakistan holds a lot of entrepreneurial promise especially in the technology sector. Unofficial, but fairly reliable sources claim that the freelancing community of Pakistan providing technology based services through oDesk, Freelancer, Fiverr and other similar online platforms, raked in over 50-70 million US dollars in 2013. That clearly proves that Pakistanis are not short of talent and skills.
The entrepreneurial meritocracy offered by the internet; return of successful tech and business savvy Pakistani diaspora to mentor and groom young entrepreneurs in Pakistan; creation of business incubators; and investors gradually opening up their wallets to tech ventures are all factors that can soon turn Pakistan into a beaming example of an economic turnaround story engineered on the back of a strong knowledge, technology and innovation economy. Three cheers for a brighter and more prosperous 2014!
Khurram Zafar is a technology entrepreneur and Fortune 500 consultant. He was Chief Information Officer at Lahore Stock Exchange Ltd where he was awarded Best Private Sector CIO of Pakistan, 2012 from PASHA. He tweets at @kayzafar.