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Tech in 2014 — Pakistan's performance tepid at best

Updated December 22, 2014

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It is difficult to gauge Pakistan’s performance in the technology sector over the past 12 months. The definitions and yardsticks vary greatly depending on perspective, and as such, any definitive assessment is bound to draw draw ire and criticism.

How should Pakistan’s tech performance be judged? In contrast to it’s own year-over-year performance; in comparison to the region; or should it be juxtaposed alongside every other country in the world to see how different facets of its performance in technology fare?

The problem is exacerbated by trying to encapsulate the different tenets of the technology industry – startups, infrastructure, inventions, accessibility, pervasiveness etc. – under one large umbrella. Also, adding to the complexity is the disparity between provinces in nurturing and leveraging technology. Given how transformative and disruptive they have been of virtually every industry globally, it almost mandates that the barometer for technological progress be the pulse of the startup sector.

In my estimation, Pakistan should be held to the same stringent standard as everyone else and as such, 2014 has been a tepid year at best.

Read on: Why Startups cannot succeed in Pakistan, yet

Some may argue that Pakistan is a developing country and should be evaluated in that context, but in an era where a single person can launch a company and access global markets on a shoestring budget in a matter of days, I believe that rationale is detrimental and delusional. The next Google or Nest could just as easily come from Chile or Nigeria, as it could from Germany or the United States.

This doesn’t imply that Pakistan is in the same stage of development, or as economically enabled as every other country. Different countries are in different stages of their life cycle at any given time, and are subsequently producing startups to cater to their current, unique problems which present profitable opportunities.

For instance, buzz-generating startups in North America, are largely geared towards curation (Medium, Last), efficiency/convenience (Taskrabbit, AirBnB, Uber, Nest, Slack etc.) robotics (Skycatch, Savioke) and privacy (Secret, Burner).

In contrast, developing nations are focusing on infrastructure (Instamojo, BRCK, Socialcops), basic health and safety (MakaPads, Onedollarglasses), marketplace/volume purchasing (Mydala, Snapdeal) and manufacturing.

Speculative as it may sound, plotting local startups on a matrix produces confounding results. All the same, this sort of elementary analysis sometimes becomes essential as it impacts the company’s ability to scale, which is to say it gauges their product/market fit. Why wasn’t recent debutante Tripda forced to acquire the young, but promising Savaree was, to enter the local market?

Take a look: Innovate and Lead: Pakistani startups with brilliant ideas

Digital anthropology is still in its infancy, but it pays to cultivate an understanding of it before venturing into an online-enabled business, especially if the terrain is continually shifting. There are certain components that were missing, and some that could be augmented to help the startup sector see sustainable improvement in 2015:

1 - More government support, less government intervention

From the asinine Youtube ban – which prevents the less technically-adept from potentially gaining a free education – and billions wasted on unnecessary firewalls to the recent debacle in drafting policies for the establishment of a payments infrastructure, the takeaway is glaringly obvious:

The government may have the scope, but it clearly does not have the acumen to catapult Pakistan onto the global startup map.

A boon in public-private partnerships can ensure a ‘best of both worlds’ scenario which would undoubtedly have more impact. Complete corporate and income tax exemptions for startups would likely attract and create more entrepreneurs. Natural selection would then ensure that only the fit survive.

Know more: The entrepreneurship virus

This isn’t an absurd expectation; governments all over the world have recognised the significance and scope of startups, and the private sector in management and governance. One recent example is the new visa category created by the Canadian government to encourage entrepreneurship-based immigration. Successful provisioning is dependent on obtaining approval from the private sector in the form of funding.

2 - More exits

The start of the gold rush. More exits mean more success stories. To illustrate, in 2013, there were 82 technology exits in North America in excess of 100 million dollars with an average value of $494 million (Source: Towers Watson Quarterly Deal Performance Monitor).

Despite a few recent seed and Series A rounds from foreign, regional companies, this is a relatively alien phenomenon in Pakistan. Whether this is due to the prevalent security situation, or a lack of financial incentives or some other reason entirely, is debatable. However, it must change rapidly if the ecosystem is to flourish.

3 - More Incubators

The purpose of incubators is multi-dimensional and critical:

  • The intensified bootcamps they provide disseminate vital knowledge in an uneven timeframe, with mentoring from real-world advisors.

  • They quickly result in functional organisations with a specific objective and a refined product offering, and hiring capacity.

  • They provide concentrated access to a potential investor network, whether they are institutional or individual.

4 - Oversight

Pakistani society is littered with examples of mediocrity simply because the concept of accountability does not exist. To ensure that this lackadaisical gene doesn’t lay roots in our digital foundation, the concept of oversight must be introduced.

The Verisign logo ensures us it’s safe to use our credit card information on unknown sites. A Zagat sticker on the door of any eatery is a promise of quality. The Better Business Bureau (BBB) logo allays the user’s concerns about the legality of the business. Dunn & Bradstreet ratings provide confidence in extending credit to businesses. Consumer Reports advises on potential duds in the marketplace. The Unilever logo reassures consumers across the globe in the FMCG category. Logos referencing Tech Crunch, Time magazine and The Wall Street Journal provide social proof that the operation is not only legitimate, but has been reviewed and also been deemed newsworthy.

Explore: Promising entrepreneurial developments

All of the aforementioned examples lend credibility to the introduction and operations of a new enterprise. This element isn’t commonplace in the Pakistani sector yet.

Browsing local consumer interest groups on social networks yields thousands of consumer complaints and astonishing examples of malpractice. Yet for all the limited backlash, there is usually very little redress, whether it is an unjustifiable delay in shipment from an e-commerce outfit, or a blatant violation of a virtually non-existent health code in the restaurant industry.

Private entities have to provide an element of vigilance and a reassurance of quality, be it in the form of a vendor alliance, a central monitoring body, a ratings company or some other.

5 - Security

The success of a startup hinges upon many factors – funding, customers, affordable employees, patents, burn rate etc. – the most primitive of which is the ability to do whatever it has set out to do. If that rudimentary requirement becomes a luxury, there is no hope of the startup blossoming.

People simply cannot work together, meet potential partners, cofounders, employees and customers if they have no surety of being able to do so the next day. In a country still burdened by regular power outages, bureaucracy and corruption, if a team has to face unfettered street crime, public strikes and radical terrorism; there is no guarantee of uninterrupted continuity which directly means there can be no sustainable momentum. Quite simply put, there are many other countries vying for these individuals and Pakistan offers them no compelling reason to be chosen over others, except maybe for patriotism's sake.

Also read: Now is the right time to invest in Pakistan startups: report

There are a great many spirited individuals in this country, aspiring to tackle significant problems. This is not meant to dissuade them from their cause.

Rather, it is meant to instill a realisation in the rest of us; that the inevitable local digital revolution may represent the most significant opportunity in our lifetimes to reinvent ourselves, and this country.


Click here for Dawn.com's special coverage of the year 2014.