Stories from Pakistani Founders & Opportunities

Happy new year (its still January)

I spent the last 6 weeks of 2021 in Pakistan to decompress and wind up for a big project in 2022 (more to come). Between a lot of chai, fries & biryani, I got a look at the startup ecosystem on the inside.

I visited Karachi, Lahore, and Islamabad, and I met bright people building world-class companies. As you may already know, I'm long on Pakistan's tech opportunity (read more here) for the last 10 years, and the tip of the iceberg is now visible.

I've summarized the key themes and listed non-obvious opportunities for companies to create value for an ecosystem that will be even larger.

Founder quality is getting 10x better  

Five years ago, when I would meet a founder it would be something like this:

"Haan yaar, 2-3 larkay bithaey huay hain (I have 2-3 underlings that I'm guiding with my "vision"), app developers. The only problem is building the app, everything else is all sorted"

I eventually gave up meeting founders and spent more time with builders (thanks Jehan for hosting my talk 5 years back). I eventually met technical founders building stuff people want after a talk at Nest I/O and worked with them to help build their companies.

The founders I met on this trip would give anyone in the world a hard time, they're building and shipping at lightning pace, some are even shipping new features every week or two.

Talent is harder to come by

"The death of our business will be People"  - everyone

Talent is the #1 woe for every founder. I wrote about how The Best Engineers have the worst LinkedIn profiles, and that was a discovery problem. Pakistan has a straight-up supply shortage. It was so obvious that I considered starting a Lambda School focused on Pakistan. If you are building it specifically for Pakistan + tech, I'd love to talk since I care about this area, and have invested in similar companies like Hatchways.

Talent wars are happening for three reasons--all are problems/opportunities:

  1. We produce a few thousand quality engineers a year - an opportunity for Lambda School type product
  2. Experienced people move abroad, no mentorship for new joiners - an opportunity for Big Nerd Ranch Style boot camps  (if you can/want to run a React/Flutter boot camp, hit me up)
  3. People still move back mostly for personal reasons - an opportunity for a remote leadership hiring/contract firm

However, Talent is not an excuse. The best companies have started their own boot camp, filtering for potential, and then training people as they come. Examples are Arbisoft (open test), Cloudways (Linux Academy) and Remotebase (open hackathons).

Arbisoft's Yasser Bashir walked me through some of their People processes & tools. They reminded me of Shopify's tool stack which explains their all-star employee retention numbers.

Some founders have engineering/product situated outside Pakistan. I've now seen 10x engineers in Pakistan being offered $100k USD to live/work in Pakistan.

The top 1% will eventually be paid high wages, regardless of where they choose to live.

Founders are hiring engineers abroad to compete globally and outpace local competitors. For example, the bulk of TAG's engineering team is based in Berlin. I'm convinced they will outbuild the competition. Eventually, companies like TAG will establish engineering teams in Pakistan, but not until Product/Market risk has been eliminated.

There is, however, one aspect where most startups still look and feel different from the best early-stage startups I've seen elsewhere. The best early startups globally are run by technical founders.

I asked a lot of the founders if they were technical, and still wrote code. Only a few said yes to being technical, and even fewer could talk about when they last built anything (even for fun). It's difficult to build an engineering-driven startup if you're not technical.

It's also much easier to compete with non-technical startups. I'd bet that technical founder-led companies will eclipse the non-technical startups in the coming years.

Non-technical talent is also hard to find

Finding a marketing/people/ops leader who has scaled a consumer startup product to $1m ARR is also hard.

I helped 3-4 founders think through what their first head of people, marketing & analytics look like. The TLDR was to find people with potential and enable them to grow into leaders.

Opportunity for a remote leadership, Reforge style training program

A lot of founders are also at their first startup. It's a tough time being a founder, and I remember being dazed and confused for the most part – I realized there's an opportunity for forums & exec coaching.

I looked around for an exec coach for a company, and even tried to convince a friend to take on the role, but it's not an easy skill to find.

Compounding the talent situation is that founders are constantly having to "settle" for candidates at mid to senior positions vs. hiring bar raisers. Which lowers the overall quality bar for the company, and can be the death of a startup.

Opportunity: a tool for founders to maintain their dream team (their top 20-100 people they would hire from)  

Founders need to build a talent bench/pipeline of amazing people that they can work on for 3-6 months to convince them to join their company. Most everyone I met was underperforming in this area.

Ability to attract smarter investment dollars

The good news is every non-founder startup person in my network outside Pakistan either:

  1. wants to visit Pakistan
  2. wants to invest in Pakistani tech founders
  3. wants me to take their money to invest in Pakistani tech founders
side note: I'm not starting a fund
side note 2: If I did it would be called Biryani.vc

Many were reluctant to outsource to Pakistani software houses 5-7 years ago, let alone invest in a Pakistani startup. It shows that we're finally catching up.

The old guard is waking up

The drawing room chats this time were mostly about startups, their founders & their valuations. Mostly discussions about people and a lot less about ideas.

Lots of opinions around:

1. how founders don't understand the market

2. the need for stronger regulations (really)

3. how existing systems (regulators, banks, payments, ..) are "digitizing"

At least they don't call it "IT" anymore.

Every big corp has "digitization" on their agenda, and has a suit + sneakers type to run "digital innovation" labs that will produce nothing. And then they will buy some of these fast-growing startups that (don't) make it.

Founders leading the ecosystem boom

An ecosystem does not happen without amazing founders. This is an unordered list of the people I met, so you can work with them.

  1. Talal Ahmed Gondal (LinkedInTwitter) | (ex AWS, VC) is building TAG (YC). He's a powerhouse that will change digital banking for Pakistan.
  2. Umair Aslam (LinkedIn) and Shoaib Khan (LinkedIn)| (ex Telenor) - building Markaz - is building a marketplace for wholesale & social media reseller networks
  3. Saad Jangda (LinkedInTwitter) | (ex Careem, Snap) is building Bazaar - a B2B platform for small merchants
  4. Babar Khan (LinkedInTwitter) | (ex ServiceX, Humbike) and Ismail Khan (LinkedInTwitter) | (ex Humbike, Harvard)  - building Tajir (YC) an online retail network
  5. Hasib Malik (LinkedIn)| (ex Flux, Tez) is building Creditbook - building a digital ledger for small merchants
  6. Salman Gul (LinkedInTwitter) and Muhammad Saad (LinkedInTwitter) - building Bridgelinx a freight marketplace
  7. Yasser Bashir (LinkedInTwitter) is building Arbisoft - software agency with nearly 800 team members and amazing employee retention
  8. Faizan Siddiqi (LinkedInTwitter) & Raza Matin (LinkedInTwitter) are building Brandverse/Chikoo e-commerce enablement platform
  9. Rooshan Aziz (LinkedInTwitter) is building Maqsad - digital learning mobile apps
  10. Asma Salman Omer (LinkedInTwitter) is building Marham - a platform to find healthcare providers
  11. Aaqib Gadit (LinkedInTwitter) is building Cloudways - managed cloud hosting platform
  12. Uzair Gadit (LinkedIn) is building PureVPN - consumer & business cyber security
  13. Umair Gadit (LinkedInTwitter) is building Savyour - lifestyle cashback app
  14. Ahmed Ayub (LinkedInTwitter) is building Airlift - quick commerce (met earlier in the year)
  15. Farooq Tirmizi (LinkedInTwitter) is building Elphinstone - 401k style retirement plans for the Pakistani market

If you are looking for a career change this year, go work with any of them. It will be worth it.

Apologies if I missed anyone, and this is a non-exhaustive list. Disclosure: I've 'advised' some of these companies over the years.

one more thing, the product experience I enjoyed most was Bykea, (bike hailing), nothing like zipping through traffic on a CD70 motorbike. Only wish is that they add helmets for passengers. Did not meet Muneeb due to scheduling issues, but his product is amazing.

Still early days, and a long road ahead

The VC ecosystem is growing thanks to people like Aatif Awan at Indus Valley Capital & Ali Mukhtar at Fatima Gobi Ventures. A few years ago, we didn't have any Series A/B companies, and now we're approaching the next barrier which is the growth stage. I'm confident we will cross that bridge as well with persistence.

I'm confident because we're tracking Indonesia, and as a matter of fact, we're actually growing faster. Indonesia has seen a massive increase of growth capital deployed into leading startups like KoinWorks (just closed a $108M Series C last week) and Zenlayer (recently closed its Series C financing round with $62 million.) by country-focused growth funds like AC Ventures and MDI Ventures over the last five years.

Community organizers like Jehan Ara at Katalyst Labs Arzish Azam at Ejad Labs and incubator turned VCs like Kalsoom Lakhani's i2i Ventures are training entrepreneurs to build the next big thing. The new kid on the block is Aly Fahd's Paklaunch, which has grown into a vibrant community.

I recently joined a webinar with them on YC founders alongside Adeel Raza of Unlayer & Naveen Qureshi of Sablecard. Youtube video below.

Webinar on Pakistani YC founders by Paklaunch.com

The number of Pakistani founder-led companies in YCombinator's class of 2022 has never been higher, which is a positive sign.

Many startups will fail, and only a few will succeed. The ones that win, that survive the incumbents' pressure will create phenomenal value over the coming years.

I'm excited about that.

Thanks to everyone mentioned for reading early versions of this post. If you are a technical (would-be) founder searching for answers in the wilderness, please reach out to my first name at this domain. I won't have answers, but (maybe) some good questions and some stories.

Show Comments