The Middle East's startup scene: a new world full of promise
With a huge potential common market of millions in the Arabic world, and a host of wealthy local...
Nearly a quarter of Pakistani youth want to set up their own business, according to UN figures. But how is the country – and its most successful firms – aiding this entrepreneurial revolution?
Pakistan is likely not the first country you would associate with a thriving startup scene. A volatile political and security climate and major regulatory hurdles have historically made outsiders think twice about investing in the nation. Yet in 2016, the Pakistan Stock Exchange was declared Asia’s best-performing equity market – helping to nurture a new breed of ambitious startups.
Technological, demographic and other factors have also become increasingly favourable. Mobile broadband coverage reached 75 per cent of citizens by mid-2016 and will be accessed by a third of the population by 2020, according to the GSMA. A 2016 report by i2i also claimed that 70 per cent of Pakistan’s 180 million-strong population is under the age of 30.
“This means that Pakistan is a country with a very young demographic that is increasingly connected, and there is a great opportunity to strengthen their own capacity to solve local issues, particularly through the use of technology,” it argued.
These aren’t the only factors helping the Pakistani startup revolution. The i2i report also points to:
– Increased migration, exposing citizens to innovations and developments in other countries and promoting exchanges between markets.
– An increase in local entrepreneur leaders – many of whom have had exposure abroad – mentoring and co-investing in startups.
– More formalised angel investor activity.
– An increasingly engaged Pakistani diaspora, contributing $19.3 billion in remittances sent back home in 2015.
– Business associations like the Organization of Pakistani Entrepreneurs (OPEN) launching local chapters.
– An increase in local support organisations and activity from incubators and accelerators like i2i and Plan9/PlanX.
Entrepreneurship has become even more “localised and indigenised” in recent times, according to i2i, with new projects launched by Pakistanis on the ground. Some have even found success on a wider scale. Pakistan’s largest music streaming platform, Patari, placed second at the World Startup Cup 2016. Also last year, six startups nurtured by PlanX travelled to the US to take part in the ATX+PAK Exchange Program.
Here are some other success stories to come out of the country recently:
Zameen: An online property portal valued at a whopping $83 million – making it potentially Pakistan’s most valuable startup.
Slide: An Android app that rewards users for clicking on ads or reading content. It claims it saw five million downloads in a year and has bagged over $4 million in funding. This will help its expansion into the fast-growing Middle East market, which is experiencing its own startup boom as local firms embrace cloud technologies in a big way.
MangoBaaz: Described as the “Mashable of Pakistan” – an online news and entertainment channel for the country’s young netizens.
Home Foodies: A platform enabling housewives to set up their own homegrown food businesses.
Beauty Hooked: Allows users to find and book local beauty salons, where they can benefit from exclusive offers and discounts.
In many ways, the key to launching a successful startup is no different wherever you are in the world – you need to spot that all-important gap in the market and pursue it with determination and persistence.
Lorraine Warren, professor of innovation and entrepreneurship at Massey University, has five top tips for getting ahead:
1. Keep your business model fluid for as long as possible to keep strategic options open.
2. Develop and promote a strong vision.
3. Be flexible – the digital economy moves fast.
4. Encourage experimentation within the company.
5. Hone foresight and ‘horizon sensing’ so you know when to incorporate new ideas.
That’s not all. Mudassir Sheikha, co-founder of ride-hailing app Careem, urges entrepreneurs to think big from day one. And he certainly understands the meaning of success – Careem was recently valued at $1 billion.
“Sure you can open a retail store, but it’s going to be difficult to make it into a large business – a billion-dollar business,” Sheikha said in a keynote at Momentum in February. “The first thing you have to target is a big problem and a big opportunity.”
Also important is getting the organisational culture right from day one, and ensuring it is communicated to every member of staff. Sheikha added that a successful startup is impossible to develop without the right team.
“You can have an amazing idea, but if you don’t have the right talent to execute then your plans are utterly useless,” he said.
Pakistan’s next generation of go-getting entrepreneurs certainly face several challenges. Longstanding regulatory roadblocks, as well as infrastructure issues, security concerns and an apparent lack of government leadership are all hurdles to overcome. But a growing number of successful homegrown startups are already blazing the trail for the next generation.