Why aren’t they doing this in Pakistan?

April 15, 2009 at 11:24 pm 14 comments

I have a question to put to IDG Ventures and Microsoft. I read an article a few weeks ago which stated that IDG Ventures India was partnering up with Microsoft India on the BizSpark program that was also launched in Karachi and Lahore recently. But there is difference in the two programs – a MAJOR difference. My question is why. What am I ranting about? I will tell you.

The Microsoft BizSpark program that has been launched in Pakistan entitles startups to some free Microsoft software and mentoring and coaching from partners which include P@SHA, TiE and MITEF and TAN.

Here is a detailed description of what they are offering in India according to The Financial Express, Bangalore,

In a bid to provide access to entrepreneurial, technology and financial resources in one place to accelerate the success of high-potential technology startups, IDG Ventures India and Microsoft India announced an ‘Early Stage Funding Program’. This partnership will offer dual benefit to the startups registering for Microsoft BizSpark wherein they will get a funding of up to 25 crore rupees by IDG Ventures and access to Microsoft suite including the latest tools and technologies at no cost.

The program is open to technology companies that are under three years old, and whose annual revenues are less than Rs 5 crore (US D 1 million). Companies meeting these eligibility criteria will be offered access to development software through Microsoft’s BizSpark program; and asked to send their business plans to IDG Ventures for evaluation. Startups that meet the investment criteria of the VC will be provided access to funding of up to Rs 25 crore.

According to the article, this has already impacted about 200 startups in India. Microsoft and IDG Ventures believe that in the current difficult scenario, this support in terms of development software, the right amount of funding and hand-holding will make a real difference between success and failure of young technology companies. Both organisations are showing their commitment to India and to innovation in the Indian ICT sector by investing heavily at a time that this help is really needed. They intend to evaluate upto a thousand companies. Wow! Yes that certainly shows real commitment. Good for the Indian startup scene. I wish them luck.

However, my question to Microsoft and IDG Ventures is: Why not Pakistan? We have some wonderful startups, no dearth of talent, a knowledge of cutting edge technologies and a stream of proven successes. So why not invest in innovation here? Why not really support the startup scene in Pakistan by committing a percentage of the amount that is being invested in Indian startups? I would love an answer – and if there’s action, that would be even better!

Sales offices are a great way to initiate a presence in a country, but isn’t it about time for multinational IT companies to show significant commitment to Pakistan by starting research and development facilities, by bringing work here and by investing in innovation in this country? Shouldn’t we raise our voices and stand up and be counted? It is about time.

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14 Comments Add your own

  • 1. Obaid Ahmed  |  April 15, 2009 at 11:36 pm

    I agree with you that we should have these programs in Pakistan as well but I can understand why MS and the VC are interested in investing in India rather than Pakistan.

    We are much more unstable than India and these days that is very obvious. These venture funds will have a hard sell if they move to Pakistan. I think it will take sometime for them to realize the true potential.

    We are way behind India in terms of “usable web”.

    Rather than just raising the voice, I think we need to raise our game. We need to get Pakistani VC’s (I am sure ppl from sillicon valley experience can get that running) for Pakistani companies. Lets help ourselves first.

    I wouldn’t pin my hopes on getting IDG Ventures to set anything in Pakistan in coming year or two. We have alot to prove before we get there.

    Just my two cents.

    Reply
  • 2. Jehan  |  April 15, 2009 at 11:48 pm

    @Obaid I totally agree that we should continue to raise our game. However, having said that, I think we sometimes tend to underestimate the innovation and talent that exists in our own country.

    We are not trying to compete with India. They are larger than we are and have a head start. However, we have some great companies operating all over Pakistan developing cutting edge technology and marketing it successfully all over the world. They have done it without anyone’s help. Even our diaspora haven’t been active until very recently.

    As for instability, what about Ireland and Israel whose tech scene flourished despite the instability that existed?

    Don’t misunderstand what I am saying. We should never pin our hopes on the outside world. We should help ourselves. However, we should also raise questions.

    Reply
  • 3. Syed Talha Izhar  |  April 15, 2009 at 11:50 pm

    I agree with Jehan and Obaid.

    Its high time Pakistanis in Silicon Valley should come up with ideas like these. Maybe an incubator setup by anyone from the valley funded by a VC would do a lot.

    Reply
  • 4. Why aren’t they doing this in Pakistan? | Tea Break  |  April 16, 2009 at 12:31 am

    […] This cup of tea was served by: In the Line of Wire […]

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  • Why aren’t they doing this in Pakistan?…

    I have a question to put to IDG Ventures and Microsoft. I rea …

    Reply
  • 6. Asim  |  April 16, 2009 at 1:14 am

    Good post. However, I think instead of asking other VCs to bring in their investments in Pakistan – we should first create a source of attraction for Pakistani VCs and entrepreneurs to invest in Pakistan rather then elsewhere. For example Ajaz Ahmed cofounder of Freeserve, etc. and there are tons of other Pakistani entrepreneurs and VCs inside and outside the country.

    Everybody acknowledges Pakistan has talent. But there are some (unknown?) ground realities that repel these investors. I was working in a Software company in Karachi who started an incubation program for their employees and even allowed them to work on their projects during work hours. That was very well received and within months everyone was bursting with ideas that they wanted to try with guidance from the Business and legal departments.

    Anyhow, they were half way setting up a kick-ass innovative idea and even had captured clients abroad for it. It was all looking really good but, then the BB incident happens in Dec and the clients back off 4m their agreement foreseeing a possible instability. The newly born idea had to close down.

    Reply
  • 7. Owais  |  April 16, 2009 at 8:27 am

    There are factors like sovereign risk, market conditions, law and order etc. Capital is always looking for an optimal return/risk trade off and Pakistan honestly is not a good option at the moment.

    I am sure once we have Taliban Sharia across the country, we will be flooded by VC money. (For those who need to be reminded – this is sarcasm).

    Reply
  • 8. Deadman  |  April 16, 2009 at 8:45 am

    Bring stability in this country everything will start working.

    Reply
  • 9. Jehan  |  April 16, 2009 at 9:13 am

    Whereas there is no question that stability is badly needed in this country, that we need to get our act together for our own sakes, not for anyone elses, permit me to be sarcastic too.

    Does this stop companies from coming here and selling to us? Does it stop them from converting us to their technologies? Do they refrain from taking our hard earned money? No none of that happens. Business people continue to see this as a huge market. Whether it be telcos, technology companies, oil companies, FMCGs etc, we are fair game. So when they are taking our money, is it too much to ask that they invest some of it back? Can we, for once, ask them to “do more”?

    No-one answered the question regarding investment in Israel and Ireland … they have been unstable and volatile for a long long time.

    Reply
  • 10. DesiBackToDesh  |  April 16, 2009 at 12:14 pm

    Gents and Jehan

    I think there are three separate issues here.

    The first is stability

    a) Take a look at Thailand and Isreal. Are they really that different from us right now or have been that different from us over the last 20 years in terms of stability. Thailand has had a muslim insurgency problem in the south for God know how long and has gone through more military takeovers in a 10 year period than any other nation.

    b) Yes we have an image issue and it is a perception issue. Has Islamabad really been overun by the Taliban or will be conquered by them in the next six months. Do you really believe that?

    c) If we were a nation of revolutionaries would we have suffered through 40 years of dictatorship. And if these “exotic” tribals are so brave and fearless and invincible why do they have a history of being overrun for the last 3000 years by every single invader that decided to come across the border. Do you really think this rag tag army funded by money flowing from across the border will actually stay together once that flow stops? Or will stand and fight when real men show up? Swat, FATA and Baluchistan are all about money, not religion. Fix the trail and the problem will go away. When an ignorant media hack talks about it on Fox or NYT, he can claim ignorance. But a Pakistani raised on the history of this region can’t pull that excuse.

    d) If our analysis for self destruction was so spot on, the rupee would be trading at 120 to a dollar right now. Is it now? If our understanding of the economy of this country was so accurate Pakistan should have defaulted on its debt in February. Did we? Trends are just that. Trends. Same is the case with Panics. Unfortunately we are a nation of worriers with too much time on our hands. Our national movie should be Chicken Little.

    The second is choice.

    a) IDG decision to not invest here in Pakistan, is IDG’s decision to not invest and their loss. So be it. Everyone else who is put money into this country at any point in time has made a bundle. IDG doesn’t want to make a bundle, don’t force them.

    b) But take a look at who is putting their hard cash into this country. The Chinese are building a Chinese only complex in Isloo dedicated and targeted towards the influx of Chinese investors and companies through Isloo. IFC today bought a stake in Packages and has been agressively on the look out for putting venture funding to work across a number of sectors for the last 3 years. Yes you read it right. Not aid, not loan, not grants, but venture funding. You can’t keep Ken Morse (MIT E-Labs, 3-Com) out of the country for more than 6 months and every time he comes in here he is ready to sign a check. Would you rather have these individuals or the losers from IDG. You decide.

    The third and final is risk to reward

    a) I have said this before, I will say this again. Domestic Demand, Energy and Food security, Demographics and Growth. The next 100 years will be driven by these four factors. Don’t take my word for it, just do independent research on our ranking as a nation across these four drivers.

    b) Do the research and you will understand why the Chinese have alway been smarter investors than the rest of the planet.

    I am not an ostrich, a zealot or a nationalist. Neither am I delusional or in denial. I am just looking beyond the great Game that is being played right now in our backyard. You need to do the same.

    Reply
  • 11. The Taliban bogey… | Desi Back to desh  |  April 16, 2009 at 2:48 pm

    […] came Jehan’s post. Then came the same old responses. And then came the always eloquent, objective, and always […]

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  • 12. Ritesh Banglani  |  April 20, 2009 at 9:30 am

    Jehan,

    Thanks for posting this. I represent IDG Ventures India, and through your blog I discovered the vibrant technology ecosystem in Pakistan.

    Currently our fund is focused only on India-based investments, and we do not invest in companies based outside the country. However, I am sure that with your combined efforts you will be able to raise the profile of technology startups in Pakistan, and attract venture capital from across the globe.

    Best wishes,
    Ritesh Banglani
    IDG Ventures India

    Reply
  • 13. Jehan  |  April 20, 2009 at 9:59 am

    Thank you for dropping in Ritesh. I hope that one day soon your fund will look beyond india’s borders and consider investing in exciting technology companies in Pakistan. Opportunities certainly exist for those who want to get in on the ground floor of startups and early stage companies that are headed for greatness.

    Unfortunately until now most VC money has been funneled into companies that have a presence in the US or other markets
    so companies that can leverage the pakistan economy by focusing on this market are effectively left hampered. However, I do see that changing as there is an increasing realization that the domestic market is an exciting place to be.

    Reply
  • 14. Web Designing Karachi  |  September 9, 2010 at 9:09 am

    Nice information many thanks to the author It is incomprehensible to me now but in general the usefulness and significance is overwhelming. Thanks again and good luck!

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