5 Basic Business Mistakes that Pakistani Startups Should Avoid

For a young entrepreneur to launch their first startup is like holding the stars in their hands. Suddenly, you feel like (in the words of Jack Dawson) ‘ The King of the World.’ That initial zest for conquering the business world gets you rushing into this rat race where you’re all about making profits, getting your name out there and enjoying the merits of media attention.  Somehow, all this attention and aspirations shifts you away from the focus of running a smooth business. And then, before you know it, one day you realize, your business is off the radar.

Nearly 90% Startups Fail by the Third Year of Business

According to a recent study by Allmand Law, more than 90% of all startups fail. Now many people may not agree with this figure, considering the estimated 25% rise in Pakistani entrepreneurship over the past few years. But it should be noted that though the figure quoted is not directed at the Pakistani market, it still reflects the general mistakes and misjudgments that have caused failure for Pakistani startups. Keeping this in mind, we need to really analyze the common flaws that have made it difficult for our startups to grow into full-fledged businesses.  Some basic mistakes you could avoid are:

1. Completely Neglecting Needs Analysis

The initiation of any venture depends upon the first crucial activity – Needs Analysis, which, for some odd reason is completely neglected by entrepreneurs. Most of the Needs Analysis is done within a limited circle of friends or family. No formal surveys, no focused groups, no testing and experiments are carried out, which is why, in the long run, the product/service ends up having no scalability and the owners are at lost. You cannot start a business on a whim. You need to make sure that your idea is a product in demand, that it can be scaled on an international level if needed and it is something that solves a common problem or makes life easier for people.

2. Operating on Impulse & Ego Rather than on Practical Methods

It’s not an understatement to claim that our youth are passionate people who would find living at the edge a much more enticing than living within safe harbors. But, fantasies aside, when you are nurturing a business, you need to know the very basics of planning, financing, market growth, market analysis and have a customer-centric approach. Just because you have a fantastic idea, doesn’t mean it will work. You need to see where you will be in the next five years. What would you do with increasing competition? How would you cater to the audience? It takes perseverance, dedicated effort, experience and sound knowledge to run a startup successfully after its third year.

3. Focusing Too Much on Self-Promotion rather than On Customer Needs

We can’t stress this enough. It’s natural for startup owner/s to get so deeply involved in their service/product that they lose focus of their main source of income – the customers. In this fiercely competitive environment, if you keep thinking about how to land yourself the next TV interview, the next media publication, the next BIG investor, you will lose grip on the business process itself.

Didn’t you launch that app to help people? Why aren’t you focused on making it more efficient? Emotional needs for validation, accreditation and acknowledgment ruins the very structure of a business. If you want promotion, work hard on pleasing your customers, you will be mesmerized with the amount of appreciation and acknowledgment you get without wasting a dime on advertising.

4. Throwing Out Tons of Ideas, Getting Bored and Moving to the Next

Industry experts have pointed out a fact that Pakistan is packed with serial entrepreneurs – young people who have tons of ideas, execute at least half of them, get bored when the initial zest dies down and start finding for the next idea to grow upon. In order to grow a business successfully, you need to stay focused on ONE product and a plethora of services/products. You can’t own a blog, create an app, launch a service website all at the same time. Take it slow. Take it one day at a time.

5. Poor Management of Team Members and Finance

Some startups over-hire, some don’t want to hire at all, or some hire the wrong people. When starting a business, you need to clearly lay down a business plan, indicating the number of people you need, the roles you want them to work on and the budget allocated. Unfortunately, most of entrepreneurs have no clue about human resource management and that alone pulls their business down. They will be unnecessarily controlling, imposing and micro-managing, which in turn takes away the time that could have been wisely spent in perfecting the product/service. Most will also end up misusing investment amounts because they don’t believe in hiring financial experts. When the very basic tenets of running a business is not followed, it’s hardly a surprise that businesses fail.

Young entrepreneurs are highly influenced by big names of the industry, but what they fail to realize is that most of these names formed a business in a world that wasn’t a global village, that wasn’t competitive and that wasn’t run by audience preference. In the current scenario, where trends are constantly changing, markets are constantly evolving, being idealistic is not helpful. We need to take practical steps to make sure the 25% rise of business turns into at least a 70% success if not higher.


  • Saad

    you have repeated your sentences in your 3rd point. Please check and correct that. Other than that nice article. if you had given solutions to each problem, that could have helped many startups.

    • Farah Kim

      Hi Saad, thankyou for pointing out the error and for appreciating the article. The solutions is avoiding the mistake itself. For example in the first point, if you’re not doing a needs analysis, you ought to do it. How? Surveys, research groups etc have been mentioned. Any other suggestion would be highly appreciated. Thanks once again.

  • kaki

    Very informational article Farah. Keep it up! and yes, like @Saad:disqus suggested, your ideas on solving these issues could surely benefit a lot of people. JazakAllah.

  • Perfect piece of article. It will be helpful

  • Ahmad

    i wish it had been more specific to the Pakistani market, else it looks a copy and paste.