By Shafiq Ul Hasan Siddiqui
Pakistan is the 5th most populous nation, globally. More than 60% of Pakistan’s population comprises youth. Keeping in view these statistics, Pakistan has a huge potential to showcase young talent and creative ideas that can attract global attention. Unfortunately, there are not enough avenues that are harnessing the potential of the youth.
The startup culture that was a buzzword, back in 2011 and onwards, Pakistan faced a lot of challenges and hardships. Many startups faced failures and there were numerous elements behind them. Many young entrepreneurs started with zeal, enthusiasm, and next-level energy but unfortunately, most of them failed in executing their ideas.
On the flip side, there are also a few startups that followed a focused path and now they are growing exponentially with every passing year. Let’s discover those challenges that limit startups in Pakistan to grow and flourish.
It holds true that it is not easy to break cultural and societal norms. One of the most common challenges that any entrepreneur faces is that families are not usually supportive. Parents want their kids to start a career as soon they complete their professional studies. Youngsters are not given the chance to explore their hidden skills. This is one of the reasons why many people in Pakistan start working at an early age and soon become disgruntled with their lives. Unless support from home is not provided to the young guns of the nation, they will not be able to embrace the confidence that is required to win professional battles in the corporate world. Parents should always empower their kids.
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Lack of financial support is a serious concern. For any startup, the availability of a regular stream of finance is the key. There are cases where promising startups failed terribly because they ran out of cash. According to CB Insights, based on an analysis of 101 startups, it has been witnessed that more than 29% of startups fail due to lack of funds. The unavailability of angel investors and financial support systems are things that make it difficult for entrepreneurs to breathe in the extensive competitive environment. To run a business, besides capital infrastructure and administrative assistance are other significant elements that help businesses to embrace growth. Without a continuous administrative and financial support system, startups die out very soon and are sidelined in the practical world. The corporate sector can help entrepreneurs in guiding them on the correct path.
Unfortunately, in Pakistan, we do not come across people who are interested in carrying out research and development. This is one of the major challenges that any startup or entrepreneur goes through in Pakistan. In Pakistan, we mostly study researches that have been carried out for the international market. Startups that do not invest in research and development are bound to fail in the professional world. R&D not only helps in delivering innovative solutions but also helps in creating a connection with the target audience resulting in the growth of the business. It is often misconceived that R&D requires a mammoth investment or deep pockets, knowledge pools can always help. Universities, organizations and government institutes have knowledge pools that can help in understanding the market any startup is planning to penetrate.
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It has been observed that most startups in Pakistan are initiated by youngsters who lack practical experience. Such startups mostly failed and could not add value by any means. Entrepreneurs in Pakistan should be trained either on the job or through entrepreneurial courses to improve the success rate of startups. Inexperienced entrepreneurs cannot help in developing the economies of the state. This challenge can be overcome by engaging seasoned resources who have experience in relevant industries and fields. 14% of startups fail because they lack marketing expertise.
Having a balanced skillset is very significant for every individual. Professionals who possess managerial and technical skillsets are often found succeeding in their careers. Similarly, startups also need a balanced skillset of technical and managerial skills.
Did you know 82% of startups fail due to a lack of managerial skills in 2019? Professionals who have engineering backgrounds are good with technical skills but are not as effective in managing the management side of the business. This is a challenge that most of the startups in Pakistan go through. Hence, startups that have a balanced skillset in the team are more likely to grow and sustain in the market. Entrepreneurs in Pakistan should have a team that has both skillsets to achieve organizational goals.
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Startups in Pakistan are mostly formulated by engaging like-minded people and this, at times, becomes a little too challenging. When you run a business, you require a proper managerial system to not only manage the staff or team but also need relevant talent from the market. 23% of startups, worldwide, fail because of team problems. Entrepreneurs in Pakistan must have a pool of “right man on the right job”, to increase the effectiveness of the business. Startups that have a human resource support system work better and produce greater results as compared to those who lack it.
In Pakistan, every year many startups kick-off but most of them fail to have sustainability. One of the major challenges that startups in Pakistan experience are that they lack innovation. A revolutionary idea can change the entire state of the market. We have seen examples that have stood out and succeeded in growing exponentially. With the guidance and extensive evaluation of the million-dollar idea, entrepreneurs can achieve their desired goals through their startups.
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If we compare the current trend with the past we can easily come up to a conclusion that in the last 10 years there is an increase in women-led startups because of various factors. Women are now relatively participating more in the economic development of the country. They are now studying more and also coming up with ideas to run startups that add value to society.
From a managerial point of view, it is observed that women are better managers and are focused. But still, there is room for improvement in Pakistan, as women-led startups are far and few. Some of which startups are flourishing and generating huge revenues as well. Pakistan’s stands at 153 out of a possible 156 countries on the Global Gender Gap Index 2021.
These are just a few challenges that startups in Pakistan face regularly. We need incubation centers and mentors that provide entrepreneurs with training, support and services that can help them in prospering. Corporates should fill this gap on a larger level so that budding entrepreneurs can run prosperous startups. Corporates have teams that can guide and mentor entrepreneurs. Besides that, there are many other facilities that corporates can provide to entrepreneurs to run their startups effectively and efficiently.
There are a few setups and programs that are initiated by organizations in Pakistan, where startups are provided with a variety of services but they are far and few. For instance, recently Jaffer Business Systems has come up with a complete range of business governance systems that are beneficial for startups, where startups can have technical, human resource and accommodation support besides many other things. NIC Karachi and Nest I/O are also playing a significant role in empowering startups. Such initiatives are needed to bring a positive change in the economic growth of Pakistan. Startups in Pakistan have a brighter future because we have an extensive pool of talented youngsters ready to challenge the norms of the business world.
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For a prosperous Pakistan, the role of corporate businesses is very significant. Corporates can take the economic growth and development of Pakistan to the next level by providing assistance and guidance to startups. The challenges that are faced by entrepreneurs and startups in Pakistan can be easily overcome by creating a strategic fit with corporate businesses.
About the Author
Shafiq Ul Hasan Siddiqui is a Digital PR and Marketing Professional. He has worked in startups and loves to write on advertising, digital marketing, startup culture and performance marketing.
