Part 3 of a three-part report
By BISMA AHMAD
Global Business Journalism reporter
In recent years, Pakistan has seen a remarkable surge in young entrepreneurs taking the country's startup scene by storm. Driven by a desire to create something innovative and positively impact their communities, these enterprising young minds are defying the odds and changing the face of business in Pakistan.
One of these entrepreneurs is Muhammed Bukhari, the cofounder of Farmdar, an agriculture-based startup focused on building remote sensing and artificial intelligence-based products. Bukhari said that after years of working in corporations worldwide, he wanted to do something positive for his country in agriculture.
"I had a family background in farming," he added.
Like many millennials, Bukhari had observed Pakistan's problems throughout his formative years. When his startup implemented his idea of precision farming on his family farms, he increased yield by up to 20% and saved up to 50% of water resources. Therefore, he decided to expand and build it as a proper startup based in Pakistan. In its first "seeding round" of funding in 2022, Farmdar was able to raise $1.3 million with help of Indus Valley Capital Venture.
"It is rewarding to see the large-scale impact we can make," he added.
Farmdar is now empowering small farmers and helping to build a more sustainable and equitable agricultural system in Pakistan. And it is part of a wave of technology-driven startups that is altering the future trajectory of the Pakistani economy.
McKinsey & Company concluded that with a population of over 200 million – and one of the world's youngest populations – Pakistan has a vast pool of talent and potential waiting to be tapped. Furthermore, a growing number of young adults are turning to entrepreneurship. Business analysts say that these millennials target problems they can relate to in society and then turn them into startups.
Another promising startup, Nearpeer, was launched in 2016 by a group of young entrepreneurs, including Shahrukh Swati. This startup provides students with access to high-quality educational content and resources to prepare them for university entrance exams. It has quickly become a popular choice for students across Pakistan.
For Swati, studying at Lahore University of Management and Sciences was only possible with a scholarship and other resources. Coming from a middle-income family, he knew that his career path would have been different if it was not for a high quality education. He realized that many students in Pakistan need an opportunity to access the best courses and learn about available resources. By starting a new enterprise, he wanted to create a positive impact on Pakistani society by improving educational opportunities for non-elites.
"What can I do in my capacity to keep the ball rolling?" Swati recalls asking himself as he decided to help less-privileged students in Pakistan.
So while his classmates traveled or slept, he and his team would devote a few extra hours to work on their startup to provide educational resources to children for a better tomorrow.
Swati and Bukhari agree that what inspires them to keep doing this is seeing how their ideas' by-products were "employment generation" and sustainable development.
The founders of Nearpeer recognized the challenges students face in accessing quality education in Pakistan, particularly those in remote or underprivileged areas. Through their platform, they aim to bridge the gap and provide students with the tools they need to succeed. By leveraging technology and creating a dynamic online learning experience, Nearpeer is helping to level the playing field for students and expand educational opportunities in Pakistan.
"I came from the background where I had seen financial struggles," mentioned Swati. "So I wanted to break the chains of poverty."
His formula for success includes a good startup model, the right strategies and a talented pool of like-minded people. In this case, the chances of you getting successful in your startup are very high, especially in a country like Pakistan, which is not the best host for tech companies.
Pakistan ranks 109th out of 119 on the competitive talent index, as reported by McKinsey & Company. This talent deficit creates an opportunity for highly educated millennials in Pakistan. Every year, approximately 290,000 students graduate from universities, and an increasing number are turning to entrepreneurship.
Still, it is hard for startups to find the right team due to a lack of effective platforms for recruitment and networking. However, Swati added that once you find the right pool of people, you can move forward quickly with your startup.
"Rather than experience, we look for talented individuals who have the hunger to do something for society," said Bukhari.
However, according to Fahad Aziz, a cofounder of Camrege, there are a lot of "roadblocks" in the startup journey. But persistence is a vital trait for entrepreneurs, he noted: One must not let themselves be discouraged by one bad episode.
"People often celebrate failures of their startups," noted Swati, because they see opportunities amid that chaos.
A report by McKinsey stated that there have been 720 startups since 2010, out of which 67% have survived. The startup arena might look attractive, but if you look deeper, it all comes at a cost because young entrepreneurs sometimes need to gain proper knowledge of markets, business models, and 10-year plans for their companies.
"You are fighting this battle by yourself," he added.
Swati never thought that his venture would turn into a successful company. But then, he said, most entrepreneurs start their journey with silly ideas and excitement. He quoted an interview of Facebook founder Mark Zuckerberg, in which a young Zuckerberg told a reporter how one day he would open a company whose head office would be in Silicon Valley.
Millennials prefer to join startups because they want to work where their efforts can make a "social or economic impact,” added Bukhari. People who like to play safe often choose to work in corporations. This means they no longer desire to be associated with more prominent names in the corporate arena. They want to be known for their work and their social contribution to society.
The unpredictable reality of layoffs
While startups may offer a more stimulating and enjoyable work environment, risks are ever-present. The post-pandemic period has seen a contraction in tech sector hiring, but these Pakistani entrepreneurs said recent layoffs had nothing significant to do with them being "startups."
Swati stated that companies like Netflix, Amazon and Byjuice, boosted hiring during the COVID-19 pandemic, and when the recession came after the pandemic, they fired them.
"Massive layoffs were of those extra resources hired in the pandemic," he added. "There was an excess demand."
On tech industry outlier, Apple, did not announce massive layoffs because it did not ramp up hiring during the pandemic.
Hiring and firing is what startup culture is about. These entrepreneurs say they hope to learn from their mistakes, sometimes at the cost of their employees. That is why Aziz and Bukhari both emphasized how vital it is for a founder to have previous corporate experience. Aziz explained it helps them in avoiding bigger mistakes when building their teams and managing finances.
Swati says Pakistan's new startup executives have been informed beforehand about how challenging the startup ecosystem is.
"As you desire high returns in a smaller amount of time, it does make startup culture riskier," agreed Swati.
Millennials choose mental health as a priority
For many millennials, the traditional 9-to-5 job doesn't cut it anymore. Instead, they're turning to startups for a more soulful and flexible career path. Still, stress is always present.
Bukhari stated that mental health is a high priority in his startup. As the work routine can be very stressful at times, Farmdar tries to talk about mental health concerns as much as they can.
"I was mentally exhausted in my previous company," said Rija Aleem, an employee in a Pakistan-based startup.
She said she likes to enjoy her work. That is why when startups take such steps, corporations are often forced to change their workload policies for their employees.
This trend of putting mental health a priority became more popular after the pandemic. Rizvi used the term "quiet quitting" when the employees felt they weren't being appreciated in the workplace. Some are choosing to quietly move to a more meaningful job than feel stress about being trapped in a high-stress, dead-end position.
This journey to join a startup is not easy in Pakistan, as it comes with its own set of socio-cultural challenges. Parents historically have discouraged children from being entrepreneurs because of the risk of failure. Sana Shah, a startup founder from Pakistan, told McKinsey that middle-class parents often advise their children to choose a job in a well renowned company rather than a newly established startup.
Fu Boming, one of the founders of Noilbox, a startup based in Beijing, said that if you choose the same path as other graduates, it is viewed as more acceptable and stable. However, if you decide to become an entrepreneur, it is “riskier” and people begin to question your choice.
That risk factor often makes it difficult for founders to find the right people for their company. But things are changing. In today's Pakistan, more employees like Rija and Lodhi prefer working in startups because of the more enjoyable and less stressful work culture.
“Social impact attracts people to come and work for startups,” commented Aziz.
These days, Pakistan's millennial generation wants to part of something bigger. And that keeps co-founders like Bukhari motivated.
“Success for me is building this exceptional team around me,” he said.