STEP: What is the Saif Center of Innovation and what was your rationale behind establishing it?

Umar Saif: It is common in universities like MIT for professors to be involved in startups. Indeed, companies like Akamai, RSA, and 3Com were all started by MIT professors and have gone on to generate billions of dollars in annual revenues.

When I moved to Pakistan around five years ago, I found that, with some effort, I could carry on doing good research, but starting a high-tech venture seemed quite out of reach. Basically, there was no eco-system for a true startup: a small company focused on an innovative product or business model that makes many multiples of the initial investment. There was no VC money available, no clear exit route (acquisition or IPO), very weak corporate law with little provision for things like co-founder options or vesting schedule. Above all, even the best students from a university like LUMS were running after jobs from outsourcing joints, with no real potential for growth beyond a certain glass ceiling (the largest IT company in Pakistan is less than 300 people).

All of this became painfully clear to me when I started BumpIn.com in a small guest room in my house. It wasn’t exactly in the garage, but it was close enough (the guest room was directly above the garage!). We toiled, dreamed, and persevered for more than 2 years to be reminded over and over again how difficult it is to do a Silicon-valley style startup in Pakistan.

This eventually led to me to setup SCI. SCI is facility for startup incubation. It is big and well-provisioned (4 floors, 18,000 square feet of covered space, dedicated fiber-optic connection), but the biggest strength of SCI is its inhabitants. Everyone at SCI works for a single purpose: to create innovative products that can result in a $100 million company. My highest point of the day in SCI is when I see two entrepreneurs from different companies share their vision, technology insights, and dreams.

In a sense, SCI is not very different from incubator models like the Y-combinator or tech-stars, albeit we do not have the same level of funding, visibility, or access to lots of successful entrepreneurs as mentors.

STEP: SCI is an incubation center but also a “training center for technology entrepreneurs and enthusiasts” (statement from the SCI page). What kind of training does a technology entrepreneur in Pakistan need?

US: The training is mostly informal. What we share with each other on a BBQ on our rooftop is at times much more valuable than what 4 years at MIT taught me. I learn everyday from our budding stars. We hope to formalize more training programs going forward, e.g., business plan competitions, workshops on technologies, pitching.

For the activities, a startup is mostly an art, not as much as science. Our activities involve everything from discussing and refining business strategy, developing business plans, preparing sales pitches, raising funding, finalizing contracts, developing new tools, organizing PR campaigns etc.

STEP: Do you think that incubation centers can work in Pakistan in the long term?

US: Of course. They have worked in many countries. I was in Seoul a few years ago and was told that there are close to 300 incubators in Seoul alone. An incubator lowers the barrier for brilliant entrepreneurs to start a company. An incubator shares the risk, shares the highs and lows and mostly takes care of the mundane aspects of running an exciting tech venture. I hope more incubators will take root in Pakistan.

STEP: Have any startups ‘graduated’ from the center?

US: There are many levels of graduation. The first 3 startups — BumpIn.com, SMSall.pk and Seenreport.com — have all become profitable ventures and moved into bigger spaces with access to more resources and more room for expansion. We are looking forward to the time they outgrow the facilities at SCI and move into their own space.

I firmly believe that if we can churn out one success out of SCI, we will create a wave of brilliant students all wanting to do a startup. All we need is one success story – but its many times more difficult to come by in a country that no investor on Sand Hill Road is willing to touch with a 10 foot pole, and where electricity is available for only about half of a working day.

STEP: Tell us a little bit about Mindstorm Studios . How and when did it start, how big is the team, and what have you been doing (in addition to Cricket Revolution and all)?

Babar Ahmed: Mindstorm Studios was actually my brother’s brainchild. I was still in the US when he decided he wanted to make a cricket game. He was in Dubai back then; this is summer 2006. So he upped and came to Lahore, at about the same time that I decided to move to Pakistan. Neither of us had ever lived here before (been in UAE and USA all our lives); so it was an “interesting” experience to say the least. I’m referring to breaking red lights in reverse at midnight in my spanking new 2006 creaky Alto! Coming from a culture that tickets you on breaking a STOP sign, it was a change! I started teaching at LUMS shortly and helped my brother found Mindstorm.

We’ve been through a few phases over the past years and have dabbled in quite a few areas such as 3D short film animation, architectural visualization, creative advertisement, casual games, and 3D games. If you check out www.mindstormstudios.com you’ll see remnants of some of our portfolios up there. Currently, we’re focused on game development for the iOS platform (iPhone and iPad). We’ve launched about 5 titles on the platform so far, with another 4 coming out soon, and have over 3 million cumulative downloads of our games.

STEP: You went to graduate school at Stanford and then came to Pakistan to kick off your company. How was the experience of doing a start up without the necessary support structure that exists in the Silicon Valley? Is there a nascent start-up culture emerging in Pakistan?

BA: As counter-intuitive as it might sound, it’s a LOT easier to do a startup in Pakistan than it is in the Valley! Here’s the simple reason why: $10,000 might last a startup in Pakistan 6 months… you’d be lucky to make it past your first month in the US with that money! Sure, raising that $10k is hard, but its no walk in the park in the US either. Additionally, you can get a LOT of mileage from family/seed funding here unlike in the US, where you HAVE to go for  Angel or VC funding very early in the company’s life cycle because costs are so high. Rent here is cheap, people typically have strong family support systems and you can work out of people’s basements (we all have those here), there’s VERY little red-tape in starting a company here. Picture this: 3 people, 3 laptops, a basement, a wimax connection, some pizza and coffee, and there you go! You have the next internet startup in Lahore!

In the US, man, its competitive! First off, you have visa issues: if you’re not working somewhere you can’t stay in the country. Gotta resolve those first! Then there’s the obnoxious cost of doing anything! Then, you have to convince people to LEAVE their $100k per year jobs and go out on a limb with you. Good luck doing that with a $10k budget! Moreover, if the people you’re trying to convince are good enough (and they SHOULD be), then you’ll have another 10 people like yourself with similar offers! And once you’ve managed all that, you have to get your idea in front of a VC who has another 1000 ideas or more sitting on his table waiting for his attention!  And IFFFFFF all of that works out for you, you give up a big chunk of your stake in your company to make it happen.

See where I’m going with this? It’s the age of connectivity. The only thing stopping you from reaching a gazillion people is yourself. Doesn’t matter where you’re sitting. For example, we have 2.5 million downloads of our game Whacksy Taxi on the iPhone. How many of those people know that just a few guys created that game in 7 weeks out of a dusty room in Lahore? Of course, it also depends on the TYPE of startup you want to do, but I really feel there’s a LOT that can be done regardless of your physical location, and that makes Pakistan a very attractive environment for startups.

STEP: A game studio is different from the usual software development company. What unique opportunities and risks did you experience in establishing a game company in Pakistan?

BA: Doing a game startup was particularly hard for us;  not having any experience in the space didn’t help much either! The issue with game development is, exactly as you put it, its not traditional software development. Its walking the middle line between the left brain and the right brain. Finding the right people and making them mesh together to deliver on a creative vision is no easy task. We faced loads of issues, from audio production to art direction to motion capture and physics engines and everything in between! One of the key issues in Pakistan is finding people with the right exposure; notice I didn’t say skill set. You get some pretty mean coders and artists here; however making a video game is like making a movie, or a song. You have to make something that’s cool and appeals and to your target market’s entertainment requirements, and for that you need to be exposed to what that market likes and doesn’t like. Also, given the maturity of tools these days, you don’t need an army of developers to make the next hit game; in fact, I’ve seen several 2 man teams that have been very successful in the mobile games business.

Pakistan posed its unique challenges, the least of which was electricity! Personally, the way the game development industry has rapidly transformed over the past 3 years, I don’t believe that physical locality impacts your ability to deliver entertainment any more. That might be the case if you’re trying to make a $50M production that rivals Halo. But you’re not! You no longer have to make Steven Spielberg-type movie productions; you just have to make the next YouTube hit and you’re home free. And trust me, you DON’T need a degree if film making to do that!

I’m not trying to trivialize making a startup or a successful company/product. It really IS hard! I’m just saying in this age of connectivity and information, it’s a lot less harder than it used to be. There are fewer and fewer business and trade secrets, there’s an abundance of knowledge and information, and there are several vehicles readily available to get your message/product in front of millions.

STEP: Let’s talk about Cricket Revolution. There is a flurry of start-up activity around iPhone and Android games. Mindstorm, like you said, is active on that front as well. What made you switch gears and target the classic PC gaming market?

BA: Well, it was actually the other way round for us. We started off as a classic PC game developer back in 2006 when touch interfaces still belonged in movies like Minority Report. And then Steve Jobs changed the world; 5 years later here we are with a strong iOS focus making games for the iPhone and the iPad. We still had to see our initial development through though, and managed to get Cricket Revolution out the door in late 2009.

STEP: How long did it take to develop Cricket Revolution? What were some of the biggest challenges in developing and marketing?

BA: Three and a half years. In hindsight, we could have done it a lot sooner, probably in two, but that’s if we had known then what we know now. During the course of development we thought our biggest challenge was animation and real-time multiplayer gameplay. How were we going to get 500 cricket animations into the game? We had to learn about motion capture, figure out that it was too expensive for us to afford, and then just figure out a hack-way of doing it ourselves at a fraction of the cost. Solving real-time multiplayer issues was a challenge – how were we going to get players across the globe to time their shot within a few milliseconds when the latency between them was over half a second to begin with? Well, we never DID solve that problem! So we had lots of online connectivity issues and what not. Other development issues were creating a custom physics engine, a custom animation engine, designing the game to hit that “sweet spot” which is very elusive to find (WHY is it that you like some songs and don’t like others? What’s the magic entertainment recipe?). But all that aside, we managed to plough through development and get the game out the door, a very tough 3 and a half years later.

It was only after that, that we realized we still had our biggest problem still ahead of us… and that was marketing! Hey, I’m an engineer, and that’s all I’ve been taught since high school. The only thing I had sold so far was virtual crops in Farmville! So, how in God’s name, were we going to get our product to sell millions of copies across multiple international markets? Well, that’s where the publisher comes in; unfortunately, we chose the wrong publisher and got burned. Our game didn’t do that well, and a lot of the selling was left on our shoulders. Alhamdulillah, we managed to overcome that challenge with a few well-timed deals with Pepsi in Pakistan and Valve’s digital distribution via Steam, but it was a VERY nerve wrecking few months getting those deals in place. It taught us a very important business lesson, and that is you have to begin your marketing activities from day 0, BEFORE production even begins. That’s a little hard to do given we’re an engineering driven company, but that’s the only thing that can convert a cool product into a successful business. No business, no product.

STEP: Has the game been a local success? Have you been successful in dealing with piracy in Pakistan (and many other cricket-loving nations)?

BA: Yes and no. I’ve actually sat at shops in Hafeez Center (Lahore) and watched people come in and purchase a pirated copy of our game for peanuts! It’s a fools wish to try and combat piracy in a country like Pakistan. We have a hard time enforcing Supreme Court laws on security, let alone international copyright laws on video games! So instead of fighting piracy in Pakistan, I decided to embrace it and give the game out for free instead. To do so, we brought Pepsi into the deal, sold the rights of the game to them in Pakistan, and had them distribute the game for free throughout the territory. Everyone wins. In India, the market is a little more mature and large enough for non-pirated content to make a mark. We had some successful deals there too with multiple retailers and distributors picking up our game and selling it through several outlet stores all over India. That, in addition to digital distribution via Steam, has resulted in a fairly wide adoption for our game, as far as independently produced PC games go.

STEP: Congratulations to you for Cricket Power becoming the official ICC World Cup game? How was the competition? What set Cricket Revolution apart from the rest?

BA: Thank you! I can’t speak for the competition; there are a few pretty good cricket games out there from the likes of EA and Codemasters. We pitched our game to a publisher, who then pitched it to the ICC; one thing led to another, ICC really liked our game, the publisher believed in our development capability, and lo and behold Cricket Power happened. The key was that we offered a complete 3D game served entirely in the browser, which was something that no one else had done in the past at the quality mark that we had. So we really had a product that stood out from the rest with a fairly small digital footprint in terms of download size. That, plus the fact that the game was redesigned for the casual audience in a pick up and play style gave it the boost it needed for selection. We’re really happy that we made it that far; hadn’t planned for it! But, alhamdulillah, the product shone through and here we are!

STEP: What’s next for Cricket Revolution and your company?

BA: We’re working hard on our next titles. We’re targeting the iOS primarily for now, so stay tuned for some releases soon! As far as Mindstorm goes, I really would like to see a game development industry grow in Pakistan by taking the lead from companies like ourselves and others who have gone down this path. I mean, game development is HUGE! Like, bigger than Hollywood HUGE! It’s not THAT hard to do, given the multitude of resources and tools available on the web. Pakistan is a low cost development center, you have everything you need on your laptop, and a single hit can make you good money! I would really like to see Pakistan come up on the global map for game development. A lot of countries are doing so, some with amazing government support (I believe Malaysia offers free electricity, office space, and 50% salary subsidy to game developers!!!!). I think if we can spawn a few startups in this space due to our efforts, and publicity that we’ve achieved, I would believe Mindstorm has truly done its job.

STEP: You also teach at LUMS. Do you think the Computer Science programs in our universities are adequately preparing students for a career in game development? If not, what needs to change?

BA: No, I don’t think they are. In my opinion, there are three aspects to this: a) Technical, b) Career, and c) Creativity. From a technical perspective, we’re more or less ok. Yes, we could do with a few courses targeted specifically to the game development pipeline to demystify the process for young minds. However, programming is just a small part of creating a game. Game design, production methods, audio production, quality assurance, and psychology are all equally important, to name a few. So, you CAN throw in game development courses into a CS curriculum, but unless a curriculum targets these other aspects that are equally important to game development, you’ll just end up with good programmers, which is good, sure, but only part of the equation. The second issue is a career perspective. Our professors and educators need to understand that game development is one of the hottest career choices on the planet right now, and will continue to be for some time. We have some serious cultural issues associated with games where the older generation believes that games are a total waste of time and not important. While they have a particular perspective, the world truly has changed. The average age of a gamer is now 35!! Everyone’s playing games! And unless our educators (and our families) treat this profession as a viable career choice, game development as a career just won’t get the adoption it deserves.

Lastly, the BIGGEST issue is creativity. Most curricula are designed to follow patterns; courses where there is a right answer and a wrong answer. The entire grading system is predicated on this one fact, and it has to be. This forces the mind to think along a certain line, a certain path, and move away from experimentation for fear of failure. This is a deeper psychological issue that can’t really be fixed just in a few courses. But I ask you, would you have guessed that a video like “Charlie Bit My Finger” would have 294 MILLION views on YouTube? Or do you think a game like “iFart” would make $100,000 in 2 weeks and be the #1 app on the App Store? I’m not saying that things like these always work. What I AM saying is that game developers need to think out of the box to truly define what entertainment value is, and it could be anything that our imagination allows it to be. I just don’t think our curricula are designed to grow that thought process and could do with a dash of imagination and fearless creativity.

However, there is a third set of opinions about the Fund that also must be taken into account. For some of us, National ICT R&D Fund’s performance leaves much to be desired, though, it does not in any way lead to the conclusion that the fund must be dissolved or become irrelevant. In fact, it leads to quite the opposite conclusion, namely, that the Fund must be redesigned and reformed to ensure that it is able to deliver on its promise. That in its current form (and with its current focus) it is not designed to deliver the kind of innovation that the society expects from it and may in fact be duplicating the work of other agencies, such as the Higher Education Commission (HEC).

Failure to Deliver

When it began (initially as PTCL R&D Fund), the National ICT R&D Fund was a beacon of hope for those who wanted the ICT industry to flourish within the country. The unique and innovative mechanism through which the Fund was created and funded held endless possibilities for the future.  I, like so many others, also thought that National ICT R&D Fund’s example could be replicated elsewhere, to provide much needed and critical resources for research and innovation across a whole range of sectors such as health and pharmaceutical, engineering, textile, and automotive, etc. – not just in ICT.

Unfortunately, though, instead of becoming a shining beacon that could inspire such initiatives in other industry sectors, the Fund has so far failed to deliver on its promise. Even though hundreds of millions have been invested over the years in a number research projects, the performance of these projects, particularly in terms of their commercial impact, leaves much to be desired. What has led to this lackluster performance?

For those who have been close to the Fund and have interacted with it, it is quite common knowledge that the Fund wasn’t really designed to deliver what it sought to do. More importantly, it wasn’t even clear to those who have closely watched the Fund what it really sought to do. And whether whatever it wanted to do was possible in the first place. The Fund’s last CEO made it amply clear that it took him a long time to establish processes and procedures to carry out peer review of the proposals that were being submitted to the Fund. Even then, the industry grapevine is full of stories that it took a long time to get a proposal through the Fund’s system of evaluation that was decidedly far from perfect in the first place. It is also known that the Fund, right from its birth, was hardwired and burdened by cumbersome bureaucracy that made sure that anything innovative will probably not go through.

Ingredients for Success

To my mind, the ICT R&D Fund needed (and will still needs) four critical ingredients to become successful. If any one of these ingredients is missing, it will fail to deliver on its objectives. These ingredients are, in order: i) a clearly defined set of objectives, and a structure that is geared towards achieving these objectives; ii) a realistic strategy for achieving its objectives (including an in-depth technical understanding of each problem-set that it seeks to target and technical challenges inherent within those) and a program of activities aimed at tackling these challenges; iii) a capable leader at the helm who has experience of delivering similar programs; iv) systems and processes in place (and flexibility, where needed) to allow the fund to achieve its objectives instead of getting bogged down in never ending bureaucracy.

Going through this list, it becomes quite evident why and how these ingredients are so critically interlinked, in that the failure to provide one will render the others in-effective. For example, if the Fund was not designed right, it would hardly matter how capable a leader it has at its helm. Worse still, an ill-deigned Fund that doesn’t know what it wants to achieve is not likely to attract a capable person in the first place. Similarly, even the most capable of the leaders is likely to fail without appropriate processes and systems (and flexibility) to support him or her. The singular factor responsible for the Fund’s lackluster performance is the lack of understanding of this cause-and-effect logic.

I believe that the National ICT R&D Fund should focus on near-market opportunities that find commercial applications in short-to-medium term (1-3 years). This would require funding ideas that target a clear market opportunity and keeping the recipients of the Fund’s support responsible for delivering a commercialized product. This would ensure that the Fund will not just duplicate the work of the HEC but would add additional value within the innovation continuum. It would also force the universities and the industry to work together in a manner that would lead to commercialization of research.

Redesigning the Fund

The upcoming change in the leadership at the National ICT R&D Fund provides an excellent opportunity to assess the performance of the Fund so far, and, more importantly, to develop a coherent set of objectives, strategies, roadmaps, and systems to empower it to deliver on national objectives in the future. This will require, perhaps, going back to the drawing board. This, I believe, is necessary and the appointment of new leadership without addressing the critical weaknesses in the objectives, strategy, and structure of the Fund would mean another 3 years of wasted energies.

Redesigning the Fund to deliver on its promise will require 4 distinct elements described below:

• Step 1: The most critical ingredient for designing a successful Fund is a policy framework and strategic direction that is carefully thought-through and developed and that aligns it with the national goals and objectives agreed upon by relevant parties.

The importance of identifying realistic and achievable national goals and laying out an initial policy framework that will allow the National ICT R&D Fund to resolutely move towards those goals cannot be over-emphasized. Before expecting the Fund to achieve some objectives, we need to clearly define what those objectives are. These national level objectives must be clear, concise, measurable, and realistic. One cannot simply expect the Chief Executive of the Fund to dream of what would be in the best interest of the country as he goes along investing money and creating new programs. It is not enough for the Fund to say that it seeks to “promote” an innovation-centric ICT research and development eco-system in Pakistan. The Fund must define in much greater detail what it seeks to do and how what it contributes to that goal. The definition of the strategic direction and policy framework will ultimately define what programs and interventions are needed.

• Step 2: Once the overall objectives of the Fund have been identified, it must carry out an extensive strategic planning and technology road-mapping exercise to chart the course for getting there.

A technology road-mapping exercise, if properly carried out, will involve extensive consultations with experts within an industry both inside and outside the country to first identify an (almost) exhaustive list of technical challenges and bottlenecks in achieving the objectives and then laying out alternative approaches that may be followed to address these challenges. For example, if one of the objectives is to develop a smart network management system, the first task is to define what the current level of performance is, what would be the desired level of performance from this system, what are all of the technical bottlenecks in achieving that performance, and what alternate approaches can be used to address those challenges. Once a list of all possible alternative approaches is developed, one is in a better position to match ones resources and capabilities with how the objective might be achieved. This exercise must be carried out in consultation with stakeholders (IT and Telecom Companies and Universities etc.) within the country so as to identify approaches that are realistic and achievable and in line with current capabilities. The existence of such a roadmap will help the leadership of National ICT R&D Fund to develop and fine-tune precise programs or priorities aimed at solving a pre-defined set of technical challenges that may lead to new products and services in the market.

• Step 3: The third key element of a well-designed Fund is the program design that will comprise the “instruments” of policy the Fund will have to achieve its objectives.

Once we know what we want to achieve, and how to get there, the Fund needs a toolkit of policy instruments – i.e. different kinds of funding programs -  that will enable it to achieve its objectives. This programmatic design must be informed by the Fund’s objective and the strategic roadmap. For example, would the Fund require some basic research? Would it need to fund industrial collaborations? Do we need a proof of concept program that will need to be supplemented by development funding later on? Do we need to support entrepreneurship – and how? Could an “Innovation Prize” be used to solve the problem? These are questions that would ultimately define the programs and instruments in the fund’s policy toolkit. In designing new instruments and restructuring older ones, one must also learn from the past by analyzing the current portfolio of the Fund and understand how the Fund’s current toolkit aids or hinders innovation, where the big gaps are, and how might it be strengthened to remove the bottlenecks towards commercialization and commercial impact.

• Step 4: The final element of an effective Fund is an evidence-based performance assessment mechanism that helps the Fund’s management to assess and report on progress and correct course, if necessary.

The final ingredient of a well-designed and effective National ICT R&D Fund must be an evidence-based policy and performance assessment mechanism that continuously assesses, informs, and improves the Fund’s performance. An effective organization must be a learning organization. This is much more true for an R&D Funding Program than for any other type of organization primarily because it must deal with processes (i.e. research, development, and innovation) that are inherently unpredictable and ever-changing. The Fund must also be flexible enough to deal with this unpredictability and adaptive enough to learn and maneuver in the changing techno-economic landscape.  The performance assessment system I am talking about is quite distinct from financial reporting that is already in place at the Fund but instead focuses on developing mechanisms to assess and improve the effectiveness of how the Fund is doing in its ability to achieve its final objectives – not just whether it is spending the money it was supposed to spend. Unfortunately, the latter is often the practice with much of program funding in the government but this may represent a critical gap in designing and managing an innovation funding program.

Taking into account the above 4-step approach, I believe, will significantly improve the focus and performance of the National ICT R&D Fund and empower it to realize its full potential.

I believe, for one, that the basic concept of setting aside a share of revenues to invest in research and innovation is noble, sound and creative way of providing much-needed resources for investing in our long term economic future without burdening the fragile short term public finances of the country. It is my sincere hope that the National ICT R&D Fund could be re-drawn to enable it to deliver on its promise of promoting meaningful goal-driven innovation within the ICT sector and hence become a shining beacon for other sectors to emulate.

Dr. Athar Osama is a science policy consultant and advisor and is the lead author of a paper published in the prestigious journal Nature titled “Pakistan’s Reform Experiment” that analyzed the effectiveness of Pakistan’s investment in the Higher Education. Dr. Osama has been, for over 15 years now, a student and a practitioner of the science and art of science and innovation policy and has been an advisor and consultant to The Royal Society (UK), OIC, PSEB, PASHA, and SciDev.Net. He worked at one of the world’s leading public policy think tank where he was a part of a team that helped restructure the R&D and Engineering infrastructure of a major US public agency, analysed the performance of US Small Business Innovation Research (SBIR) Programme, and helped form a public sector venture capital fund. Athar is the founder of Muslim-Science.Com. He maybe contacted at athar.osama@gmail.com.

Editor’s Note: In 2009, we conducted an in-depth interview with Dr. Qasim Sheikh, the-then CEO of the National ICT R&D Fund. The interview is available here (Part 1) and here (Part 2).

As part of our efforts to try and develop a “Do-It-Yourself” incubation center in Pakistan, we’ve set up Allied Incorporated as our first pilot project. We began operations on January 1st, 2010 out of Lahore. Allied Inc. (as we call it) is run as a not-for-profit. Our objective is to inspire, train and facilitate entrepreneurs – both inside Pakistan and abroad (when they want development teams in Pakistan).  Through this process, we hope to develop and refine a practical model for encouraging entrepreneurship within organizations, across the industry and in the society at large. In this article, I hope to document and share our model, so the model can be improved and perhaps even replicated in smaller, under-served cities.

We envision a 3-step process for new entrants:

1. Inspire: Inspiration is usually the first step in the transformation into entrepreneurship. It is also the fuel that picks us up on days when things are not going so well. I recall reading the story of Shabeer Bhatia (founder of Hotmail) and how he built a $400M company in less than a year with no prior experience of running a company or even managing a team. This was bigger than the budget of most of the cities in Pakistan and how much good it could do. You don’t need to look too far to see that there is amazing content already available online for this purpose. To name a few examples:

• PASHA is going great work in collaboration with CIO Pakistan to develop a series of interviews with key players in the IT space in Pakistan
• Stanford and MIT have great entrepreneurial content
• Forums like greenwhite.org are cropping up as online communities to discuss startups

2. Educate: Once an individual decides to start a business, he is usually met with the realization that he doesn’t know how to proceed. For young fresh graduates, the gaps are huge. For experienced individuals, gaps lie in the financial management and sales and marketing side. Our training focus thus is:

1. Business Management content with an entrepreneurial focus: This would be content for someone who has several years of technology experience and now wants to move to a technology entrepreneurial role. These include basic finance and sales and marketing skills.
2. Technical training content required for a startup: This would be focused on last mile technology content that a typical university grad can take and be ready to work in the industry

Though there are many other things that one feels are lacking in resources available out there, we need to be careful what to adopt into a self-funded incubation model since each of these areas requires a huge effort in collecting content, refining it, and keeping it up to date. Our plan on the training side is to develop an online collaborative knowledge base for the industry. We have solicited content from companies in the local industry that specialize in a certain field and are in the process of consolidating and publishing that content. You can find an alpha version of the knowledge base here. Once we have enough content collected and organized, the plan is to start the delivery phase where we will start exploring other forms of delivery for this content (e.g. in-person delivery, video link-based off-site delivery for remote locations, etc.)

3. Facilitate:  Once an individual feels they are ready to take the plunge and start a business, we aim to provide additional facilities. We want to provide a physical forum where entrepreneurs can be around others bitten by the same bug. This is perhaps the most natural way to provide both guidance on things they are doing wrong, and validation of things they are doing right. At the moment we have a small rented office space which entrepreneurs can choose to work in and pay by the seat. The incubator take on the administrative hassle (e.g. power backup, internet connectivity…) allowing new companies to focus on what they’re trying to do. You can find a detailed list of services provided on our site.

Canned Business template #1 – IT Consulting

Since most of the founding team of Allied Inc. are IT professionals, our first template for businesses has been centered around the IT industry. This, we feel can fairly easily be extended to the engineering sector in general.  Most of our participants, so far have been 30-somethings that have significant experience in the outsourcing IT industry and are fairly well aware of the risks they are taking. So far, we haven’t been able to attract fresh graduates with mature ideas but that is something we hope will come as we “templatize” our processes further.

The business model is that of a typical offshore IT outsourcing firm. Target markets are the US and the EU. In particular, we focus on the entrepreneurial sector in these markets due to the ease of access to this sector directly from offshore. The fact that the IT offshoring business is considered a well-known, run of the mill activity is good for us since it provides a lower risk trajectory for tentative entrepreneurs and allows us to focus on the incubation more than the consulting.

Compared to a typical consulting firm, ours is different in a few noteworthy ways listed here. Most notable, however, is that we aim to increase the level of ownership in participants. Ownership of tasks, their consequences and thus the individuals destiny in general. Academic research details five factors that influence the perception of ownership in people in an organizational setting (listed in order of importance):

1. Fairness
2. Community
3. Participation
4. Financial Payoff
5. Influence

Within Allied we’ve tried to implement these principles using the following policies:

1. All policy making is based on a shared vision of fairness. We define fair as values of greatest combined mutual interest.
2. All employees have open access to information. This includes details of revenue and expenditure.
3. Consultants get paid what the clients pay for them (minus overheads). Since Allied Inc. aims for no profit, this leads to great value for both the employees and their consultants. Details of this here.
4. All employees are free to experiment in their free time and are open to solicit other companies and customers for business. If they succeed in bringing in business, they are free to setup their own teams or businesses the way they see fit. This is quite unlike conventional IT units in Pakistan where this attitude is actively discouraged.
5. We present no grand plans or strategies for the future. Our growth will come ecologically depending on what the employees of the companies are most excited about. There are no grand plans or long term strategies. We encourage constant experimentation with delivery and sales models, guided by the training options available internally.

[Note: To give credit where it’s due, most of these ideas are derived from Dr. J. s's story of how he started Science Applications International Corporation (SAIC). The company was started in 1969 with total revenue of $250,000. By 1990, they had $1B in revenues, which grew to $8B in 2006. Our operating philosophy derives heavily from the guiding principles of SAIC.]

Challenges (so far…)

• Slow decision making: Given the collaborative and democratized nature of our decision making process, it is slow. We need to spend a lot of time developing consensus and doing due diligence on a lot of issues. This is almost always slower than a ‘saith’ making spot decisions and at times speed of making decisions matters more than making the absolute right choice.
• People issues
  • Skepticism: Amazingly, we have had a lot of resistance from people in accepting the idea of a not-for-profit firm. Most of our clients show skepticism on the validity of our claim. More surprisingly perhaps, hiring new talent is even harder. We get the “what are you getting from all this then” question a lot. This is, however, natural since few, if any, references are available for people both here and abroad.
  • Behavioral Inertia: Another related issue is the lack of people who are willing to take responsibility. Most of our hires are senior people with 7 or 8 years of experience in the local services industry. During that time, they have been groomed to take as little ownership as possible, and to participate only when absolutely necessary. They have been convinced that doing better will not necessarily lead to better reward. We’ve found that this re-adjustment process takes a while to sink in for most people.
  • Strange definition of risk: People in Pakistan have a strange definition of risk. I once interviewed a person who told me that ours was a small setup and it was a big risk for him to join us because he wouldn’t know how long we’d last. I offered to give him a few months advance salary and extended notice periods for termination but he wasn’t very interested. I asked him how much guarantee he had from his current employer and if he knew how well that company was doing internally. I asked him if his current employer had a million dollars in reserve but chose to shut the company down anyways, would he have any control over it. He got the point, but he still didn’t join us!
  • Impatience: Being young, full of ideas and having an entrepreneurial flame burning in you is a really bad combination! Many times our level of patience for results is that of a hungry two year old in front of candy. This is, however, a happy problem. We would rather have people too eager for change than those who have given up on it.
• Lack of guidance: One of our major issues is not having a reference business model for incubation and in particular non-profit/cooperative consulting firms. There are few of these out there in the world and even fewer that are openly documented for references. Hence a lot of our learning on incubation is experience-based.
• Making the training unit break-even: One of our key challenges on the training front is monetizing the effort required to build and maintain the training portal initially. Although technology training remains a major hurdle for the growth of the local industry, most companies are not willing to act on it. Our attempts to form an industry-wide fund to develop the training portal have so far met with stalling tactics. This lack of funding has made the training development slow and stuck in a chicken-and-egg situation.
• Avoiding external funding: Since one of our basic objectives was to setup an incubation unit that a small community itself can develop, we adopted a basic policy of no external funding. All the capital expenditure is made by the employees themselves. This has the positive side of increasing the ownership level of people but making inventory management and accounting all the more complex. It also challenges us to create aggressive growth since some of that (especially in the services industry) is heavy on capital investment when growth kicks off.
• Making the companies break-even: Being a small company, the biggest challenge of course is always to make ends meet at the end of the day. With all the energy spent on the incubation and consensus building process, there are days when there is little time for the things that actually bring in money. A lot of this has to do with the fact that we are in early stages and systems and processes are being streamlined. However, our biggest challenge remains stabilizing our sales and delivery units. Only that will enable us to survive long enough to call this a success.
• Creativity and innovation: Understandably our business models are designed to be low risk, predictable stepping stones into entrepreneurship. This, by design, moves away from riskier, highly creative ideas. Our thesis here is that if you have enough free people (financially free and free in thinking) in close proximity, creativity and innovation will occur naturally. While innovation and creativity are not out immediate focus areas, we want to be able to assist people in that to whatever extent possible.

Conclusion

As a percentage, too many of our youth are groomed to become docile, white collar employees and to suppress their ideas for ‘practical reasons.’ In the long run, this is bad for the nation and the people. Allied Inc. is our attempt to try and change that and develop nurseries of entrepreneurship in Pakistan; to develop a mindset that looks at problems as opportunities but with a realistic, long term lens. These are still early days for us and we have a long way to go to prove our point. Our biggest challenge is perhaps to survive long enough for us to bring about perceptible change.

If you feel you can assist us in any way or if you have ideas on how we can do things better, please share your feedback with me at momer(at)alliedc.com. Our website is located at www.alliedc.com where you can find details of our specific IT offerings. A special thanks to Ali Bin Jamil for his support in the effort so far.

The Atlas is a study (Atlas Brochure) that will explore the changing landscape of science and innovation across a diverse selection of countries with large Muslim populations in the Middle East, Africa and Asia, including in-depth case studies of fifteen geographically and economically diverse countries. It aims to draw important cross-country conclusions to help national policy-makers, international stakeholders, and development planners to chart the way forward. Working closely with partners in each of these countries, the project will chart the delicate interplay between science, innovation, culture and politics, and explore new opportunities for partnership and exchange with the wider world.

The project is a true partnership between OIC family institutions and member countries and partners in Europe, Canada and the US. With oversight by the Secretary General of the OIC, Professor Ekmeleddin Ihsanoglu, and jointly managed by the Royal Society and SESRIC in Turkey, this project draws upon a wide range of OIC institutions, local country partners, independent experts and other partners such as the COMSTECH, ISESCO, IDB, the British Council, IDRC (Canada), and Qatar Foundation. In that respect, the AIWSI project is an important example of how the West and the Muslim World can work together to achieve their common objectives of development.

Country Case Study: Pakistan

The Pakistan Case study of the Atlas Project has been launched in Nov 2009 and will conclude by December 2010. The Pakistan Case Study will look at the innovation landscape in Pakistan paying due emphasis to geographical as well as sectoral dimensions of innovation as well as other factors such as collaboration, people and diasporic interactions, and socio-cultural and economic factors affecting innovation. These Atlas studies build upon earlier work (here) carried out on other countries but also extend them as per the specific terms and conditions of the AIWSI project (e.g. Brazil, India and China).

Each country case study is led by a Country Leader Researcher from the Project’s International Research Team and supported by other members of the project office at Royal Society and SESRIC. This Lead Researcher works with a National Focal Point (a policy-making entity like a Ministry or relevant entity within the host country that takes on the role of the key “door opener” and supporter) and a National Research Partner (a non-for-profit university, think tank, or civil society organization with extensive links with relevant organizations and existing or potential research capacity to support the research work within country). One of the core elements of the Atlas programme is the desire to build local capacity to carry out research work of this nature and to help support the continuation of the research agenda through local ownership and capacity building.

Timeframe:

The Lead Country Researcher along with members of Royal Society Team carried out a scoping trip in November 2009. The study kicked off in December 2009. HEC was appointed as the National Focal Point in February 2010 followed with the nomination of LUMS as National Research Partner in May 2010. The final report will be released in December 2010 at the COMSTECH Science Ministers Meeting in Islamabad.

Call for Nominations for Research and Commercialisation Success Stories for Atlas of Islamic World Science & Innovation (Pakistan Country Study)

The Organisation of Islamic Conference (OIC) in Collaboration with The Royal Society (United Kingdom) is currently carrying out an exercise to document the state and promise of science and innovation across the Islamic World. This is a multinational effort funded by a number of international donors that seeks to bring visibility to Science in the Muslim World, identify pockets of excellence and good scientific practice, and hence promote greater scientific collaboration between OIC countries and between OIC Countries and the West. The Pakistan Atlas Study will be released in December 2010 at the COMSTECH’s Science Ministers Conference in Islamabad. 

In addtion, the Atlas Project seeks to create national dialogues across the Islamic world on the importance of science and innovation in Muslim Societiesand thus lead to policy change and create better opportunities and environment for for research and research commercialisation. The project’s objectives and timelines are described below.

The Atlas Project Team comprising researchers from The Royal Society (UK) and the National Research Parter (Lahaore University of Management Sciences are seeking inputs on research and commercialisation success stories that the Principal Investigators believe are worthy of projection at the OIC and international level. In particular, we’re interested in examples of significant scientific or commercialisation accomplishments done for the first time in the Muslim Countries or the World and that have received major international acclaim or achieved commercial success.

Scientists and Technologists are invited to send in their nominations by August 31st, 2010 at the latest. Each nomination must include the following:

a) Name of the Principal Investigator and other researchers
b) Contact of the Principal Investigator (including mobile number and email)
c) Name and Contact of Foreign Collaborator (if any)
d) Research or Patent Abstract (or Brief Description of Commercialisation Activity)
e) Scientific Significance or Commercial Value of the Innovation (especially what has already been achieved)
d) Any external (third-party) validation of the work and conact information for the validator
f) Links to Published Work (or Patent) and Impact factor of the Journals where the work has been published
g) A Short Statement Outlining why you believe this work is worthy of show-casing Pakistan at an International level.

One individual may make more than one nominations although it is unlikely that both will be included. It is better to focus on your most significant work with greatest impact (or likely impact). The Atlas Team will evaluate the significance of each entry and will contact those they feel could be included in the Atlas Report.

These entries may be sent to: athar.osama@gmail.com and zahoor@lums.edu.pk

Dr. Athar Osama

Visiting Fellow, Pardee Centre, Boston University,
Country Lead Researcher – Pakistan
Atlas of Islamic World Science and Innovation (AIWSI)

Dr. Zahoor Hassan

Professor, SDSB, Lahore University of Management Sciences
Co-Principal Investigator – Pakistan
Atlas of Islamic World Science and Innovation (AIWSI)

Quaid-e-Azam once wrote to the people of a Muslim village. The people in the village complained how the British Raj had not done enough to improve issues in their village. Jinnah’s response to them was to take ownership of their problems: “to identify their issues, make plans to resolve them, and act on their plans” and not wait for the British government to come help them. It sounds simplistic but really in many cases, it really is as simple as that. Jinnah understood the psyche of our nation well and we, as a whole, haven’t changed much since.

A lot of solutions — I would argue that all of them — begin by a determined individual taking ownership of an issue. Technical challenges, financial constraints, leadership, or even motivational impediments are really direct effects of strong willed people taking ownership of the problem. In my view, there is no shortage of people trying to take ownership. What is required is guidance and reinforcement to these people to stay the course.

I propose what we require are a series of incubation facilities that help develop the entrepreneurial spirit, and then to coach it into sustainable businesses. Incubation is the chosen medium for this around the world. Seoul, Korea has over five hundred incubators alone. Compare that to that three (that I know of) in Lahore. For Pakistan, the idea has simply not kicked in yet. Governments lack the funding and universities lack the infrastructure required to generate ground-breaking innovation and deploy technology in a financially sustainable way.

This article is the first in a two part series to explore the concept of incubators in Pakistan. The first part introduces incubators and deals with considerations needed to establish incubators in Pakistan. The second part details efforts of my partners and myself to develop a practical model for incubation in Pakistan.

About incubators

Incubators come in various forms with various objectives and degrees of success. Incubators based in property firms try to add value to their offering, non-profits trying to encourage entrepreneurship create jobs and affect social change, universities trying to encourage industry collaboration and monetize research, investor driven incubators look for high returns from the next big idea, and corporations try to expand into new markets or looking to encourage entrepreneurial talent within their enterprise.

Incubators provide:

• Premises that are accessible on easy terms for a limited amount of time:
  • Other physical facilities including conference rooms, restaurants, catering, security, furniture rental, office equipment rental, telephone, library and reference material, vehicle rental, cleaning and maintenance, child care, and overnight accommodation.
• General business services:
  • Audio visual equipment, Shipping and receiving, mail services, fax, photocopy, printing, reception and messaging, word processing and clerical and administrative services, access to laboratory and computer equipment.
• Professional services:
  • Legal matters, intellectual property, accounting, book keeping, recruitment and staff selection, education and training services, IT and internet services
  • Liaising with schools and colleges for training of their people and MBAs
• Management and business strategy service:
  • Technology assessment (R&D strategies, competitive positioning, patents and IP protection, technology partnering)
  • Business plan development (CSF, Revenue models, Wealth generation strategies, exit strategies)
  • Marketing plan (Launches, Alliances and Partnerships, Sales and distribution strategies, PR campaigns)
  • Corporate Finance (Capital raising, Mergers and Acquisitions, IPOs). Government and grant loans, equity finance arrangements, debt financing arrangements, business tax, risk management and insurance.
• Networking opportunities: These include interaction with academics, other entrepreneurs, financiers and service professionals
• Guidance according to the phase of development the company is in (creativity, direction, delegation, coordination, and collaboration)

Incubators in a Pakistani context

For Pakistan, the concept of incubation needs customization before incubators become viable, sustainable units. Incubators in Pakistan need to go beyond acting as investors or financiers assisting in ideas that someone else brings in. Entrepreneurship is generally missing in our society so incubators need to make the job of starting a business easier by having pre-fabricated business templates. These can include strategically appropriate areas to begin, points to investment and supporting in hiring and delivery. This is particularly true in the early stages of the business and more so for first time entrepreneurs.

Unlike western countries, capital in Pakistan is largely private equity. For religious reasons, a significant percentage of the population will not go to banks. This makes networking in the right circles all the more important. If the investment is to be generated within Pakistan, investment also includes a long period of investor education in the technology’s potential. This extremely intensive relationship building can overwhelm entrepreneurs, if left unassisted. Incubators should also focus on business templates that are not capital intensive in the first place.

Incubators need to start businesses with proven models and a proven customer base rather than one where the customer adoption is likely to take years. The appetite for risk is fairly low and ideas like disruptive innovation die in R&D before the investor’s patience runs out. Many new start-ups fail, not because their ideas didnt make sense, but because they run out cash before the target markets accept their ideas. Most product ideas fall under this category where the ideas make sense on paper, and even at times have successful implementations in other parts of world, however these just don’t have an accepted customer base in their target markets yet. Attempts to implement eBay equivalents are just a few such examples.

Training is an essential part of any organization’s portfolio. With a high turnover of talented people from the country and constantly changing developments in the technology sector, preparing and delivering training is a constant exercise. The key focus training areas for incubators should however be business basics (from the perspective of a technologist). For any one startup this task can be overwhelming, which is why the incubator needs to operate this as a shared function. Within business training, development and support on the sales and marketing side is probably the key missing element. This can take the form of, for example, buying-houses in the textile industry. These buying-houses serve as unified sales units for textile delivery (stitching units). These allow new businesses to focus on smaller functions, expanding overtime across function.

A strong networking component is required. Pakistan remains a country where normative influences are strongest. The incubator needs to provide a forum for entrepreneurs to connect to each other, investors, educators and resources. These can provide essential reinfocement, guidance and vision required to operate successful business models.

Finally, successful models need to focus addressing social psychological gaps with entrepreneurial archetypes. In particular, there is a need to raise levels of self-efficacy and ownership and correct how risk is perceived. This is probably the least understood and most neglected portion of any organization’s implementation strategy. Managing people, their motivations and their emotional is probably the most impotant thing an entreprenuer/manager has to contend with after financing and sales.

In the next part, I will discuss our efforts at establishing our incubator in Lahore, with the hope that it sparks discussion and the opportunity to talk to like-minded people who can give us insight on the initiative.

Muhammad Omer is a simple guy with a new found fascination of entrepreneurship and the process of building entrepreneurs.  A graduate from the Ghulam Ishaq Khan Institute and Linkoping Tekniska holgen in Sweden, he’s probably suffering from a mid-life crisis since he recently left a decent career in a Pakistani Software house to start a technology incubation center. His areas of interest include cultivation of social entrepreneurship, creativity, and self esteem in the people of Pakistan.

In this article, I recollect a conversation I had with Umair Khan, a man who has started not one but six companies in his young life and is now also a partner in a venture firm in Silicon Valley. Umair is also a founder of OPEN Silicon Valley (Organization of Pakistani Entrepreneurs). Currently Umair is the CEO of a children’s online gaming community called SecretBuilders.com.

Meet Umair

Umair was gifted in academics and went to MIT for his undergraduate studies in Mathematics after graduating from Karachi Grammar School and Habib Public School. After his undergraduate degree, he completed his Masters in Computer Engineering from MIT in 1995 and was recruited by Intel. An employee with Umair’s academic record was destined for success at Intel. It would have only been a matter of a short time before he climbed the ranks to top management, but this is where he took a turn to a life less ordinary, he decided after a short period in Intel that the cubicle life was not for him.

Umair started on his entrepreneurial journey with Chowk.com, a blog portal focusing on South Asia. The statement “It (Chowk) was born out of a spirit of creativity and a refusal to believe that all things useful had already been said and heard,” embodies the entrepreneurial ambition of its founders. At the same time at Urduweb, Umair developed one of the first Internet based Urdu word processing programs and a computer-age answer to the Nastalique script, now used widely in Pakistan and elsewhere. Building on this experience he founded Wordwalla Inc., a venture backed company providing multilingual web communications services and software solutions. Wordwalla was acquired in 2001 by Morisawa Corporation, a public company in Japan. Umair had successfully created social and economic value by doing things he was passionate about.

Describing his ventures, Umair said “there is no downside to entrepreneurship”. In today’s world of VCs and corporate sponsors, you can draw a clear partition between personal wealth and your company’s capital. Gone are the days when entrepreneurs were liable to the banks on personal loans to run their businesses (my future article will be on an entrepreneur within Pakistan who has raised venture funding). The only risk is the humiliation of failure, a risk that is propagated more by the South Asian culture then it is a true risk. “The beauty of America”, Umair said, “is that failure is celebrated”. Many companies view failed startups as work experience in par or higher than multiple years of corporate experience. In contrast, Japan is an example of a country where failure is not an option. People who fail feel so much humiliation that they often rather take their own life than face the public. I’d have to sadly say Pakistan, and other South Asian countries also have a taboo against failure. Individually and at a cultural level we should celebrate the entrepreneurial spirit and associated risk of failure.

A Tale of Resilience

In 1999, Umair started Clickmarks Inc., during the prime of the dot-com bubble in the United States. Clickmarks got a lot of press coverage and had great expectations for success. By 2000 they were set to make $1million per quarter, they expanded their work force and that is when it happened – the bubble burst. This turned out to be the low point of Umair’s entrepreneurial adventures. It had become evident that he would have to layoff a lot of his work force. He started feeling personally responsible, feeling that he had enticed them to join his company because of all the positive press he was getting and now he had let everyone down. He was depressed and was taking his failure personally. He found inspiration while watching “Lord of the Rings”. For those who have not seen the movie, it is an epic about a heavy responsibility on a youth, Frodo, who at one point starts to feel the weight of his burden and regrets having taken on the responsibility. In one scene Frodo exclaims, “I wish the ring had never come to me. I wish none of this had happened”. To this his wise-old mentor Gandalf replies, “So do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given to us”. This hit a note with Umair who was at a position in his life where he was starting to second guess his ability and in some way regret having started the journey. He left the movie filled with purpose. With an unclouded mind he worked out a new business strategy to come out of the crises, he found the strength to take the tough decisions and his company survived the dot-com bust. Clickmarks went on to be a success and was acquired in July 2005 by Semotus Inc., a publicly traded US company.

Umair’s advice to young entrepreneurs is that sometimes things get bad before they get better. There will be low points but if you sum up all the low points and all the good times, the good times overshadows the low points by far. After Clickmarks, Umair went on to start two more companies, Folio3 and Verisium. Folio3 is an off-shore development company which has grown to 150 employees. Verisium is an off-shore testing and test automation company. They are now generating revenue and their off-shore component is housed in Pakistan and their sales offices are in the United States. Umair’s latest venture is SecretBuilders.com.

Passion and Creativity

Should a fisherman stick to fishing for the best chance of success? Not in today’s world of knowledge economy. While any domain knowledge is an added asset, entrepreneurship is all about innovation and taking a fresh look at existing problems. Umair had no prior experience in web game development arena when he started SecretBuilders.com. His only asset was a passion for developing innovative virtual portals for young children, their parents, and teachers. The market opportunity was immense and Umair saw the potential. SecretBuilders took two years to get established and they are now generating revenues with a million paid users. He has had more success than some of the competition that had direct game developing expertise.

I asked Umair, “Who is an entrepreneur?” Almost immediately, he replied “Anyone! They come in all shapes and sizes.” They can be risk taking or risk averse, but they must have a stomach for risk. Most importantly they must be able to have a vision and faith and can see the intended outcome at the other side of their actions at all times. Umair stressed on the importance of having a well defined end goal. A flexible plan of action on how to get there is required: it is important to be able to make course correction when competition arrives and the market changes. It is also important to have the optimism and persuasion to help other people buy your vision, believe in the possibilities ahead, and trust you to show them the path to it. Another important trait, according to Umair, is being an honest salesman. It is critical to have full disclosure to all your stake holders and to be consistent. Umair explained that integrity is a key human quality, however, in a startup the margin of error is even slimmer, and due diligence and disclosure go a long way. Not upholding the company’s cultural values and misrepresenting facts, even if done with good intentions, can kill a startup. Don’t over-state your abilities or hide your weaknesses, always be up front about what can be expected.

The Idea Litmus Test

Inspiring to be an entrepreneur, I search for new ideas in every aspect of my life. In the words of Alice, “sometimes I’ve believed as many as six impossible things before breakfast”. So I asked Umair, how does one know when it is time to throw in the dish towel and start their own company? Umair thinks that you first need the right reasons, it is a bad idea to start a startup because you are sick of a work situation in your current company.  People who are unhappy like this have the feeling that they need to start a company at any cost. At the other end of the spectrum, there are people with Analysis-Paralysis who are literally sweating the small stuff and haven’t made any real progress. He suggested, if you think you have an idea take a few months thinking about it, poking at it with a stick and if you are convinced then try to convince twenty other people. He suggested writing things down to methodically go through the design process; go as far as making presentations and financial excel sheets even if you don’t have an audience to show them to. Give due diligence, if after a couple of months you are not able to convince yourself to start a company, then either you are not ready yet or the idea isn’t good. Be brutally honest with yourself. Most importantly, talk to people, bounce ideas off people, try and talk to other intelligent successful entrepreneurs about your idea.

In our conversation, Umair pointed out an interesting South Asian trait: hiding a good idea for fear that it will be unjustly taken from you or copied. He says there is nothing further from the truth, you need to talk to as many people about your idea as possible. If the idea is weak and it can be copied easily then it is not worth investing your time on it. Feedback from peers is invaluable, hence, the importance of growing a strong network of smart men and women cannot be overstated. Umair went on to say that you need to surround yourself with a lot of good people who support your cause, be they investors, advisers or just peers. If you can convince the right people to be on your side, you are already on the path to success.

Execute

Once you start a company, how do you balance between getting a product out to the market as soon as possible and the time consuming task of building a cutting-edge product? Umair’s advice is to work on the innovation before you take the money, he suggested doing this as early as possible, either by yourself or with your partner, before you start building the company. Inspiration and innovation takes time and as soon as you get funding the clock starts ticking. Umair also stressed the importance of having a good team, screen candidates to get the best, evaluate them early on and get rid of them if they don’t fit. He warned technology startups to get sales people of the right credentials at the right time, not too early in the process. Hiring right is important for all roles, but it is crucial for sales.

Umair’s advice to students: don’t have fear of failure, every company you start, if it is successful or not, is a badge you have. You can get a lifetime of experience from your successes and failures. You can’t keep everyone happy, be ready to make tough decisions. If there are youths reading this article, don’t wait, if you have an idea pursue it now! With age and life come more and more economic dependency, which can only make starting a company more difficult.

If you have any feedback, topics that interest you, or questions please comment liberally and I will try to reply interactively. If you have ideas for articles that you would like to collaborate on, I would like to hear from you. Start a discussion if you have some startup idea and would like to get community feedback – sometimes its as simple as talking. Wondering where to read more? Here is a good reading list.

Asad Awan obtained his PhD in Computer Science in 2008 from Purdue University. He is currently an engineer manager at a new technology start-up called Conviva Inc. His interests include technology and systems in general, and the process of technological entrepreneurship, in particular.

As this application internally uses the Google Transliteration API, so, all the supported Google transliteration language pairs are available via this application. To use this application, one first need to save its bookmarklet in their web-browser, similar to creating a normal webpage bookmarks, and that’s it. The one main advantage of using the bookmarklet technique is that you don’t need to install anything on your machine, plus it automatically updates itself on the next load, so users will always see the latest version without running any updates.

How does it help in writing Urdu? To write Urdu in any text box on web-page, one needs to first load this application by clicking its saved bookmarklet link. Once the application is loaded in that page context, the user may enter text in Urdu using roman script in any text box on that page. To activate the Urdu Entry mode, one needs to simply press ‘Ctrl’ and click in a text box. When the Urdu mode is activated, the text-box orientation is changed from left to write, and an آ image is displayed in the background of text box indicating that Urdu mode is now active. In the Urdu Entry mode, if a user enters roman text like “Ye to bhat shandar khabar hai.”, it will be auto-transliterated and displayed in Urdu script i.e. “یہ تو بہت شاندار خبر ہے.”.

This Urdu mode entry works nearly on all the web sites pages, and all types of text boxes, i.e., one-liner, multi-liner, dynamic, and rich-text editors (as used in Google and Yahoo web mails). Using this tool, one can comment in Urdu on any website, can send emails in Urdu, can set their Facebook status in Urdu or can even chat with friends on Facebook in Urdu. These are just few examples of how and where this tool can be used, but basically using this tool you can write Urdu on the web everywhere you can currently type English without installing or changing any thing on the website.

How does it help in reading Urdu? The main inspiration behind this tool development was not actually Urdu writing. In fact, there are many existing tools and applications which let users type Urdu either using a special keyboard layout or by using roman script transliteration. What actually inspired me to develop this tool was to provide a way to easily convert the roman content on all the existing web-pages to Urdu script so that it is more readable. For example, there is a good poetry archive on www.urdupoetry.com, but all of that is in roman script. This is where this tool comes handy, and it lets user perform on-page transliteration of the existing roman Urdu content on the web-page without leaving that page. The transliterated text is displayed in place of the original text keeping the same format and layout. One can do this transliteration simply by just highlighting the text, and clicking the “Transliterate Selected Text” button in the preferences dialog of the bookmarklet. It also displays the original text (before transliteration) when the user moves the mouse over the transliteration text. Another handy feature is that one can also view alternate transliteration options and apply those by double clicking the transliterated words.

Why Hindi to Urdu transliteration? Hindi and Urdu languages share grammar, morphology, and a huge vocabulary, yet the majority of readers of both languages can’t read the other written language mainly because Urdu is written using the Arabic script while Hindi is written using the Devangari script. The speakers and readers of these two languages combined are more than a billion. So, if we can provide a good transliteration between these two languages, it can serve a very large community. Some very good work has already been done in this field, notably the Hindi to Urdu Transliterator by CRULP, and Hindi Urdu Machine Transliteration by M G Abbas Malik. Even though the results of these transliterations are good, they are not excellent because Urdu language has more than one equivalent character for a Devanagri character. For example, the character त (ta) in Hindi has two equivalent characters ت (tay) and ط (toey) in Urdu. Similarly, the Devanagari character ज़ (za) could map to ز (zay), ض (zoad), ذ (zal) and ظ (zoay) Urdu characters depending on the context and language rules. This becomes tricky to handle without complex language processing rules and dictionary. What I have done for this tool is a two step process. First, I transliterate Hindi to the corresponding roman script using the combination of the ITRANS and IAST transliteration rules to produce a roman script which is best for the transliteration. The transliterated roman text is then passed to the Google Transliteration API for English to Urdu transliteration and as a result the Urdu script you get using his technique is almost accurate. Of course, similar to other transliterations supported by this tool, one can perform Hindi to Urdu transliteration on the fly (without leaving the page), and you can also do the transliteration corrections on the transliterated words.

What’s next? It’s not the end; it is actually just a start. I have been getting a lot of feedback and suggestions from friends and the community. Other than tweaking and improving the interface, I’m also working on the Google Translation integration. I also plan to integrate dictionary and image lookup-up for selected words. So stay tuned and keep sending your valuable feedback and comments.

About the author:

Akbar has been developing software for more than 12 years. He is an Application Architect at Jin Technologies Pvt Limited.  He also does software development as hobby and some of his freeware utilities/projects are available at his site. He maintains a blog to share the software tips and tricks with community. When he is not doing software development, he loves to spend time with his family, watch movies and fly & build R/C planes!

This is supported by theory with successful case studies and field evidence from around the globe. However, little attention and application has been advanced in Pakistan. In many ways, we remain stuck with the business model of the industrialized century: hide, confine, and protect knowledge to self, whether in the form of an organization or person.

Unfortunately, the internet will not allow this model to flourish for too long. Its inherent features of freedom, equality, and access provide new opportunities tailored to knowledge sharing, openness, and empowerment. Pakistan on the other hand has yet to face the realities of the internet dominant world, therefore protection still flourishes. This is due to the limited use and access of the internet to the public, catering only to a small fraction of the population base. But growth in usage and eventual overturn is inevitable.

The concept of learning through informal and open exchange is not new, it has existed throughout history but the integrated, accessible, and connected world has enhanced its coverage, scope, and influence over a wider audience. For example, it has been widely documented that clustered organizations outperform scattered ones, whether it is academia or any other industry. One of the core reasons for this is the spillover feature that interaction and social presence of firms and people is able to create, referred to as ‘untraded interdependencies’ by Steven Pinch and Nick Henry [1]. This is probably the most natural, indigenous, and localized form of learning to have existed over time, where people learn with and from one another. Its pedagogy may differ per region but the essence of interaction remains the same.

Similarly, open and integrated spaces are overtaking the old wave of cubicle, closed door and isolated office spaces. In Pakistan, we are still confined to the box. We need to take a leap and step outside our box of comfort — and our traditional business parameters.

Motor Sport

Let’s consider the success of ‘Formula 1’ as a learning experience. The culture is predominantly based on collaborative forms of learning and competition — an underlying condition to generate a degree of competitive balance between teams. Healthy competition is necessary to attract crowds — with financial benefit to the industry. This is a subtle feature that a one-sided outcome would not achieve. Although teasing to the traditional mind, competitive balance cannot be acquired through pure confinement and minimal exchange, as learning and new knowledge is regularly shared to maintain a degree of competition in the industry. Moreover, knowledge generation itself is a cumulative outcome of exchange between diverse viewpoints and cannot be optimized in isolation. In [5], Steven Pinch and Nick Henry show that minimal learning is attained through formal exchange in conferences or industry wide journals; passive at most. Active forms of learning are through physical presence in the pit stop, employee turnover, and social interaction.

Bill Taylor [2] of the Practically Radical says ‘the only sustainable form of market leadership is thought leadership…the most powerful way to demonstrate your position as a thought leader is to teach other organizations what you know — whether they are customers, suppliers, or even direct competitors’.

According to Dr Kaplan of Virgin Mason, ‘the more we educate, the faster we move as well.. By teaching others what we’ve learned, it forces us to keep learning’. The approach ‘is not to out-market the competition, but to out-teach the competition. Why? Because teaching creates a different kind of presence in the marketplace. It creates a higher sense of loyalty among those who learn from you. And it helps the company create not just customers for its products but an audience for its ideas — in the same way that famous chefs are willing to share their recipes so as to build a following for their overall approach to cooking’ says Bill Taylor.

Innovation and Technology

A major feature underlining Google’s creative and social success lies in its ability to respond to market need and create a new business model. The company predominantly relies on creating an environment fostering creativity through collaboration, interactivity, empowerment, and sharing rather than protection and storage of learning between few. In Pakistan, our mental and social colonization, under-utilization of capacity, and minimal pursuit of continuous learning, stemming from our education system — which does not seed features of lifelong learning along with other cultural factors — are probably some of the reasons underlying our attachment to the business model of the 20^th century.

Is lack of research a cause of our inability to innovate? At best, it is the surface of the cause and an outcome of the approach and mind set.

Is lack of human capital the cause? Not really: most potential does not attain its due worth. Most of the brightest graduates aim at attaining middle management jobs at multinationals — a core feature of structural dependency of the economy. There are various companies in Pakistan which are constrained by mindset rather than their ability or acumen — inevitably influencing the human capital it retains — putting in place a vicious cycle between cause and effect. These companies need to feel self confident — invest, cultivate, and subsequently envision human resource as their capital.

After all, the DVD as a product technology was created in the industrialized world, but was eventually replicated and mass production took off in the developing world. This did not mean that the industrialized world lost its power, infact it gained on the contrary, as the dependency on the industrialized world ‘to create’ further increased.

Academia and Research

The London School of Economics shares its public lecturers locally (in session) and internationally for free. This does not mean that the School is losing its market power or competitive edge. In fact the opposite is true. It is a tool used to create social power, generating the ‘wow factor’, and instilling a strong desire among students to be part of the process, another reminder of the knowledge driven future. Open Course Ware at the Massachusetts Institute of Technology and the recent advancement of Professor Sandel (Harvard University) to television underlines the case. The internet has changed the parameters of competitive edge in business.

Successful academia has started using knowledge to create tacit power, utilizing it as a tool to market and attract students — if you constrain exchange and dissemination, the internet will outpace you — use it before you become redundant.

The competitive edge of a university is maintained through the interactivity between students and faculty in and outside the classroom, the social, intellectual, and economic opportunities it provides, the presence of diverse viewpoints and mindset, and most of all the ‘chaos’ — creating avenues for ideas, learning, and breakthroughs.

An interesting example exists on how research is shared and disseminated. International firms such as Mc Kinsey and Company, Price Water Coopers, and Boston Consulting Group share some ideas, publications and analysis with the public for free (readily available on their website), utilizing it as a form of tacit marketing strategy. You would not find such information on most corporate websites in Pakistan. Similarly, universities and broadly faculty share and upload their publications and research articles online for free view. This reflects a social and intellectual mindset gaining precedence and force in the new generation of learning, a feature you would not find on websites of most organizations in Pakistan including many universities and research organization.

As the modern models of exchange evolve, thought leadership is social leadership, which reinforces economic and political leadership. Business models need to respond to changing times –– the year 2010 is much different from the year 2000. We need to envision the use of the new approach in Pakistan; take the step forward and overcome the innate fear. Lead and benefit, as many still remain plugged to the old business model.

The opportunity is there, and the dividends are for the taking. A wise man once said ‘the timing of decision is more important than the accuracy of choice’. The time is now!

Ali Sohail is an economist with a postgraduate focus in local economic development from the London School of Economics and Political Science. He is currently working on the development and launch of an interdisciplinary university in Karachi. The views expressed in this article are solely those of the author and do not necessarily reflect the views of STEP.

References

[1] Pinch and Henry (1998) Paul Krugman’s Geographical Economics, Industrial Clustering and the British Motor Sport Industry, Regional Studies, Vol. 33.9, pp. 815-827.

[2] Bill Taylor (2009) The Teaching Organization, Practically Radical, Harvard Business Publishing http://blogs.harvardbusiness.org/taylor/2009/11/companies_with_class_the_rise.html

[3] Cohen (2009) Morals Class in Starting: Please Pass the Popcorn, The New York Times http://www.nytimes.com/2009/09/26/arts/television/26sandel.html

[4] Michael Todaro and Stephen Smith (2003) Economic Development, Eight Edition, Pearson Education Limited

[5] Pinch and Henry (1998) Paul Krugman’s Geographical Economics, Industrial Clustering and the British Motor Sport Industry, Regional Studies, Vol. 33.9, pp. 815-827.

[6] Porter, M.E. (1998). On Competition. Boston: Harvard Business School Press.

[7] Porter, M.E. (1990). The Competitive Advantage of Nations. London, Macmillan.

STEP: Till now, mostly you were funding projects in the academia. Would you be looking at funding projects that are directly initiated by the industry?

QS: We are supposed to fund projects submitted by the industry. Our proposal can be initiated by even an individual. But, being an entity that funds public money, the longevity of the institution to which we are giving money is very important to us. An individual can take the money (from us), work for a little while, and then disappear. What do we do then? Universities don’t disappear. They can provide longevity and credibility to the project. And, it is not (just) longevity for the length of that project but even after that.

We don’t fund projects just for the sake of those projects. We fund projects to create an eco-system as well. You don’t plant a seed on a land that may be abandoned or may  be sold for building a commercial building and the tree will be cut down even before it has a chance to get 5 feet high.  So, when industry comes to us, we say, it may be better for you if you come through a university channel.

That’s not a (strict) condition, however. We have also funded industry proposals directly. Actually, we very clearly say that we are a pre-angel fund. We fund creation of technology. But, we are finding out that the challenge of monitoring them can at times become difficult. A lot of these companies start to take this funding as work-for-contract. They say, ‘oh, you asked us to do these things and we’ve done these things, end of story and we’re done’. When you are trying to create an eco-system, and you’re not even asking for any money back, you want the sort of vision where the entity that gets the money runs with the ball. It doesn’t matter whether it was a 100m dash or a marathon; if you have gas, just keep going.

STEP: You talked about longevity and stability but, in a sense, innovation is counter to that. Fostering innovation may mean saying, ‘okay, here’s a smart guy, he has a really smart idea, let me give him some money to go build something’.

QS: We do exactly that. We just say, please park in a university so that there is some stability. You know, smart guys can be very fickle too. [Laughter] If the smart guy walks out, we get totally stuck. If we were VCs, and it was private money, we could say, okay, we were going to lose ninety percent of the projects anyway. This is one of the ninety percent. Ten percent will take us forward. But, with the public funding and government level accountability, we can be taken to task for funding such projects.

Whereas, if the money goes to a university, and a professor is involved, then if nothing else the professor becomes the archive. If the smart guy moves on to the next smart idea, some student or another entrepreneur could come and take the idea and developed IP forward.

STEP: So, what’s the motivation for industry then to get professors up to speed?

QS: One of the ways I motivate industry to partner with the academia is that I give them the argument that suppose you get  Rs. 15-20 million from us and suppose the solution that you create is a hit, and suddenly your product is bought by General Electric or Microsoft or some consulting company. Now, the buyer says, we want to take your  company to a 300-people development centre. Where are you going to get 300 people from? The idea is that, if an entrepreneur hosts his project in a university and gets a professor and a few students involved, he may not get 300 students by the time the project is completed but at least you would have sown the seed in the university and you will be two years ahead in creating this pipeline. So, a very big positive effect for the industry here is that the human resource developed by universities is in line with industry’s requirements.

STEP: Shouldn’t we make a technology park or an incubator with every university?

QS: That’s exactly what we’re doing. The only difference is that we believe that building a building is not necessary. In several cases, the incubation center of the university is about 3 miles away in a rented house. If the university has space, we compensate the university with rent. If the university does not have space, then the industry-academia joint project rents an office and we pay for electricity, air-conditioning, etc.

STEP: Do you think that the industry that is generating this revenue, which is the telecom industry, has a right to demand back some return for this money? Or, do you think those are two decoupled things?

QS: I think they gain a lot by wealth generation and improvement of standards in the country. If the improvement is more suitable to their goals, it’s even better.  So, as any entity we have to pay attention to our financier. Some of the thematic areas for research and development, for example, the center of excellence for telecom operations, are of interest to the telecom industry. There is also a significant probability that education through ICT will light up their network as a lot of that activity may have to happen through mobile phones.

STEP: The Fund’s vision states that you want to create a knowledge-based economy. Historically, economies have evolved from agriculture-based to post industrial-revolution industrial economies, and then recently to knowledge-based economies. In a sense, we are still largely an agricultural economy. Does it make sense to jump directly from an agricultural economy to a knowledge-based economy?

QS: I think there’s significant leap-frogging that’s happening today, for example, our land line connections are 4 million, and our mobile connections are 60, 70, 90 million depending upon what interpretation you go after. Like I talked about before, one of the key things that I really want to push for is to come up with scalable and sustainable solutions for delivering high quality education by using ICT technologies. That you can do without having to go through the industrial age.

Actually, I think a significant amount of technology management models have to be re-thought. I am not an expert on it, but when I hear statements from people who say that they are experts on technology management and technology transfer, and they go through traditional models, I tell them that tradition has been thrown out by telecommunications.

STEP: When you fund research, who owns the intellectual property (IP) that is produced?

QS: We own the IP. The Fund owns the IP. But, the grantee has an irrevocable and perpetual license to commercialize, further develop, sell, and productize the intellectual property. The only thing is that this license is non-exclusive; that is, the grantee cannot stop another party from using the developed technology. If somebody else wants this technology, we have to give it. But, realistically, our goal is to generate wealth in Pakistan. So, if you have taken the technology forward and created a significant company leveraging the developed technology, we are not going to — at least as long as I am the CEO — actively look for people who can use this software and bring you down. After all, we helped create your organization.

Future of the Fund

STEP: Do you think that the Fund is under some sort of risk or pressure to spend? And, if yes, where does the pressure come from?

QS: Oh yeah, we are very much under the pressure that we are not funding enough. This pressure comes from very well-meaning political managers, and I really mean well-meaning. A bureaucrat at a certain level stops looking at the process we are following and starts looking at key parameters from his macro view. And one of those parameters is the amount of funding that we are being able to disburse while satisfying the quality constraints. Similarly, from (the viewpoint of) political management a key parameter is the impact that we are creating.

STEP: So, is there a chance that the Fund might lose some of its funding and the money channeled somewhere else?

QS: Could be. But, I don’t think that’ll be a good thing to do because, if we were allowed to build buildings and buy equipment for a university, we could spend a billion rupees in six months. We could spend four billion rupees in 6 months.

STEP: What about some of the other directions that the Fund is taking? I know the Fund also has a scholarship program.

QS: Yes, we are funding 4-year scholarships for deserving students of rural area public schools. At this point, there are over a 1000 students in the program who are going through FAST, NUST, GIKI, COMSATS, IIU, and other universities. The students who entered the system in 2006 are becoming seniors now, and at least at FAST, since the first batch was only at FAST, they are at the top of the class.

STEP: What are some of the success stories of the Fund?

QS: One of the success stories that I am really proud of is the open-source software engineering course developed by Dr. Fakhur Lodhi at FAST-NU Lahore. In this course, the instructors select an open-source software, and the students become part of its support network. They have to either add a feature or fix a bug that the entire open-source community linked to that software has to accept.

The course has been a real success, so much so that this year a team from FAST got accepted at Google’s Summer of Code program (which is very competitive). Next year, their goal is that every kid who goes through this course to be accepted at Google.

Then there’s a project at FAST-NU Islamabad where they are working with lady health workers and they have developed the whole interface for neo-natal care. That has actually led to a briefcase-sized device which has equipment to measure temperature and blood-pressure, etc. This device has become so popular that a company that does work for UN and USAID throughout Africa and Asia wants to buy it.

Then, there’s HL7, Health Level 7. It is a standard for transferring medical data between applications. Its latest generation, which is probably version 3, is being developed at NUST in open source and already a lab in Pakistan has adopted it where they are using it to transfer data between their centers in Lahore, Islamabad, and Karachi.

STEP: Are you hoping to get the Pakistani diaspora involved with the Fund?

Yes, absolutely. But a problem that I have at times with the diaspora is that they say ‘I make $150,000 a year, so if I give you my time will you give me a percentage of my salary?’

I go as far as saying, look we will get you a solution developed, and you build a Google on top of it and become a billionaire. We would not ask for a single penny back. But, for now, if you spend time in Pakistan, may be, we can compensate your time in Pakistan at a Pakistani level (but not beyond that).

STEP: Well, we hope that there’s enough good will for people to contribute voluntarily, be it as program managers or reviewers or mentors. Of course, they cannot be compensated based on their US salaries.  Thank you for your time. We hope that our readers will find this conversation just as interesting as we did.

QS: Thank you, for giving me an opportunity to share my thoughts.