Entrepreneurship is an attitude. It’s the passion of creation. It’s an outlook on solving problems. It’s the embodiment of human resilience. It’s the vision of crossing the chasm. Sound fantastic? So, why don’t more people start (or work at) startups? Statistics stack the odds against most startups with about one out of ten chances of succeeding, and an even smaller chance to make it really big. But most failed entrepreneurs will tell you that they don’t regret having tried. To understand why, I will present a series of articles covering various topics related to startups and would like readers who are actively engaged in startups or have opinions on related subjects to come forward and contribute or collaborate. As a part of this thread, I will be presenting a few articles covering the experiences of successful and budding entrepreneurs — what better place to find answers than the life stories of people who took the plunge.
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.
An interesting article. Entrepreneurs do create jobs and wealth, but society has to have excess disposable capital to risk on new ideas and initiatives. I wonder how a cash-strapped society like Pakistan can jump start this cycle. Your conversation with Umair seems to reinforce my feeling that risky entrepreneurship cannot exist in many places, even in the developed world.
Tauseef, thanks for bring this up. I don’t agree and two examples come to my mind immediately:
1. In my next article I will present my discussions with an entrepreneur who started a startup in Pakistan and raised money in Pakistan. So there is funding available. I also have a friend who started a company in Islamabad and after initial prototype got funding in the US to build his company back home. These are only my direct contacts and I am certain there are several other success stories. If someone reading has such experience please share.
2. There are VCs like Acumen Fund, who have offices in Pakistan to help build social enterprises. I know about them because I have personally met people who work there. I am sure there are more and I will try to collect a list. If any of the readers have done such research, it will be nice if you can share.
No, you don’t need “excess disposable capital” to fund start-ups. Say someone wanted to start a Petrol Pump in a new locality on the out-skirts of Lahore. Would enough customers come to it? Would the investment pay enough returns over say 3 years? What happens if there are not enough customers for the pump? What if there the road on which the pump is on gets neglected because of a bigger road opening nearby? What if there’s an accident and the place burns down?
That’s a lot of risks for something not very entrepreneurial. But are there no pumps in Pakistan? Sub-Saharan Africa? Of course there are. Every venture has risks; some more than others. Poorer countries have lesser wealth to go around so you won’t get to hear about multi-billion dollar venture funds in these countries. But that doesn’t mean risky investments aren’t made. They are made, they’re just of a smaller magnitude.
I agree with you when you say: “Entrepreneurs do create jobs and wealth”; then any country where there are private jobs would already have some degree of entrepreneurial activity going in it.
I think that entrepreneurship is especially relevant for poor countries. These countries are behind in technological advancements so many of the tools and tech already in use in modern countries have not been adapted locally. The problems that we have in poorer countries are of a much larger magnitude and bigger the problem, bigger the rewards.
Very well-written article my good man. I didn’t know chowk was started by a KGS guy :)
Thanks! Chowk founder & staff list: http://www.chowk.com/articles/6442
Read if you are interested in the learning about why and how Chowk was born.
Indeed a very good article with some very useful tips. Looking forward to reading more on the same topic!
Entrepreneurs are the building blocks of a local as well as global economy. Asad, I must thank you for providing a much needed mental stimuli to people through your article on a very significant area of development. I am a keen learner of entrepreneurship and (as I’d like to believe) an idea factory of entrepreneurial ideas, therefore, I would encourage you to also educate the masses on the financial and managerial services available to establish startups, esp. in Pakistan. In the long run, it would be a good idea if a television program can be developed to educate and maybe even invest in entrepreneurial ventures! God Bless!
Asad,
The article is very inspiring and knowing that Pakistanis are doing so well against all odds is very encouraging. But almost all the blogs that i have came across talk about tech entrepreneurship which is great but i ask this question to myself and others, is entrepreneurship all about technology ? i think not. I have been trying to gather enough information on sector definition, business planning and most importantly availability of funding for non tech ventures in Pakistan. It will be great if people with your credentials and experience can tell us (the not so literate and experienced) about the opportunities of entrepreneurship in general and what it can do for our country and how anyone and everyone can contribute and use it to their advantage.
Great comment Umar. Startup is not all about technology, rather the key is “innovation that disrupts”. Innovation can be in the form of technology (e.g., Google) or a business model (e.g., Groupon). The Groupon.com example is actually pretty impressive — they started the company in 2008 and by 2010 they have a valuation of more than $1B. There is not much technology involved at all, but it is a brilliant business model (read about it: http://techcrunch.com/2010/04/18/its-official-groupon-announces-that-1-35-billion-valuation-round/). Similarly, Netflix when it started was not much about technology. A similar startup in Pakistan is “The readers club” (http://www.thereadersclub.com/about_us.php), which is an innovative solution catering to a real need, but isn’t high-tech.
I believe Umar’s point was that there can still be entrepreneurs beyond dot-coms. There are many potentially profitable problems on energy, agriculture, mining, and transportation that could stand some attention from entrepreneurs. Being net-centric isn’t necessary for entrepreneurs. It would be great if we could get some discussion on that aspect too.
As another example check out:
http://www.acumenfund.org/investment/micro-drip.html
Which is a drip irrigation based innovation funded by Acumen Fund.
The projects funded by Acumen are focused on social impact, but it gives some insights regarding needs of the developing world.
If the economy of a country was like a company; then startups/VCs would be its R&D. Because of the nature of startups, most will break new grounds via technology. That could be a new way to clean water, generate power cheaply or even a dot com. I have rarely seen a startup which did not innovate technologically.
I suppose it depends on what you mean by a startup. If by startup you mean new businesses this is not true. New restaurants, factories, shops, or farms are what most new businesses are I expect; no technological innovation here, usually. The reason why this distinction is important is that in Pakistan there are problems to be solved, but much of them do not need new solutions — just the application of known solutions, as you have mentioned in your earlier post. If startups are limited to technologically innovative startups, then we exclude much problem-solving potential that is relevant to the country.
Wonderful and encouraging article for the consumption of our young university graduates.As a Founding Director General of the first Technology Innovation Center established at NUST in 2003 at Islamabad and going thru the challenges of start up companies, I have realized that developing an Innovation Culture in Pakistan in a generational phenomena like gardening.We are the gardeners of to-day and the next generation would reap our fruits.Are there any more gardeners here to build our existing critical mass of Innovative Manpower.
Yes, several :)
But the garden destroyers are many more!
A very nice and inspirational article. We certainly need such motivational writings in order to take out initiatives that we won’t due to a lot of constraints being put up around us namely economical.
We need to educate ourselves that we have got enough role models within ourselves to follow along. Thanks for sharing, good to know the personality and KEEP IT UP.
Inspirational!
clickmarks was sold stock for stock for a million and a half, after 27 million in investment, is that a success?
Of the entire content of the article, *this* is what you chose to comment on? Please be more constructive.
Dear Anonymous, When would someone sell his stocks/ company? Only when he believes that he cannot take it to the next step forward. 27 million vs 1.5 million is definitely not a success but it does tell you that someone knows how to play with millions.
Someone else’s millions :), right?
Yes, that’s the real magic.
[...] I was reminded of all this when I read STEP’s sort-of-an-interview of Umair Khan. [...]
Mr Awan, I really enjoyed reading this, it was inspiring! But regardless, the idealism shown still makes me doubt the idea of entrepreneurship in our country. So I am eagerly waiting for your next article with “an entrepreneur who started a startup in Pakistan and raised money in Pakistan”, though I really hope its not the person who I’m afraid it might be….
Interestingly the primary fear is failure. But did umair ever witness failure ? It would seem that his start ups were bought and so were a success. The fear is the question “What if I lose all the money I invested when my family heavily relies on me”
Name any ONE entrepreneurial venture in Pakistan and discuss how it has used innovation to create value in order to make it successfu?
[...] seemed familiar – I found out that it was one of the websites I checked out after reading this article of STEP. I checked out the Acumen Fund blog, to have it bookmarked, and found out that she gave a talk [...]
Nice Article. Definitely a motivating stuff for new-comers. But, I’d disagree with Umair at one point where he thinks
“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.”
I must say that there are some ideas which are so simple that they can easily be copied and implemented. The only thing is that not anyone had thought about it before you did. So sharing is good .. but with ‘anyone’ ..!!! I don’t agree.