There is no shortage of problems in Pakistan today with no apparent end in sight. Entrepreneur types you will tell that every problem is an opportunity in disguise. If that were true, we would be the “land of opportunity”. But are they wrong when they say it? Probably not, nearly all of Pakistan’s problems can be monetized into successful businesses that make someone money and solve someone’s problems. Yet there is a serious shortage of people who view things that way. My friends and I always wonder why

I realized that for most of us, hopelessness is a very comfortable place. We complain about the state of affairs and then find someone else to blame it on. The government, the army, the burocracy, heck people even blame their parents for their state of affairs. Anyone really, but themselves.

It reminded me of a letter Qaid-e-Azam wrote to the people of a Muslim village in 1920 (or something). 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. Sounds simplistic but really in many cases, it really is as simple as that. I think Jinnah understood the psychii of our nation well and we, as a whole, haven’t changed our weaknesses 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. I don’t think there is a shortage of people trying to take ownership. What is required is guidance and reinforcement to these people to stay the course.

I believe that what we require are a series of incubation facilities that help develop the entrepreneurial spirit, and then to coach and it into sustainable businesses. Incubation is the chosen medium for this around the world. For example Seoul, Korea has over 500 incubators alone. Compare that to about 3 (that I know of) for Lahore. For Pakistan, the idea hasn’t kicked in yet. Governments lack the funding and universities lack the research infrastructure required to make generate ground breaking innovation.

This article details our efforts to try and develop a practical model for incubation in Pakistan.

About incubators

One can classify incubators around the world under the following broad categories. They vary largely in success rates and objectives:

• Property firms trying to add value to their offering. They are in it for money of course.
• Non-profits trying to encourage entrepreneurship create jobs etc…
• Universities trying to encourage industry collaboration and monetize research
• Investors looking for high returns from the next big idea
• Corporation trying to expand into new markets or looking to encourage entrepreneurial talent within their enterprise
• Variations on the themes above

What do incubators generally provide?

• Premesis – flexible, 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, 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)

[Reference to the incubator book]

Incubators in a Pakistani context

For Pakistan specifically, we feel that the incubation models need customization before they become viable, sustainable units. In particular:

• Incubators need to go beyond acting as investors or managers assisting in ideas that someone else brings in. We feel that our incubators should have pre-fabricated business templates that go beyond the realm of ‘support’. Particularly in the early stages of the business and particularly for first time entrepreneurs.
• Capital is largely private equity. For religious reasons a very large population will not go to Banks. Of that too, smaller amounts are available compared to what Banks can provide. This means that successful business templates need to be low on capital requirements and the techniques to raising this capital focus heavily on private equity networking.
• Starting business’s with proven models with a proven customer base rather than one where the customer adoption is likely to take years.
• Incubators need to focus on hosting low risk business. It seems a little counter initiative to think that someone living in Pakistan would be risk averse. But perhaps we probably exhaust our quota of reasonable risk living everyday life.
• Training focus should be on basic business training for the educated community
• Development and support on the sales and marketing side. 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.
• 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.
• A strong networking component is required. As with most industries, most entrepreneurial activity is deeply fragmented with there being few, if any, forums.