Analysis: local start-ups that have made it...

Pakistan's start-up ecosystem is gathering steam. There are scores of start-ups that one gets to hear about these days on social media. While some have struggled to take off commercially, others have gone on to make their mark. BR Research set about finding critical success factors (CSFs) that are common among successful start-ups.

Criteria for inclusion in this analysis were that the firm should be: 1) an original, local start-up 2) based out of Pakistan and 3) in commercial phase. More than a dozen such start-ups were contacted for key information specific to their operations. The response has been mixed, presumably on account of limited willingness to share data with the public. Before going to the CSFs, let's briefly look at the start-ups that did share information. They are listed in an alphabetical order.

<B>Sector:</B> Automotive

<B>Founding:</B> 2015, Lahore (Hamza Abbas, Abdullah Cheema, Rabee Jamil, Hassan Samiuddin)

<B>Idea:</B> A platform that connects trusted mechanics to the car owners at their convenience.

<B>Latest funding:</B> $100,000

<B>Main Investor:</B> PakWheels.com

<B>Business strategy:</B> Convincing mechanics to work on freelancing model and using social media to promote the concept of booking a mechanic online

<B>Sector:</B> eHealth; eCommerce

<B>Founding:</B> 2014, Karachi (Furquan Kidwai)

<B>Idea:</B> To ensure that authentic pharma and consumer products reach consumers

<B>Latest funding:</B> Nearly $1 million

<B>Main investor:</B> Crimson Seed Capital, Planet N (Nadeem Hussain), Noor Abid, and two other angels from the UK and South Africa

<B>Business strategy:</B> Become the Amazon of Pakistan.

<B>Sector:</B> FinTech

<B>Founding:</B> 2015, Lahore (Qasif Shahid, Monis Rehman, Umer Munawer)

<B>Idea:</B> To demonetise payments and digitise the Pakistan economy

<B>Latest funding:</B> $1 million

<B>Main investor:</B> Vostok Emerging Finance

<B>Business strategy:</B> Change payments' methodology the same way WhatsApp changed communications space. Grow and scale like a social networking platform

<B>Sector:</B> Information Technology

<B>Founding:</B> 2014, Lahore (Maaz Kamal, Jazib Babar, Ali Ahsan, Waqas Aqeel)

<B>Idea:</B> Use Smartphone to interact with advertisement/media content, in real time

<B>Latest funding:</B> Rs 22 million

<B>Main investor:</B> Fatima Ventures

<B>Business strategy:</B> Use B2B2C model to help clients (advertisers/broadcasters) make their content interactive

<B>Sector:</B> Automotives

<B>Founding:</B> 2003, Lahore (Hanif Bhatti)

<B>Idea:</B> To build an Eco-System for all the automotive needs of Pakistanis

<B>Funding:</B> $3.5 million (2014)

<B>Main investor:</B> Frontier Digital Ventures

<B>Business strategy:</B> Building an online ecosystem around automobile market to satisfy anything to everything related to automobile buyers, sellers and enthusiasts.

The following start-ups, listed in an alphabetical order, also made the list. But the information presented on them is taken from public sources, as most of them did not share information. Special mention goes to startuplist.pk, which is maintaining a database for Pakistani start-ups.

<B>Inception:</B> 2015, Lahore (Sahr Said, Sidra Talha, and Abdullah Ahmed

<B>Sector:</B> Beauty and Personal grooming

<B>Latest funding:</B> $280,000

<B>Idea:</B> Mobile/web platform to search nearby salons, make appointments, and look for deals

<B>Inception:</B> 2013, Lahore (Faizan Aslam)

<B>Sector:</B> E-ticketing, bookings and reservations

<B>Latest funding:</B> Unknown

<B>Idea:</B> Without having to wait in a queue or get in the rush, book cinema and bus tickets in advance in major cities of Karachi, Lahore, and Islamabad

<B>Inception:</B> 2014, Karachi (Rai Umair and Nauman Sikandar)

<B>Sector:</B> Online food delivery and restaurant reservations

<B>Status:</B> Acquired by Food Panda in February 2015

<B>Idea:</B> Order food online for free, round the clock. Find valuable deals at good restaurants

<B>Inception:</B> 2011, Lahore (Waqas Ali and Sidra Qasim)

<B>Sector:</B> Artisan Footwear

<B>Funding:</B> $227,000

<B>Idea:</B> Design shoes based on centuries' old Pakistani craftsmanship and sell online

<B>Inception:</B> 2013, Hafizabad (Saba Gul)

<B>Sector:</B> High-end, handmade handbags

<B>Funding:</B> Unknown

<B>Idea:</B> Use indigenous handcraft talent to make luxurious handbags and clutches for a global market.

<B>Inception:</B> 2007, Lahore (Monis Rehman)

<B>Sector:</B> Recruitment

<B>Funding:</B> Over $8.5 million

<B>Idea:</B> An online recruitment website that links job-seekers with employers

<B>Inception:</B> 2013, Lahore

<B>Sector:</B> Transportation

<B>Latest funding:</B> $200,000

<B>Idea:</B> Reduce inefficiencies in the public transport domain by offering services such as planning bus trips and booking rickshaws via an app-based platform

<B>Inception:</B> 2006, Lahore (Imran Ali Khan and Zeeshan Ali Khan)

<B>Sector:</B> Real estate

<B>Latest funding:</B> $29 million

<B>Idea:</B> Become a "one-stop-shop" for all aspects of real estate, by focusing not just on transactions but also information on the real estate markets across the country.

<B>Critical success factors</B>

While the above listings are not exhaustive, and there may be successful start-ups that haven't yet caught the eye, there are some factors that point to a blueprint for success for the new kids on the block.

<B>1. Convenience and speed sell</B>

Successful start-ups haven't really created new 'needs'. Instead, they have offered to satisfy existing needs in a way that is faster and convenient. Value is a relative notion that depends on many factors, but convenience and speed can help.

<B>2. Technology is the ally</B>

Using technology helps to achieve convenience and speed of service. All the start-ups listed have online platforms that bring users, both producers and consumers, together. Another key benefit of using tech-based platforms is their wider reach at home and abroad. As marketing is embedded in the online offering, start-ups don't have to spend too much money to promote themselves.

<B>3. Align with the youthful middle class</B>

Hitching the start-up wagon to the country's middle-class youth can pay dividends. Compared to the previous generation, these folks seem especially fond of socialising over food, movies and riding together. Apps that smartly target such socializing needs, such as bookme.pk, travly, and eatoye, will stand on solid ground.

<B>4. Look for the niche</B>

But the market doesn't necessarily have to be large enough. Bringing obscure talent, such as indigenous craftsmanship online, can create a new, small, but lucrative niche, with a decent shot at making the product mainstream sometime in the future. Markhor and Popinjay have demonstrated that.

<B>5. Don't shy from messy stuff</B>

A start-up need not be all fancy and stylish. It's the messy stuff - such as finding plumbers and mechanics to fix things - that can also create tremendous customer satisfaction.

<B>6. Build an ecosystem</B>

Growing popularity of online portals like PakWheels and Zameen demonstrates that start-ups which depend on "information" must try to build an authentic ecosystem. Not only that, the ecosystem must be driven by the crowd, the producers and consumers of information.