A few years from now, Ahmed Haleem Khan sees himself as building “Pakistan’s first billion-dollar startup!” Like Uber or Pinterest or Instagram, he tells The News On Sunday, in an exclusive interview.
That isn’t quite an unrealistic goal, given Khan’s illustrious educational background and experience. Currently the Entrepreneur-in-Residence at LUMS’s year-and-half-old Centre for Entrepreneurship (LCE), where he mentors startups, besides being on the PlanX board, Khan has more famously spearheaded Savaree and set up the online marketplace model under the brand of Kaymu.com in Asia and Europe for Rocket Internet GmbH. He is also the Principal of Jabberwock Ventures, a company that claims to be providing impact-driven support to businesses and NGOs.
His earlier work assignments include consultancies for leading multinationals before he took up teaching at Forman Christian College (FCC) in 2007. He had just finished his MPhil in Industrial Management from University of Cambridge, England. That, combined with his graduate-level training in Economics and Computer Science at LUMS, prepared him to perform “a wide variety of roles, from IT to Operations to Consulting to Marketing to Finance.”
Today, Khan, 36, is the proud mentor to startups such as Travly and MARO Tandoors who, he says, have managed to raise money and are all over the place. No wonder he calls himself a “startup guru”.
The News On Sunday: There is criticism that the LCE incubator is very city-centric and it isn’t one of those national outreach programmes that LUMS boasts. Comment.
Ahmed Haleem Khan: I think I agree with that. But, see, when you are starting, you always go for the lowest hanging fruit. So, the department had to be established; it’s still unproven whether the LCE incubators can work. But this time around, we got pitches from Islamabad and Karachi also.
We actually took one startup from Karachi and one from Islamabad who moved here. So, we are working towards that. We are also an accelerator, so that challenge isn’t there.
Having said that, geography isn’t our criterion, merit is.
TNS: LUMS is already producing business graduates. Why the need for such a centre? How do you see it sustain in the long run?
AHK: There are a few worrying statistics that come up — our economy’s slow growth, limited foreign investment because of the security situation, which means that multinationals are few and far between, which in turn means that there are fewer jobs available. Until and unless there is an inflow of capital, there will be no job creation.
The statistics we hear is that the number of graduates versus the number of jobs created and vacated is in millions. So, there are at least a few million graduates every year who would not find jobs because the jobs don’t exist. Keeping that in mind, they need to turn somewhere. We are trying to turn these people towards entrepreneurship.
LUMS produces MBAs and BScs but they are all either interested in the development sector or the academic sector or the corporate sector. Over the past one year or so, LCE has seen a lot of kids wanting to do startups. Traditionally, that thing was missing. Either you were from a business family so you got into business or you went through the grind by opting for a corporate job, obtained experience and then got into your own business. That’s what we are changing. Now the top students or the most brilliant students are more excited about doing their own thing than doing the corporate job.
TNS: LCE programmes are equity-based, unlike those at Plan9 and PlanX. Is that proving to be your drawback? How do you compare?
AHK: Plan9 and PlanX are completely not-for-profit but they have the government grant which we don’t. So, we need to find a way to fund ourselves. Technically, LUMS is also not-for-profit but we can’t really be making any money off our startups. Whatever money LCE makes, it can’t go back to LUMS; it has to be used to fund further programmes. We would also like to start funding our startups. Obviously, there’ll be a criterion.
Having said that, an organisation that is for-profit also has stronger KPIs (key performance indicators) because the people who give us money hold us accountable for that money. We have to show that we are making the right decisions. Unless we do that, we are going to be shut down. Their [Plan9’s] onus of making the right decision is slightly less.
Besides, Plan9 is solely technology-based. So, they will not take startups, such as MARO Tandoors or King Kashmiri Tea. But we are interested in businesses; we don’t care what the area is.
TNS: Just how realistic is the 7.5 per cent equity on a Rs200 million sum?
AHK: So far, anyone who has raised money has got more than this amount. Interacta is a prime example of that.
TNS: Why should a startup come to you and not opt for crowdfunding?
AHK: Our startups know that they are sitting in a business school; if they need help in, say, marketing, they just need to walk up one floor and find three PhDs in the subject. Likewise for finance, accounting, or law. So, they have access to all these resources and to a dozen of published papers. The other thing is the LUMS brand. When our graduates step out, they have a bit of credibility. The investors realise that LUMS has vetted this group for them.
TNS: It seems the LCE is interested in incubating/accelerating only commercial ventures. What about social enterprises?
AHK: Well, there’s no mandate for us to churn out commercial ventures. We just try not to overlap, because at LUMS we have a social innovation lab which caters specifically to social entrepreneurship.
Besides, we’ve never stopped anyone. If someone comes with a pitch, they get measured along the same axis which is that how good the team is, how good the idea is, and how good the execution plan is.
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TNS: Ideally, the startups should create jobs and not just wealth. How have your graduates fared so far?
AHK: Our startups are at such an early stage to be able to achieve this. Only 35-36 startups have graduated so far. Let’s suppose, 10 of these shut down and 25 startups gave jobs to 2-3 people each, that’s 100 jobs maximum.
TNS: Is that why you brought in Mobilink to sponsor an entire batch?
AHK: Again, there are two things we want to raise money for — to meet our running expenses, because LUMS gives us a limited amount, and to expand our team. Our only incentive is more startups, better startups.
The second thing we want money for is investment. The startups are usually not able to raise money on their own, so we want to set up a fund where we can actually fund them. If we have taken these startups it means we believe in them. Right now, we hold an investment summit for every graduating batch. People come, our guys pitch.
TNS: You call yourself a “startup guru” on your LinkedIn profile. Could you tell us what it takes to become one?
AHK: Oh, it’s a little embarrassing, you know, but the people around me insisted I should sound important. I need to change it. But the fact that I call myself a startup guru is because I’ve been doing startups for three years now. I have done a funded startup [Daraz.pk, Kaymu.pk]. Not only did I launch Kaymu in Pakistan but we launched it in Sri Lanka and Bangladesh. We literally went there and hired teams. Later, we did bootstrap startups, such as Savaree where we had absolutely no money but we built it to some level.
I guess, there are a couple of things — you need some theoretical knowledge and the rest is just the number of startups that you’ve done, the amount of experience that you have. It’s like what does it take to be a guru at any thing; it’s the same principle.
For three years, I’ve been mentoring and advising startups, I am on the PlanX board as well. So, I represent both sides. (smiles).
The startups that I have mentored have managed to raise money, and they are now all over the place. For instance, Travly and Baby Planet.
TNS: For a tech savvy person, you aren’t very active on Twitter. Do you not take social media seriously?
AHK: I do take social media seriously. Time is a bit of an issue right now.
Basically, my area of strategy is operations, which means having to really deep-dive in a problem and solving it at that level.
I don’t consider myself much of a marketing expert, and, again, I am not trying to sell my own brand, so I don’t want to be really big on Twitter. My interest is that my startups, my mentees should be active on social media. Even if you look at my Facebook profile, my posts are always promoting my startups.
TNS: Where do you see yourself going from here?
AHK: I want to build Pakistan’s first billion-dollar startup, whatever that may be, whether it’s on a logistics platform, whether it’s our digital wallet, whether it’s in the tech space or education space or healthcare space.