Starting a business is scary. That’s why the startup ecosystem in any country will help determine how successful young businesses can be. Without a support system in place, the mentoring, guidance and opportunities take so much longer to trickle down to those who need it. In any economy, venture down into the crowd of newbies and the scenario is a lot of noise, a lot of frustration followed by some stumbling into the revelation of how things work. The charm of the unstructured ecosystems is a bit of ‘learning things the hard way so you never forget the lesson’ with a touch of the ‘blind leading the blind’. The lack of knowledge-share is always surprising.
Every entrepreneur has been through their own learnings and falls into the same rut of not having enough time to share that know-how with everyone else. After all, if the hamster stops, the business cycle risks coming to a screeching halt.
However, if there was only a manual, a playbook, that would give the basic guidelines as to what a startup needs to know… you know, answer the basic questions and unknowns, life would be so much easier. There is. There finally is.
Invest2Innovate, a startup accelerator since 2011, produced a Startup Toolkit to help answer some of the basic questions and queries fresh entrepreneurs have. Among other things, an attempt to level the playing field of all fresh entrants. “I’m fairly sure this is the first toolkit of its kind, which is terrible because it should have existed before!” explains Kalsoom Lakhani, Founder and CEO of i2i. “We, meaning us at i2i and our co-author Mubariz Siddiqui, just thought it was ridiculous that this kind of information should be available to everyone and yet all the information that is out there (SECP website, etc.) is siloed or difficult to comprehend.” The toolkit deals with answers to questions about taxation, business registration, valuation and dilution.
But this isn’t the first set of insights the group has shared. In 2016, they released an Investor Toolkit to help investors navigate the landscape in Pakistan. “We launched this toolkit because we realized that startups need access to this kind of information – and not just the ones that got into our program, but everyone. I’m so tired of seeing founders being taken advantage of or losing out because they just didn’t have enough access to good information – we wanted this guide to be a starting point to change that. I think knowledge in any ecosystem is power, and Mubariz and I especially wanted to help level the playing field for founders.”
The Startup Toolkit is geared towards startup founders, wannabe entrepreneurs, ecosystem builders and even other startup programs. From a Better Business perspective, anyone can thumbing through either of these toolkits can get a relatively comprehensive idea about what the entrepreneurial landscape is like. From two documents. Referenced and shared.
So what has the accelator’s experience working with startups? Based on the layout and findings placed in the toolkit, what are some of the other common challenges startups face in an ecosystem such as Pakistan? “So many,” begins Kalsoom. “Something we’ve explored in our past ecosystem studies, I think the regulatory environment poses the greatest challenge. We find that it leads to a trust deficit in the Pakistani ecosystem, which is why information asymmetry exists, why people are reluctant to share ideas, why payments is such an issue, etc. I think it all goes back to the regulatory environment.” In an age where the ‘Keep It Simple Stupid’ mantra governs all, complex and complicated just doesn’t make sense. “Even though it’s so great to see the progress of Pakistan’s ecosystem, those barriers will continue to act as an unnecessary ceiling to that progress that will prevent more success stories from emerging.”
It’s no secret that the startups have a high failure rate. They are high risk and few make it into the spotlight. But those are the risks involved with any venture at any level of maturity. In Silicon Valley, 9/10 is an accepted failure rate, explains the founder of i2i. According to research published by Harvard Business School, 75% of venture backed businesses fail; another published by Statistic Brain says that 50% of all businesses in the US fail after 5 years and 70% fail after 10.
Networking and information sharing is vital to the overall success of any sector and startups are not the exception to the rule. While the Startup Toolkit is just one of the many playbooks you’ll need to be on your way, whether or not yours is a successful venture, will really be up to you.