Why Pakistani Start-ups Fail?

In the last decade the world has seen a major rise in technological advancement, and so did Pakistan. But for Pakistan, it’s opposite was true. Opposite in terms of progress and vision. We have seen many Pakistan origin start-ups fail over the years. But why are our startups failing?

start-ups fail

Well, working on a start-up is not for everyone. Not everyone has an entrepreneurial mindset nor does the majority have the skillsets of being a founder, That being said, those who do pursue entrepreneurship and create a company face some of the toughest challenges in the industry. It is a fact that 9/10 start-ups fail. Keeping this in mind along side the monopoly of big corporations, corruption, lack of resources and funding, all help contribute to the failure of startups in the country.

Not Thinking Big enough

One of the most fundamental reasons is because most founders lack the “Billion Dollar idea“. Most founders do not have a broad vision. They simply don’t think big enough. This includes not thinking about going global, tapping into new markets, not solving a ‘big issue’, or marketing towards a larger niche. Startups need to work on problems that could scale globally and more importantly had the potential to become a billion dollar company.

The Funding Curse:

One of the most prominent reason of the failure is insufficient funding or no funding at all, this is a major problem and realistically the biggest. Yet the startups who do get funded still succumb in the future not because of their idea was not valid or their team rather the funding ideology of VCs and ‘angel investors’ in Pakistan. The local investors’ policy of “take $50,000 and give me 51 percent share of your company”, even though provides a push in the start can create problems later. For instance, in later rounds this makes startups fail to raise money because they don’t have rights of the company. So investors have effectively killed the startup. Doing so you get “controlling rights of zero chances of success”

Copying Others

Copying Startups is something which founders in Pakistan have been doing since the start. Founders often spend hours upon hours on google trying to find a startup idea which they could replicate. Mostly this is what kills a startup. If something has found success that does not guarantee that you to will share that success, in fact, most founders in Pakistan end up copying startups and business-models from countries such as India, In their thought process they feel that the economies and work-culture is very similar to India, yet this is completely the opposite.

India is totally in a different league than ours, their Ideas, their economy, their culture, their startups. All the opposite. What we should do is try to learn and understand and “fix” that idea to fit into our country. Examples of this are UBER and Careem. When the American giant Uber saw great success in Pakistan, our founders started creating numerous ride-hailing apps similar to Uber and Careem. For obvious reasons they failed pretty bad. Because the people at Uber had a vision, they tried to solve a problem and not just throw another idea around. I mean, the fate of the startup is not in your hands, but at least you can have a solid vision.

In conclusion, not thinking big enough, lack of funding, and copying are what cause the downfall of many startups in Pakistan. Hopefully in the near future, our founders can correct and overcome such challenges and envision the best of ideas to create the bigger startups.


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