I have been fortunate enough to live through the greatest ages of technology yet, and launched a company in that sector. We were a startup ourselves which saw the PC era change the nature of work forever. We witnessed the birth of the internet that would go on to disrupt entire industries. We watched the rise of the mobile internet and with it a fundamental reimagining of the customer journey. We began investing in numerous startups with sound business models. And we are now watching, and involved in Internet of Things era.
The technologies that combined with the internet and enabled innovation, sociality and mobility, are now fueling a startup boom in emerging markets. Pakistan is no exception. While startups have been a part of its economic fabric for decades, they have recently ascended the hype curve with unprecedented acceleration. However, over the last three years we witnessed the unintended consequences of it. The biggest being the availability of quality human resource for growing companies.
Today, the startup mentality is sometimes enshrined into the mental map of students before they even start college. A proliferation of incubators, which is good in a lot of ways, at universities and exposure to startup successes via highly informed social networks helped create this early awareness. Many students instead of launching a career after college work at startups or bootstrap fund their own. The founders value these startups with crazy unjustifiable numbers. Many a time, their business models often fold like a house of cards under even the most primitive of analysis. We’ve seen a number of cases where after two or three years, with investors failing to bite on the valuations or due to an erroneous business case, these startups go under and the founders then go into the job market.
This is where we come across them leading to an odd impasse, where they don’t have skills in most areas needed to add value to an established and growing business. Yet because they have been in startups for a few years calling the shots being the CEOs and co-founders, they do not (a) fit well in a corporate structured culture and (b) they don’t settle for salaries that equate with their experience and skills.
In this year alone I’ve come across this at least six times. The scale of the startup frenzy has come to hurt the ecosystem. For the first time in two decades we are having trouble finding a good roster of candidates to take up positions that lead to very rewarding careers in many different companies, industries and even countries.
This is by no means a case against entrepreneurship. I am a big proponent of it, but with the right experience and knowledge. The issue here is not the genuine startup ecosystem. But why not hone your skills and entrepreneurialism inside companies with mentors who spend time and resources in developing you. Understand how successful companies are run and the financial discipline and management nous that underpin them. Experience the constraints to growth in industries and customers firsthand and then parlay that valuable experience into startups that address those constraints. This is how you stack the deck of success in your favour.
We all have a responsibility towards these fresh graduates and a great need of mentorship. Incubators and mentors need to go from relentless cheerleading at the obfuscation of all else, to having a crisp clear dialogue of what it means to be in a startup, what it takes to succeed and the chances of success. They need to address the perception — that starting your own company is the fastest way to wealth. It isn’t. Starting successful companies is about fixing issues we face and solving problems in the world around us. Wealth is a byproduct.
We also need to evolve as organisations. Our corporate cultures need to account for the nature of millennials. They need to be empowered quickly and listened to in a culture that values their agility and flexibility. Once we have these cultures in place, we need to reach out to students and make our case to them that careers can also be as rewarding, or more rewarding, than founding companies.
Published in The Express Tribune, May 12th, 2017.
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