When I started this blog, I decided to write about all things positive. I wanted to encourage others to start their e-businesses and I wanted to motivate them and give them optimism. But it’d be unfair not to write about the other side. Because while running a startup, there’s no way you won’t go through the dark side.
Honestly, I didn’t want to write about this for as long as possible. At the same time, I knew I will write about this someday as it continues to bother me 6+ years later. But mainly, I decided to write about it as I spoke to someone yesterday, who is also a victim of these criminal digital agencies of Pakistan. And it’s just a reminder that nothing has changed in over 6 years.
Koolmuzone’s Closure
In 2013, I closed my first ever commercial project ‘Koolmuzone’. Since closure of operations, it has continued to serve content accumulating 15 million+ pageviews causing me ad revenue loss in the range of 10s of thousands of dollars. I did it because I was put into a difficult situation where I had to choose whether I will continue to conduct business with criminals, or move the heck on. I moved the heck on, and I’m happy that I did it. I was able to put my time into better projects where my business could flourish without having to deal with these agencies.
Why It Happened
Till 2013, I worked with one of the digital agencies that frequently advertised on my blog and represented clients from telecoms, consumer-goods, food & beverage etc. Delayed and unpaid dues was routine. The promised payment time was net-90 after the conclusion of campaign, which was already 60 days longer than the industry standard net-30. But unfortunately, they didn’t ever honor that either. The average delay was 18 months after the net-90.
Startups are often cash-strapped & cash is everything to a startup. And a delay of 18 months translates into a slow death for a company. One of the days, after following up with them for months, I had an argument with the then manager of the company. After exchange of hot words, I was given the ultimatum that forget delayed payments, I will never get paid.
On hearing this, I was left with no option but to reach out directly to the client that advertised on my blog. After speaking to the designated employees in the company, I was told that I’ve no business speaking to the client. Because client doesn’t work with me. They work with the agency, and agency works with me.
I don’t want to get into details of what happened next, but after reaching out senior executives in the company, I got paid at one condition: no future business. I said my goodbyes and moved on.
Other Instances
It wasn’t just one digital agency. There are others that contributed to this criminal cause. Another agency that represented an ISP, declined to respond or make payments altogether. After speaking to client, I was offered a dinner to make up for it which I declined.
Yet another agency that represented a multi-national restaurant brand declined to make payment and stopped responding altogether.
Another agency that represented a local snack brand did the same. I was neither paid, nor given a response.
I fought for the larger payments and was able to get those by reaching out to clients. But small clients and small campaigns stayed unpaid forever.
It Affects Everyone
I’m not the only one affected by these agencies. Almost every independent publishing company in Pakistan has to go through the same process. If you’re not big enough to have legal teams to challenge big agencies and even bigger clients, just keep your head low and move on.
Yesterday, I spoke to someone who has not been paid over 5 million Rs in ad revenue for months by these same agencies.
The Bigger Picture
While it may sound like a story of only bad business practice, there’s a much larger impact happening. Just like traditional employment “brain drain”, where talent exits the country in order to find better employment opportunities, similar thing is happening for entrepreneurs too.
It’s already less profitable to choose to work in a singular market like Pakistan instead of reaching global markets, and that coupled with these practices make business nearly impossible in Pakistan. As a result, entrepreneurs exit local markets and make products that serve global audience where the revenues are higher, and payments are instant.
Even for e-commerce, those serving global markets have a 3-day payment cycle. While those working in Pakistan on cash-on-delivery and local gateways, have to wait for weeks if not months to get their cash.
Conclusion
These agencies are startup killers. They killed my startup and will continue to damage and destroy many other indie publishing companies in Pakistan. I want to conclude this with a popular quote by the founder of Seagate who said
It is important to remember when starting and growing a new company that cashflow is more important than your mother
Alan Shugart
and everyone knows mothers are really really really important.
Really shocked to know that. Govt should make some laws to protect the startups from these giants.
You should mention Agencies name so all can know what they are doing
Synite Digital
Rot in hell symmetry and synergy
One of the prime reasons why I discontinued publishing business in Pakistan and moved towards the U.S. market was the devilish attitude of digital media agencies in Pakistan. The lucifer of these agencies ha always been symmetry who not only exploit publishers but also mislead clients and brands. I used to run a technology blog with a team of 4 people. We started very small but over the next few months, we managed to grow a strong daily readership. I can not forget the hassle of getting my payments from the Symmetry group. Getting paid after 8-10 months was the usual norm. Once, after creating a little havoc on twitter due to non-payments, Symmetry also approached me for a settlement even offering a female escort stint at a local hotel in Karachi describing it as ‘client satisfaction’. The dirty, sluggish and discouraging ecosystem of digital agencies pushed me and my team to stop blogging in Pakistan. We altogether moved to the U.S. market. Initially, we suffered a huge blow but gladly the decision paid off in the long run. Today, I manage a group of affiliate blogs focusing on travel, economy, and technology. The moment I read this blog, it brought back the horrific memories of years ago. It is sad to see that the state of affairs in Pakistan is still the same. Sigh!
Thanks to show the other side…
I’ve been dinged twice for a total of $20,000 by perfectly normal “gora” clients. Sh*t happens. All we can donis learn something new and move on.
Well I am a freelancer myself and I have had the chance to work with some agencies myself.
Firstly, the quality of work that you get is never up to the par with what was promised.
Secondly, after receiving payment they start acting like we owe them. They will miss deadlines, wouldn’t take your calls and even their tone of voice will start changing.
Once I worked with an agency on a web development project and before taking project from US client. I asked the agency to whom I was outsourcing and they said that they can handle it easily. I took work from client outsourced it to them and after missing deadlines for 2 weeks they told me that they couldn’t do it and refunded me money.
After that till this day never worked with a Pakistani agency or freelancer or Client.
I can relate to this on more levels than I can mention here and its true. Late payments, monopolies and unfair advantage tactics have killed more startups and small agencies than bad business models or lack of drive on the entrepreneurs part.