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Tag: Pakistan

Do We Choose Grey Hat, Or The Grey Hat Chooses Us

I met this guy in 2009. That’s 11 years ago. He always wore a hat. He loves them.

He taught me how the systems are gamed. I loved it. We were on the Digg’s front-page everyday. We worked for the top guys. I will probably not name them today. May be they don’t want to acknowledge they gamed the system too.

The system was nothing but a recommendation engine. One of the first I had seen. When Twitter and Facebook ranked posts chronologically, Kevin Rose had the recommendation engine figured out. We just knew how to make the best use of it. Reverse engineering it, I would say.

One of our clients in the sports niche got acquired for $150 million dollars. Almost all of our clients are a multi million dollar properties today.

We even made some of our own tiny sites that we drove from Digg.

Over time, struggling between gaming the system for growth, solving an actual problem or doing both at a time, 2020 came.

Today, I’m wondering, how do you build a global business from Pakistan that could one day grow large enough?

How do you hire white people or black people or asian people or anyone to cast them in your ads? Can you? Are there any in this country? If yes, are they actors? They probably aren’t and you probably can’t.

You could outsource though. For tens of thousands of dollars perhaps? Or millions of Pakistani Rupees that you can most likely save in 5 years working in a day job.

If you’re bootstrapped, which you most likely will be because there aren’t any VCs here, what would you do? Would you get that ad made? Or would you pick a hundred ads from the internet, break them apart, and stitch them enough times that they qualify for “fair use” and become DMCA-free. This would probably cost you $50.

Forget about the ads. Not all businesses advertise and advertising could be just one of the many things about building a business. You will most likely require certain kind of digital infrastructure for sure. PayPal? Ability to accept cards i-e payment gateways? But there are none that support this region. What do you do?

You could fly to US or another supported region, setup a company, and use that to setup the rest of the digital infrastructure. But most likely you’ll never get a visa and you probably also can’t afford this travel easily. If you think I’m exaggerating, I know at least 5 tech entrepreneurs from Pakistan who have built multi million dollar businesses but were declined US visit visa.

May be you could fly to one of 31 visa free countries? But they are just as good as your own country as far as the digital infrastructure and access to business tools is concerned.

You could reach out to friends or relatives in US and form a company in partnership with them. You could use that company to setup PayPal, payment gateway and other business tools that you need to begin your business.

But there’s more. You will most likely be banned at some point once you access these business tools physically from within Pakistan.

What do you do then? You could rent a server physically in US. Remote Desktop Protocol. You could access that server remotely and run your business on that. Sounds sketchy, doesn’t it?

But you could get banned for that too. Because it’s not that big of a deal for these multi billion and trillion dollar companies to understand the difference between a data-center’s IP and that of a home in US.

So may be you could buy a Raspberry Pi that you could physically place in someone’s house in US. I’m confident none of my friends or relatives would agree to this. It would seem strange to them that why would someone want to do it? They would think that there could be something malicious going on that could land them in trouble.

You could also buy a laptop and physically place that in their houses and run your businesses with remote access. I know my cousins aren’t going to like that idea. May be yours do.

By the time you would come this far, you would have exhausted 83% of your energies in setting up the the foundation to start your business.

Thousands of entrepreneurs from Pakistan actually have to go through all of this (and more) to actually start their businesses. May be you see a scammer, but I see a victim that turned around his fate and became a hero.

So what happened there? Did we choose that grey hat, or did that grey hat choose us?

My Life Right Now

I don’t like doing these posts too much. I like to talk more about meaningful things that could potentially help others and less about myself. But I don’t feel like talking about meaningful stuff today. I want to talk about myself.

Pakistan

2 days ago, Pakistan reported more than 100 cases of COVID-19 in a single day. The government of Pakistan so far is claiming that 100% of the cases are imported ones, and there are no local transmissions. The problem with Pakistan is not the virus itself, but the healthcare system which is over-loaded and in a mess even without the virus. The second problem with Pakistan is that with lockdown more people will die of hunger and poverty than the virus will kill without the lockdown. Hence, Pakistan has adopted a mid-way strategy with regards to social distancing.

Mental Health

For the past few days I kept reading to learn more and more about the virus in order to be more aware of the virus to protect myself and others not only in health terms but also in the markets and to create the right investment strategy. The good thing about consuming all that information is that it kept me busy while I was distancing socially and I learnt a lot of things. The bad thing about consuming this much information on a pandemic is that it induced fear, anxiety and panic in my mind. Today, I’ve decided to pull back. The important stuff will reach me as it will reach everyone. The details, I’m not interested in anymore.

Work

My work is a mess. For the past 15 years, I’ve only known two ways to make money. I either sell ads to make money i-e publishing, blogs, ad-breaks etc

Or I buy ads to make money i-e e-commerce, influencer marketing etc.

Both are in a mess right now.

The CPMs are down as much as 75% depending on the industry you are in. So selling ads is 75% lesser profitable as before. This in theory means this could be a good time to buy ads. While that’s true that CPMs are lower for buying ads too, but that’s because the demand for buying things except for certain essentials is down too. In addition to demand, the supply chain is disrupted too as most things are manufactured in China which is not fully functional even now.

In summary, both e-commerce and publishing are largely affected.

As I was spending more time at home than usual, and do not have much work to do except for reading about the virus, it has been a bad combination for me. So I’m taking a step back.

Options

The options that I can personally think of to keep me engaged are Netflix, reading, courses etc. I don’t think binge-watching Netflix will be too helpful in restoring the right state of mind for me. So I’ve decided to enroll in certain online courses. Work has been absolutely essential for me always to keep me in the right state of mind. I think getting educated further about digital marketing is going to feel as an extension of work to me.

What are you guys going to do if you are in a similar position?

Recycled Clothes, Landa, And How Large Is The Industry

I learnt something unique in the past few weeks. The size of the recycled clothing industry is mind-boggling and Pakistan get’s the lion’s share of this market.

Zari originally introduced this to us, but my curiosity was further fueled by my long-time friend Saad who filled me in with complete details. I’m left speechless by the sheer size of this industry.

Since 80 billion pieces of clothing are produced every year, more than 10 times the number of human beings in the world, it is obvious that every year there’s a lot of clothing waste. Since I buy roughly 5 pieces of clothes and hope them to last 5 years, I must admit I was shocked with the amount of production and could obviously imagine the wastage. But what happens to all this wastage? It’s sent to emerging economies like Pakistan for nearly free.

The west gets rid of their “waste” instead of using it to fill lands, or decompose in environmentally hazardous manner. Pakistan then puts a new soul in what is termed as a waste.

This wastage that comes to Pakistan is approximately about 1.5 billion pieces per year. This is 125 million pieces per month or 12.5 crore pieces of clothing.

After sorting, nearly 50% of this clothing is marked unfit for wearing and eventually goes into fiber extraction. The other half, which roughly comes down to 60 million pieces of fashion, are restored and made fit for wearing. But what surprised me the most is this fun part; a large chunk of what is restored as fit for wearing is then exported out of Pakistan.

Now I’ve given you the size of industry in terms of number of units, but not in terms of revenue. Pakistan as a country generates nearly $200 million out of export proceeds from these products.

Mind boggling, isn’t it?

Thanks Zari and Saad for the input.

Pakistan-Turkey Dual Citizenship, Myth & Facts

Today I met a Turk who is a student immigration advisor. His firm runs ads on Google but has recently stopped advertising in Pakistan. The reason he did that is because their query volume increased by 1000% in the last week. All of their budget was getting consumed by leads that didn’t convert. That happened because a news story surfaced in Pakistan about Pakistan and Turkey looking forward to sign a dual-citizenship agreement.

The news was interpreted in Pakistan with an assumption that all Pakistanis will automatically become Turkish citizens and all Turks will automatically become Pakistani citizens. The news was fueled by all Pakistani newspapers who are responsible for giving that feel to the news. This was further fueled by celebrities such as Hamza Ali Abbasi who called this resurgence of Khilafat movement and further suggested that we should also have one currency like European Union (WTF, Hamza bro?).

The truth is that all of that is baseless. There is indeed a deal between the governments happening, but the deal only means that any individual is now able to keep both citizenships in an event he’s offered one such citizenship through regular means such as by marriage, investment, naturalization (spending time etc), or through any other means that existed before. This agreement is identical to how Pakistanis can keep both Pakistani and American citizenships at the same time. But not all Pakistanis automatically become Americans.

Without this agreement in place, all Pakistanis had to give up their Pakistani citizenship in order to acquire Turkish citizenship and vice versa.

Pakistan already has such deals with many other countries including muslim countries such as Egypt, Syria, Jordan & Bahrain. Pakistan also has this treaty with many western and European countries. A treaty of this kind with Turkey is a step in right direction, but it isn’t what everyone has concluded it to be.

The Criminal Digital Media Agencies of Pakistan

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.