Why Pakistanis need to read Pakistan

Small confession: I really enjoy reading non-fiction about business, creativity, people’s experiences etc. But more often than not, these books are written as stories of countries outside Pakistan. And while I love reading them, the lessons don’t translate as well in our society.

All of Duke’s MBA classes fail to teach us what to do when the contractor promised the product delivery but it’s been 2 weeks and each day he will give an excuse not previously known to mankind. Pakistan’s problems are unique which makes them challenging and incredibly tricky.

Legislation and policy make it the easiest and most difficult country to operate business in, and too many people my age get disheartened by the complexities of our socio-economic fabric.

These last few weeks, I got the opportunity to speak to more than 15 self-made millionaires (yes in US dollar). [I have an issue with measuring success in monetary terms, but that’s beyond the scope of this blog post and I’ll spare you my qualms]. Each of these people started from different points: from washing cars, to distributing newspapers, to working on weaving the yarn in a textile factory, all of them worked their way to building business systems that not only have beautiful PnL statements, but are also a means of social good in society.

So what was the one underlying factor in all their success?

Understanding the way Pakistani market operated. Not American, not Chinese, not the UAE, but THIS market.

Let’s deep dive into what that means.

It means studying things on a macro and micro level.

THE MICRO LENSE:

Culture influences how and when things work. When I first moved back to Pakistan, I spent so much time stressing about how inefficient the market was, how slow things were, and how much people wasted time.

Now, I’ve learnt that I was constantly comparing Lahore, Islamabad, and Karachi to New York, Shanghai and London. It took me so long to unlearn behaviors and relearn that wasting time over meals was in fact relationship building. That cup of tea or lunch is worth more than the entire business deal because both parties are vetting each other out. Things were not “slow” Lahore just enjoyed life, of which work is a part, not the other way round. Every company iftar, Eid break, casual holidays just meant economy was going fine, and people are going in and out of phases of life. Not that this should excuse bureaucratic delays and the very real systemic problems of Pakistan, but not everything needs to be criticized because you’re not living in a country that glamorizes a 16 hour work day ;)

Average business meeting in Lahore ;)

The micro lense also teaches you what language to use with whom, how to deal with employees at various levels, and how to maintain successful, long-term relations with your customers.

Basically, use the micro lense to weave yourself into the fabric of the society you want to operate in. Doesn’t matter if it’s Pakistan, the US, EU, Emirates, or East Asia.

THE MACRO LENSE:

This is in some ways related to my previous point, but let’s zoom out. Pakistan has lot’s of policy constraints that prevent you from “making a fortune” to put into old terms. But did you know historically, people and industries have made huge successes by reading and learning the policy that either existed, or incentivized something which was there in plain sight, but few could figure out. Story time:
The case of physics and steel in Pakistan:
If you remember high school physics, you’d know that steel is an alloy, but if you were a physics fan, you’d know that adding nickel to it makes it stronger and according to the policy of Pakistan a few decades ago, classified it as not steel anymore. One gentleman realized what this meant, imported thousands of tones of nickel mixed steel into the country, paid no taxes/tariffs on the import since it’s technically not steel, and hence had a businessman’s best friend “lot’s of stock”. Earning a competitive edge on price due to avoiding tariffs, as well as having readily available stock, you can only imagine what the local market was like for this businessman. What did he do? Paid a close attention to how policy was structured and predicted market demands correctly. Was it luck? Was it connections? Was is geekiness paying off? You be the judge.

The button story - every cent counts

This story is about a gentleman who worked in a textile factory in Lahore, Pakistan in the 90s. He decided a job isn’t for him, and decided he would quit his job within a year to try his luck in running his own business. One year later this man studied everything he could about the landscape of textile industry in Pakistan. Pakistan was a great supplier for foreign markets, especially the United States. But with textile giants, and their long standing relationships, entry to market was difficult. What could he do? He decided to pick a small part: buttons. Pakistan was making shirts for the West. Each shirt had at least 2, and at more 12 buttons on it (including the cuffs of the sleeve). Let’s average it out to 5 buttons a garment. Each day there was a demand of 1000 shirts. That’s 5000 buttons. This man cut his margins to compete with the market and offered companies buttons worth 10 cents cheaper than the going rate, making about 10 cents per button for himself.

Do you see where this is going? that’s $0.10*5000 = $50 per day of profit. That’s $1500 a month. And $18000 a year. Slowly but surely this man built his reputation in the market, and delivered a seamless quality experience. Now almost 2 decades later, he told me he had just given $3 million worth of goods on credit to 2 young founders in Los Angeles, United States. “They’re just like my kids. And we have a good relationship with them. I wanted to help them establish their brand so I facilitated them. They’re amazing people. I love the food they make for me everytime I visit them for a trip” He recalled fondly as we discussed this over some lovely homecooked meals in Lahore after visiting his factory that employs more than 500 people currently.

I was left beyond inspired.

Everyone keeps telling you there is potential in emerging markets, and everyone also keeps questioning why I’m so naively committed to the emerging market that’s Pakistan, but it’s stories like these that keep me isnpired. The best part? You win big in numbers, but you have control to do as much social good as you want. But those a stories for another day!