Pakistan’s Entrepreneurial Future: Can Lessons be Learned from Indonesia?

A few years ago, Pakistan’s startup community was booming. From 2018 to 2021, young engineers were founding startups or seeking work with them, foreign investors were leaning in, and Pakistani graduates educated abroad were returning home, sensing opportunity. 

After a great start, it may seem that the startup boom in Pakistan has come to a screeching halt. Last year saw entrepreneurs facing a series of new challenges including political upheaval, currency devaluation, and record-high inflation. The shutdown of high-profile startup Airlift in mid-2022 sent shockwaves through the founder community. 

In our experience, however, this was the ideal time to launch Endeavor in Pakistan.

The opportunity Pakistan presents has been significant for some time — A large market with high digital adoption and no shortage of talented citizens with many problems to solve. Look at GitHub’s January 2023 innovation report showing a 43% YOY increase in software developers in Pakistan – making it one of the fastest-growing countries around the world. What’s changing now is that Pakistan is beginning to see its own role models emerging. In turn, making startups attractive to top talent, and unlocking local sources of funding. We know Endeavor’s launch can help to guide and expand this opportunity.

Endeavor has nearly three decades of experience operating in rising entrepreneur communities in 30+ countries around the globe.  We see many parallels between Pakistan and countries previously launched; most notably Indonesia. All of the necessary building blocks are in place for Pakistan to be a flourishing ecosystem, and Endeavor’s capable team in Pakistan has already selected seven Endeavor Entrepreneurs; impressive companies that include Abhi, Bazaar, LAAM, SadaPay and PostEx. It’s only a question of time before Pakistan has homegrown unicorns of its own. Looking at the progress in Indonesia over the past decade only makes us more bullish about Pakistan’s entrepreneurial future.

Indonesia: Lessons from a Country 10 Years Ahead

Today Indonesia is one of the most active startup markets in Southeast Asia. Indonesian founders have created 15 unicorn startups, including B2B products platform Bukalapak, and aquaculture startup eFishery. But it took a lot of hard work to get here.

When Endeavor opened its Indonesia office 12 years ago, the Indonesian startup ecosystem was struggling. Much like in Pakistan today, entrepreneurship was not championed in the culture, and the economic and political climates were challenging. Indonesia was recovering from the pullback of international investors during the global financial crisis of 2008, and the currency devaluation “taper tantrum” of 2013. 

A big part of the problem, recalls Devina Hartono, managing director for Endeavor Indonesia, is that Indonesia’s business community didn’t value opportunities to found, or work, for a startup. Graduates sought work with major conglomerates, leaving startups struggling to find talent and continually at risk of having their teams poached. 

Still, like Pakistan today, Indonesia had potential due to its large, young, tech-savvy population. With a population of 250+ million at the time (close to Pakistan’s population today), Indonesia was a country where a startup could scale a substantial business at home before going global. 

At the time, Indonesian entrepreneurs faced three main challenges: 

1. Limited local role models: There were few highly successful startup founders in the country willing to inspire new founders. Worse, the ones that were successful had a culture of secrecy instead of paying-it-forward by encouraging, mentoring and investing in other founders. “Entrepreneurs were more likely to hide their ‘secret sauce’, and that mindset was hard to shift,” Devina recounts. Without a critical mass of founders willing to support each others’ journeys, it was difficult to grow the community. 

2. Limited equity capital: The wealthy in Indonesia for the most part didn’t invest in startups, and global investors weren’t focused on the country. “When Mapan gained outside investors, that was so rare.” 

3. Limited access to global markets: Local startups seeking to expand beyond Indonesia didn’t have the connections or know-how for global expansion. “They needed introductions to relevant parties to scale beyond the country.”  

These were the challenges focused on by Endeavor Indonesia’s earlier managing directors, Sati Rasuanto and the late, much admired, Wayah Surya Wiroto. They got to work expanding the country’s entrepreneurial community, fostering dialogue and awareness of entrepreneurship, bringing investors and founders together. They assisted Indonesian startups to reach unicorn valuations by making introductions to international investors, partners, and peers. It was difficult work, but they ultimately prevailed. 

As the ecosystem grew and more startups scaled to global success, Indonesia’s founders benefited from what Endeavor calls the “Multiplier Effect.” As companies that had reached unicorn status saw lucrative exits, their founders became seed investors and mentors. In time, their employees also began to found new startups of their own, compounding impact. Mapan co-founder Aldi Haryopratomo was among those who became an influential mentor to other founders, including eFishery founder Gibran Huzaifah. 

Aldi’s firsthand experience scaling a company in Indonesia has helped other founders scale faster. Inspired by his father’s career building roads, he believes it’s his responsibility to help his country prosper.

A single successful startup like Mapan can create a ripple effect in its home country. Aldi was one of the first Endeavor Entrepreneurs selected in Indonesia. Since Mapan was acquired in 2017, Aldi has mentored founders at more than a dozen companies and invested in many startups. In addition, Mapan staffers have spun out to found eight companies. 

Indonesia’s experience provides Pakistani founders and Endeavor Pakistan with a blueprint for success.

Pakistan Is Ready to Grow

While local role models are still limited in Pakistan, there have been a few successful founders who are inspiring and investing in others – a critical step.   

Mudassir is one such founder. He co-founded Careem in 2012, and the business was then acquired by Uber for over $3 billion in early 2020, and the Multiplier Effect of Mudassir and his co-founders Magnus Olsson and Abdulla Elyas continues to expand. They have invested in 91 companies, mentored founders at 32 startups, and former Careem staffers have started 124 new businesses throughout South Asia, the Middle East and North Africa. Due to their commitment to pay it forward, far more founders today better understand how to build and scale a startup.  

Regional success stories like Careem help validate the entrepreneurial ecosystem in the eyes of global players. This has brought in more early-stage funding and investor interest. International funders have gotten some exposure to Pakistan’s market in the past few years, which will pay off in the future. 

The Path Ahead for Founders 

To counterbalance tougher macroeconomic factors, startups in Pakistan will need to be built differently than those in more popular ecosystems—that’s not necessarily a bad thing.

In emerging markets like Pakistan, entrepreneurs have to be more resilient, more persistent, and in some ways even stronger than their peers in Palo Alto because they’ve had to overcome so much, explained Allen Taylor, managing partner at Endeavor Catalyst at the launch of Endeavor Pakistan.

Pragmatic entrepreneurs who understand and adapt to the situation they find themselves in can thrive. Resilient founders in Pakistan like Saad Jangda and Hamza Jawaid who co-founded Bazaar are already finding ways to counter brain-drain and keep top talent who understand how to operate in a scaleup, and in parallel develop their own training to counter engineers retreating back to big-company employment.

Prominent tech investor Bill Gurley encourages entrepreneurs to tune out the macro, “There are just so many variables with macro. You can fool yourself” in McKinsey’s podcast: Provocations to Ponder. In the interview, Gurley talks about two things that remain in the back of his mind that relate to startups and the startup ecosystem: 

His advice is to focus on building a great product and team and not getting too caught up in the hype. Gurley’s wisdom reminds us of Airbnb co-founder and CEO Brian Chesky’s laser focus on the customer, and ability to tune out macro factors. In it, Chesky explains that one route to a great user experience and word-of-mouth growth is designing the perfect experience for just one person. “How do you make something for a million people? I don’t know where to start. But if you pick one person, study them, and take their journey, you can actually build something really personal.” 

Mudassir often gives this message to the Pakistani founders he mentors: “Stop solely chasing funding and start building valuable businesses.”

After all, many of the most successful companies were founded in harder times. Disney was created in a garage in the middle of the Great Depression; Airbnb founders struggled to pay rent during the 2008 financial crisis, and Slack started during the U.S. Great Recession in 2009. Pakistan will be no different; founders who are innovating and solving real problems will emerge from this time.

As our co-founder Linda Rottenberg succinctly states: onward and upward!