Start-ups, especially high-potential ones, impact the economic growth of a country by creating more jobs and presenting solutions for socio-economic problems through the latest innovations, making entrepreneurs the most valuable players in the field of economy. Having a direct positive impact on Pakistan’s economy, start-ups such as Zameen, Airlift, Markhor, Mangobaaz and Careem brought employment opportunities to hundreds of people across the country. The Pakistani government has initiated various start-up incubation programs in the main cities of the country to serve as a place for innovation and fresh ideas to flourish. In turn, these start-ups promise to benefit the country’s economic and social growth through their revolutionary problem-solving abilities and latest innovations. The impact of start-ups on economic growth is huge. However, it is also common knowledge that most aspiring start-ups tend to fail and die out in their infancy. We gonna dig deep into National Incubation Centre at LUMS.
Pioneered by LUMS Centre for Entrepreneurship (LCE) in 2017, National Incubation Centre (NIC) is the largest technology hub of Pakistan which aims to digitally revolutionize the country by providing advanced facilities to entrepreneurs and their start-ups. With the public-private partnership of the Ministry of IT & Telecom, the Ignite National Technology Fund, Jazz and Teamup, the team at NIC helps entrepreneurs build their start-ups from scratch. Aiming to build a successful entrepreneurial ecosystem in Pakistan, NIC promises access to latest research, investors, and opportunities to work under mentorship of successful entrepreneurs. The start-ups currently incubated at NIC include PEZ, a locally manufactured dog food, WASGO, a recycling company, Roof.pk, a Pakistani Airbnb, Alif aur Art, an online resource development product for children to integrate Urdu learning through arts, and ORFOL, an Online Reported Found or Lost platform to report your lost and found possessions.
Since its initiation in 2017, many start-ups such as We_Over_i, Journal Post, Maro Tandoors, Beautyhooked, and Sabzi.pk have been incubated at NIC. Out of many start-up ideas at NIC, only a few receive funding from investors. Other than a handful of success stories, many start-ups fail in execution of their ideas, many get rejected altogether, whereas some choose to go their own way and are still successful in the market.
Academia Magazine reached out to some of these start-ups to hear what they learned from their entrepreneurial journeys while incubated at NICL.
LUMS at the epicentre and the chain of command
Providing up to 4 months of coworking space to high-potential start-ups, Incubation Centre gives an excellent platform to entrepreneurs with the resources and prestige that LUMS has to offer. At the end of each year, NIC presents its successful start-ups to the Investor Summit, an online tech conference for entrepreneurs to showcase their innovations and pitch their ideas. This year, only half of the 30 incubated start-ups graduated and were given the chance to present their pitches to the investors. NIC recently announced the Investor Summit to be held live on their website on 28th-29th August 2021 at 5 pm PKST.
Start-ups incubated or affiliated with Incubation Centre at LUMS are indeed a step ahead with potential investors in the market, however, LUMS being an educational institute and not a government building open to the public, comes with its cons. Those wishing to enter its premises need their CNIC along with a confirmation call to the security desk at the entrance from the person they wish to meet. People coming in for job interviews at these start-ups are often turned away at the gate for not carrying their CNIC with them or being unable to connect with their employer at the time for a confirmation of their appointment. Moreover, since the NIC team at LUMS handles all the administrative issues so that entrepreneurs can focus on their ventures, start-ups incubated at the centre are unable to make executive decisions. They must follow the chain of command and get approval for many important tasks related to business. For example, start-ups wishing to shoot their product for marketing and advertising must ask for permission from the higher-ups at the centre which takes days to come through and wastes valuable time.
Lack of Entrepreneurial Mindset
The reason why most start-up ideas fail is the lack of an entrepreneurial mindset. The entrepreneurial mindset helps innovators identify opportunities and work with steely determination, have a thirst for knowledge, and see failure as a lesson on what not to do rather than not do it at all. Failure is not received well in Pakistan, making it more difficult for entrepreneurs to take a risk with their ideas. The main problem is that our education system does not allow space for these skills to form. Students at educational institutes are overwhelmed while trying to meet their academic requirements and have little to no time to work on their business ventures.
The team at NIC has the policy of “fail fast so you can learn faster.” However, start-ups whose ideas are rejected by NIC are rarely heard of in the business market again. An entrepreneurial mindset serves as a remedy for demotivation for aspiring entrepreneurs. While commenting on the issue of most start-ups not making it in the market, Jehan Ara, President P@sha and Founder Nest I/O said, “There are many reasons for a start-up to fail such as the idea just didn’t work or being too early or too innovative for the target market. I have seen that start-ups that tend to fail multiple times are the ones that eventually are the most innovative and successful. The key is not to get demotivated with failure.”
Abundance of Resources vs Limited Workspace
Meanwhile, the team at NIC does its best to mentor the young innovators with its business incubator and accelerator program for entrepreneurs called The Foundation. The program also provides business acceleration programs to fresh start-ups that are not incubated at NIC so that its services can be provided to young entrepreneurs at a larger scale. Moreover, a set of 5 technologically advanced labs known as the Makers Lab at NIC offers students, entrepreneurs and researchers, access to facilities such as machining, building electronic circuits, 3D printing, wood and metal power tools to create prototypes of their desired products to solve various socio-economic problems. Moreover, Plug n Play Centres by NIC, with their advanced and accommodating coworking space ensure a gradual build-up of an entrepreneurial hub across the country. Since these Plug N Play Centres have LUMS at their epicentre, the start-ups working at these centres can not only benefit from interactive sessions with guest speakers and seasoned leaders of the field, but they can also join the business acceleration program at The Foundation. The quality of support and facilities offered at Incubation Centre attract many passionate entrepreneurs to call LUMS their home base.
However, this leads to overpopulation in the limited working space of the Incubation centre. Start-ups need access to a meeting room to conduct their businesses. Since the offices at NIC are shared workspaces, holding a meeting in one’s office disturbs everyone working in the vicinity. Moreover, due to the incubation of multiple start-ups at NIC, many conducting their business from the same venue find the meeting room already occupied resulting in postponement or cancellation of interviews and important meetings with investors and clients.
Lack of Funding & Return on Investment
Since the start-up ecosystem in Pakistan is not yet fully established, investors consider all the risk factors before providing funds for a start-up. Every start-up in Pakistan, not just at NIC, are still in early stages of life since the start-up revolution has just begun. The same ideas that lack funding in Pakistan might get funding in another country whose start-up ecosystem is fully developed, depending on the need and benefits of the innovation. On the other hand, the start-ups that do end up getting sufficient funding from investors face their share of challenges as well.
Investors typically demand return on investment a few months after the investment has been made. Return on investment, or ROI, is a mathematical formula that investors use to evaluate the ratio of a profit or loss made in a fiscal year in terms of a particular investment. It takes time for an idea or a product to get a breakthrough in the market and reach its targeted audience. Only after enough time has passed can it be determined whether the product is exceeding the amount of investment made and whether it’s generating a loss. Investors should provide more time to entrepreneurs and believe in their ideas before claiming return on investment.
Supportive mentors & interactive environment
Despite limited funding and workspaces, mentors at NIC adopt a hands-on approach at teaching. Taking a huge chunk of time out of their day, the professors and mentors not only teach their assigned classes at LUMS, but they are also assigned to work with young entrepreneurs incubated at the centre. Since start-ups need connections, knowledge, network, and resources, they cannot operate in isolation. One start-up cannot work without the involvement of another and hence, the start-up revolution is referred to as an ecosystem. By hosting interactive sessions and working in collaboration with other successful entrepreneurs in the market, NIC is a self-sustained ecosystem. By hosting The Entrepreneur in Conversation Series, NIC presents an interactive program with successful entrepreneurs who serve as role models to the young innovators. Earlier this year, Saima Mujtaba Rana of NICL Learning & Development, an alumna of SDSB LUMS hosted The Entrepreneur in Conversation Series “Creating PakWheels” with Suneel Sarfaraz Munj, Co-Founder of PakWheels and “The Resilient Entrepreneur” with Mehmood Bhatti, Fashion Designer & Entrepreneur to hear about their entrepreneurial journeys. With a diverse range of topics such as “Empowering farmers through technology” and “Blockchain to Cryptocurrency”, NIC aims to inspire young entrepreneurs with stories of resilience and hard work and educate them about the latest technological innovations.
To overcome the hurdles faced by entrepreneurs in the market and build an environment where innovation can come to flourish, National Incubation Centre at LUMS must make its start-ups more autonomous in terms of administrative decisions, provide access to more funding with investors who believe in the ideas being presented to them. Most of all, learn to move past failure, which is something that only an entrepreneurial mindset can accomplish.
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