Dr. Umar Saif Writes for the Washington Post
June 13, 2012
“The technology startup scene is starting to look like Charles Dickens’s A Tale of Two Cities,” writes Dr. Umar Saif, Associate Professor at the School of Science and Engineering (SSE) at LUMS and co-founder of SMSall.pk, in his recent article for the Washington Post, which was published on June 5, 2012.
Dr. Saif has been drawing in rave-reviews for SMSall.pk, which is Pakistan’s largest SMS social network. In 2010, World Economic Forum recognised his work in the world of Information Technology (IT) by naming him as the Young Global Leader.
In the article, Dr. Saif talks about the entrepreneurial segregation between the ‘Venture Capital (VC)-funded Silicon Valley startups’ and ‘the unglamorous, underfunded, never-heard-of ventures slugging it out for those in the developing world.’ According to him there is a huge difference in size between these two potential markets. He discusses if the market in the “Indus Valley” has been left untapped simply because venture capitalists are unable to reach it. Or maybe its easier “achieving overnight success with a mobile game is too great to bother with out-of-the-box solutions for those who spend less than $3 per year on their cellphone calls.” Dr. Saif also feels that the market might be left untapped because of the scarcity of technical skill in the developing world to start and grow such ventures.
His article argues that lack of product development and management skill does not adequately explain this entrepreneurial divide between the developing world and the Silicon Valley, nor does a lack of access to foreign markets. “A web-based social network or a viral mobile game can be run just as well out of Pakistan as out of the United States. Mobile application stores and techniques like search engine optimisation have leveled the playing field for, at least, consumer tech products.
However, given the size of the market in the developing world, entrepreneurs no longer need to look to the minority of well-off users. There is plenty of opportunity to develop products catering to consumers in the developing world and still hit a homerun. But why don’t startup founders do it?”questions Dr. Saif.
Dr. Saif concludes that the problem lies at both ends. A lack of innovative products for consumers in the developing world and a dearth of ideas on the VCs’ end. He feels that products for the developing world rarely advance beyond a donor-funded pilot project or a social enterprise, while VCs keep doing what they do best: momentum investing. Some VCs who actually invest in emerging economies make little effort to mask this fact. Take, for example, e-Planet Capital, which has invested in, among other companies, Skype and Baidu. The company describes itself as “one of the leaders in catalysing migration of business models and technological innovation from developed markets to emerging markets.”
Photograph Courtesy: Washington Post