“Hello Mr. David, how are you finding our city of Peshawar?” Muhammad asked with a giddy smile and an outstretched hand. “Have you noticed we’re not all terrorists?”
And with that question, it struck me. I was in the heart of a war-torn city, and yet surrounded by hundreds of 20-somethings who wanted nothing more than to be my friend and tell me about their business ideas. I was the first American, and certainly the first Jew, most of them had ever seen.
As I promised Muhammad and his fellow aspiring tech-entrepreneurs that morning, I would do everything in my limited power to share my story with the world. Because all it took was two days at a tech conference in Pakistan to wipe away a lifetime of stereotypes.
The lone Jew in Peshawar
So how did I end up at the Digital Youth Summit 2014—in a city that is all but off limits to foreigners and seldom visited even by adventurous Pakistanis?
Two weeks before the trip, I was at dinner with my wife and Jana, a colleague of my wife’s at the World Bank. Jana told us about her projects, working with governments across the Middle East and South Asia to address the challenges of youth unemployment. In particular, she was most excited about Pakistan, where a few months ago she helped organize hackathons in Peshawar & Lahore that attracted more than 200 techies to solve civic problems through technology. One of the winners at the Lahore Hackathon created the country’s first ride sharing app ‘Sawari’. The Urdu Uber, if you will.
As a tech entrepreneur myself, I knew that hackathons were all the rage. But in Pakistan? “And we’re just getting started!” Jana exclaimed. “We’re hosting the first ever tech conference for young men and women in Peshawar, and it’s attracting attention all over the country.” And then, in a surprising twist, she asked me, “Wanna come?”
I was intrigued. I’m a sucker for a good adventure. And especially when adventure coincides with my view that technology can play an outsized role in reshaping global societies. I grew up in the Israel, where I witnessed technology turn a tiny emerging economy into an economic powerhouse. In fact, my mom still lives there, and started a company of her own in the self-proclaimed “Startup Nation”.
Israel isn’t the only booming tech hub in the region. I had just finished reading Startup Rising by Chris Schroeder. Chris is a friend, a mentor, and an investor in my company ReelGenie. He visited the Middle East and was so inspired by what he saw that he wrote the definitive account of how technology is transforming the region.
As Schroeder explains:
[Entrepreneurs] are unleashing social and economic forces that will create the foundations of a new Middle East. These forces will build and evolve over the years, but will be accompanied with a speed and transparency through technology that will hold any leadership, and themselves, to instant accountability. These entrepreneurs are not naïve. They expect setbacks. But they believe they are on the right side of history.
So to me, the most interesting question of all is, why wouldn’t the Middle East be ripe to unleash a new era of tech-based entrepreneurship and innovation of the sort that has driven growth and job creation around the world?
Thanks to Jana’s invitation, I now had the opportunity to explore that question first-hand. Pakistan is not part of the Middle East, but the dynamics taking shape in Pakistan mirror those of many of the countries profiled in Startup Rising. I was eager to understand the tech scene taking shape a world away from Silicon Valley.
“Sure!” I told Jana without thinking too hard. “But when is it?”
“In ten days,” she replied. “We’ll have to get you a visa right away.”
Reactions when I told friends about the trip were consistent. Consistently dumbfounded. Why in the world would you go to Pakistan? For two days? Did you forget you’re Jewish? Do you have a death wish? There are startups in Pakistan? Are they like ‘AirBNB for Al Qaeda’? And on and on.
I could only chuckle, nervously, doing my best to hide the pangs of doubt of what I was embarking on. But when my mom supported the trip, I knew I couldn’t miss this opportunity.
Thank you for coming to visit me.
Peshawar, like Pakistan, boasts a long and troubled history. Its location at the crossroads of Central and South Asia put it squarely on a strategic trade route dating back 2,000 years. According to one scholar, it was the 7th most populous city on earth in 100 AD. Since then, it’s been in the hands of Buddhist, Muslim, Pashtun, Afghani, Sikh, and British empires, before joining Pakistan in 1947 despite the opposition by many of its citizens that it becomes a part of nearby Afghanistan.
Despite boasting a rich cultural heritage and an impressive number of universities, Peshawar has a reputation that could only be described as rotten. When I told people that I was going to Peshawar, reactions ranged from “That’s the boonies” to “You’re freakin’ crazy.” Even most of the Pakistanis I met had never considered going. One tech entrepreneur from Lahore told me, “When I first heard this event was in Peshawar, my reaction was ‘No way’. Why would I ever venture there?”
“Peshawar has its back against the wall”, Kashif Khan told me at the conference. Kashif is Pakistan’s head of Global Entrepreneurship Week, a program billed as “The world’s largest celebration of the innovators and job creators who launch startups that bring ideas to life, drive economic growth and expand human welfare.” Just two years after launching, the programs have spread to most of the major cities in Pakistan. But until now, Peshawar had been left out. As Kashif told the conference attendees in his presentation, “There’s really only one direction the city can go. This event is a major step towards changing the minds of Pakistanis, and foreigners, about Peshawar’s potential.”
That’s a perception the conference organizers wanted desperately to change. As one told me, “We’re a peaceful people. A loving people. We’re not bombers. Peshawar is ruined by a small community poisoning our lives, and the world’s view of us. Only through events like these, and through the voices of people like you, can we ever hope to change that.”
He told me how he used to see Americans walking the streets of Peshawar. But since the 9/11 attacks, he’s seen a total of zero. Until I showed up at the conference. “We feel isolated from the world,” he lamented, “and that’s not a good place to be.”
“You know why everyone is happy to see you?”, an attendee named Farrukh asked me, as he smiled for a selfie. “Because many youth in Peshawar have never met a foreigner before. You’re the first American I’ve ever seen in person. And that makes me smile. Thank you for coming to visit me.”
I would never have visited Farrukh without the tireless work of a new organization called Peshawar 2.0. Founded by Faisal Khan, an Oxford PhD with an understated charm to match his keen intellect, the group’s elevator pitch is as follows:
Peshawar 2.0 is a social enterprise aimed at building a startup community in Peshawar, the capital city of Khyber Pukhtunkhwa. It is a citizen/youth-led movement to rebuild and rebrand the City of Peshawar through innovation and entrepreneurship in technology, design, and art. We believe entrepreneurship is an empowering medium to translate creativity and talent of the youth into action that has social and economic impact. It is a medium of expression for the youth, and channel for their passion and energy, a source of income and job creation and the primary driver of a knowledge-based economy.
That’s some serious stuff, especially for a fledgling organization in a region completely devoid of any tech startup “scene”. In late 2013, Peshawar 2.0 was an idea Faisal kicked around with some buddies. Little could he have expected that in a few short months, he would earn the backing of the provincial government, the World Bank, and corporate giant Nestle to pull off the first tech conference of its kind.
The Conference & The Expo
When I walked into the building on the first morning, I was taken aback. Thanks to weeks of effort by Faisal and a small army of volunteers, the 2014 Digital Youth Summit attracted 300 attendees and 66 speakers. Panelists included entrepreneurs, professors, and government officials from across Pakistan, Ville and me from overseas, and several other international speakers joining via a live Google+ video feed.
The dichotomy between the dreary streets of Peshawar and the bright, modern conference centre could not have been more glaring. Filling the massive hall were hundreds of twenty-something techies chatting, taking pictures and playing on their mobile devices. High-tech lighting, large flat-screen TVs, and video cameras were set up around the room. Well-designed banners with catchy slogans and hashtags—“Bringing together the next generation of digital innovators”, “#SocialMedia”, and many others—reminded everyone that they’re firmly in the midst of a global tech boom. This scene could have been any startup conference in Washington, DC, New York, or Silicon Valley. Sure, there were glitches—including, on several occasions, waiters with giant chefs hats walking in front of speakers during their presentations—but for a first-time event, it was beautifully done.
The optics were just the beginning. The conference sessions were equally impressive. The speakers included respected company founders, university professors, and writers from around Pakistan. Keynotes and panel discussions ranged from the effects of social media on government transparency and democracy, the future of eCommerce, pros and cons of venture funding, and the roles of universities in creating a more robust startup ecosystem.
Of particular interest to me was a dilemma several professors addressed—“Why can’t we get more MBAs to start companies?” As one of only a small fraction (3% to be exact) of my Wharton MBA graduating class to start a company, I know this discussion is happening in the halls of every business school in the United States. As it turns out, Pakistani MBA students face a similar calculus to their American counterparts—the allure of a “stable” job vs. the “risk” of starting a company, especially when faced with a mountain of student debt and the goal of saving enough money to buy a nice house and a car.
A “Startup Expo” ran alongside the conference. Set up in a separate hall nearby, 15 startups from across the region presented their companies in small booths. An early employee of one of the companies offered to show me around. Komal, a young lady in her early twenties, introduced me to founders and told me their backstories. The companies ranged from a texting social network (with 1.3m active users) to an addictive iPad game (Angry Birds, but worse) to a device that detects villages stealing electricity from the power grid (a big problem across Pakistan). “The ideas presented in this room,” Komal told me as we left the expo, “will fundamentally change Pakistan.” Noticing that I might have been a little underwhelmed by some of the startups, she added, “We’re only getting started. Just watch what happens in the next 5 years.”
Women in tech
That Komal is a female techie in Pakistan may be surprising to some. In fact, women made up roughly 20% of the attendees (although only 4 of the 66 speakers). These figures are similar to the gender breakdown of tech conferences in the US. According to Chris Schroeder, women account for one-third of startup founders in the Middle East, a higher ratio than in Silicon Valley.
I spoke at length with three other women attendees, all wearing traditional hijabs. They were feeling empowered by the conference, ready to break through the limitations that centuries of cultural norms of sexism and ageism had imposed on them. “We came here to learn, to explore ourselves and learn from experts in their fields,” one woman in her early twenties told me. “Never underestimate the ideas of youth. All we need is a suitable platform and we’ll take the whole world by surprise.”
Women in Pakistan face significant hurdles in starting a company. In fact, the 2014 Gender Global Entrepreneurship and Development Index ranked Pakistan #30 out of 30 countries for favourable conditions to promote female entrepreneurship. As the report suggests, “Pakistan needs to focus on improving fundamental issues such as women’s rights, women’s access to resources such as education and bank accounts, women’s access to broader labour force sectors as well as improving the business regulatory environment.” In one startling statistic, only 3% of Pakistan’s management positions are held by women, vs. 59% in Jamaica and 43% in the US.
The women at the Summit were un-phased by the challenges. They see technology as opening up a world of options to break through the barriers. One female attendee at the conference walked up to Faisal and said, “I’ll be praying for you. Never before in my life have I this much opportunity.”
It was reactions like these that Faisal hoped for when he dreamed up Peshawar 2.0. A trained scientist, Faisal started a bio-insecticides company while studying at Peshawar University. He went on to pursue a Masters and PhD at Oxford, where his idea took home first prize at the Cambridge business plan competition. That was an eye-opening moment for Faisal. “It showed me how science could make a major impact on everyday lives,” he told me over tea and a surprising (but delicious) breakfast of spiced chicken wings. “But I knew the impact would be even greater back home in Pakistan, where mosquitoes wreak havoc. I had to return.”
The decision to come back home to Pakistan was an easy one for Faisal. The transition, well, less so. “I quickly realized that running a company here would be rough. There are challenges all around that aren’t going away on their own. I had to either do something about it, or give up any hope of my startup working.” Faisal rattled off a list of problems that most ecosystems face, but are especially acute in an emerging economy with few startups. These included the lack of trained workforce, the negative stereotypes of startups and their risk profile, limited access to experienced mentors and advisors, and the difficulty of raising venture funding, among many others.
“But you can’t just copy and paste solutions from other cities”, echoing a theme that was repeated throughout the conference in various contexts. “We have to leverage the strengths around us rather than assuming that what works in Silicon Valley would work in Peshawar.” As one example, Faisal recalled that every high school student in the country is required to complete a final year project. “So I thought, why not use those projects to create business plans and demo days? Rather than expecting students to start thinking about companies on their own, especially when startups are stigmatized here, we’re leveraging the infrastructure that already exists. And it’s working. Teachers and students are engaged.”
I asked Faisal to tell me his vision for Peshawar 2.0. “I want quality startups that make a difference. I have faith in the power of entrepreneurship to revitalize Peshawar.” Faisal could have gone to the big cities—Lahore, Karachi, or Islamabad—where the tech scenes were already buzzing, and talent far easier to come by. But he chose his hometown of Peshawar. “I hate to see all the terrible PR here,” he lamented. “The news is always negative. Bombings, war, jihad, it never ends. I want to empower the people of Peshawar, and especially the youth, to rebrand the city. Startups are the pathway to success in a knowledge based economy,” he exclaimed, with the eloquence of a seasoned startup evangelist.
An excitement building in his voice, he turned to me and asked “What’s the biggest concentration of startups outside of Silicon Valley? Tel Aviv!” Imagine my surprise when a Muslim entrepreneur in Pakistan brought up Israel—a topic I promised my mom I wouldn’t broach, for my own sanity and safety—in a positive light. I was floored. “Go on,” I asked. “So what does that mean for Peshawar?”
“It’s impossible not to admire what they’ve done in Israel. If Israeli entrepreneurs can do it for their country, with all the wars and challenges they face, we can too. And I always use Israel as an example when I talk to government officials. It raises eyebrows. They’re just as shocked as you were when I bring it up. But we have to start facing reality. Plus, it addresses many secondary problems we face, like extremism. We’re engaging young people in something useful and productive to society.”
Faisal ended the conversation on an upbeat, but realistic tone. “There’s a lot that we can do. But we have a long road ahead of us. And potholes are everywhere.”
The Barriers to the Boom
Faisal wasn’t alone in lamenting the potholes startups face in Peshawar. I’m used to hearing gripes, having been to many Washington, DC conferences where attendees lament that DC isn’t Silicon Valley. But the breadth and severity of the challenges facing Peshawar was especially impressive. A few worth noting:
- The Mindset: Parents tell their kids that a good job is a stable government or corporate job. As Badar Khushnood, who heads up Google’s one-man presence in Pakistan, told me, “My parents don’t think I have a real job because I don’t go to an office with a desk every day.” Nearly all MBA students—even those who are tempted to launch their own company— end up joining big firms. “The stigma is too hard to overcome today,” one attendee told me.
- The Mentors: Every startup ecosystem needs experienced mentors who can guide young entrepreneurs through the intricacies—and inevitable ups and downs— of starting a company. Veteran entrepreneurs are lacking across Pakistan, and Peshawar in particular. And when a city as restrictive as Peshawar, bringing in mentors from the outside becomes impossible.
- The Wins: Success stories are critical to convince entrepreneurs and investors that a big payday is around the corner. Until people get rich off a highly visible company—like Facebook or Twitter in the US—the mindset that startups are risky and doomed to fail will be tough to overcome.
- The Capital: Raising money for a startup is a challenge anywhere, but especially in Pakistan where angel investing and venture capital are still in their infancy. The real estate bubble has made a lot of people rich, but they’re comfortable investing in physical land, not failure-prone tech companies. And that means only the well-off techies can afford to launch and scale a startup.
- The Government: Government programs to encourage technology formation are just starting to take shape in Pakistan. But more worrisome are the government’s actions to limit free speech. In fact, Pakistan’s government often sends Google a list of items to remove from its site, which the company typically complies with. The government has banned YouTube several times since 2008, with the latest ban in 2012 driven by the government’s objections to a trailer for the “Innocence of Muslims” video. This is a systemic problem across the region. As Chris Schroeder writes:
If anything marks the rise of startups in the Middle East and around the globe, it is that entrepreneurs build, bottom-up, around obstacles and succeed despite them. At the same time, however, while there is no going back, governments have a distinct ability to slow this talent in ever-moving, globally competitive markets… Anything slowing an ecosystem can have significant, even generational, consequences. In all the focus on political instability in the region, less examined is that many countries have adopted restrictive internet access and privacy laws… Entrepreneurs and investors alike view these as moves that risk chilling business development in their promising ecosystems.
None of these challenges came as a surprise to Ville. Over the past 10 years, he’s traveled the world speaking to emerging entrepreneurs, and counts “Startup ecosystem building” as one of his life passions. He’s seen and heard all the hurdles many times over.
In fact, he felt the stigma against entrepreneurs in his home country of Finland. When he started his first company, Finland’s “nasty” bankruptcy laws meant that a startup failure would doom the founder financially, not to mention the social stigma of being that “loser who went bankrupt.” Nobody got a second chance. When 8 out of 10 companies fail, Ville explained as we inched through the hot mess of Peshawar’s streets, it’s “like someone inviting you to throw the javelin, and if you don’t win the gold or silver medal, they’ll cut off your arms. So why even bother throwing?”
The crazy thing is that even if you did win the gold or silver, you weren’t much better off. Successful founders couldn’t flaunt their wealth, and the country hated when American tech companies—the most viable exit opportunity for Finnish startups—bought them. In fact, when Ville sold his company to a Silicon Valley tech giant for $40m, a huge success by all accounts, the local newspaper lamented, “Yet another Finnish company lost to America.” At the time, few young Fins had any interest in startups, just like in Pakistan today.
This atmosphere has changed drastically in the past few years. A well-organized movement was formed to think about the ecosystem problems. One outgrowth was a wide scale PR and media campaign, in which entrepreneurs spoke with journalists to explain the ins and outs of startups and venture capital. Now, 5 years later, startups are all over the press. And it’s generally a positive spin. Ville’s lesson for Pakistan: attitudes can change quickly, but it requires a concerted effort.
A Strong Foundation
Despite the daunting challenges facing Peshawar, the tone of the conference was decidedly upbeat. Everyone I spoke with agreed that the both Pakistan and Peshawar have a strong foundation on which to grow.
First of all, demographics are working in Pakistan’s favor. Pakistan is surprisingly large— it’s the 6th largest country in the world, with a population of 186 million. And it’s young. 35% of the country is under the age of 15, vs. 20% in the US, and growing at a rate twice as fast as the US. The country is becoming increasingly urbanized; Peshawar has grown at 2x the rate of Pakistan, with the city doubling its population between 1981 and 2002. Literacy rates, especially in urban centers among males, are strong and rising (the low literacy rates among women and rural Pakistanis is certainly cause for concern). After establishing the Higher Education Commission (HEC) in 2002, the government has more than tripled the number of universities in the country. Critical for entrepreneurship to take shape is the prevalence of science and engineering talent; several of Pakistan’s technical universities are top-notch.
As Google’s country director told the audience during our panel, “Pakistan is already an enterprising society”. One need only look at the boom in freelancing taking shape across the country, which is the 3rd biggest in the world on Elance.com behind USA and India. The income from freelancing as percent of the population or of GDP is higher in Pakistan than those two countries. Many of the youth I met at the summit were already active on Elance, doing anything from basic virtual tasks to graphic design to website development, mostly for companies in the United States.
Pakistan is also a hub for micro-tasks and crowdsourcing of labor. Ville, who wrote a book on the topic, has 80 full-time employees contracted through a Pakistani company. The tasks that these employees do—mostly data entry and quality control—are increasingly being outsourced to low-cost areas, with Pakistan being at the forefront of this movement. Ville picked Pakistan over many other low-cost countries, due to the high “quality to cost” ratio of its workforce. Each worker costs roughly $2/hour— a very high wage for Pakistan and giving those workers, many of whom are graduate students, the ability to work part-time in a country that offers very few flexible work options. Granted, a vibrant freelancing and micro-work community doesn’t necessarily translate to entrepreneurship, but it’s a good starting point.
And the government, which to many is holding back the private sector, is taking notice. The conference was co-organised by the Khyber Pakhtunkhwa province’s IT Board. The Minister for Information Technology and Health gave a keynote address, and said the province is now ready for a technological revolution. “Our objectives are to train and equip the youth with modern technology for a better tomorrow,” Minister Shahram Khan Tarakai proclaimed to a rousing applause. According to the World Bank organizers, the province’s Chief Minister heard about the conference and is eager to invest to continue the momentum. Only time will tell whether the words will translate to meaningful technological progress and job creation.
By all accounts, the conference was a success. The 300 attendees came away with a nuanced view of the challenges and opportunities for startups in the region. They heard stories of success, stories of hardship, and most importantly, stories chock full of lessons that any entrepreneur should heed.
The reach extended far beyond the conference center. The event’s hashtag, #KPDYS14, trended nationally on Twitter. Over 400,000 tweets mentioned the summit over the two days. More than 57,000 people listened to live streaming on INSAF radio. And the press picked up on it, with one article headline proclaiming (without irony), “After two days of seminars, techies go home buzzed”.
Attendees treated the World Bank staff, Ville, and me like stars. We were constantly swarmed by a crowd of attendees eager to take our picture and shake our hands. They were smiling, laughing, and thanking us profusely. They asked for our cards. A few even asked for autographs. Ville travels the world spreading the startup gospel—in 78 countries, to be exact—and he had never experienced anything like the treatment we received in Peshawar. As he posted on his Facebook wall that evening, “Now I know what it feels like to be a rock star: after our panel session today, I spent 45 minutes getting photographed together with various excited young entrepreneurs, posing with more than a hundred people. It’s crazy how excited everyone here is about the event!”
As I sat on the long plane ride home reflecting on the trip, one question that my friends back home asked me kept popping in my mind, “Why would you go all the way to Pakistan for only two days?” My response: other than a tad-bit of jetlag, what’s there to lose? And as it turns out, two days is more than enough time to completely change the way one thinks about a place. As Ville told me, “I love going to new countries for 2-3 days. I’m constantly surprised by how different it is from my mental model. I pick a city I’ve been to that’s nearby, and assume it’ll be similar. But in many cases—including on this trip, where I came in expecting it to be just like India— that notion proves to be totally wrong. Plus, if I don’t like a place, I can suffer through anything for 2 days. If I love it, I can always go back.”
As Muhammad asked me early in the conference, “Please tell your tech friends about what’s going on here. Otherwise nobody will know. It shouldn’t stay a secret. We need mentors, we need investors, we need the world to understand we’re human beings trying to better our lives and better our society.”
The young people of Peshawar never asked for conflict. It’s a burden imposed on them. And they’re looking to break through. They understand what they’re up against. But what they lack in opportunity, they make up for in optimism and courage. They’re looking to take matters into their own hands, but they can’t do it alone. It’s that potential that the West needs to understand, and embrace, if it’s to bridge the massive gulf that separates our two countries. As Chris Schroeder wrote:
If I have any one hope for Startup Rising, it is that it will inspire people to rethink our conceptions of the Middle East and engage…. For all the power of communications technology, there is no substitute for human interaction. And there is no greater first step we in the West can take toward understanding emerging markets than to simply visit them
I’ll definitely be going back to Pakistan, this time for longer than 2 days. I’ll accept the invitations from several of my new friends to return and witness the tech scenes taking shape across the major cities. The question isn’t whether I’ll return. Rather, it’s when, and how many fellow entrepreneurs I’ll bring with me to engage, learn, and mentor. Who’s in?