I don't know why they think I would have the money for this um so I was like if at some point I can connect somebody to somebody and they can make something bigger than uh you know what they're currently doing uh that could work but you saw the the pitches and uh I love how you can be not offensive and break down that the business model is not right so how often do you have to do that you have to like tell people straight to their face like you didn't think about this thing about that or what is the aim that is the aim to shoot someone down is they aim to make them improve their uh pitch next time how did the relationship form how how's what's the process like yeah I love that question right because on the one hand my entire kind of like job description and and the daily work that I have to do is to listen to pitches and figure out which one is interesting and which one is in element of Hope support there with every entrepreneur when they're approaching an investor right like you know because everyone thinks that their idea is is good and and most of the ideas are actually good but what we also have to solve for is whether it's suited to our type of investment or Venture investment pretty specific trajectory follow karthi um and most businesses actually don't fit that um but at the same time you're wanting to be polite and and I still obviously like you know there was it was a nice comfortable setting but but imagine like a conference in which I'm showing up to speak just getting to the hall um you're going to have like you know maybe like 10 20 50 individuals out there that are wanting to get like just a few minutes of your time and a lot of those are are not like you know we're spending too much time on not because the the those people don't believe in themselves or they can't pull it off but it's just that the fit isn't there so striking that balance between like you know giving them useful advice versus also finding good opportunities that we can pursue where it says just being rude and like you know not giving them time or saying something that like you know just um discourages them that's a fine balance but I mean I saw a TV show where you were uh uh listening to other people's pitches and you're being pretty sweet like and breaking down like what the flaws are critically like kind of analyzing what their pitch was but piche music like a dash as if you said something that just destroyed their soul I was like yeah Shark Tank the the US show like on this show was like you know trying to model off off of that um right like you know and sometimes um like you know shoulders But ultimately the the objective is is to find those brilliant ideas that are being come up with by entrepreneurs that are dating that have the grit the perseverance to go out there and make something new entrepreneurship is is really like the creation and extraction of economic value and the way we describe it in in our space is like this this form of like entrepreneurship normally requires taking on more risk than is associated with starting a conventional business Associated so you have a traditional industry technology you can come up with a scalable model that doesn't require brick and mortar setup that doesn't require hiring people thousands of people on your payroll but instead you can connect people together to create opportunities for economic value chain generation both horses so our job primarily is to assess those risks and what makes it a little bit more difficult is whether this thing is going to work in five seven ten years time and then at that point become this massive company which is going to generate Financial returns for us a lot of times we're going to get it wrong um that's the nature of the beast but the idea is really that if you don't swing you're going to for sure miss right like you miss 100 of the shots you don't take yeah so we still have to take shots but we also have limited Capital we can't be for example just from small jobs we couldn't have given money to all Seventeen hundred yeah so how are we determining potential and for the most part it comes down to the individual so even though we say business model and like you know a market size against traction Cassie at the economic reality of the country in which you're trying to create such an opportunity um pale in comparison to the potential of the entrepreneur because you can give a great company to a mediocre entrepreneur and he's going to run it into the ground and you can give a mediocre idea to a great entrepreneur and that entrepreneur is going to Pivot around try new things experiment and eventually make it work because their hunger their Drive is what is going to make these things all possible hamara Masters because we're not the ones actually building these companies we're just a support act in that process and it's a crucial support act because otherwise those risks won't be taken individuals we also say to them why not try this different model around the same space in some cases when when there adamant are trying what they what they want to try my own objective is to keep as good terms with that entrepreneur as possible because the next time when they're coming out and raising hopefully we are one of the first ones that they approach for for that funding that doesn't mean without believing that they can make something out of it just to buy that opportunity for a second time that's the daily job and did you learn this over over Years also I wanted to get into like I have this breakdown so I have this breakdown of uh and what uh of course I should give shout out to Prophet Pakistan today.com.pk I guess they're seeing it on screen right now but uh there's this uh uh whole breakdown of how much money where it went where this is probably changed over time your portfolio is different now yeah so you you got the 200 000 to patari yeah that was like the first deal that we did uh when we started samayaka um the idea there was um interesting kind of a coach sorry as VCS is we need to um do some pattern recognition and and CK type key opportunity in an economy similar to ours or in a space similar to what that company is operating in trajectory so back in the day when I was making the transition from investment banker to the buy side as an investment professional when I was at GIC colleagues with a couple of my colleagues consumption of music was moving to digital sources within digital sources it was moving to streaming rather than outright ownership background Apple iTunes Spotify rather than owning one album or one song why don't you subscribe to a service and then you have all of those songs available whenever you want them obviously that investment worked out for me as well the Spotify one but that also prompted when I started looking at the Pakistani opportunities and like you know they had a great product yeah and it was a proposition which made sense their music has played a critical role rounds the rich history that we have around music will become quite evident and and we still resonate to that um very massive Market here around Pakistani underground music studio was the biggest song in the world and I heard it in a a German club I heard it in Baku there you go so so bobalie cheese appeals and that resonated with us even though it wasn't being monetized at that time as it turns out that that specific business model that we had in mind didn't really pan out because subscribers Pakistan content came there was a time when 38 million people in Pakistan were subscribers to bring back tones and they were paying on average a little less than 20 rupees a month they might opt out of it interesting Jesus it's people who are calling you but you want to be seen as someone who either appreciates music or has a certain abilities so that has been a part of Pakistan from the beginning and it's that's not going to change so we look for business models around these types of Mega thesis for example Trend here maybe if I can take this opportunity to also explain why like you know Pakistan is interesting around this large population which is very young am I a 64 of our population is less than 30 years old our median age is 21.3 something years so meaning almost 50 percent is less than that as well and very consumption oriented economy more than 85 percent of our GDP is actually linked to consumption consumption patterns huh what digital first Avenues to really start spending on that consumption but the same way of an elderly father in our country sends his son to a specific Pharmacy is as difficult as it will be for one of the youth in our country to actually resort to that as the first means rather than saying can I check online and can that thing be ordered online and can I have a digital First Avenue a unit user interface that is different to walking into a store having that different experience at an overarching level our economy is only about one percent penetrated e-commerce versus traditional retail India maps in the US is like you know mid mid 20s plus overall growth rate opportunities to imagine the entire e-commerce base in the country is doubling doubling yeah and the GDP is not doubling necessarily in that same period so that opportunity to play on that trend is only starting now and that's really the thesis behind our Venture fund and other like Venture funds that have come up in the country as well because in order to experiment around those new business models you need risk capital because it carries higher amount of risk or some higher amount of risk for compensated so meaning even if one two three of your backed companies work out they really need to work out so they need to become hundreds of millions of dollars worth to pay for all the other bets that didn't pan out but traditional lenses even the people who who held a lot of money or wealth in the country they were not comfortable with taking the kind of risk that is associated with the Venture asset class for people like myself to to try to bring together for some of that risk capital and provide the governance and the structuring and like you know the support that is needed around this taka Blue Chip management because each investment is too risky to just be done on its own so you need a portfolio of these I try to identify which space is interesting which space has some margin that you could potentially capture if you come up with like you know scalable opportunity leveraging technology a streaming services let's continue with that example um for getting 2 000 subscribers or even 10 000 subscribers you do not need to create a new platform you do not need to do much other than getting like you know Cloud Canada and whatnot um to get 40 people in that hospital bed at the same time you literally need to create more space more space you need to create 20 more beds beds right scalability and so what we do is we back these types of scalable opportunities over time you can add more users without having to increase your employee Base by that much without having to recreate what you have already created or double in capacity that thing that you have created even if you need more like cloud storage space or whatever it is still a portion of that overall thing that you need to increase but the rest of it stays the same yeah I mean if you can go to this on the screen again uh I found uh patari to be really cool because it had uh an interesting like image so shazil who did the production design and the artwork A lot of the artwork um was just uh unbelievable she is so super talented man and like this I remember this this is a concert I performed on as well right now but Darius please I think volumes might be going I performed a few songs but all of this artwork and the app looks so cool uh so when a lot of these a lot of people who understand you can come back to my face now earlier I subscribed and the payout thing was also a part of it that the artist is going to get money so for the artist to upload to incentive uh there used to be apni isp.com right at the end of that so uh when you looked at this patari pitch and you're saying it's more the people the entrepreneur and his background as opposed to uh idea okay idea seems like patari is the same as Spotify right it wasn't a subscription-based model though at that time it was in a subscription-based model but that was part of the plan but what did you see like so so that people who are going to pitch to you get an idea of okay I'll be here from these pitches I also realized that uh they need to have proven their entrepreneurial skills before coming to you because this is the bigger step as opposed to the the small step where you set the company up is that always the case or do you find someone from scratch as well or is it always like I need like a background history yeah I think it's very rare that we would do something where nothing has been done on actually executing against the thing right um I think ideas are great but they're only acting as multipliers for whatever the execution capacity is going to be and then we have to take a call here for execution capacity a monetizing an idea or a product might come later but the product needs to be there at that time was good it was well made their thesis around aggregating as much Pakistani audio content in one place made sense because at that time actually they weren't they hadn't even launched in Pakistan so and and most of the founders were were engineers so they had just built the product and some people that they had actually football commentary so he had also a good sense like you know or like you know understood the pulse of the the music pulse of the nation and and they were getting that content from artists because artists didn't really have a platform where they could potentially monetize and benefit more than what they were doing through these traditional labels so that was the hypothesis at the beginning also fell short was was really being able to translate that into true economics for artists and why was that was because they weren't able to monetize their service as much for big Brands so but those are like specific like campaigns and projects which are different to what the what the streaming hypothesis was right like on the thesis around streaming was that you have this content in one place people subscribe to that they pay a monthly fee and then depending on how many streams artist a has had relative to the overall streams they get paid out that Pro rata to all the other artists um was just low because the overall monetization by patari was very low and so you cannot be paying out of your pocket for artists one versus artist two because then everyone feels that that is not a fair way of doing it and and the way Spotify for example does it is by adjusting how much of the total money they're going to pay out to artists but the payouts are always in proportion to the streams because that's data telling you that's basically consumers telling you who who they want to listen to more than others so that was the model um it unfortunately didn't pan out in that same way but I think the strength of the product itself kept the company going abibi if you go you still have patari around in fact there might be something which is a somewhat of an exciting Development coming in the next few months because our belief after that experiment was that patari is probably better housed in an under bigger umbrella where people might have like you know a broader value proposition just against which I think a little bit experimentations so now we're trying to have like you know find it a different house under which it can reside when when that that harassment controversy happened uh was there a downfall in the amount of uh consumers or was it just like news so on the user side now what's interesting is and some artists obviously took exception to like you know patari's kind of like you know with that controversy coming around and so some content got removed um at that time um user numbers but overall ultimately if you want to keep these users on your platform and you need to charge them for it you need to continuously have like you know new new content coming on anyone who's up and coming wants their music and content to be everywhere irrespective initially of how much they can monetize from one channel versus the other so for some reason but I still get some new music I mean I haven't uploaded mine there in a while not that I've made much in the past five years but I have a few songs but like what your distribution mediums that we use like this tune core this CD baby there's there's one place you go to when they put it on everything the but patari is not there did you did you guys think of putting it up there in that distribution yeah absolutely we don't have any restrictions on anyone putting content on it's only around the quality of the recording effectively because we can't be arbitrary we can't like you know say that oh upcoming music the reason why some of these things might not be there like you know evident right now is because ultimately you need to be monetizing something and paying those platforms back for it right because whoever is even aggregating like you know uh um right and to maintain relationships and so on so forth so I'm not not surprised that like you know there are aggregators out there that are not putting the content on patari but but that's primarily because like you know maybe the model at the time at which it was launched was a little bit early for Pakistan but also just having Pakistani content might not be enough to get people to pay in the country so that's why um if patari was let's say gobbled up by an international player like Spotify it wouldn't make a lot of sense for them because they would get a lot of Pakistani content and they can monetize on their overall platform through the Pakistani Market but for patari by itself to to do that I think it's difficult okay uh let's look at some of your other Investments uh from uh sir Maya car's end uh so you got music streaming service out of Lahore okay that's followed by to in Pro check a company that also Integrity yourself ah what is it what is what does project do yeah and how much like also I had another question like so you're an investor yeah you're not part of the process of making the company function and like all the day-to-day no so normally we're on the boards of these companies okay so um of most of our like you know all of our frankly like first funded Investments we are on the board of directors so what we would have are are some kind of like you know rights as part of being on the board and some responsibilities to ensure governance is put in place normally even the hiring of a CEO and stuff is subject to a determination by the board but we are not uh what are called like you know Executives of the company so we are not responsible for day-to-day building we're not responsible for day-to-day hiring um where they need to be allocating some of their budget we of course are leveraged by some of these Founders and CEOs for example our graphnik c-suite um so they would normally request us to like you know interview them and to provide like you know some view we would normally be setting their compensation levels and so on but idea is that we don't know how to build those businesses better than those people and once we have made a determination that this is an interesting space that we want to be in and structured around it then we let them build those companies and then work on a pull factor basis let us know pull us in and then we will provide that help obviously this also varies company to company because the capability of every founder or every CEO is also different so in some areas where they might not have the financial background or like you know understanding around how to fundraise but they might be very very good at building the product we will try to provide them that help there in other areas where they need for example marketing support but we don't know how to like you know do effective marketing we might then go out and get some people that can help them with it so it's really becoming like you know it's kind of like a marriage like you know you're getting in there for a long period and the only outcome that works for everyone is that the company actually becomes big and valuable and once that position is sold or if the company is exited it then the founders make money we make money and and then we can recycle some of that cash to other new opportunities as well so that alignment of incentives is one of the key elements that we provide at the very beginning and the way to ensure that is mostly through board representation okay and what about Pro check so project uh thesis accordingly thirty percent of approximately one-third of the medicine that's available in Pakistan is counterfeit right so what the original thesis around project was okay the reason we like that model at that time was government enforcedure drug regulatory authority of Pakistan mandate for every uh pharmaceutical manufacturer in the country medicine so project was the company that would apply those labels and through their platform and the software offering you could check the validity of each of these medicine and and find out more information that business model didn't work because we're regulation manufacturers if you were chasing the same opportunity the government sets the prices yeah so in Pakistan it's a regulated market price control Market margins Pharmacy but the RRP is set for each medicine kind of category by the government and then you work backwards getting and how do they justify this mandate like shouldn't it be like not regulated in private that's a call joke a different uh jurisdictions but different calls um ultimately I'm I'm unfortunately I have a capitalist in my job description literally um markets good she's in determined condition because the government or The Regulators cannot get like you know that balance right ABI up for example they can manufacturers are are having to deal with these escalating costs your inflation with these others index prices foreign a certain regulation which frankly in my opinion doesn't work in a place like Pakistan but yes that's the case in uh over here I mean the ugly side of it would be like the American side where the the advertise drugs and as if like they'll cure everything on the commercials show them consuming the drug but they show someone who's happy traveling adventurous and all of a sudden some um me to M2 drug for some heart disease thing comes up and when I was in America I was shocked that that's actually a possibility as well but uh the corporate interest of big Pharma uh could be something that can be used in marketing to kind of get people on drugs that they really don't necessarily need as well I suppose is that is that the dark side of that I think fatalistic model I think there is right like and and I think there was this individual I'm forgetting his name um who used to be called Pharma bro who you would you who would wait for the some of these drugs to come off there like you know the patents that they have or like the protection that they had and then the next day the price of that specific drug would increase by like you know fifteen hundred percent right because it was no longer under that protection which kind of like you know controlled the pricing and so on so you can have effects like this right because again it's an open free market and and you could have like you know Pharma companies income generation opportunities which is a proxy for like jobs but but in this new economy in the gig economy a job is effectively someone who has an opportunity to do a small gig and make make a couple of bucks and so on and that has been facilitated a lot by companies like bike here so that's why like you know that's all obviously close to close to my heart it's also doing really well we can also talk about but you still have to wait till the end of the month to get paid even for those 20 days of work okay so what ABI does is it allows you to draw up to a percentage of the salary that you have already earned because you've already worked for 20 20 days okay and why does why is this interesting in Pakistan is because um what this company does is it formalizes they have the facility to withdraw up to whatever they have earned up to a percentage of that or with mahineke and May and grow directly payrolls so this is not like a Payday Loans so that makes it they charge a fee a flat fee around like you know each each transaction that that you do but again this makes it a Sharia compliant and B in a country which is ravaged by inflation right now 15 days can also make a difference yeah right and so to have a proposition like that in in a country like Pakistan um became like you know very appealing so when when this opportunity came around for us this was um perhaps the only investment that we made before the product had been rolled out even hmm But it's been one of our best performing Investments um the company has gone on to go do like other things that they now lend to businesses as well so these are one of your later Investments this is one of the more recent Investments so you know that uh there's that think if you want to succeed fail fast and I'll start and start up entrepreneurs tend to say that the first two startups are going to fail so you had how many of these failures before the success of the by KIA thing and this upni is what you're calling uh Finance this is fintech this is fintech exactly so um thankfully luckily for us um we have um from our first fund we've done 15 core Investments and then we've done like you know some which are very early stage we are through a different program of the core Investments so far touchwood all are surviving thank you but not everyone has had the same level of traction or what we would describe as success okay in reality for an investor particularly for invention investors success should only be determined one we've started receiving returns meaning we have either sold a position or we start getting dividends yesterday was the first time that one of our highly profitable companies announced a dividend which will be the first dividend we believe in the entire Venture industry out of Pakistan that is actually going to go back and to our investors as well and come back to a venture capital dedicated fund is this bike here no so this is not by care this is actually one of the early Investments okay Publishers and and theirs was a very interesting proposition to monetize and monetize customers locally particularly when you're offering something digitally right um the founders of simpesa had another streaming platform a video streaming platform by the name of tapman when they came up with that they saw like customers were coming like they were getting consumers but they didn't know how to charge them limited Avenues take direct carrier Building Services that model is is not very efficient because to take a very big chunk out of that so the merchant your service will provide 55 to 60 percent so um these Founders basically went out and founded this new company called simpes like direct carrier billing but also over time credit cards direct integration with easy PESA Jazz cash and so on so they made that product and this is 2019 was when we invested in them late 2018 actually and in during covet they got tremendous traction because they were able to specialize around Apple Store okay or Google Play Store K International Merchants gaming companies but it's so seamless because you don't have to go to a different app you're just playing that game and because the game has integrated with sympesa they charge a very small percentage between three four percent which in a country like Pakistan is not actually that high for processing payments and the absence of any other exact thing available exactly so now they have raised hardly any capital in our world um a total of two hundred thousand dollars which in today's world is Unthinkable company but um inshallah their net profit net profit after everything should would be in millions of dollars so so we just have like you know hopefully our first dividend coming from them but that also signifies the type of opportunity Pakistan May because of scarcity of such Solutions um can create even in a niche you can generate value um you can then create that value and capture it in a structured form and everyone who's taken that risk along the journey can get paid off even in that scenario like in every other situation where only minority small investors in these platforms the bulk of the ownership remains with these Founders and so when these things work they are the ones who really just Company New Year but like I think of the various companies that we have in our portfolio they would be a leading Contender eventually to potentially IPO in because IPO markets would it be interested like because it would dilute your share right so how's that work no but we also want to exit our position at some point right so we entered in end 2018 so far we've already been invested for four years are more invested in but eventually our model also requires that we need to sell these businesses and make a return so that we can get paid ourselves and also share those returns with the investors that have backed funds like samayaka so if you if you had like a big massive chunk of an investment in a company let's say 200 000 in the company is worth four hundred thousand dollars if you pull out your two hundred thousand dollars I'm sorry to borrow a sexual slang of a 16 year old if you were to pull out at that point that would mean massive downsizing in the ruination upon the company but if it was big enough and it could take that shock you could pull out and have a how does that work so so there's differences difference between and this is going to get slightly technical there's a difference between primary capital and secondary Capital right primary Capital means that the money is going into the business we can't just pull it out we can't just tell the company or give it back to us when we're selling it we're selling it to our position to another investor who's paying us to buy our shares it doesn't mean that the company is is paying it back so there's that distinction so if we were to sell let's say when it was worth 400 000 technically it shouldn't make any difference to the business itself but there is obviously some disruption right like you know upcoming shareholders are in like you know they will want like you know their own rights you need to like you know take them along that journey and the question is why would they want that to happen um if it's going to cause disruption without them benefiting so normally leading up to that exit um you normally would have mostly primary injection yeah Capital going into the business maybe in some cases you can have small secondary percentages that are also sold by either existing investors or in some cases also by Founders for example economic means and they go on this journey of building a company and they've done a good job at some point they want some liquidity as well right startups you're trying to make ends meet with whatever funding that you have available but at some point they want to also buy a car they want to have like you know if they have children they want to send them to good schools and so on so so it's not unreasonable to imagine that along that Journey some of the founders will sell like a small portion of their stake as well but the idea around incentive alignment is so we want you to be building that investment and once that investment goes to a certain scale and the company gets sold you're going to make the most money still but in the interim you're not going to be motivated to continue to work there and then obviously then that incentives are in that case incentives are misaligned so we try to avoid that through like you know the rights that we typically look for uh where is the food delivery model by Uber for foods I guess is what they would say where where's the problem in that model where do you see the problem so just to just to be uh clear I think the food delivery model like the prepared food delivery model can still work and and food panda is a long way towards that in fact I would say that perhaps if they're not already breaking even they might be very close to it I think just the standard quick Commerce delivery model I think is a little bit more challenged because the economics are very different economics restaurants are complaining because 20 25 30 of the total order value is charged by food Panda from those restaurants the margins in a quick Commerce delivery model are not that they're like mid single digit margins right manufacturers Just because we're we're delivery distribution platforms so so that's the slight distinction why do like you know some of these more models work and some don't ultimately Amazon's the same thing isn't it right so Amazon Amazon also takes the cut right and what they did was they said that every subscale manufacturer of a product that is selling on the platform is not as efficient in the subscale subscale meaning aggregate of every manufacturer on that is selling the products on Amazon that aggregated scale is much bigger Warehouse the economics will always be different so why did the mom and pop shops not survive was because their Logistics in a world where people were moving their purchases on online they could not match Amazon's fulfillment effectively the logistics element of it Etc and and the similar thing applies uh similar thing applies like you know in Pakistan as well but economics can you foreign now if Amazon is let's say delivering that in one particular area for 100 people versus that one order being made to one manufacturer and and one delivery person coming there the economics of those are very different or is the product that has been consumed or ordered or delivered what are the economics tied to that um when I was sharing the example of some of the quick Commerce businesses in Pakistan the problem that arose was um because of the delivery slas that were promised like meaning from delivering within 15 minutes 20 minutes 30 minutes you needed to have what are called Dark Stores um and very close radius because delivery within that time period is difficult what also had to happen was in Pakistan around these kind of types of products fmcg products it's a full inventory purchase model meaning you need to have already purchased that inventory it needs to it needed to be sitting in your Warehouse then it had to be an idle person there um who with an idle vehicle and you couldn't stack up these deliveries because there wasn't enough order density from each dark store okay nearby areas so what that meant was now it could have still worked if we had moved our monthly purchases of our groceries to these online platforms instead of having um there was enough margin for the platform to cover its costs because you need to have like you know you need to develop the technology you need to like you know have that fulfillment center dark store even if they're not purchased all of these things have a certain cost attached to it so you you needed to be delivering so many such orders every hour that the economics and of and the salary or the whatever you're paying for that individual plus the economics of that dark store had to be covered by this this last like a large number of orders that were coming through we as as a country in Pakistan maybe are not at that point yet and and there's various different factors we can discuss monthly groceries that's an outing for a family every family in Pakistan like you know yeah it's not part of it um right so both of those things together with the uptake of this um offering in Pakistan was not quick enough to offset that is while you can get some demand the unit economics are hurting there our Venture can the assumption the cost of that discount is it the is it the person who's selling the thing or is it uh like the Amazon no because exactly so you your company is that's delivering Amazon would have to absorb that exactly which in turn is absorbed by the VCS that fund fund these things because that's the experimentation you're doing around a particular model and if it takes shape well hypothesis eventually once they are scaled and they're the only players in town to they can set their own prices Amazon and they can then dictate their terms which we all experience Uber Karim and maybe this might be a good segue into bike here as well when Uber Karim launched um and I think 2016 was like you know the first year when they were kind of like I'm taking off 2016 2017. um [Music] will start using this start getting used to the fact in a place where mass transit is not available mass transport is not available these offer a solution to plug a gap but Uber models can there unless you have Supply supply of those cars or those captains um it makes no sense right because a graphic app 52 minutes you're not going to use it so at the beginning in order to incentivize Supply you give them guarantees bonuses at the beginning I'm sure you also remember owners were going and buying cars so that they would put their drivers on the thing right like a separate bonus work a separate bonus and so on so why was that working was because APK demand sidekeeper bin centralization okay supply side um people were finding that these were cheap enough right so they were taking them right up okay at one point uh at the peak um like you know the combined they were doing close to a million bookings a day wow right at the the peak days in Pakistan wow um between Uber and Kareem combined um I'm sure I can't disclose this too openly but they're like combined less than 50 000. combine less than fifty thousand because that's actually JoJo fair price why would a person stay on that platform they need to make some money to be able to cover the cost of it yeah this is where Ikea comes in tractions foreign is maybe three times on the actual fare charge the cost of the asset difference is 20 30 times right in terms of like you know equivalent use so the yield Dynamic was such that it made a lot more sense for people to come on a platform like bike here yeah but it's going to ask you different challenges so there's always going to be a market that can be covered by like you know those cars but the economic reality of the country is such that mass Market again with the economics available becomes quite difficult foreign because ultimately these platforms make their money from the commission they charge from these drivers or captains or Riders whatever you want to call them so that's the point at the beginning they're absorbing some of that loss because they want to capture that market okay so then you can then says that's the same thing that happened with Kareem where it went something one million uh that you were saying into Now 50 000 which is half even right yeah instead of the platform dictating what the price should be the consumer can pick what they want to pay for a journey from A to B so what can in Drive consumers drivers that are nearby um and then a driver picks it up and can also negotiate that thing yeah right that's how these platforms works so all of this at the beginning needs to be subsidized through money that is raised through Venture Capital so these types of risk elevated risks are what a key part of the kind of opportunities that we looked at so that eventually they can become profitable and a lot of times not just us like globally VCS have gotten it wrong as well and like you know for example last year but I think tens of billions of dollars were poured into Justice um experiment around quick Commerce unfortunate failure is is not an exception all over the world last year tens of billions of dollars just went into this quick Commerce keyboard opportunity a lot of those companies are are no longer there or are looking for another home or are looking to merge because unit economics just didn't make sense okay right and and I think that's the assessment we as VCS have to do at an early stage and whether there's a market for there whether people are going to be willing to pay a certain price to to use this product or service well you said that you're a capitalist and and as we were talking about that Amazon example I've just read this book called The warehouses on computer so it's this book that projects uh this uh post-apocalyptic kind of a future oh nice um and it's a wonderful book and just can their mom and pop stores and individual um it's a book I wanna I Wanna Give the shout out to whoever wrote it by Rob Hart what they showed was this is this guy he's an inventor and he invented this uh little shell that gets wrapped around an egg and you put that egg into a microwave and it boils it perfectly and that was in it is his invention and I was assuming that the writer must have read and researched this problem because what he was saying was that individual inventors are dying now because uh that invention was put on 15 discount and the inventor had to Bear the shock of that and slowly it didn't make any sense for him to sell that thing on the warehouse and the warehouse ended up absorbing like you know the mom and pop stores become a part of the warehouse and this great monolith is created that ends up monitoring people like we find out in Amazon warehouses that they've got a timer running yeah so if you're not active and uh so labor rights uh or unions violations uh do you see like all of these like capitalistic entities going to this post-apocalyptic kind of a place where you know like this big brother watching there's a totalitarian corporate interest that is dictating the lives of human beings if not so already because we are kind of manipulated by copyright corporate interest in marketing and PR ways anyways do you see any of that like uh coming out of this finding progress and doing quick Commerce and all of these things and consumptive sort of do you see any of that to be honest I as much as I would not want that outcome I think there is going to be certainly an element of it my instant gratification around your addiction right that that gets fueled or like you know you have put your head upcoming through through these kind of like you know Avenues I think there will always be like you know niches where where like you know that uh that specialization or that personalization element is always going to be there they're always going to be some services for example that we would not want to be provided by like you know giant organizations Etc but when it comes to standardized stuff right we're all going to lean towards that for example Galaxy phone Samsung it's going to be the same phone whether you buy it in person like you know like you know from an individual Mom and Pop shop or you order it on a giant online platform if a person places enough value on that experience of that purchase then they might continue to go there but by and large being rational economic animals which we need to assume humans are you would naturally gravitate towards what is like you know the least leakage um like you know from an economic term as well right like so so while I don't want to like you know kind of Imagine such a such a world and I don't think it's happening in in our lifetimes but I think eventually this is in a way like you know Adam Smith said right like specialization element and and so on um I think it will move to that what kind of like you know prevents it from happening or maybe um some conscience Within These like large organizations um hopefully like you know some realization that that humans are different to like robots and and and ultimately you need to cater to like in different elements of humans um rather than just oiling a machine on the other hand but uh unfortunately I can't say that okay we're moving in that direction in more so than like the direction that you pointed out which is like you know actually organizations becoming larger um using AI machine learning to know what your patterns are what your consumption kind of like you know is going to be around and then putting that right in front of you um for a human to do that is is just more difficult right because then the processing ability is is a little bit difficult yes you can make judgment calls and everything but like you know to to just take plain data that of your own consumption or your own history and then coming up with a proposition that appeals to you I think machines are going to do that better and that's why we're going to continue to move in that direction as much as I wouldn't want to see that face of the world I mean do you think do you think that works gonna become uh optional for the human race anytime in our uh lifetime because there's that talk about Universal basic income okay and like a lot of like these things also replaced like previous jobs yeah how do you see that that's like in this necessary thing that has to happen I I think Innovations when you look at like you know some of the Communist socialist countries around the world why would you work right like so then you just want the best Necessities in fact um from from innovating that's what you would do and and what is the American dream right like American Dream explain if you go there you work hard you're smart you can achieve anything right like you know if you if you go to like you know Cuba and maybe right now is not the you're an example of that dream I mean like in my case like you know the whole like Pakistan angle was a very crucial part of like you know what what I felt was like you know completing of the circle for me um I wanted that to happen and and that's why like you know I would have been okay and I did um like you know even give up some money which was like you know an easier path for me abroad because so like you know for me that was an important element of like you know my career and I've been very lucky to have had those opportunities um there's no difference between you being smart or not you're working hard or not um then it will eventually lead to like you know just basically all mediocre outcomes which which effectively are going to like you know we would all have to live with I don't think we're going to necessarily go there because I think a human Ingenuity is something which carries a premium um I think human effort also carries a premium and so like you know finding new opportunities finding new avenues where people that previously um have been maybe maybe laid off is not the right word but may defunct because like you know technology has taken over I think our pockets emerge with this this recent thing you might have um heard of like you know open AI this called platform called like chat GPT which basically you ask it a question and it pulls like you know AI polls like you know information and data from all over the web and it will give a response to you I mean the accuracy of some of those responses is mind-boggling right so so the question becomes and you ask that lawyer can you um prepare standard articles of Association of a company of a private company in Pakistan if you go ask that question on chat GPT it's going to spit out something which is 90 percent what what the lawyer would be doing right so the question is like why would you engage a lawyer to do that um but the reason why a lawyer is required is because like every situation is also a little bit different there are nuances around it you might want some terms in there Etc which which it would take time to train one of these models to like you know accurately capture that for all the ways different individuals that are using something of that sort but we are going to continue to move more like you know gradually towards that that World um and in that world I think like you know again there are going to be different roles that like you know humans are playing not all of the roles are are going to move to to robots or be powered through AI simple examples um getting a haircut um like you know a surgery like you know these are types of like services that would be difficult um for people to fully trust robots to do even though technically you can prove that robot Bots might be better at doing that no they seem to be better at Auto driving according to Tesla's statistics of people having accidents and doing things like they argue in the car they get into they sleep they fall asleep at the wheel but uh the car doesn't the car can stay up Forever Until the battery runs out and if the battery is about to run out it'll find a way to park itself on the side there you go but we can't trust it I remember the first time I turned the water pilot thing on and started driving there was that it was a nerves thing like and it avoids it but like you're afraid but at some point you start trusting it with when enough data goes into your brain about trusting that and validates it right so yeah it we will get an application right and none of us has that crystal ball our pick um I mean all of religion is similar right like you know okay outcome but and that forms your belief the same way like you know belief in a system works right like you know Pakistan can there be um why why do I know I want to sit around and just enjoy life and not work and like you know everything still be taken care of um so you need to instill that kind of like you know belief and confidence and and perhaps like in the way of bringing it round to like you know the Venture ecosystem yeah entrepreneurship is also just instilling that belief in the Youth of a country that entrepreneurship can be a viable career choice that was the biggest objective and the biggest hurdle I would say in starting what we started or what's happening right now in Pakistan foreign thing that happened Henry Ford in well I'm starting 1904 or whatever like you know the first Model T was coming around he in an interview he said that if you had asked people what they really needed at that time they would have said they need Faster Horses right and to think that that was replaced by a car which right now seemed like who would have thought that was like who would have said still measured in Horsepower still measured in horsepowers but that was the reality at that time so what is going to come in the next few years is is going to for us look like completely unimaginable but for the Next Generation it might be like you know par for the course so what's next for uh sarmayaka are you looking at uh new Ventures or or are there any good ones on the horizon that you can talk about yeah so we we are currently also engaged in a couple of like transactions like I mentioned there's this streaming platform like on the video sort that we're looking to do something potentially where we combine patari um we are also looking at the hospitality sector where again in Pakistan one of the the thesis is that as as inflation is rising like you know the exchange rate is where it is people are going to stay more in the country but the human urge to travel to experience is going to remain there so is there a model that we can move away from like hotel banake and also they've been looking at spaces like that but at a higher level it's like Airbnb or something like or it's like Rumi's done something I don't know if you've noticed it yeah so I don't know how you got that name but I think you might hear you might hear something very soon in the news around Rumi and samayakar oh interesting I did a great job yeah so that's the idea right like you know again you have a proposition you have a model which is asset light um and you're playing on a thesis which we think is going to like increase demand over the next few years so that's really like you know the intersection of what we look at but just taking a step back for samakar overall our first fund is almost coming to like you know it's close we've invested most of that we are how much was it uh first one was 25 million dollars okay we are now looking to a monetize slash exit some of those opportunities and uh inshallah like you know one or two of those exits are coming up we've had one stock exit already but we are in parallel of course also looking to now do our second fund um for which we're in the market we're raising capital and um if I have one hope um because when I made this decision of coming back to Pakistan and setting up samayaka the idea was okay this should be for the rest of my life okay Pakistan RK or sorry but I also need to like hopefully be successful in what I'm doing which is um generating attractive returns which um hopefully haven't been generated in Pakistan before this time so my hope is that like you know I can continue to do this um for for the rest of my life meet interesting entrepreneurs on a daily basis come up like come across like you know innovative business models that um seem ridiculous at the beginning but are really going to transform Pakistan's economies a lot of iron Industries and so on and and like you know I was lucky to be the first like you know professional VC in Pakistan uh I really want to be the last meaning like you know that you're still around um when when when all dust has settled so so in that journey I think we're only at the beginning literally Pakistani Venture ecosystem is like what two three years old um the U.S in the US it started in late 50s and it's only picked up steam you look across like India Indonesia Egypt to use some of the more call it comparable companies countries to us um they are further ahead but we can LeapFrog a lot of that we can we can bring together like capital from all over the world and focus that attention on Pakistan is around the global radar so that's really what we have as our objectives more recently we've just set up our Karachi presence as well which like you know is very important in like as a city in Pakistan so that's how we're building um but hopefully like you know many more chapters to write in there amazing and so people who would want to send you their pitches what should they they do so that's a great question because one of the things that we as VCS are also looking for is how resourceful um is a Founder that is approaching us for funding so some of the common known Avenues are LinkedIn we have a website where like our emails are mentioned and they might be like talks that we're giving where at the end sometimes the information is shared but the best Founders are the ones that make warm connections through people that are either friends or whose opinion we trust because those people will only recommend and refer people that they also value and so it automatically goes to the second layer of filtration rather than just the top of the funnel so so a lot of the times I did the right thing today you did absolutely the right thing today I would give them credit for figuring out this Avenue of reaching out to us right because what it does is that um ultimately like I think I shared earlier in the podcast that we've gone through like what 17 1800 situations in Pakistan of which only 1516 got in investment okay so the so the hit rate is very very low so we're also looking for some kind of evidence some kind of signal that or this particular opportunity makes sense and we want to so most of the companies that are currently in our portfolio were referred by some other entrepreneur that we had backed from the fund already because that entrepreneur will know what type of opportunities we like what is our style what are we looking for at that beginning and and so it starts already with like you know better potential or probability of making a match compared to a completely cold call you have an international partner as well right there's an investment Committee in the fund um which is made up of myself and that International partner so even no matter who has had the initial interaction it will go through a process within the firm so we will have like you know we will look at commercial elements Financial elements technology elements and all of that if it's interesting enough will be compiled together in in an investment memo which then goes through our multiple stages and then eventually once we've done due diligence that's and and figured out what kind of a transaction construct can work in that situation then it gets approved and then we basically fund the company how long is this process like so for a company which is um has its ducks in order it could be as short as like you know three to four weeks for um for companies that are completely coming fresh and they don't have like you know much in place um it can vary a little bit because they're already in the market but they just don't have a data room or like in all the documentation and everything all the numbers the business plan ready so then it can take like you know I would save like you know six to ten weeks um typically as well um a lot of times when there is competition amongst investors as well to invest we have to also move quickly in some situations so if there is the right Meeting of Minds and the priorities are right between the investors and the founders that are looking to raise Capital so then we work according to what the time frame that is available to us okay man thank you so much it's been a pleasure it's been an honor it's been very educational for me and I hope uh I'm sure people are always got ideas and plans and want to execute on something so uh I'll attach like some emails or some some sort of like contact details under in the description of the video and thank you so much thank you thank you for having me this was like you know my celebrity moment with you so thank you so much for giving giving me time and and I just want to leave everyone with this message that like you know again we have so much potential in this country because and that's always the starting point of a place where to look to do something rather than trying to like Escape that um find areas like you know if you kill it all of us are happy