Venture Capital Funds boosting required to develop cyber entrepreneurship in Pak
July 5th, 2015 | Technology Times | No Comments
Adeel Lakhani is a Finance and CIS Graduate from Kelley School of Business, Indiana University, USA. He has vast experience of cyber entrepreneurship. He founded web development firm, managed fast food chain successfully, and now is running his cyber business of one of the largest online DVD Stores of Pakistan i.e. dvddirect.com that has collection of over 13,000 titles. Adeel shared his views with Technology Times in a recent interview
Tell us briefly about yourself and highlights of your career?
I am a Finance graduate by qualification. I worked with various organizations in multiple job roles such as Tech consultant, marketing and distribution officer, marketing manager. The organization for which I worked for included Breakaway Solutions, California, ARY Digital etc. Later on, I co founded and managed a web development firm with two of my cousins from 2007-2010. Afterwards, in 2010, I started and managed a fast food restaurant, Gourmet Burger Company (GBC) in Karachi for 3 years and sold it in 2014. Till then, I am dedicated to run and expand dvddirect.com which needs no further introduction.
Did you deliberately choose cyber business as your career or was it accidental?
It was purely a planned effort. My earlier experiences in the cyber world had prepared me for this role, so I knew what I was getting into.
Where do you see yourself after 5 years?
I usually plan a few months ahead, max one year in terms of my goals and objectives, so 5 years is like a lifetime in todays tech age.
All can say is that I will be making a lot more mistakes experimenting with different ideas and concepts in 5 years so hopefully will be wiser and smarter!
How you recognized the need of creating an online portal like dvddirect.biz?
On a warm summer evening in Karachi, two good friends and business associates were sitting in their office and wrapping up work for the weekend. After a very hectic week, they just wanted to relax at home with their families, preferably with some Chinese food and some movies.
After placing the order to have the food delivered to their respective homes, they felt too lazy to drive to the nearest video entertainment retail store and pondered over the following question:
If we can get food delivered to our homes or offices, why cant we have entertainment delivered to us as well?
At that very moment, they decided to solve this age old problem of having to physically step out to satisfy their entertainment needs. They did this by spending that entire weekend (and countless weekends for the next few months) at the office, making this a reality. And thus DVD Direct was born in January, 2010.
These two gentlemen are my friends and after running DVD Direct for almost 4 years, they sold it to me. They were migrating abroad and rather than shutting it down, they wanted to sell it to someone who believed in their baby and had the skillset to grow what they had started.
At what level you want to take dvddirect.biz being an entrepreneur?
Obviously, I would like to see it mature into a top local portal in terms of traffic and revenue. This requires money, execution and patience and still there are no guarantees of success.
Yes, we are headed in the right direction. Our customer base has increased along with number of orders per day. We are now delivering to all areas of Karachi and shipping via courier throughout Pakistan. In addition, we have improved upon quality of our product, customer service, delivery mechanism, branding, packaging, marketing and launched a completely revamped website last year, so slowly but surely we are gearing up for the next level. Who knows, if an opportunity to collaborate or merge comes along the way which benefits us, we will be happy to consider it.
How dvddirect.biz has changed the trend of DVD purchasing?
When I was running my fast food outlet, I never felt I was in the business of selling burgers. I was in the business of satisfying your hunger. Similarly, we are not selling DVDs, we are selling convenience. The product does not matter.
To link this point to your question, we have customers who have been ordering now since 2010. They are hooked on to the convenience we are offering and value it a lot more than actually going out to make that purchase. Almost all our customers are repeat customers and many of them use our service religiously.
It comes as no surprise to me that most of our customers are women. The driving culture and lack of security outside the home makes us a very safe and convenient option for them. We also have a mini-mart section so customers can order soft drinks, phone cards, popcorn, chips, chocolates, and lot more.
In addition, we send out weekly SMSs to all our customers informing them of the latest releases and box office hits so they already know what to order when they go online or call us.
Secondly, people like to read reviews and take their own sweet time in making a selection.
We offer all this on our portal minus the noise, the flirtatious shopkeeper and a bad recommendation. Once you enjoy the experience of ordering through us, you will keep on coming back and stay with us.
The trend has shifted from the inconvenient task of purchasing a DVD to an enjoyable experience where we do most of the thinking and running around for you.
How much DVDs are currently in database of dvddirect.biz, and what are the categories?
We have almost 13,000 titles categorized under English and Indian/Urdu Movies, English Shows and Urdu Shows.
These are further categories such as action, animation, biography, children, comedy, documentary, drama, horror, musical, romance, Sci-Fi and thriller.
Can a small online business could also be setup with small investment?
Yes absolutely. For instance, if you are a female entrepreneur wanting to sell clothes or other merchandise from home, you can get an online store at one of the local portals operating in Pakistan so there is no investment. You only have to pay the commission per sale or monthly subscription fee. Or you can set up and manage your own online shop on a site like shopify.com which is a complete plug and play ecommerce shop solution with hosting, paypal, credit card options and so on.
What factors do young entrepreneurs must take care of before setting up an online business?
There is no right or wrong answer to this question but based on my experience the four most important factors to consider are:
1) Funding – Money is like oxygen when you are setting up your online business. If the money finishes before your business becomes self-sustaining or profitable, your business will die. Secure a minimum of 1.5 times your initial budget when you are starting out.
2) Team – Your idea is as good as the team which will execute it. Identify what requirements, skills and abilities are required for the business to have a high probability of success and then look for individuals who have these. Every team member should be able to add value to the business in some way or the other. Just because someone is your friend or part of your family is not a smart way to go about forming your team.
3) Lean Startup approach – Dont wait till the idea is perfect and every comma and space is proof read. Its all about baby steps. Create something of value. Test it. Listen to the market cause the market is never wrong. Make necessary changes to the product and test again until you get it right. Its not about satisfying your ego. Its about satisfying your customers. Thats why they have a suit trial!
4) Exit Strategy – When do you pull the plug? Sometimes the hardest and most emotional decision is to shut down your dream. Hoping for the best is not a smart decision. Stick to the deadline and stop wasting your resources and money feeding a dead horse. Knowing when to pull the plug and pulling it or in some cases when to sell out is more difficult than getting into the business in the first place.
What future of cyber entrepreneurship do you see in developing countries like Pakistan?
There has been a lot of hype about ecommerce in Pakistan. A very rosy picture is constantly being painted by other entrepreneurs and companies for instance the constant increase in mobile phone penetration and rise in broad band coverage networks is quoted. All this sounds great but we are still years away from an actual boom of cyber business.
I feel this way because of following reasons:
PayPal, probably the most popular payment service in the world is present in the majority of countries except Iraq Afghanistan, Syria, couple other countries and Pakistan.
Think about it: We are the sixth most populous country with an abundance of youth and young minds waiting to be molded and shaped and PayPal is not interested in us. What does this say about our market potential? I speak to a lot of free lancers and they all have the same complaint that they find it hard to secure oversees projects due to the absence of PayPal, which is the gold standard of online payment.
2) Absence of local Venture Capital Funds
It requires deep pockets and steady funding to create something which can compete globally. It requires hundreds of thousands of dollars to develop an idea and market it.
In the west, there are nationwide and city wide start up conferences where entrepreneurs have the opportunity to show case and present their ideas to venture funds in order to secure funding for their idea. The idea is valued even before the company actually starts making any revenue because these venture capital firms understand the potential and are willing to invest in the idea.
Where can a budding entrepreneur go in Pakistan to present his idea and raise capital to execute it?
Amazon, E-bay, Google, Facebook, Whatsapp, Twitter, Linked In, were ideas conceived in a dorm room or at a restaurant. But they are where they are today because the conceiver met someone who believed in him or her and was willing to invest in the idea. Had this happened in Pakistan, these ideas would have never made it past the starting line.
We have a lot of smart kids here. Maybe some of them have great ideas. Unfortunately, unless they have money, their ideas will never develop into businesses. Pakistan is not a supportive place for cyber entrepreneurs. This might change in the future but as of now, I dont see any light at the end of the tunnel.
Published in: Volume 06 Issue 27
Short Link: http://www.technologytimes.pk/?p=13742