If Pakistan Was a Startup: A Silicon Valley Perspective

At a founders' meet in San Francisco a few months back, I had a thought-provoking conversation with an American entrepreneur who had recently sold his unicorn and was now heading one of the largest venture funds in Silicon Valley. Upon learning that I was from Pakistan, his first and almost instant reaction was, "You guys are perhaps the most poorly governed country in the world, which is shocking given that you have a solid talent base." These remarks are not new, and you hear them frequently, both in Silicon Valley and in Washington, D.C., where policymakers and investors alike are dumbfounded by Pakistan’s decision-making. But then he went on to say something that has had me thinking for weeks since. He said, "If Pakistan were a startup, it would have shutdown 50 years ago." He had plenty more to say, especially on cricket and politics, but that deserves an article of its own.

This short conversation stayed in the back of my mind, and I wondered: what would Pakistan indeed look like if we were to gauge it as a startup? Here is how I evaluated Pakistan based on the key metrics used by VC funds to assess whether a startup would be a success or failure.

1. Founders and Management

In any startup, the founders and management are the heartbeat of the operation. They need to have technical skills, domain expertise, a clear vision, and, most importantly commitment and integrity. But in Pakistan's case, the folks at the top—the ruling elite—seem to be missing the entire package, especially integrity. Not only do they lack the necessary expertise to navigate complex challenges, but their proven track record of corruption, embezzlement, and assets abroad also puts a big question mark on their integrity. It’s as if the founders' core intention is to extract essential startup resources to build their own little shops at the expense of the long-term success of the startup. Good talent isn’t sticking around either; brain drain is a real issue in such an ecosystem. And nepotism? It’s rampant. Imagine the kids of the founders and top execs getting handed senior roles, not because they’ve earned them, but because of their last name. No startup can survive a day with such founders and management at the helm.

2. Burn Rate

Let’s talk finances. What’s Pakistan’s burn rate? In simple terms, the country is broke. The tax-to-GDP ratio is one of the lowest around, meaning there’s not enough revenue coming in to cover expenses. And how could there be? The country provides either poor service or no service at all to its subscribers (citizens), so they have no investment in paying taxes—especially when those taxes are meant to subsidize founders' perks and privileges, sinking the ship. A huge chunk of the budget also goes to the military—the "security team"—which eats up funds that could be used in productive sectors. Overhiring is an issue too; there are more people on the payroll than necessary. Instead of finding ways to become self-sustaining, Pakistan relies on loans and bailouts from "friends, family, and lenders" to keep going. It’s like a startup constantly burning cash without a viable plan to break even.

3. Decisions and Accountability

Who’s really calling the shots? In Pakistan, it’s not the government as you’d expect, but the military establishment that holds the reins, which I believe is the single biggest problem in the country. That’s because the military establishment is beyond accountability, making decisions without transparency. There’s a disconnect between who we think is running things and who actually is. Imagine if the security team in your startup—who is supposed to guard the gates—decided they were going to take over the CEO’s role, with no sense of management or decision making. Crazy, right?

4. Product-Market Fit

Has Pakistan found its product-market fit? Over the past 76 years, there have been opportunities to carve out a niche in the global economy, including textile tourism, and technology. But poor management and decision-making have left the country without a clear sense of what it offers to the world. It’s like a startup that hasn’t figured out what problem it’s solving or for whom. Without a unique value proposition, it’s tough to gain traction.

5. Mechanisms for Reform and Turnaround

Any startup at any stage of failure can change. But are there systems in place for change in Pakistan? Ideally, the constitution and democratic processes should allow for review and reform. But in Pakistan, these mechanisms have been overshadowed by power struggles among the elite that neither want to learn and change nor want to let go power. Instead of facilitating progress, they’re being used to extract whatever value is left. It’s akin to a startup where the board is more interested in seeking extensions than steering the company back to health.

So, What’s the Verdict?

If Pakistan were to be pitched as a startup to investors today, it’d be an impossible sell. The leadership lacks credibility, expertise, and integrity; the finances are a mess; decision-making is in the hands of those neither trained to take decisions nor accountable; there’s no clear product-market fit; talent is desperate to leave; and any avenues for a possible change is blocked.

So, what would it take for Pakistan as a startup to get back on track? A major pivot that builds enough momentum to change the foundational structures, individuals, mindset, and practices of the startup. Anything short of that is destined to fail. It’s a good thing that Pakistan is a country and not a startup—it wouldn’t survive a day.