October 26, 2020 Launching athar-ahmad

Why Are Pakistan’s Startups Successful?

Disclaimer: This Article is updated by Yusra Qasim.

Pakistan is witnessing a rising trend of start-ups in almost every large city. Their success rate, both globally and locally, is remarkably low as it ranges between 10% and 20%.

It is true that even a failure adds to the experience of an entrepreneur and to the society’s collective knowledge. However, every entrepreneur and policymaker wants to know what makes a start-up successful?

There may not be a definite or universal answer, but a recent study commissioned by the Social Innovation Lab titled “Beyond the Buzz: A Deep Dive into Pakistan’s Start-up Ecosystem” does provide important insights.

The study is based on surveys, interviews and focus group discussions with entrepreneurs, investors, incubators/accelerators and industry experts. The myth about the reason behind success of a start-up is access to finance, but the data analysed by the lab shows that access to finance is last among the six top reasons for the success of a start-up as reported by entrepreneurs, investors and incubators/accelerators in Pakistan’s 16 tier-one and two cities.


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There are slight variations as the reasons of success are perceived by three types of respondents. However, the results still provide useful guidance for the start-ups struggling to make the next headline about their innovation and impact.

Before moving forward, it may be pertinent to mention that success is certainly a relative term for a start-up. The study uses indicators such as sustainability, longevity and a persistent track record of growth to measure success.

It finds that the key reason for the success is team strength. Even in today’s world of technology, human wisdom and ingenuity are core factors for ensuring the success of a start-up; therefore, the founders need to pay close attention while building a team.

We understand that the diversity of disciplines, trust, professionalism and competence of the team ought to be given priority. We recommend looking for a growth mind-set in individuals when recruiting for the core team.


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The second reason is reported as execution. Start-ups generally make ambitious plans, but many fail to execute those plans. Hence, consistency between plans and implementation process is what plays a major role in making a fortune out of a start-up. The ability to set realistic goals and then measuring and monitoring one’s performance against them plays a key role in the execution process.

The third reason is innovation. Of course, innovation is the key to progress. Start-ups need to spend a considerable amount of time on thinking and planning to introduce a new product/service or a better way to deliver the existing products and services.

The fourth reason is described as good branding and marketing, which essentially measures how well a start-up captures its target market and carves a space for itself in the sector.

This is closely tied to the concept of product-market fit, since a product or service that is designed to cater to the needs of the market is much more successful at gaining the requisite traction for financial sustainability.


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The fifth factor for success is considered as high demand for product/service. As discussed above, the product-market fit principle applies here as well.

We would go further to say that it is not only essential for start-ups to assess the existing demand, but it is equally important to foresee upcoming needs and find opportunities for disruption therein.

Sometimes it becomes difficult to disrupt an existing product/service market. In this scenario, the survival really depends on the efforts of a start-up to induce demand for a new and upcoming product or service. We consider entrepreneurship as a discovery process. Thus, entrepreneurs should continuously test their ideas and work in the market. They need to build social capital of diverse professionals and mentors in order to gain valuable knowledge from personal interactions.

It is also important for the start-ups to remain motivated and persistent in their endeavors. One thing is for sure: success generally comes after persistent efforts – so give your-self some time!

The recent tax relief initiatives by the federal government have also provided impetus to the growth of start-ups. It is now time for the start-ups to set their own house in order. The study provides insights into a range of issues of the start-up ecosystem; however, for this piece we decided to focus on some of the key ingredients for the start-up success.

Some other important findings relate to what investors are looking for in the start-ups, how well incubators and accelerators are doing when it comes to catering to the Pakistani start-up space and the need for gender diversity in the entrepreneurial ecosystem.


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