This issue will be slightly different. We have gone for 70 Weeks with 8 Sections or connected thoughts in every newsletter. This week is about reflection. Given the dire circumstances and challenges, startups, SMEs and every one in business is facing it is important to reflect on how we got here. Here are my thoughts.

The Incompetent Elite Problem....(Elite Capture)

All societies through out history have had elite structures. The issue doesn't really lie with people being a the top, they have existed for years. The issue lies with having an incompetent elite.

The old guard is an institutional problem in societies that have an information access & disparity issue. Think of it like the 1% but with their own Government, military, civil services & political access along with preferential treatment & patronage to always be able to jump the queue 

We have a serious old guard issue. Where patronage and circle jerking are competitive sports. People don't talk about it so long as they benefit from it. We some how misconstrued respect with ones title and linked it tot heir station in society vs their contribution to society. 

We confused wealth with status vs ones ability to pay taxes to build a national narrative where people lead by example. We hero worshipped those who got breadcrumbs from the colonial times and became local feudal or worse, at the continued cost of our middle class today. 

The British Raj was a polarizing force whose beneficiaries and affectees' are well within sight today. I remember reading how the boys giving rides on mules to the British. “Two anna, two anna, two anna per ride.” The British Sahibs and their wives rewarded the mule men not only with two annas, a goodly sum in those days, but also with vast tracts of land, making them the future landed gentry of Twoannas or Tiwanas! The Saxenas and Asthanas of today’s India were once similarly “Six anna and Eight anna” beneficiaries of the Raj. 

True or not, theres typically no smoke without Fire. I mean no disrespect to any one but sharing what Ive read. It fits into the narrative of status vs ability and inheritance of good fortune vs building ones fortune in a competitive market space. 

So to get an advantage you most likely need to be ahead as a starting position. Meaning that there are little to no 0-100 success stories or role models, I can point to locally to my children as titans of industry and trade or folks who grew out of hyper competition to excel 

Most if not were all privileged, their competitive advantage was either a last name, access to politics, military or religion and they over indexed on having access to or participating with the ruling elite to change the balance of power on the resources of the country 

This sounds crazy. But its true, in my mind I went through a list of these name brand families/saiths/owner operators/family offices/titans of so called industry, there really is not much good to say about them. Besides what they have in common, tax evasion using favors for land allotment, buying or getting concessions on tariffs, putting up massive industries but never setting up services for the people than run them, making land slide profits from taking their tax free wealth & driving property prices in Pakistan to the most expensive in the world having access to government tenders and contracts, having the same access to winning and building infrastructure projects in collusion with elected officials, in running cement factories and selling a few trucks a day tax-free on cash to the open market. In building car companies with international collaboration and suffocating the market and killing domestic innovation by force feeding us Japanese brands at prices approved by their friends in the competition commissions and beyond by maintaining an over 30 year oligopoly. 

This is what the old guard is doing to us: Controlling our Food Security, look around you, from sugar to milk to fertilizers we have cartel like situations. The entire breadbasket of this country and its input vectors are in the hands of 10/20 groups give or take. 

With wealth came the desire to legitimize operations and the so called institutional industrial groups ventured into Banking. The public is so stupid no less, we give the banks our deposits and the banks turn around in yet an other oligopolistic situation where instead of lending to entrepreneurs and SMEs, Bank 1, lends to Family 2 of privilege and Bank 2 returns the favor and lends to Family 1 of privilege, where by avoiding related party transaction but fueling THEIR growth with OPM(other peoples money) At the top they collaborate in their own interest 

This is neither unique nor a PK specific problem, but in our case this has eaten at the fabric of society. It has killed competition, it has made market entry near impossible in to the industrial space. An entrepreneur from Jhang can basically not get a loan to put up a factory 

So for all the foundations and awards and announcements of promoting CSR, eduction and standing with Pakistan and announcing billion rupee initiatives in times of Corona, the reality is, that they are actually responsible for the class divide and the cancer that is corruption. Corruption doesn't happen on its own.When folks of such privilege & access always have to win its the rest of us that always loose. Why, because they always have a guy who will ensure for the right price across every sector that they win or they have access to prefect information 

They have mastered the 8th wonder of the world, compound interest. They know from the patwaris where and when land will be taken over by the govt to say build a national motor way, they get in before the public ever knows and buy the land in advance. They Buy Low Sell High. Capital builds capital, they take land that is otherwise worthless and put it to use instantly by selling back to the govt and cashing out, destroying local villages and others who should have been the beneficiary but they had market intel that the rural folks didn't + they took their gains and put in their friends bank or overseas and let the money grow with compound interest.

This is one of many examples and why the old guard is the plague in most developing countries because it continues to spread and multiply. Whilst we must celebrate true success from every decade gone by, we have to engage and educate our masses to tell the difference between real success and engineered success. We must break the fold of the lingering Mafia of Saiths, self appointed vanguards of industry and trade the know it all’s. We must start by making sure in our own individual capacity we help guide the rising talent of the industry so that we level set the field. The most likely way the new generation gets access to the old boys club is by creating value multiples in the tech space where they can achieve scale they cant in other domains. Slowly the second generation of the industrial old guard are investing in the startups, the startups need to be careful not to go down the death spiral the post partition business went through, where the anna boy types got in and became partners with merchants & traders, took over their destiny by loading them up with credit they couldn't pay back. Thus taking over their businesses. Startups beware!

Do more with less..

Every 20 something year old middle class Pakistani...

To this, I tell you that: technology is miraculous because it allows us to do more with less, ratcheting up our fundamental capabilities to a higher level. If what ever you are doing in your 20s does not involve technology you will soon be out of work not because of the lack of effort but for the lack of relevance. Ive written various previous editions hi-lighting what you can do to up-skill, this time I wont. What I will tell you is, complaining is not your option out of it.

This likely isn't getting better, soon. You need to look at the small data on the currency exchange rates and understand that your outcomes are only on a downward spiral if your main gig or side hustle is not dollarized.

Heres a sobering view to take to heart:

Timeline of PKR

Fluctuation of the Dollar rate in Pakistan from 1947 to 2022:

In 1947   1 USD was  3.31 PKR

In 1948   1 USD was  3.31 PKR

In 1949   1 USD was  3.31 PKR

In 1950   1 USD was  3.31 PKR

In 1951   1 USD was  3.31 PKR

In 1952   1 USD was  3.31 PKR

In 1953   1 USD was  3.31 PKR

In 1954   1 USD was  3.31 PKR

In 1955   1 USD was 3.91 PKR

In 1956   1 USD was  4.76 PKR

In 1957   1 USD was  4.76 PKR

In 1958   1 USD was  4.76 PKR

In 1959   1 USD was  4.76 PKR

In 1960   1 USD was  4.76 PKR

In 1961   1 USD was  4.76 PKR

In 1962   1 USD was  4.76 PKR

In 1961   1 USD was  4.76 PKR

In 1962   1 USD was  4.76 PKR

In 1963   1 USD was  4.76 PKR

In 1964   1 USD was  4.76 PKR

In 1965   1 USD was  4.76 PKR

In 1966   1 USD was  4.76 PKR

In 1967   1 USD was  4.76 PKR

In 1968   1 USD was  4.76 PKR

In 1969   1 USD was  4.76 PKR

In 1970   1 USD was  4.76 PKR

In 1971   1 USD was  4.76 PKR

Look closely....it started to change.

In 1972    1USD was  11.01 PKR

In 1973    1 USD was  9.99 PKR

In 1974    1 USD was  9.99 PKR

In 1975    1 USD was  9.99 PKR

In 1976    1 USD was  9.99 PKR

In 1977    1 USD was  9.99 PKR

In 1978   1 USD = 9.99 PKR

In 1979    1 USD = 9.99 PKR

In 1980   1 USD = 9.99 PKR

In 1981   1 USD = 9.99 PKR

Lords of War- Russia + Afghan time frame....

In 1982   1 USD = 11.85 PKR

In 1983   1 USD = 13.12 PKR

In 1984    1 USD was  14.05 PKR

In 1985   1 USD = 15.93 PKR

In 1986   1 USD = 16.65 PKR

In 1987   1 USD =  17.4 PKR

In 1988   1 USD =  18 PKR

More Internal political Turmoil......

In 1989   1 USD =  20.54PKR

In 1990   1 USD = 21.71 PKR

In 1991   1 USD =  23.8 PKR

In 1992   1 USD = 25.08 PKR

Construction and Motorways vs Healthcare and Education....

In 1993   1 USD =  28.11 PKR

In 1994   1 USD = 30.57 PKR

In 1995   1 USD = 31.64 PKR

In 1996   1 USD = 36.08 PKR

In 1997   1 USD = 41.11PKR

Corruption leading to absolute power and control....

In 1998   1 USD = 45.05 PKR

In 1999   1 USD = 51.90 PKR

In 2000   1 USD = 51.90 PKR

In 2001   1 USD = 63.5 PKR

In 2002   1 USD =  60.5PKR

In 2003   1 USD =  57.75 PKR

In 2004   1 USD =  57.8 PKR

In 2005   1 USD =  59.7 PKR

In 2006   1 USD =  60.4 PKR

In 2007   1 USD =  60.83 PKR

More uncertainty around certainty of power.....

In 2008   1 USD = 81.1 PKR

In 2009   1 USD =  84.1 PKR

In 2010   1USD =  85.75 PKR

In 2011   1 USD =  88.6 PKR

In 2012   1 USD = 96.5 PKR

Elite capture part 2...

In 2013   1 USD = 107.2PKR

In 2014   1 USD =  103 PKR

In 2015   1 USD = 105.20 PKR

In 2016   1 USD was   104.6 PKR

In 2017   1 USD = 110.01 PKR

Dollar fixers at play yet nothing to play with...

In 2018   1 USD = 139 PKR

In 2019   1 USD = 163.75 PKR

In 2020   1 USD = 168.88PKR

In 2021 1 USD =  179.16PKR

In 2022 1 USD =  240.00PKR ( July 28)

Present day...

If this is history, are you going to be prehistoric in your decisions or will you take a forward looking view on what needs to be done. The choice is your, bitching moaning and complaining ain't gonna fix it, your actions will.

You can start by joining in the conversation on how to Earn in Dollars here..(Weekly, its free)

The power of not believing in the grind....(alone)

Wait what?

“There is no actual donkey in the Donkey Kong game.” 

Simple and powerful. Focus your attention and time to what generates the revenue multiple vs things that don't.

The name came about due to a translation error. Miyamoto thought 'donkey' translated to 'silly' or 'foolish' in English. But the focus was on the game not the name.

Focus on your game!

Low tech is not the enemy of high tech.

Low tech is the gateway drug to high tech

All if not most innovation stacks are built on layers. This week if you want to learn to appreciate the origins of some thing. Let the origin of animation be that.

One Last thing.....

Out of school lessons to take to heart. Today reflect on this. I wish some one had shared this list with me when I was a child. I hope you do it with the children around you.