Interview: Parvez Abbasi Wanted To Be a Spy, But Liked Phones MoreParvez Abbasi founded one of Pakistan’s biggest companies. Now he is helping young Pakistanis to do the same. Parvez Abbasi is the director of the National Incubation Center (NIC), and previously served as the Chief Commercial Officer of Mobilink (now Jazz Pakistan). An entrepreneur, Abbasi founded MobileZone and led it to become a billion-dollar multinational telecom company.
At NIC, Abbasi is at the forefront of the booming startup ecosystem in Pakistan. Shahrukh Wani talked to Parvez Abbasi about his life and lessons he has for young entrepreneurs.
The content is produced independently by millennialpk as part of its Startup Series which is supported by the National Incubation Center and the Invest2Innovate.
Shahrukh: Lets start from the beginning, tell me a bit about your childhood and upbringing.
Parvez: I was born in Murree, but I was just one year old when my family relocated to the UK. So, my early reformative years were in London. So I grew up there in the 60s, 70s, 80s and 90s.
Shahrukh: You grew for a very long time.
Parvez: Yeah. I’m still growing up in a way. The first 25 years of life were spent in the UK, and the last 25 years have been spent in Pakistan. So, I have a balanced worldview.
Shahukh: What made you move to Pakistan?
Parvez:I became a little curious of Pakistan in my early 20s. I didn’t know any of my real relatives in Pakistan. So literally we could walk pass each other and they wouldn’t recognise me and I won’t recognise them.
In other words, it was just basically a journey to find me from my heritage, from my family, from my roots, more than anything else. So I moved to Islamabad.
Shahrukh: So where did you work after moving to Islamabad?
Parvez: I initially came for a short family wedding, and I found myself in a completely alien place. But there was something magical about Pakistan.
Shahrukh: So what did you do?
Parvez: So I went on a journey to enjoy Pakistan by travelling throughout the country on a student budget Regrettably, holiday time came to an end and I had to go back home. So when I went back, somehow there was a bug in me, that I need to know more about Pakistan.
Regardless I stayed in London and after graduating, I started working with British Telecom, and I was really insanely in love with telecommunications, particularly the mobile phone.
So there’s a little bit of a story but the story goes like this:
One day in 1987, I was in London watching TV and I saw an ad for a company I went on to later work for, called Motorola. Where this gentleman is driving a limousine in New York. It was completely dark. It was raining, and he was stuck in traffic. So he picks up his car phone and dials the number and starts to talk and he starts to begin the conversation and then the screen is shot from the across the continent, in England. There’s this guy on a golf course about to hit the golf ball and his phone rings, on the bag. So he walks over to his bag takes out his phone and puts to his ear and they start the conversation and it says MOTOROLA. This one ad changed my life.
Shahrukh: The sounds like an amazing marketing campaign.
Parvez: This one ad is the reason I am sitting here, this one ad is the reason why I left the UK. I was thinking this guy must have a really long wire to have to carry his phone on the golf course. Because the concept of wireless didn’t exist those days.
I saw this and I just wanted to have a mobile phone but I was still a student, and mobile phones were really expensive in the 1980s. I was determined so eventually I got on. I paid about 750 pounds for it at the time.
Shahrukh: 750 pounds for a phone. That’s very expensive
Parvez: That was the subsidised price after signing a 2-year contract.
Interestingly, after getting the phone I realised that I had no one to call to. I was the only one in my social circle who had a phone so there was nobody to call and the landline was very expensive to call too.
By this time, my desire to come to Pakistan was getting very strong. Then in 1989, the government of Pakistan, led by Benazir issued two licenses to set up mobile networks in Pakistan.
That’s when I saw my opportunity. I read the article in the newspaper. I said Yes!! this is my chance. I made phone calls to Cable Wireless (one of the companies which won the bid), they gave the number of their regional office in Singapore, which was looking after Pakistan.
I called him, I said to him I want to work in Pakistan. I have a background in telecommunications and I want a job. The idea was to come here and get the local knowledge.
Parvez: I initially decided that I couldn’t set up a telecom business in Pakistan so I went back to the UK for a while but I still wanted local knowledge of the market in Pakistan, so I got a job in Karachi, at a company called InstaPhone.
Then in 1995, I initially did some consultant work to Saif Group, before I formally joined them in 1995. As head of their corporate market. In 1992, I also met at InstaPhone, a gentleman by the name of Zouhair Khaliq who was the Chief Financial Officer. Later on became my co-founder at TeamUp.
Shahrukh: So why did you leave Mobolink?
Parvez: I was there until 2001. My last position there was as their Chief Commercial Officer. So I was looking after Sales, Marketing, Customer care, and so on and so forth. I left to start a company called MobileZone. we started working with Nokia, Samsung, Motorolla, Sony Ericsson, among others.
Shahrukh: So creating a mobile business in Pakistan, launching it, at that stage. What lesson have you learnt from it?
Parvez: Interestingly, it was still very early stages of the telecom sector. Nobody was serious about, no real professional wanted to be into it. So we had huge hiring problems. And let’s be real, the only mature industry was the banking industry, and nobody from the banking industry would even consider telecom.
Shahrukh: Now it’s the opposite.
Parvez: Then what happened in 2001, a totally different domain, it brought me to another side of the telecom world. Everything that I had done was in teleports.
We started working I didn’t have anyone working with me, like at any job you don’t really have a lot of savings you don’t have a lot of money left with what you can start a business.
So I had this really great idea, I had seen this in the UK, being done by a company called Carphone Warehouse. Where under one shop you had all the different brands of handsets and you had all the different mobile operators with it. You go to one shop and you have everything. But in Pakistan, the market was very fragmented, so if you wanted to buy you could not buy a handset from Mobilink. You could only buy the sim card. For the phone, you had to go to another shop.
For me, it was a no-brainer. I thought hey, Why don’t we just have one place and have all the brands, and by the way, different brands, different shops.
Shahrukh: Makes sense.
Parvez: And so we said why don’t we just have one shop and with all the brands all the operators. It seemed like a great idea. There were some challenges of course. But the other interesting thing was that at the time it was there was no concept of warranty or after sale service in Pakistan.
We came up with a concept of 12 months warranty. So that you could come back within 12 months and if there was a defect in the phone, we could repair or replace the phone. Originally people didn’t believe this [Laughs] Pakistan may tou asa nahi hota.
And they abused it. Because every 3 or 6 months when it was time to change a phone like I see a new phone and I want that new phone and what do I do with my old phone? They would either purposely damage it and get the phone replaced or refunded.
Shahrukh: People always find a way to misuse that. So how did it go?
Parvez: The good news is that despite that fact that faced many challenges and had many expenses. We did up to our commitment. It was very expensive but that created a brand for us and MobileZone became the leading brand for choice. And I can tell you that now in our heydays we controlled about 70% market share. Not just in Pakistan but in Afghanistan, Bangladesh and we also sold phones into Africa via Dubai. We even started trading phones into Russia.
Our turnover exceeded 1 billion US dollars. One of the first Pakistani companies. And I fact in Pakistan at one moment we were the second largest importers in, only after Pakistan State Oil.
Even the State Bank set up an inquiry.
The State Bank actually started an inquiry because the government did not believe our growth; they thought that there was some sort of money laundering going on.
Shahrukh: That’s impressive growth.
Parvez: 1 million, 2 million, 3 million, very rapid growth. We just happened to be in the right place at the right time. It’s like a wave you know when the wave comes you, whether you are prepared or unprepared you are gonna go with it.
So the growth was phenomenal. So much so that, that despite sanctions on Pakistan, we were able to bring in foreign banks. You know corporations like Sony Ericsson has its own Bank. Nokia has its own bank. We brought all those banks to Pakistan. And those banks extended their credit to local banks to facilitate the needs that we had.
When I introduced myself to Musharraf. He actually blamed me saying, “So you are the reason for our deficit of trade balance…” because of the imports we were doing were so high.
But then we had the global financial crisis and that really impacted us in a really, really severe way. So liquid cash and credit was really crunched. But more importantly, the problem that we faced was that we were buying in dollars and selling in rupees.
During Mushraff tenure, the dollar was stable at 60 rupees for all practical purposes. And then we were expecting it to stay stable. But it moved from 60 to 90 rupees within 100 days. That means when we import the phone for about $100 it was Rs 6000. And we sold it for a six and a half thousand rupees.
Shahrukh: So you lost a lot of money during the crises?
Parvez: I guess that’s what entrepreneurship is about. You have good days and not so good days. We lost about $20 million over 3 months, and that was one of the reasons why we basically thought about looking at other businesses. I took a break, and sold my shares to my partners in 2010.
Shahrukh: You learn more from your failures than you do from your accomplishments.
Parvez: Correct. I often joke about this. At the peak, we were looking for an aeroplane to buy for the company because we got to that stage where we felt like why wait for PIA for 2 hours? Our time is worth more.
So this was one height of this. Then the next height of this is where I didn’t have enough money to put petrol in my own car. And both of these extremes teach you this, as you have correctly pointed out when you don’t have money you have to be more creative.
When you have money you don’t have to be so creative. But one thing I realised is that I wanted to do something which was, not capital intensive. So mobile phones, for example, we bought them for $100 we had to pay in advance. We sold it at around $105 and so we made 5% -6% margin. And within that margin we had to give credit, we had to market it.
So that margin wasn’t very much. So I thought what business can I do? Which gives me a higher margin? And less capital and I realised that consultancy was the best way forward because in consultancy there is no real cost other than petrol and very nominal costs. The return is much higher so it’s a 95% margin as opposed to 5% margin.
Shahrukh: I think people in the development sector have figured that out.
Parvez: Its fantastic right?
Shahrukh: So I have heard.
Parvez: Then as part of the program, working with Mobilink, an opportunity arose where NUST to work with students.
So university students were a wake-up call for me. In the telco world, people would say Sir, Yes Sir, How Sir, etc. They won’t really argue with you, they would conform as the corporate world tends to do. So when I came to these university students and I sat with them they had no idea who I was, they didn’t even care who and what my background was and one of the student said so “Parvez what do you think about this?”
And I was taken aback. This guy just called me by my name. And he’s like younger than my son. How can he do that? So this was a learning experience for myself.
This was a good experience for me and just by sharing my own knowledge and experience with them. I saw that they really benefited from my experience.
Immediately I realised, that why not get these people who are young, naïve, energetic and great ideas, great motivation, great energy to team up with these older people who have knowledge experience, all the contacts, money and allow them to work together. And that’s when TeamUp was born. And at TeamUp, the philosophy is to team up people from different areas, different backgrounds, different ages.
The older people had something to do other than pay their bills.
Shahrukh: So do you see the potential in young startups.
Parvez: That’s the only potential. Our country is in a very dire situation. And who’s to blame for that? You cannot blame you, because you were even not even born then. Our generation is to blame. That’s the reality of it.
Yes I would add to that in selected people there is a benefit, there is wisdom, there is maturity, there is experience, that can benefit the youth. And so again I come back to Teaming up with the right people who would give you the benefit of what’s what.
Shahrukh: Do you think that potential is being unlocked.
Parvez: I think a lot of it is being wasted for sure. We are just touching the tip of the iceberg. You have to fair and honest as well. How can we really do justice with such a large young population? So, I don’t think we are doing justice but I do feel that on an individual basis if we can make a difference in one person’s life. Then that’s more than enough. I don’t go around and promise I’m gonna change the entire world, but if we can improve the quality of their lives by simply giving them some advice. Some guidance and some support. It’s worth it.
Shahrukh: So, where does the role of the public sector come in?
Parvez: The government must create an environment for us to do something for ourselves. Entrepreneurs don’t rely on people to do things for them. Despite challenges, we have success stories from Pakistan. Within the same environment. You have to also acknowledge that people have to do things for themselves as well.
If you are gonna wait for the government to do things then you are going to be waiting for a very long.
Our capital is our youth, but not everybody has to be a genius.
I want to share a small story with you for illustration purposes. When Musharraf went to one of those Scandinavian countries and the Prime Minister of that country said to him, that the literacy rate in your country is very very low and people are very ignorant in your country. And look at my country we have a 100% literacy rate.
Musharaf replied back to him and that in any organisation, in any country you would have 1% or 2% of people who are geniuses, and if you look just 1% or 2% of my country’s population, they exceed the entire population of your country. So my point was that even if we have a small percentage of people who can create those organisations so you know if you look at, for example, Careem, Uber, Facebook, Apple. They weren’t created by thousands of people.
They were created by a very small group of people, and those people then created these organisations that ultimately employed hundreds and thousands of people and created millions of revenue for the government.
Shahrukh: I fear that entrepreneurship has become a sexy thing to do.
Parvez: A while back at a conference, I had the privilege of meeting very many young people there, who asked me for advice. I don’t know why they asked me but they still asked me! [laughs] and this one gentleman come to me and says that he’s a recent graduate. He’s done his MBA. His family background is that we came from a rural area.
So I asked him a few questions before I could give him advice and what transpired was that his family was in the apple growing business. Basically, they were apple growers. The owned orchards and they sold apples.
He told me that his family gave me 5 million rupees to do anything he wanted to. He asked me what should do with the money.
After talking to him in my heart, I knew was not an entrepreneur. I told him to give the money back, and get a job.
Shahrukh: How do you know that he wasn’t an entrepreneur?
Parvez: You know despite what they tell you every single thing about entrepreneurship, there is nothing to do with other than your gut feeling. Plus, he was an introvert. He was timid. He wasn’t going to the best university so to speak.
Shahrukh: Whats the main challenges startup founders face today?
Parvez: Understanding. Lack of understanding. Of their product, market, their industry.
Shahrukh: Why is that?
Parvez: Immaturity. They are not shortcuts to experience. Is that we have a problem in our country, our problem is that where does our experience really start and what do you mean with experience? So our experience in Pakistan typically starts post-graduation. Once you’re graduating you start looking for a job. That doesn’t happen in Europe.
I started, for example, my first business at 13 years old. I was running the top shop in my school in London. I was already delivering newspaper by the time I was 15 years old. I was doing part-time odd jobs by the time I was 18.
So before even my formal education had completed I probably I had a good number of years of experience.
So this is where is it. Our kids don’t even know what they want. If you ask somebody why did you study this particular subject? 90% have no idea.
Shahrukh: They say they want to make money.
Parvez: But that’s too vague. But if you say to them how are going to make money? They have no idea.
People do things that they don’t want to do. I believe everybody has a purpose. If you can find your purpose and the earlier you find your purpose in life the better you are at succeeded in that.
Shahrukh: Perhaps the problem is in universities.
Parvez: True. We work very closely with universities and I am disappointed with many. Generally, I am disappointed with the number of quality students that in those universities, and with all due respect. Its garbage in and garbage out. My view is that by the time people go into universities they should know what exactly they want to do in their life. Normally what people do it that after graduation they now think about what to do by that time it’s too late.
Shahrukh: When you were 25 what advice will you give yourself.
Parvez: I would say go for it. Do all the things that you didn’t do. And the hesitations that I had or the beliefs that it was too much hard work or too much what will people say? Whether my parents would agree with me or whether they would not into that. Just do it. Make mistakes. Live your life. Don’t have any regrets. Fail. Fail often. Fail fast. That’s it.