A few years ago, scheduled talks centered on key figures in the e-commerce industry were a rarity. For one, there were very few notable e-commerce sites in the Pakistani ecosystem. Secondly, the startup ecosystem wasn’t readily developed.
Now, a plethora of different e-commerce sites have received investment from foreign venture capitalist companies to further enhance and consolidate their stance in the Pakistani e-commerce market. In this Startup Grind event, held at Café X2 in Lahore, CEO of PakWheels Ahmed Raza was invited to talk to various entrants in the startup space about his journey: a process by which he took over the reins of PakWheels, received investment from Frontier Digital Ventures, and subsequently invested in another auto-related startup, AutoGenie.
Background: Life Before PakWheels
Ahmed grew up in Bahawalpur, and received his schooling from the esteemed Sadiq Public School. He later enrolled in LUMS, as a computer science major, to later complete his MBA from the same alma mater. The early beginnings of his entrepreneurial journey began in the form of a software house, Confiz. Ahmed significantly notes the lack of expertise and resources for software companies not just in Pakistan, but around the world.
Back then, oDesk wasn’t around, and registering on Elance cost around $1,500. Now, Elance is free, and many more freelancing marketplaces have popped up.
Ahmed’s software house was invested in by an Englishman for around 1,500 pounds – a few years later, the investor realized a 200% return and took his dividends with him. However, Ahmed had bigger plans, to expand in to something more worthwhile – a venture in the emerging auto industry in Pakistan.
Buying Out PakWheels in 2008:
Enter Pakwheels.com. Pakwheels began as a simple online forum for car enthusiasts, and was very well known for organizing auto shows all over Lahore and soon all over Pakistan. In 2008, Ahmed, due to his imminent success with Confiz, decided to buy the company out altogether. No one can really question his decision; after all, PakWheels was receiving an immense amount of traffic, and still is to this day.
PakWheels receives around 250 million page views every year, of which 13 million are from unique users.
On Growing PakWheels and Looking for Investment:
Ahmed started growing the customer base of the website even more, by engaging users and facilitating car sales through the website. The venture ended up performing so well, that in 2014, PakWheels started asking for investment from multiple venture capitalists. Ahmed cites the skills and knowledge he learned from his MBA as pivotal components in formulating a feasibility report for the company.
I learned basic financial skills, such as creating a feasibility study, profit/loss report, and various projections to finally get Frontier Digital Ventures to show interest in us. My conveying this to others makes it seem like an easy task; however, it was all possible due to the fruits of intense focus and productive, talented labor.
$3.5 million dollars, PakWheels made international headwaves. This lead to important collaborations being established with other notable partners – Dubai Islamic Bank was signed as a financing partner, and browsing on the portal was made free for Mobilink 3G users in the wake of the internet boom in Pakistan.
Mobile First Is Going to Become a Necessity in Time:
That’s where Ahmed shed his thoughts on ‘going mobile’ for ecommerce sites.
70% of all ecommerce traffic in neighbouring India comes from mobile devices. This trend has caught on in Pakistan as of mid-2014. I can now safely say that more than 50% of our traffic has come from our mobile app, that has lead to our unassailable lead in the internet auto industry in Pakistan. Pakwheels evolved from a simple listings website into an automobile marketplace, where buyers and sellers for cars could commercially engage with each other.
An Evolving Advertisement Model:
Though PakWheel’s premier method of monetization for revenue was digital advertising, Ahmed looked towards a monetization model employed by auto-commerce websites in more developed countries, through a “lead generation model whereby the website would charge a commission off car sales”.
PakWheels even collaborated with PakistanToday in releasing a bi-weekly newspaper listings for used cars put up for sale by their respective owners. Though the tide was in PakWheels’ favor, Ahmed still wanted something more, and that’s when AutoGenie came in the picture.
PakWheel’s Investment in AutoGenie:
AutoGenie was conceived by a bunch of students at the LUMS Centre of Entrepreneurship. The concept was simple: a version of AAA in Pakistan, minus the insurance component. Those who wanted to avail AutoGenie’s service could pay a nominal annual fee for unlimited repairs for their cars in the event of a breakdown.
However, AutoGenie’s main service lies in oil changes for wary car owners, who might be comfortable with visiting a workshop at a given time of day. AutoGenie’s initial response to PakWheel’s intent on investment was perplexing. “Why focus on us when this doesn’t entail your core competencies?”
Pakwheels later explained that they intended on dominating the auto e-commerce industry in Pakistan, and saw AutoGenie as a promising venture that could cater to a relevant demographic through PakWheels’ extensive user base. And that’s how AutoGenie received a handsome $100,000 investment from PakWheels. Not too shabby.
Advice for Budding Entrepreneurs:
Ahmed concluded his talk with pieces of advice for budding entrepreneurs. He cites the three main keys to success as
Immense focus,Passion for the field you’re inNetworking
With more motivational symposiums like this, more and more startup founders can be enthused and motivated to reach the heights with their new ventures, and establish a Pakistani startup ecosystem to be reckoned with on the global stage.