I have asked many entrepreneurs, what pitfalls they have to deal with when they outsource to Pakistan. Besides the strikes, poor electricity/water/phone/internet situation/long vacations/real lack of skilled and responsible labour the main factor is overcoming the communication gap. Most Local teams still do not work with the clarity and urgency as the foreign/US based team, unless its the same guy leading both teams…the usual 3 months in Pakistan/9 months in US model for the CEOs of these US based startups. One cannot sit in the US and concentrate on business development/value generation/VC funding, while expecting the local office to understand the grand vision. Most entrepreneurs have stated that Pakistan needs to make a better case for outsourcing. Still, you can’t beat the numbers. If you can successfully outsource, you save a bunch load of $$$$$. If you start in PK and move out thats a different story, but we are discussing the more frequent situation where a startup gets US based VC funding and comes home looking to setup shop to save some $$$ and provide jobs to other Pakistanis.
Some companies though, have gotten outsourcing right and have been doing a good job overcoming these issues, though the ones that have are few and far between, (Five Rivers, Techlogix, TRG, ex-Clickmarks). Now, whats interesting about Folio3, a new outfit thats been around for a few months, is that its not really a new outfit. A few savvy Silicon valley based Pakistani entrepreneurs have gotten together, (essentially the Clickmarks management team), gotten some really smart guys on their advisory board and launched Folio3. The idea it seems is to make the entire outsourcing lifecyle and make it into a service product for startups in the US. And startups always need to save money, but not everyone wants to put up with the headache of outsourcing to a third country. It may save you lots of money but that means its also a difficult task, no walk in the park. So these guys come in and say, we’ll handle the tough bit. Its a brilliant idea, the only thing we would need to see is if they can handle the capacity and grow the company and build a strong local team.
With the US economy growing, and Pakistan becoming a relevant ally to the US in the War on Terror, and the VC funds pouring back into Hi Tech startups, this might be the best time for companies like Folio3 to get business from the US and send it home. Another Cressosft without the tragic end? We should all hope so…
(PS I do not work for Folio3, nor am I paid/endorsed by ANY company/person/entity I mention in my blogs. I am not paid to blog, and all opinions are my personal opinions not linked to my workplace or other people)