Lahore School of Economics

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Entrepreneurship and Platform-based Value Creation

Mr. Qasif Shahid, Co-founder, and CEO of Finja delivered a session to the MBAs at the Lahore School of Economics on Entrepreneurship and Platform-based Value Creation on 6 December 2022. During the session, he highlighted the following trends and shared the following insights.



It is wrong to think of Entrepreneurship as an “electric guitar” which one has purchased after following a trend. “Entrepreneurship consumes your soul.” It is not about starting a business that everyone else has been doing, such as indulging in trading, buying plots, making plazas, or running a shop. It is more about creating something which did not exist before, which you can grow, which should impact others, and which in its very foundational design is premised upon creating value not only for yourself but also for the stakeholders around you. All great entrepreneurs in the primary phase of entrepreneurship were doing something noble; if they changed into something else, they changed having reached a certain scale, size, and success.

Equally important, the world of creation has moved on from the erstwhile vertically integrated silo-based paradigm to platform-based ecosystems. If your product is based on the former, it will be beaten easily by the latter. Look at Nokia in 2011 when it was making some 51 phone models and had a large market share. Apple beat it with iPhone because iPhone has millions of Apps. And if one App fails, it does not put a small dent in Apple. Another example is Baked which has become a platform for quality organic products produced by many suppliers but brought together on one platform.

Finja is another example. It has on its upstream multiple sources of capital such as bank debts, off-balance sheet financing, etc., and as downstream a world of different types of customers creating the demand side by being on the same platform. But how is Finja creating value? The kiryana stores get financing for buying from upstream (but they do not get cash to fund private activities). When the consumers buy from a kiryana, which has been financed by Finja, the consumer does not have to travel to big stores, the suppliers are getting paid, and so on.

The world of banking itself is changing from vertical to horizontal, and in 2030 the chances are that all banks, even all companies will have become Fintechs. How? Already, almost every single large company has technology at its core. Almost all have now either a mobile app or a portal. A customer who is visiting these can get credit or pay through these portals or apps. These can then be used to generate data and insights. In fact, in many cases, one does not need specific licenses and can plug into APIs (Application Programming Interfaces) which have “wires” that have been put out and into which you can plug and run your businesses. At the same time, Fintech and banking are on the same side of business, and more and more it is becoming important for both to collaborate.

Qasif put paid to another myth: If you work in a large company you can get into a smaller, entrepreneurial one but not vice-versa? No, said Qasif. In fact, it might be the reverse. From Finja you can migrate to a large bank anytime, but it is becoming very difficult for large old-economy style managers to find work in smaller but smarter companies. It takes years to “unlearn” what one learns from large old style economy companies. Are eB2Bs creating value? It seems they have disrupted the market but it is doubtful, at least questionable, if they are creating value because what they seem to be doing is borrowing or arranging for capital, injecting it into the system by going to distributors, buying at an expensive rate and selling it cheap. Remember, the purpose of all entrepreneurship is impacting people.

So should one finish one’s degree and rush to become an entrepreneur? Not so quickly, said Qasif. It is better either to get some experience in a larger company only for a couple of years if one has some specific purpose in mind or even better work within “entrepreneurial structures”, and then conceive an idea, form a team and unlock value. In these smaller structures, you work closer to the founder and you have multiple tasks to do and learn from. But also you have to let go of your “sense of entitlement.”

Qasif spoke with passion, and yet with clarity and logic, and the MBAs asked a range of questions. We are delighted to have him in our program.

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posted by S A J Shirazi @ 12/07/2022 04:16:00 PM,

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