After getting a Bachelor’s degree in Engineering from Fast University, Khurram Samad decided to use his skills and the best technology available at hand to produce a time management system. Just before he could launch it in the market, he realised that there were lots of similar products already on the market at one tenth of the price of his product. That was a time of realisation for him that passion and creativity are not enough for commercial success. Market research is also essential.
A while after that, he gathered his sources once again and launched an initiative offering foreign investors the platform to launch their business in Pakistan. This second unsuccessful attempt at having his own business taught him another important lesson that was the significance of a brand identity and the associated monetary returns with a brand that were not possible with freelancing or a mere consultancy firm.
After four years of working in the industry and having exhausted his ideas for businesses, he got admission at LUMS for a Masters degree. Getting his internship requirement waived off owing to his work experience, he entered the entrepreneurial world one more time during the summer vacations. By now he had bought his first iPhone and had a new idea to use the platform set by Apple for his own company here in Pakistan. He named this initiative as GeniTeam and began working as his own boss. This time it was successful. GeniTeam makes mobile apps and games for smartphone users. He lists these apps on iOs and Playstore and every time someone purchases one of his apps, the proceeds are divided in 30-70 proportion, with GeniTeam getting the 70%.
He introduces his company in these words, “If kids in your family spend too much time playing games on mobile phones instead of studying, then we are the people to blame.”
“We started this company in 2008 that was also the time when Apple launched the iPhone. When I got my first iPhone back in 2008, I thought that it was a good device and I thought that it is going to disrupt a lot of industries, the way we interact with information, the way we access information, the way we communicate and play games etc. To summarize, anything that plays on this device we make that.” Khurram Samad
Q) You began this company when the first iPhone was launched. Was that a coincidence or was there some direct relation between the two events?
Answer: That was totally related with the ios software. The year I am talking about was when a global recession was going on and a lot of companies were shutting down and even we were working on a typical outsourcing model [working as a factory for tech products for other but without his own brand name].That was the time when we thought we needed to build up something, build our own brand.
Q) You started when the economy was in a downturn. Was there any backlash or just some rational argumentation considering the timing of this venture?
Answer: There definitely was but when the economy goes down, and are changing so rapidly, there are also opportunities, and that is exactly what happened with us. Everyone was being hit so badly by this outsourcing business, it was so predominant before, that afterwards we were forced to look at other opportunities.
Q) What was the primary motive or objective behind this business?
Answer: When we talk about competition, in this particular field, there are so many players in the international market. For instance, there is one Pakistani company and a hundred Indian companies. The Pakistani company will pitch their skills and perhaps a lower cost whereas Indians would pitch their decades old experience. There already was a market that was being hit which allowed us to look for new avenues. We decided to enter a market where everything was new and all the players were almost at the same stage. So from 2007 we had been working as an outsourcing company, but in 2008 we entered the mobile app and game development sector.
Q) Was there any direct business link between you and Apple, since you mentioned that the launch of iOS was your motivation to start your business?
Answer: You don’t need to work with them directly, but you can always create an account. There wasn’t any as such direct contact but when you build your own product, they become your sellers. So basically we build our own games and sell through the iOS player. You can sell those apps to the android players and iOS.
Q) What are the costs and revenues per app through this channel?
Answer: It’s a 70/30 proportion. When anyone buys our app, they keep 30 percent of the revenues and give us 70 percent. It’s the same for iOS and android. There are also in-app purchases and advertisements that contribute to the revenue. The structure is different for every app. There are multiple channels and it is up to us how we want to monetize them.
Firstly, there are paid apps and games and that cost is 70/30 for all apps. The in-app purchases is the second source which means the app is free but if you want to add more features or say move a level up in a game, you have to pay for those extras. This is called ‘freemium.’ The third way is to include advertisement where the advertiser pays. The costs of the products are the cut we give to the sellers and the companies finding sponsors, but apart from that our main cost is payroll cost.
Q) Is it your choice to decide which advertisements will go on your apps or the sellers?
Answer: We have some control but this is such an evolved industry that there are people and companies who find advertisers for us. There are companies who fill this inventory for us. The sponsors then have the decide as to which countries they wish to advertise in. So their advertisements will be tailored to the chosen countries. We have sublet this responsibility and it’s not any small company who does it. It’s Twitter, Facebook and Google that does this job for us.
Q) What is the cost of this process then, choosing sponsors?
Answer: The industry cost here is again 70/30. Seventy percent of the sponsorship amount is ours and thirty percent is kept by the company who brings those sponsors.
Q) What are your reflections on the IT landscape of the country overall?
Answer: This is the only industry in the country with double-digit growth. I can’t be sure of the exact figures for the industry, but our own company has definitely grown over 50-60 percent each year. Our general salary increments are 10-20 percent annually and so I assume the industry should be growing by 30-40 percent.
Q) A couple of years back there was a big gap between the skill levels or educational levels of the people and the requirements of the industry. How has that evolved until now?
Answer: That issue still persists and there is still a big gap. For us however, the gap in IT alone is a lesser issue than the overall mix of our workforce. For a typical IT company with a single disciplinary field, 90 per cent of their workforce would have computer sciences degree. For our company half of our people are from arts. We need artists, story writers for games and creative minds. Furthermore, because we have our own brand we also need a marketing and development team. Some employees of our company are from NCA, who did not even know that there is such a job for them in the field. But over the past eight years, we have managed to spread awareness and the market grew as well so now it’s relatively easier to find appropriate skills in the market but the gap still persists.
Regarding the overall IT industry in the country, the thing about this field is that it evolves very quickly. So if you are teaching the textbooks from ten or eight years ago, that is only good for learning basics. The good thing is that everything is available on the internet but people here are not interested in self-learning. So there are some definite problems but we have been able to overcome that with training and increasing people’s exposure.
Q) If training is the main factor that is lacking here, how high is the risk of employees leaving for another company after you have spent time and money in their training?
Answer: That has happened to us in the past. As of now it is not a big issue because we have a larger team so even if someone or a few people leave, it doesn’t create that much of a problem. But in the beginning when we were just a start up, didn’t have many funds and had a smaller team it was a major issue and a challenge for us. We were the first movers in the industry and had to face this too. It is not as important an issue anymore.
Q) What other challenges are persistent in the market?
Answer: The biggest challenge now is competing with international players. They have better quality and exposure, education, employees’ productivity and so on. The overall environment of the landscape and the country also play a part in it. The creativity level of the workforce is another challenge for us. The evaluation of creativity in a person is very subjective but after years of experience in this field I now know the qualities and attributes in a worker that can make him an excellent resource in this field.
Q)Who are your primary competitors?
Answer: The good thing is that companies all over the world are our competitors. We are sitting in Pakistan but the majority of our customers are from the US so the companies there become our direct competition. Second highest number of our customers are from India. These customers pay to Apple, which then pays us so technically this also makes part of the exports with foreign exchange coming in and all. On the local level, in the gaming sector there are a couple of companies that are ahead of the curve but we are all friends. The thing about losing resources is also pertinent here. We are friends with each other and don’t look at each other as competitors. So we communicate even if we need each other’s employees. I wanted to hire this guy from Tintash but before making him an offer I talked to the CEO if I could hire him. He told me that he needed that employee but he found me ten other potential people to fill that job. So there is more cooperation than competition here.
Q) If there is more cooperation than competition, do these companies act as a united entity then?
Answer: There is a possibility of consolidation between these companies because the economic conditions make it more profitable for a big company than many small companies. We also brought experts from the US and other countries to evaluate the possibility and they also advised us to consolidate. But it might not be practically possible. There is a cultural predominance in owning your own company and the ways to do business differ in the same sector which might make it difficult to actually achieve consolidation.
Q) What is the structure of the three branches that you have and how many employees do you have in all three of your offices?
Answer: These are three different companies with different structures. The one in Pakistan is a sole proprietorship, the one in the US is a public limited entity and the one in Dubai is an LLC because the law there dictates that 51 percent of the equity is to be held by an Arab kafeel so we didn’t want to risk the other two companies as well considering that equity would also mean the ownership of all three of them. We have a hundred people here in Pakistan, fifteen in New York, USA and four in Dubai. The Dubai office is only a sales office.
We still doing outsourcing but our primary work is mobile app and development. The revenues generated from those offices are used to pay the salaries and expenses of those offices and the remaining profits are sent to us here in Pakistan.
Q) Do you send your employees from here to your offices in US and Dubai or hire the locals there?
Answer: For the US we primarily need to deal with Hollywood studios etc. so it is difficult for a Pakistani to go there and build contacts. So we hire the locals there. We do send our people from here for exposure and training etc, but as proper employees we have the people from those countries. However, with the latest political changes, I have decided not to travel there this year myself. It is an undesirable thing because if the CEO can’t come to the company the employees start owning it which creates problems.
Q) What would be your advice to budding entrepreneurs?
Answer: I would say the same thing that my first CEO told me and at that time I wasn’t able to understand it. He said that it’s not about the money, only do this if your body can absorb the pressure. The idea of entrepreneurship looks very glamourous but there is a lot of stress, pressure and hard work that goes into it.
