Startup failures in Pakistan and the role of founders

My perspective as a founder who has seen both success and failures in his journey may help some of the critics see things in a different light

Ever since the demise of Airlift, failing startups have served as gossip fodder in this ecosystem. However, the recent string of news has turned the gossip into outright vitriol. I have recently seen Aman Nasir (Sarmayacar), Kalsoom Lakhani (i2iv) and Sheryar Hydri (Deosai Ventures) come out and defend the fallen startups and their founders. They have presented very valid points but I thought perhaps my  perspective as a founder who has seen both success and failures in his journey, may help some of the critics see things in a different light.

We need to understand the background of the failures. Pakistan for the first time had become an interesting emerging market where international and regional VCs had started taking interest. Unfortunately Pakistan only caught the tail end of the great funding wave and the party was over soon after it started. Most of the local and international VCs are finding it challenging to raise new funds.The dry powder (existing funds) they have are being preserved for the existing portfolio companies.

Many startups that received funding were not able to establish themselves. With scarce funding opportunities, companies struggling with PFM find it even more difficult to reach follow-on rounds. Had the funding environment not changed so drastically, some of the startups that have failed or are going to fail in the next 12-18 months would have been able to raise the capital to either reach the fit or still die a natural death. Failure is an integral part of the startup ecosystem and founders will either make a lot of money or learn some valuable lessons. Remember, success is a lousy teacher and failures tend to teach you a lot more lessons.

Please understand that failure already has an extremely negative connotation in our society. When entrepreneurs march forth with their ideas, there are umpteenth rejections on the way, from prospective employees to investors and customers. An entrepreneur takes a plunge while putting a career on hold or leaving a well paying job. The uncertainty and challenges of the venture itself take a huge toll on the mental well being of the person. Despite all the effort and pain, if the venture fails, the added pain of public accusations of wrongdoing is something that can put someone over the edge. 

Like many have pointed out, it’s not public money and the founders are not answerable to you. They are liable to answer to their customers, employees and investors and unless you are one of them, please refrain from passing half baked judgements on the matter. 

The aftermath of a failed startup can have a profound impact on the founders, leaving emotional, financial, and professional scars that may take years to heal. 

The emotional toll of startup failure can be immense. Founders invest not only their time, money, and effort into their ventures but also their dreams and aspirations. When the venture collapses, they experience a sense of loss, disappointment, and even shame. The fear of judgment from others and the feeling of letting down supporters can lead to anxiety and depression. The psychological burden can be overwhelming.

Founders like myself pour their personal savings into the startup. The financial implications of a startup failure can be devastating, leaving founders in dire straits.This financial burden can extend beyond the founders, impacting their families and relationships as well.

Considering the attitude of our society in general, a failed startup can seriously damage the professional reputation of its founders. Potential investors, partners, and employers may view the failure as a reflection of the founder’s capabilities and decision-making skills. Rebuilding trust and credibility in the business community can be an arduous process, and some founders may face difficulties securing new opportunities or funding for future ventures.

For many founders, their startup becomes an integral part of their identity. In startup circles, my introduction is usually with my startups’ name depending on which city I am in (some are more popular in one city than the other). When there is such a close association between our startup and us, the failure of the venture can lead to a crisis of identity, leaving the founder wondering who they are outside of their entrepreneurial pursuit. Letting go of the startup and its vision can be emotionally wrenching, leaving founders to redefine their goals and purpose in life.

The pursuit of a startup often demands significant time and energy, which can strain personal relationships. Founders may neglect family, friends, and even their own well-being in the quest to make their venture succeed. When the startup fails, these relationships may suffer further, as the founder grapples with guilt and regret over the sacrifices made.

The fear of failure can become a significant obstacle for founders who wish to embark on new entrepreneurial ventures. Having experienced the pain of startup failure, some may hesitate to take risks again, even if they have a brilliant idea and the necessary skills. This fear can inhibit growth and creativity, preventing founders from realizing their full potential.

Despite the pain and challenges, startup failure can also be a valuable teacher. Founders who have weathered the storm gain a wealth of experience and insights that can prove invaluable in future endeavors. Resilience, adaptability, and the ability to learn from failure are traits that can set a founder up for success down the road.

In the end, I will say that the journey of a startup founder is not for the faint hearted. While success stories often make headlines, the reality is that most startups fail, leaving their founders to grapple with the aftermath. The emotional, financial, and professional toll of failure can be overwhelming, and it takes a significant amount of courage to pick up the pieces and move forward. However, when one is struggling with the shame and guilt of losing the venture and letting family, friends, employees, investors, customers down – the last thing a founder needs is baseless accusations from people who have no idea of the struggles and challenges one has faced. Learn to be and let people be, kindly.

Ovais Zaidi
Ovais Zaidi
The writer is CEO and co-founder at CreditPer


  1. Failures often stem from unclear strategies, poor execution, team issues, financial mismanagement, and a lack of adaptability. While founders are pivotal, external factors also influence outcomes. Learning from failures is essential for enhancing Pakistan’s startup ecosystem.

  2. I consider these failures as fly by night or some as scam . if the idea was to borrow , raise funds from overseas and spend . Creating a software or digital marketing start up . As the term goes bootstrapping, let the company run for 3 to 5 years and then raise funds . Internationally even a company is not allowed to go public without a record of 3 to 5 years in operation. Somehow Pakistan does not have a good record .

  3. Greed is a major factor, we use to copy the formula for other startups to try to replicate the success, failing to understand the circumstances is also a major factor, referring to Uber still struggling to earn a positive cash flow, how could a developing build a better example if the same won’t fit in the developed one.

    Being a Business Student myself, evidence the projects that start in the class to convince the teacher for a better case study or course project, leave a gap in the research to apply those concepts in Pakistan, with the audience that has money to invest with the prestige and honor of the institute may feel startup would be a good opportunity to avail less it devastates the resources and financial ruin leave a bad mark and trust to the overall domain.

    For the startup, it is not just an idea to be a success, it would be a whole process including the regulators, auditors, investors, literature, and even national institute to incubate the idea, take the example of Israel (known for “Start-up Nation”), it goes too long length by the support of the ideology, the institute and Government agency to rescue and support them.

  4. “Startup Failures in Pakistan and the Role of Founders is an insightful read for anyone interested in the entrepreneurial landscape of Pakistan. As a successful blogger with a background in marketing, I appreciate how this article sheds light on the challenges and learning opportunities that aspiring founders can gain from failures. It’s a must-read for those looking to make their mark in the Pakistani startup ecosystem.”

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