Meet Humayun Mazhar, the Founder of CresVentures.
I had the chance to sit down with Humayun Mazhar, founder and CEO of CresVentures, a wing of the Crescent Group focused on investing in Pakistan’s startup ecosystem. His story is one of struggle, mentorship, and optimism for the future. Sitting on the 10th floor of the Bank of Punjab Tower, I saw a view of a city on the rise – Lahore. I’m sure he felt the exact same way.
Humayun had his computer open to the list of pre-drafted interview questions I sent him via email. However, both of us knew how our meeting was to transpire – as more of a ‘chat’ between two individuals belonging to well reputed families of Lahore, eager to learn more about, and invest their own time and resources in, the nascent startup ecosystem of Pakistan. Through the conspicuous certificates and awards omni-present in the office, there was no doubt concerning Humayun’s individual achievements – however, he started off by noting the ‘missed opportunities’ he saw in two startups in Pakistan – Markhor and PopinJay.
Markhor was a project founded by Waqas Ali, set on popularizing Peshawari Chappals on a global scale. Humayun initially thought of this as an opportune time to make his mark after recently having formed Crescent Ventures. However, after consulting many in the fashion industry and leather manufacturing industry in Pakistan, he was suddenly dissuaded from adding Markhor to his portfolio. And who could blame him? Keep in mind that this was well before Pierre Cardin came out with their own brand of Peshawari Chappals, that clearly epitomized the shoeware on a global scale.
PopinJay, on the other hand, was an e-commerce platform headed by Saba Gul – an MIT alumnus. PopinJay was the go-to platform for Pakistani e-commerce buyers who wanted to buy locally manufactured handbags in the country. Though Humayun has looked back on both missed opportunities, he has noted a commonality between the two that has given him much food for thought: the importance of social impact in scaling your business. Markhor and PopinJay hence were more than just business ideas: they were works of art that helped nurture local talent. Markhor gives individual profiles of craftsmen who construct each shoe by hand, whereas PopinJay claims to have worked with more than 150 women in Hafizabad, Pakistan in manufacturing their own handbags. Social impact, to him, has truly been the determinant of not only startups, but established institutions, to attract foreign investment in to Pakistan.
Humayun recounts three separate encounters with foreigners determined to facilitate positive change within Pakistan, all for the higher goal of poverty alleviation.
In one encounter, Humayun met with Jacquelyn Novogratz, CEO of Acumen Fund, who was interesting in examining the rural landscape of Pakistan so that the Fund could set a footprint within Pakistan. Now, Acumen is heavily involved in the country. In another scenario, Humayun was crossing the border from India in to Pakistan. A woman he happened to be assisting in communicating herself to the immigration officer turned out to be an Australian woman, keen on visiting Chitral to examine their local handicraft market. She claimed there was an increasing demand for such paraphernalia in the international market. Humayun also reminisces about the incident where he met a Scottish Woman who focused on Akhuwat Foundation as part of her doctoral dissertation, and how it plays in to his point of how important social impact really is – and how it has translated in to mammoth companies like Telenor and Coca Cola implementing their own respective CSR (Corporate Social Responsibility) programs.
Humayun’s closing remark on this matter: “Social impact can be done on a great scale, but entrepreneurs who have a sound business model, work well with others, and have the tenacity to withstand all hardships are the ones who ‘go big’, at the end of the day”.
With all that was said and done, Humayun then assumed the role of a raconteur in narrating the journey of his company, CresVentures. CresVentures roots stemmed from a company formed much earlier, in the 80’s, called CresSoft – known for software exports out of Pakistan. What was Humayun’s role in this? Well, he had just completed his Masters from abroad from Philadelphia University, and was running a textile unit of the Crescent Group in Faisalabad. A good friend of his from his alma mater (Aitchison College in Lahore) advised him to delve in to software exports. A year transpired, and ideas were exchanged – ideas merely floating in the air. All in all, it took 3 years for CresSoft to finally get formed. After this, Humayun ventured to many locations in the world to grasp a better lens of the software exports market. This led him to Bangalore, where he met the founder of Infosys, a company which at the time was handling $500 million in exports, annually. After meeting with him, Humayun was convinced that he was to ‘make his mark by doing something different’. Though CresSoft had doubled their funding in a period spanning 4 years in the early 90’s, the company as being at standstill (which, as Seth Godin feels, is the Dip for any company). The year was 1994, and Humayun was on the verge of shutting down CresSoft. Then, 2000 arrived, and the dot-com bubble in the United States was looking to burst. Luckily, for CresSoft, the vast majority of their companies weren’t internet based entities. April, 2001 then ensued, and CresSoft were on the verge of their NASDAQ listing – with a $300 million valuation. However, the dot-com bubble had burst, and IT consultants in the field were deemed surplus to the economy. 80% of CresSoft’s revenues had dried up. 50 employees in the United States, and 300 employees in Pakistan had their jobs’ in jeopardy. In the midst of the 2003-04 year, CresSoft was officially shut down – I decided it was time to move to better things. However, more and more hardships ensued. Still, I kept in mind that the word for ‘crisis’, in the Chinese language, is the same as the word for ‘opportunity’
“In 2010, a large manufacturing facility I was heading incurred heavy costs in synthetics and polypropylene, which required me to shut it down in 2011. 3,500 employees were given their due diligence and handshakes were made. I suddenly found that I now had more time on my hands, and decided to do some research on Tech Startups, in an ecosystem that wasn’t even formally established. Through intensive research, I read about a student from SWAT who enrolled at NUST, and created a mobile application he sold to the App Store for $50,000 – Friends Planet Pro”. People started me questions, wondering why I hadn’t started this inquisition any sooner. 70 of my employees at CresSoft had settled in the States and had received permanent residency through Green Cards. I felt there was a scope for investing in local tech startups in Pakistan, so I set up a Venture Capital Fund. Realizing that there lacked a proper ecosystem for such ventures in Pakistan, I set it up in Dubai”.
2012 followed, and Humayun attended a course at UC Berkeley’s Centre for Executive Education, focused on Venture Capital. He also attended a course at Harvard’s School for Executive Education. He met with a lot of Angel Investors as well, with whom he happened find more relation. Through conducting research on Pakistan’s entrepreneurial ecosystem, and networking with global Angel Investors, Humayun decided to create CresVentures in October 2015 in Pakistan. What happened in between? Well, Humayun had plans to create an Enterprise Certification Institute, which he managed to put off for a while. In that span of time, Humayun got quality advisers on board for the eventual formation for Cres Ventures, and managed to invest in three companies: Sukoon – a blue collar job portal – PerkUp – a loyalty rewards program – and Travly – logistics service.
Humayun also set the groundwork for the Indus Entrepreneurs in Pakistan, which was actually formed by Syed Babar Ali in 2002. Recently, Humayun was inducted as the President of the Lahore Chapter of TiE, with a primary focus on mentoring tech startups in Pakistan. Here are his thoughts on Angel Investment and its pivotal role in bringing startups imminent success:
“Angel Investment is an art, especially in investing in other startups. I met a German at Harvard, who was adamant in the belief that all the world’s innovative ideas are going to come out of Silicon Valley. That gentleman explained to me his methodology for ‘capturing his bait’: if he likes the idea, he invites the founder for coffee; if he likes the founder, he invites him/her for dinner. Today, that gentleman is managing a $20 billion portfolio for the world renowned Kaufmann Group.”
It was then that Humayun made the presumption that smart ideas directly translated in to smart money for the principal(s). He needed a great team to bring this presumption to life. A former employee of Humayun’s was currently managing an $800 million company in the US, AllScripts – known for providing software solutions for EMR’s (Electronic Medical Records). Alongside Healthcare Technology, another former employee was making waves in e-commerce, heading a company called Sapient Nitro. A third contact of Humayun’s was based in Islamabad, and had substantial experience at World Bank and the Founder’s Institute. Before long, all three were on board with Humayun’s vision for CresVentures. All that was left was to examine the Pakistani market and depute a “referral market” with which it could be compared.
It was then, on this premise, that Humayun has urged startup founders to look no further than idea as an exemplary model to follow. Though India’s sheer magnitude and size differ from Pakistan, it shares with the country a similar culture, language, and economic landscape. “Pakistan is clearly 2 years behind India in developing their ideas on a large scale”, quotes Humayun.
When asked about his opinion on incubation in Pakistan, Humayun feels that incubation centres all over the country are a platform for ‘grooming’ startups to reach their eventual goals. The process is twofold, in that (1) the centres nurture their ideas and (2) focus on improving their traction and concept. Most companies are evaluating their market using a top-down approach in Pakistan, according to Humayun, when in reality, they should be evaluating their market based on a bottom-up approach. Targeting a specific market is very important for a company to succeed in Pakistan. Through intensive research and advisement, Humayun has found that the logistics and home/office startup space in Pakistan is growing the quickest, in terms of both value and volumes. That was when he was presented with an opportunity to secure his first investment for CresVentures when evaluating the following three companies:
- Technician.pk (LUMS Centre for Entrepreneurship)
- Sukoon.com.pk (The Nest I/O)
- Cargar
Sukoon was eventually chosen, with the “passion of its founders” being its ultimate forte.
And the rest is a chapter that is yet to be written. I discussed with Humayun his thoughts on what the future holds for Pakistani entrepreneurs, and he mentioned a few issues that are still pertinent in the country. For one, many people confuse tech startups with entrepreneurial ventures, seeing that entrepreneurial ventures can only be deemed so with a tech component, and vice versa. He has mentioned a few examples of how local entrepreneurial talent can be bolstered by investments from global tech juggernauts, namely Rocket Internet. That explains Rocket’s acquisitions of Savaree through Careem, and EatOye through FoodPanda. After visiting a plethora of Startup related in the country, Humayun has noted that though the sheer volume of startups emerging in the country has increased dramatically within the past few years, the quality of ideas has heavily deteriorated. When asked about how he evaluates the quality of startups, he replied by stating three factors:
- Disruptiveness
- Financial Stability
- Business Model
He also mentioned how competitive startups have become in seeking incubation. “What if 10,000 startups apply to be inducted, and only 200 get in. What makes Startup #201 unworthy? Startups like #201 make the ecosystem more interesting, not the 200 that get in”.
He concluded the sit-down by slamming critics of his views of the ecosystem as being too embedded in a corporate lens. “I am not taking innovation away from this country. I am simply fostering growth through the innovative ideas of local talent. However, the buck doesn’t stop there. One’s exit strategy is always important. However, to those in need, CresVentures is with you every step of the way”.