Kasbtv.com Investing in Pakistan's IT Businesses: Opportunities & Challenges Altaf H. Khan.
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Transcript of Kasbtv.com Investing in Pakistan's IT Businesses: Opportunities & Challenges Altaf H. Khan.
kasbtv.com
Investing inPakistan's IT Businesses:
Opportunities & Challenges
Altaf H. Khan
kasbtv.com
Overview
• IT is hot!
• Investing in IT is hot!
• The investment selection framework
• An objective selection procedure
• Brief intro of selected IT sectors
• Selection procedure in action
• Wrap-up
kasbtv.com
Why IT is Hot?
• Internet has catalyzed a huge, world-wide demand for IT products & services
• Stories of individuals making immense wealth quickly, has caught the imagination of the masses
• Limited-supply, huge-demand for IT pros has made it the hottest profession
• Underdeveloped countries see it as a quick fix for their decades-old miseries
kasbtv.com
Why Investing in IT is Hot?
• Fabulous fables of Si Valley VCs, entrepreneurs
• Possibility of early, huge returns
• A large IT market, getting larger:– All businesses now require IT products & services to
improve profitability
– Internet makes it easier to address the global market
kasbtv.com
Investment Selection Framework
• A vocabulary, describing objectives and constraints of investment opportunities
• Elements of this vocabulary act as a committee of critics, each member trying to influence the outcome in an individualistic & selfish manner
• An opportunity is selected if it satisfies most of the critics in the investor’s committee to a reasonable degree, without overly upsetting the remaining ones
kasbtv.com
The Sixteen CriticsMarketing
– Market size– Competitive advantage
Human Resource– Leadership– Availability of:
• Experienced pros• Junior pros
– Training
Infrastructure– Telecom– Distribution channels– Buildings
Finances– Initial investment– Returns– Payback period– Ease of exit
Growth– Scalability– Diversification
opportunities– Sustainability
kasbtv.com
Which IT Sector is Right for You?
1. Determine the investment selection profile for yourself
2. Determine the selection profile for various IT sectors
3. Invest in the sector that matches best with your own profile
kasbtv.com
Selected IT Sectors
1. Professional Training
2. IT-enabled remote services
3. Custom software development
4. New technology, product, or business model development
kasbtv.com
Selected IT Sectors
1. Professional Training
2. IT-enabled remote services
3. Custom software development
4. New technology, product, or business model development
• Training for working IT professionals
• Generally tool/ skill oriented
• Example:Training on Microsoft, Oracle, Cisco products
kasbtv.com
Selected IT Sectors
1. Professional Training
2. IT-enabled remote services
3. Custom software development
4. New technology, product, or business model development
Examples:• Transcription• Call center• Online advice• Accounting• Insurance claims
kasbtv.com
Selected IT Sectors
1. Professional Training
2. IT-enabled remote services
3. Custom software development
4. New technology, product, or business model development
• Focus of the current IT frenzy in Pakistan
kasbtv.com
Selected IT Sectors
1. Professional Training
2. IT-enabled remote services
3. Custom software development
4. New technology, product, or business model development
• Cause of the recent NASDAQ boom & bust
• Few success stories in Pakistan
kasbtv.com
The Rating Scale
■ ■ ■ ■ ■Very
UnattractiveUnattractive Moderate Attractive Highly
Attractive
kasbtv.com
The Rating Scale
■ ■ ■ ■ ■Very
UnattractiveUnattractive Moderate Attractive Highly
Attractive
kasbtv.com
The Rating Scale
■ ■ ■ ■ ■Very
UnattractiveUnattractive Moderate Attractive Highly
Attractive
kasbtv.com
The Rating Scale
■ ■ ■ ■ ■Very
UnattractiveUnattractive Moderate Attractive Highly
Attractive
kasbtv.com
The Rating Scale
■ ■ ■ ■ ■Very
UnattractiveUnattractive Moderate Attractive Highly
Attractive
kasbtv.com
Professional TrainingDimension RatingMarket size ■ ■ ■ ■ ■Competitive advantage ■ ■ ■LeadershipExperienced professionals ■Junior professionals ■ ■ ■TrainingTelecom ■ ■ ■ ■ ■Distribution channels ■ ■ ■ ■ ■Buildings ■ ■ ■ ■ ■Initial investment ■ ■ ■Returns ■ ■ ■Payback period ■ ■ ■ ■ ■Ease of exit ■ ■ ■ ■ ■Scalability ■ ■ ■Diversification opportunities ■ ■ ■ ■ ■Sustainability ■ ■ ■ ■ ■
kasbtv.com
IT-Enabled Remote ServicesDimension Training RemoteMarket size ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Competitive advantage ■ ■ ■ ■ ■ ■LeadershipExperienced professionals ■Junior professionals ■ ■ ■ ■ ■ ■ ■ ■Training ■ ■ ■ ■Telecom ■ ■ ■ ■ ■ ■ ■Distribution channels ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Buildings ■ ■ ■ ■ ■ ■ ■Initial investment ■ ■ ■ ■ ■ Returns ■ ■ ■ ■ ■ ■ ■Payback period ■ ■ ■ ■ ■ ■ ■ ■Ease of exit ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Scalability ■ ■ ■ ■ ■ ■ ■ ■Diversification opportunities ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Sustainability ■ ■ ■ ■ ■ ■ ■ ■
kasbtv.com
Custom Software DevelopmentDimension Training Remote CustomMarket size ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Competitive advantage ■ ■ ■ ■ ■ ■ ■ ■ ■LeadershipExperienced professionals ■ ■Junior professionals ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Training ■ ■ ■ ■ ■ ■Telecom ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Distribution channels ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Buildings ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Initial investment ■ ■ ■ ■ ■ ■ ■ ■ ■Returns ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Payback period ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Ease of exit ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Scalability ■ ■ ■ ■ ■ ■ ■ ■Diversification opportunities ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Sustainability ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
kasbtv.com
New Product, Technology, BMDimension Training Remote Custom ProductsMarket size ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Competitive advantage ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Leadership ■Experienced professionals ■ ■Junior professionals ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Training ■ ■ ■ ■ ■ ■Telecom ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Distribution channels ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Buildings ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Initial investment ■ ■ ■ ■ ■ ■ ■ ■ ■Returns ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Payback period ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Ease of exit ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Scalability ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Diversification opportunities ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Sustainability ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
kasbtv.com
Which IT Sector is Right for You?
1. Determine the investment selection profile for yourself
2. Determine the selection profile for various IT sectors
3. Invest in the sector that matches best with your own profile
kasbtv.com
Which Sector is Right for You?Dimension Training Remote Custom ProductsMarket size ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Competitive advantage ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Leadership ■Experienced professionals ■ ■Junior professionals ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Training ■ ■ ■ ■ ■ ■Telecom ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Distribution channels ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Buildings ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Initial investment ■ ■ ■ ■ ■ ■ ■ ■ ■Returns ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Payback period ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Ease of exit ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Scalability ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Diversification opportunities ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■Sustainability ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■
kasbtv.com
Summary
• Selecting among competing investment opportunities can be made more objective by formulating them in terms of the framework suggested here
• This framework is useful, forcing us to consider early in the investment life-cycle the issues that we will face during the entry, monitoring, and exit phases