Yes, we were on a roll, but it was entirely self-funded with no semblance of revenue. When we started running Lootmaar, we faced 5 major issues:

1) Sellers just didn’t get it

Sellers were just unwilling to participate. Getting each retailer online took an enormous amount of personal effort by the founders (predominantly Noman). And these weren’t cold calls, as we were often referred to these vendors through friends or family. Even when they did agree to participate, it was on the condition that Lootmaar would manage all the logistics including maintaining their online inventory, listing items, responding to questions, coordinating with buyers – everything. We agreed to do this initially in the expectation that vendors would be more willing to manage their stores once they see steady sales, but that turned out not to be the case as most sellers were ill-equipped to take on this responsibility and the volumes weren’t enticing enough.

2) Viral marketing didn’t work

We were expecting small-scale viral activities such as charity auctions and 1-rupee auctions to multiply and produce the results of a conventional marketing campaign at a small fraction of the cost. This was very naive of us. Yes, these activities generated a hundred or so user registrations each, but then instead of building buzz, they just petered out. We were unable to generate any viral impact. We tried to rationalize our lack of success at viral marketing by assuming that viral networks don’t work in Pakistan. This is of course, utter bull. Truth is that viral marketing has the potential to work spectacularly well in Pakistan, it just requires consistent, focused attention. There are two types of viral campaigns: Those that are accidentally successful, like the million dollar homepage, and those that require experimentation, investment and nurturing. In hindsight, I see we were banking on the first type. Marketing is the key thing that we got wrong, because to keep sellers and partners (couriers, payment platforms) interested we had to rapidly build scale and this did not happen.

3) Technology cost too much

To launch early and test the market, we bought an off-the-shelf system and privately hired two moonlighting developers to customize the software. It was the cheapest way to do it, and worked well initially. Problem was that when we launched we did not have the capacity to respond to user feedback in a timely manner. The primary developer, well meaning though he was, just did not have time between his day job and family commitments. We got so badly burned by this experience that I did not want any unpredictability in tech dev and started looking for a reliable partner. After months of searching, we got into an agreement with Folio3 after Adnan Lawai offered us friends and family rates to support our fledging start-up. Given the professionalism of the Folio3 team, the rates were indeed a bargain, but for a tiny Pakistani startup (making no money) it was still a significantly amount monthly, and since the contract was dollar denominated the currency shock of 2008 added to the burden.

4) Technology hogged all the management attention

I’m a geek, Noman is a geek, and Maryam is a (quasi) geek. We spent a disproportionate amount of time building and refining technology. Sajjad, the Folio3 software engineer working with us was great, but the underlying code that he had inherited was complete garbage. Given how picky I was, each change, even the minutest one took days and even then I only grudgingly promoted it to production. Truth is that building technology is fun and easy and we consciously fell into the trap.

5) Execution. Execution. Execution

What it really comes down to is poor execution. None of the four points I have written about above came as surprises. Noman and I had expected these problems, and devised plans to address these. The problem was that we did not have the time and resources to execute. Soon after launch, when the challenges of building scale and generating cash-flows were starting to become apparent, I took up a consulting offer and moved to Dubai taking an “advisory” role in Lootmaar, leaving all operational responsibility with Noman. Even with very low volumes, Lootmaar was very resource and operations intensive requiring extensive manual coordination between buyers, sellers, couriers and banks. As if this didn’t keep Noman busy enough, he also had to manage some important aspects of his family business, so his hands were quite full. Hence, we obsessed about technology (at the expense of business) because it was the easy thing to do as it could be directed remotely, and performed asynchronously. Client facing activities, such as bringing retailers onboard, expanding the network of evangelists, integrating payment systems, partnering with media companies-all activities that required on-site face time-suffered.

So now the big question is: What’s next?

-Adnan

Last time I was in Karachi, sitting in the departure lounge on my way back to Dubai, just a few seats away from the spot I’m in right now, I said something that I’m deeply ashamed of. “I hate Pakistan” was my outburst to my dad. It felt satisfying at the time, but as the plane ascended, the burden of those words started to weigh in. As soon as the plane landed, I called my dad and apologized. I didn’t mean it.

So what pushed me to say it?

Over the past 3 years, I’ve been to about a dozen cities and have been to airports ranging from a tiny terminal in the mid-Western city of Peoria to the massive regional hub of Singapore. Holding a Pakistani passport has never been convenient. I have invariably been selected for secondary screening, but have always been treated with respect. Even in the US, notorious for its broken, paranoid immigration system, after 4 hours of waiting (which is unpardonable), the visa officer was at least polite and apologetic.

So why is it that it was in Karachi of all the places that I was treated like a criminal?

As you enter the main airport building in Karachi, there is a security guard who checks your ticket to verify the departure time. Right after, there is a customs check-point that generally let you pass without any bother. After that there is a scanning machine, which takes a moment to pass through. The work-flow is well laid out and on most days it takes less than 30 minutes from the moment you enter the airport to the time you’re sitting at the departure gate. By any standard, that’s pretty good. Civil Aviation and ASF (Airport Security Force) are two government organizations that work. When other government departments decide to stick their respective noses into a well integrated process, shit happens.

I don’t know if most readers are familiar with the ANF. The highly ineffective, effete anti-narcotics force of Pakistan. If they weren’t so busy lining their pockets, they might actually do something about the rampant drug problem in the country. Last month, when I crossed the Customs counter uneventfully, as usual, right before the scanning machines, a bearded peasant-looking man was standing with a crowd around him. He was wearing a crushed white shalwar kameez, stained with body grime and tea spills. I thought he was a labourer on his way to some construction pit in the GCC. I navigated the crowd around him (there was no obvious queue), and someone called out in a gruff, rude voice “Kahan ja rahay ho?” (Where do you think you’re going?). I turned back and saw this cretin gesturing rudely towards me.

He turned out to be a constable of the ANF. He spent 2 full minutes memorizing my passport, while I patiently stood by. Looking at me suspiciously, he said “Udhar jao” pointing to an improvised luggage rack where another plain-clothes (but decent looking) ANF constable was standing. I lugged my hand-carry over, and let the guy prod through my stuff. While this was happening, the first ANF guard said “Meray saath aao.” (Come with me). I wanted to take my bags with me, not wanting to leave them unattended. He asked me curtly to leave the stuff where it was.

I followed him to a dingy, poorly lit corridor, which appeared to be a makeshift store-room. I had a deep sense of apprehension building. He asked me to lean against the wall and started roughly probing my stomach, poking invasively. When I protested (loudly), he said he said gruffly “shak door kar raha hoon“. Finally, I headed out into checkout area, deeply infuriated, wanting never to come back. To do the rational thing, I approached the CAA counter to complain. It turned out that the ANF operates from its own ivory tower that was too high to receive complaints from lowly citizens.

What pissed me off was not just the invasive body search, but the way it was conducted, the place it was performed, the lack of a process, the obnoxious manners of the ANF constable, and the general disregard that security forces in Pakistan (police, army) have for ordinary citizens.

But no, I do not hate Pakistan.

This time it took less than 30 minutes to go from check-in to boarding. Each check-point operated efficiently, airport personnel spoke respectfully (“aap” not “tum”) and the immigration officer engaged me with familial banter while she stamped my passport. Only in Pakistan am I treated this warmly.

I love Pakistan, because it’s home.

-Adnan

(Written in the departure lounge at Karachi Airport on 12 November 2009)

We got off to a great start. We organized a 1-rupee auction event at SZABIST and planned to replicate its success at each major institute. We also set up a network of evangelists at major universities, launched charity auctions, integrated tell-your-friends functionality and continued to generate a steady buzz.

Building a successful marketplace is a two-sided dilemma, in order words, the classic chicken and egg problem. You have to bring the sellers and the buyers onboard at the same time and in the right proportion to make it work. In order to give Lootmaar an immediate boost we convinced a range of different sellers ranging from Jogi’s, a retailing giant to GamesRus, a small corner shop in Malir, to put up their inventories on Lootmaar. In order to attract this segment, we built attractive store fronts that were easy to set up and configure.

We continued to develop the platform to provide services unheard of in Pakistan. We introduced a Buyer Protection program which protected buyers for transactions up to Rs. 5000, a dispute resolution system to help facilitate disputes, a flash advertising platform that could push live ads of real auctions, and a widget that a store owner could customize and embed into his website or blogs with 5 clicks. And ofcourse, we tied up with a prominent courier company to offer a version of Cash-on-Delivery to circumvent the ePayment issues in Pakistan.

On the technology side, we decided not to develop technology internally and handed over ongoing development to Folio3. Sajjad, our primary developer there, did an outstanding job despite inheriting messy, patched up code that had been tinkered with by half a dozen different developers before. Around this time, Maryam joined Lootmaar to take over technology management, freeing us up (in theory) to focus on business development. Anoushey became a key stakeholder.

To flatter us, a couple of imitators also hit the market, often with crass, plagiarised marketing campaigns. We were on a roll.

-Adnan

Now this movie is going to be awesome. Can’t wait.

Software Engineers are the life-blood of a high-tech company. The ability to write clean, scalable code is part art and part science, and those who do it well, should be not a rung lower than the top of the totem pole. Instead, they are paid nothing, treated badly, expected to work like slaves on projects that insult their intelligence.

Joel (of Fogcreek fame) has a brilliant solution.

Upgrade your career – Joel on Software

At one of the recent DevDays events, I asked the audience (almost 100% programmers) how many of them were incredibly satisfied with their job, found it fulfilling, and were treated well by their employers. Only about 25% of the hands went up. I asked how many people either hated their job and couldn’t wait to find something better, or were actually actively on the job market. Again, about 25%. The rest were somewhere in the middle: maybe they can tolerate their job, but they’re keeping an eye open for something better.

Who is this DevDays audience? They’re the elite of the elite of the best programmers out there. They’re the people who participate in Stack Overflow, the people who read, the people who are constantly trying to learn more about programming and software development. More than half of them paid their own money to attend a one day conference. They’re the most desirable software developers on the planet. And 75% of them are not delighted with their job.

That’s unacceptable. I’ve been saying for ten years that the top developers have a choice of where to work, and the top employers need to work harder to attract them, because the top developers get ten times as much work done as the average developers.

And yet, I still keep meeting ridiculously productive developers working in shitholes.

We’re going to fix this, right now. Thus, Stack Overflow Careers.

The idea of Lootmaar started in 2003, when we wrote a business plan for it as part of Jawwad’s entrepreneurship course at SZABIST. Noman and I had always craved for an online platform where we could sell our stuff, and buy gadgets at a bargain. The internet penetration of Pakistan at the time was a couple of million and growing rapidly,  Bazee was creating waves in India and hence the inevitable question: Why can’t we do this in Pakistan?

A bit of competitor analysis revealed that someone had tried (Bolee) and failed. There was too much wrong with Bolee and creating a successful marketplace, at first, seemed like simply fixing some of those things: interface, help, active moderation, dispute management etc. Furthermore, a quick back-of-the-envelope calculation showed that the potential was enormous. Just getting a small fraction of internet users in Karachi would make the model sustainable. It made sense, and so we started obsessively writing code. Looking back, it was such as awesome time. We were out to dominate the world, spending nights cloistered away in Adeel’s plush den, interrupted only by his mom’s luscious cooking. But then we graduated and the party ended.

With fervent ambition we pitched the idea to everyone who would listen- family, friends, passersby, but were told with a few exceptions, that its not the right time. At this point, I got an offer from IBM (Pakistan) and I put Lootmaar on hold to gain some “real world experience”. While at IBM, I secretly wore this invisible badge that said “I’m actually an entrepreneur” and I continued to toy with the idea of Lootmaar. It was partly because I was genuinely passionate about the idea, and partly because it was a coping mechanism of working in a narrow cubicle selling extremely expensive boxes. At IBM, only my supervisor and very dear friend, Faisal, knew about Lootmaar and he used to proudly call me the “that crazy kid” for my naive ambition.

In Spring 2006 I got accepted at Duke,  I quit from IBM Pakistan and joined Alchemy for the Summer in my first real brush with entrepreneurship. I don’t think I’ve ever posted about my time at Alchemy. Suffice to say for now that after my 3 months at Alchemy I had more to write on my CV than the 2 prior years at IBM. Alchemy was a training, not just in entrepreneurship, but also consulting, both of which I enjoyed thoroughly.

While at Duke, I met other crazy dreamers. I looked at some other possible startup ideas with Wynn, even got some NCIAA funding, but through that whole process I was stuck on Lootmaar. “You just have to do it to get it out of your system,” my mom once told me on the phone. Luckily, Noman was feeling exactly the same way. A couple of months into my MEM program, I called Nomi and after three full years since the original spark, Lootmaar the company was formed.

It had been three years since we had written the original code and much of it was outdated. We decided to develop a new system from scratch, and also in the interim, purchase and quickly customize an off-the-shelf auction system to launch early and test the market. This “simple” customization became an all-consuming nightmare and cost us over $15,000 in hard cash (not considering my or noman’s time).

We launched in beta in August 2007 generating a quite a buzz.

-Adnan

The last update made to our subversion log was in November 2008, which means that it has been exactly one year since we stopped active development on Lootmaar. I haven’t written about Lootmaar in ages, and the truth is I didn’t quite know what to say. Is Lootmaar dead in the water? Is Lootmaar changing its business model? Why aren’t there any items listed? Deep inside, we knew what the right answer to each of these questions was, but saying it out loud seemed like an admittance of failure and so we continued plouging cash in an attempt to convince ourselves that the business will take-off. We are the mere cusp of the hockey stick. Another five lakh rupees and we would made it.

We were going through a case of entrepreneurial delusion, or in management terms “commitment to a losing cause”. In the next few posts, with the clarity of hindsight I’ll tell you what happened, where we screwed up and what now.

-Adnan