The E-commerce sector in Pakistan is still in its nascent stage, but has experienced promising outcomes, characterized by a rising number of e-commerce startups, and with revenues expected to hit $1 billion by 2020 if it continues to grow at its current rate. Successful startups share a commonality: They tap into a market gap, an unmet need, an unidentified niche; the old adage ‘Customer is King’ comes into play. And, it is these minds that identify the direction of the tides and, thus, set their sails accordingly. One such promising venture is Nearpeer.
Nearpeer offers an ingenious solution to the common problem faced by students: not being able to effectively gain information through the tedious task of reading whole chapters from books, and wasting time in trying to decipher the meaningful topics from the huge influx of information. Instead, students can simply avail Nearpeer’s modules, designed by instructors belonging to the student body of a particular institution itself, comprising of courses with short videos explaining various concepts. Presently, Nearpeer offers its services to LUMS, although it plans to expand its services to other universities in the near future.
An entrepreneur’s traits play a major role in improving the business. It is evident that for a startup to succeed the entrepreneurial drive can prove to be an efficacious personal asset. Likewise, the factor that Ammar Ali Ayub, Co-founder of Nearpeer, attributes to his success includes his ambition to succeed and challenge the status quo. Those who are fortunate enough to achieve such passion early on in their lives might end up searching for opportunities like did. His remarkable profile before Nearpeer includes internships at the Higher Education Commision of Pakistan and the World Bank, other than his previous startup venture, Luminous.
A major determinant of success is the motive of the entrepreneur. The singular desire to make profits cannot make a business flourish; there need to be other driving factors behind it too. As in the case of Ammar, profit wasn’t the end goal—what he desired was far greater: He wanted to be a celebrated entrepreneur. Startups that identify gaps and solve a customer’s problem are the ones that succeed. Ammar grasped this from his previous venture (Luminous), which only catered to a want, unlike Nearpeer.
Firstly, one needs to identify the general curve of market demand. In order to do this, a survey is considered vital. However, surveys are to be approached with caution, for they are scarcely good predictors of success, as experienced by Ammar during his collaboration with 20 – 25 startups. He recommends the use of minimum viable product testing (MVP), which is essentially the smallest pilot test that one can run before investing heavily in the product or idea.
To make a startup succeed, one should be willing to put in effort before bringing it to the customer. The foremost step is clarifying the assumptions behind the venture, which is hypothesis building. Nearpeer wanted to cater to the hypothesis that students were dissatisfied with their instructors. Moreover, one should be willing to go to any lengths to make their vision come alive. The founders of Nearpeer, after receiving a disappointing response of merely 3 people to their initial online survey, took matters in their own hands, and went from room to room in their dormitories, requesting people to fill the survey on their cell phones. This is the kind of drive one needs to make their dream a reality.
Similar online educational platforms, like Khan Academy, provide direct competition to Nearpeer. For a startup to thrive in an environment like this, it has to set itself apart from its competitors. Nearpeer realized that other businesses were not tailoring the courses to the needs of the students; they were generalized for anyone who wanted to learn, and therefore students would have to go through extra information to arrive at the relevant bits they needed. Convenience was a top priority for Nearpeer: Since people tend to shy away from online payment systems, Nearpeer introduced a scratch card system, which was available at the tiny stores at LUMS, allowing any student to easily get one on their routine grocery trip.
Nearpeer also claims to focus on effectiveness and scalability, rather than just quality. Though this may seem counter intuitive, they have ingeniously designed their system in a manner that, although quality is not their ultimate goal, quality ends up becoming a priority for the instructor themselves. To achieve this, they have kept the first module of every course—which is 20 – 25% of the course—free of cost; this transfers the enormous burden of retaining customers on the instructors themselves. Moreover, unless the course has a rating of at least 3.5 by the students, it is taken down. Other than signing a required document promising quality, the instructors were motivated additionally by the desire for recognition, as their profile and picture would be visible on the website along with their courses.
If one is attempting to venture into a startup without first addressing scalability; they need to retrace their steps. It was not possible for Nearpeer to be scalable tantamount to sites like Facebook. It could not have users generate more content for other viewers, thereby increasing the size of viewership. Instead, it is only scalable from the customer’s side, through recommendations and word of mouth. From the suppliers’ side, scalability could only be ensured through a quality product, which was a necessary concern to address since Pakistanis are generally unwilling to pay for a product online.
The results of building a model after putting tremendous amounts of thought and effort into it are obvious—Nearpeer generated a whopping 7 lac Rupees in revenue last semester. However, ecommerce comes with its own disadvantages; even if one is generating a generous amount of revenue, the different costs involved considerably lower the profit margins. Initially Nearpeer founders had to be extremely frugal with their spending, with a mere 20,000 Rupees per month stipend each from LCE (LUMS Center for Entrepreneurship), which they repeatedly invested back into Nearpeer, trying to minimize costs along the way.
This is not to say that these factors provide a causational link to success, but there is most definitely a correlation present. Recently, MIT professors Brynjolfsson and Andrew McAfee predicted that numerous professions will be replaced by technology in the future. This is exciting news for the realm of e-commerce, which can have a huge impact on the future of technology. When this kind of technology reaches Pakistan, whenever that may be, Nearpeer hopes to be part of the game, pushing academic assistance even further.
Interviewer: Safir Hasan
Transcriber: Maneeha Aftab
Editor: Minhal Asif
