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Entrepreneurship is a buzzword these days. There are stories upon stories of people making it big in the market, from nothing to millions in a matter of weeks and months. These stories are true; however, it is equally true that 9 out of 10 startups do not go beyond the first year. There are reasons for such high attrition rate, and we shall discuss these in appropriate context. I shall focus on entrepreneurship as it evolved in the Pharma Industry in Pakistan. I shall prefer not to go into the long history of local pharma companies because it is not the subject of these posts. These are exclusively based on small entrepreneurial ventures in the more recent times, say, from 90s onwards. SBA – Small Businesses Association defines small businesses as those having less than 500 employees. By this definition, probably 90% or more will be categorized as small businesses.
We shall also limit our discussion to those startups who started small, without a manufacturing facility, meaning they got products from here and there and started marketing. Those who became very successful, got into manufacturing also, but much later.
For clarity, we shall divide entrepreneurial startups in three categories: nationwide, regional, and local. Each segment had its own specific matters which can best be understood separately.
I shall use examples by name, without prejudice to anyone. I respect all of them and have no intention of passing judgment on anyone.
National Level Entrepreneurships
Let us start with HiQ Pharmaceuticals, owned by Mr. Iqbal Ahmed, who had worked in a multinational company for several years before launching his own marketing setup in mid 1990s. They had few products imported from Cyprus and they went to the market with a very small sales team. They did not try to cover the entire country in the beginning and expanded with the pace of business. They grew constantly and relentlessly and are among the top twenty companies now with over 12-billion-rupee sales. They must have done many things right to reach this level, and in my view, they are a perfect case about which a case study should be written by the business schools. It is unfortunate that our business schools ‘teach’ business like teaching history or any other such subject’ rather than getting the students involved in the business environment. Anyway, back to our main topic; two factors appear to have worked to the great advantage of HiQ. One, they worked to build brands and did not let up this project and did build several strong brands. Two, they did customer services more generously and innovatively as compared to other pharma companies. They must have had their share of issues, but apparently, they had been going from strength to strength. They have their own large-scale manufacturing now.
Genetics Pharmaceuticals, owned by Mr. Aamir Qayum started in the early 2000s with few products manufactured by a local manufacturer. Aamir Qayum had worked for several years in the multinational and national companies. They also started with a small patchy team and kept working diligently, against odds which is expected for startups. They have expanded, grown constantly, and have crossed 3-billion-rupee sales mark. Their products are available all over the country, and they have invested in their own manufacturing unit. Seen from the outside, we see three factors that have supported them greatly. One, they focused on one specialty only for many years, made a stronghold there, and became a force to reckon with for competitors in their area of strength. Two, they did a lot of effort in marketing, branding, brand building, image building, and developing corporate profile. Three, they focused on customer services in a positive manner. Genetics is also a fit case for writing a case study.
Horizon Pharmaceuticals is another inspiring story for startups. Interestingly, they became an inspiration for marketers and manufacturers both. The startup is owned by Nazim Sayani, who had few years of experience in pharmaceuticals. Horizon started with several products manufactured by one local manufacturer. They built business rapidly and crossed the billion-rupee mark earlier than the market norm, hence the inspiration for both. By virtue of huge sales, Horizon became a talked about phenomenon in the pharma industry. From the outside, three factors also appear to have worked for their great success. One, they offered a large portfolio of products, and offered the customers to choose, rather than promoting or building specific brands. In fact, they built the brand ‘Horizon’. Two, they expanded rapidly without waiting for every step become financially viable. It may be seen as adventurism, but it worked to their advantage. Three, they focused on customer delight, not just customer satisfaction. They have their own manufacturing now and are building product brands also. The company and few of their brands are worth writing case studies about.
The most recent entrant making waves is Cell Laboratories. There are a few partners in it, and their beginning was sort of dubiously tentative, trying to establish a venture while doing jobs. It is not a recommended thing, but anyway. Cell is doing quite well, adding products, territories, and revenue. They started off with nutraceutical products which they got manufactured locally. These products can be easily and quickly registered with DRAP and do not have price control. This is the reason many nutraceutical, cosmeceutical, herbal products carry relatively higher prices. From the outside, their major strength is customer focus, and they are trying to raise the bar in this area. They are still new and evolving and a better picture shall emerge in the next five years.
These are few very well-known success stories. If we drill down the success factors, customer orientation runs common in these, and many others also. It has to be so, because among generic products, technical advantages are not seen, and products succeed if the customers accept them. Product merit is important, but it is of no use in isolation; customer approval is critical.
To be Continued……
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