Update May 1st 2020: A modest success. With the help of friends and politicians, I and others managed to persuade the Australian Treasury to modify the JobKeeper scheme to include startups like Close Comfort and many others. A lifesaver for us. Thank you to all those who listened and acted!
The Australian government’s business rescue packages, while welcome, have overlooked the future: thousands of small and successful startups. Startups in many other less fortunate countries may struggle to survive.
Our company, Close Comfort (www.closecomfort.com), a small family-owned business, cannot demonstrate a 30% year on year loss of business to be eligible for assistance because we have invested to grow our sales. Now we face a similar financial catastrophe like tourism and hospitality businesses as our sales and sources of investment capital dry up simultaneously.
A Pakistan university Vice Chancellor told me how, when he first took up his position, he challenged his engineering faculty.
“Listen, he said, you and other engineering schools in Pakistan have graduated tens of thousands of electrical engineers, yet, the more you graduate, the worse electricity load shedding becomes.”
“Sir, they replied, that is a political problem, it’s nothing to do with engineering! The politicians have accumulated a huge circular debt, which is not real debt, just an accounting aberration to cover the fact that rich people don’t pay for electricity.”
The Vice Chancellor smiled. “Please remember, he said, electricity and water utilities are staffed and run by engineers. Furthermore, the debt is real debt: Pakistan State Oil now has to pay cash in advance of delivery because it ran up too much unpaid debt with suppliers. As long as people can use electricity without paying enough to cover the cost of fuel to run generators and maintaining and extending all the transformers and cables, the problem will get worse. So whether you like it or not, as far as Pakistan is concerned, it is an engineering problem. That means it’s your problem too!”
Pakistan’s politicians and business community have a low opinion of Pakistan engineers: it is not just load shedding and poor water service quality. Pakistan is a high cost operating environment, and Pakistan engineers (with a few notable exceptions) have a poor record for delivering on promises: on-time, with good quality, high safety standards, and within financial constraints. In short, Pakistan is an unattractive destination for capital investment because engineers (among others) don’t deliver what they promise.
That’s the bad news.
There’s good news, too….. well sort of. Continue reading