Jawwad Farid Profile picture
Startups. Models. Finance. On Zen of building better models faster. 20 yrs. 6 startups. 4 continents. 1 exit. Founder Puzzles 2nd Ed Pre Orders. Link below ⏬
Abdul Manan Profile picture Furqan Punjani Profile picture Pakistan First Profile picture 3 added to My Authors
Jul 22 15 tweets 5 min read
On default. Are we going to? No.

With due respect for everyone who shared their take, but once again, no.

Let's take a look at underlying data. Don't take my word, see for yourself.

The only thing to focus on and worry about is global bonds.

finance.gov.pk/dpco/Debt_Bull… Everything else can be negotiated, rolled over or placed on a principal moratorium.

We did it before in 1998, post sanctions when economic conditions were much worse.

But then why the alarm bells?

This graph, same source. US$ 21 billion figure for '22? How much is Eurobonds?
Jul 20 13 tweets 3 min read
I think it is important for kids and students to intern in professions they plan to work in before they commit to them.

I fell in love with numbers and picked the actuarial profession.

For the 11 years I took actuarial exams, I had tremendous fun.

But there was a catch. My first year was benefits valuation.

The essence of my assignment was to update already existing clipper valuation software.

Change a few lines of code, run numbers, take summary tables and update an existing report template.

In about 8 months I was bored to death.
Jul 19 6 tweets 2 min read
There are certain aspects of my work where the only thing I am sure of is that everyone is guessing.

No one knows anything.

Almost everyone is making it up as they go along. The sooner one accepts and acknowledges it, the wiser one's outlook.

Also good for blood pressure. This has interesting applications to professional market price trends forecasting.

I remember seeing this fascinating result 20 years ago. A primer on simulation.

The best educated guess for the present value of terminal future price is.....
Jul 19 8 tweets 2 min read
Despite my repute for wearing rose tinted glasses, I tend to be blunt and early with my calls.

Exhibit 1. The winter of funding tweet in early April.

Here is my latest call.

Yes the news on the ecosystem front is depressing but this is not the end.
Markets work in cycles. We have just witnessed a down cycle.

This is a natural part of startup evolution.

Yes, there is more depressing news in the pipeline and it will keep coming.

But we will also see a pickup in deal flow and checks by end January '23, if not earlier.
Jun 30 28 tweets 7 min read
Notes from Dr. Tariq Banuri's chat on quality, from @ibakarachi faculty retreat.

I never had the pleasure of hearing him speak before. @jehan_ara we must invite him to +92D in Karachi.

I volunteer to moderate a fireside chat with him on talent and tech, tech and talent Dr. Sahib's spoke about quality and made it fun.

Relying on Robert Pirsig's Zen and the art of motor cycle maintenance. A book I grew up seeing around Shehla Baji, maternal aunt, respected and qualified engineer.

It was cool to see him quote it.

Jun 30 4 tweets 1 min read
Middle class? All the work we have done on this subject in the last year and I finally found the right definition yesterday.

The class in our society where mothers eat two day old left over food and children think they do so because they like it.

That is my mom. Three layers given the feedback so far.

Upper middle class. Everyone eats food cooked the same day.

Middle middle class. Mother eat two day old food for dinner.

Lower middle class. Mothers skip dinner. Period.
Jun 29 16 tweets 5 min read
Notes from my chat on non-academic perspectives at @ibakarachi faculty retreat, covering our needs as founders, parents, dreamers and teachers from academia.

Learned a great deal about outlook and teaching philosophy across the 2 day faculty retreat hosted by @EDIBAKarachi. As founders, talent we seek should be comfortable with taking risks, making mistakes and recovering from unexpected shocks.

Mechanics and process are important but intuition is more valuable.

You builds intuition by being wrong. Academic assessment rewards you for being right.
May 26 5 tweets 1 min read
I don't have any pictures together from our days in New York.

I had work, out of city, was mostly broke and missed my graduation ceremony.

Because billable hours were more important.

Same for Broadway plays or a long run, Riverside.

At 29, I didn't think it mattered. Don't get me wrong. It wasn't a hard life. I did what I wanted to do.

I read oodles of papers hidden in the stacks. Spent hours modeling Excel in breakout rooms. Placed limit orders for trades at 4 am.

Discovered tapas on Amsterdam, Matrix and Episode One in all their glory.
May 26 10 tweets 3 min read
As a founder who lived through '00 dot com and '08 GFC crashes I only have one advise for fellow founders in Q2 '22.

Do not take personal or credit card debt to cover payroll or office expenses.

You either have the cash or you don't. Don't get creative with basics. I know you are sharper, smarter, more driven and hard working than I was.

It will take you maybe a third of the time it took me to do things. So here is a metric.

It took me 10 years to pay down my '00 debt. I am still paying down my '08 one.

1/3 * 14 years. Not really fun.
May 24 11 tweets 4 min read
3 separate founder conversations today.

At 8:30 am. Please don't drink the Kool-Aid. Build value / deliver it before you can/will raise. Also don't count on it.

At 9:00 am. Never take anything I say or do at face value.

At noon. Investors don't owe you anything. Neither do you The real world we live in is more interesting and revealing than the world we observe on Twitter.

Some stuff we see here is make belief. It will never happen to/for us.

Some is posturing. Some is real.

Some is out right psychosis. You need to build your own truth filters.
May 8 27 tweets 7 min read
Understanding valuations in a down market for founders in Pakistan. On request.

Markets are not static. Valuations are not isolated calls. They depend on context. Understand the context.

Here is a simplified guide to the math behind valuation models. There are 6 primary factors that control fund investment valuation models

1. Expected future payoff

2. Founder + Team credibility

3. Opportunity cost. Discount rate.

4. Future dilution. Additional rounds

5. Likely consumer traction

6. Stage of Economic cycle
May 7 17 tweets 3 min read
A thread on tech demos. On request.

I follow the Sun Tzu school of demos.

Best demo are the ones not given.

For context I sold risk software to banking industry for 15 years.

Always focused on solution design, data requirements and regulatory approvals for models. To be fair, we almost always did a demo but we avoided them in first meetings.

The first meeting was all about discovery. We set expectations on day one.

We will not be doing a demo. Our expert needs to understand your needs. Once understood, a demo will be arranged/done.
May 7 22 tweets 6 min read
In Jan 1999, as a fob founder I raised $250,000 from an incubator in Orange County, California.

What started off as an offbeat Christmas eve conversation set the tone for 23 years of my life.

A short thread on funding game across 2 decades and what happens when the music stops. First, things that haven't changed across 20 years.

Connections. Worked in '99. Still work in '22.

It is easiest to raise from investors who know of you or know someone you know.

I worked at @GoldmanSachs, graduated from @Columbia_Biz, traced roots to tech, Bombay + Karachi.
Mar 1 4 tweets 1 min read
I was 18 when I stumbled across Catch-22 by Joseph Heller.

The book made fun of everything I respected. Religion. Pride. Divinity. Righteousness. Service.

My introduction to counter narrative, balance as well as darkness.

If you haven't read it, you should. Rated NC-17. I quote:

"There was only one catch and that was Catch-22.

Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't..."
Feb 7 4 tweets 1 min read
I have said this to my kids once every year for 7 years.

Your competition is not your peer group in your school or your city.

Your competition is someone you have never met in a country you have never heard of who is hungrier and willing to work harder than you are. When you do meet them, they will eat your lunch.

The same is true for industries and sectors waiting to be disrupted.

Just because everyone in the game doesn't want to change the rules, doesn't mean that an outsider won't come in and change the game.

Always remember that.
Feb 5 13 tweets 3 min read
Founders log #1

I know day one was officially 2 days ago, but we have to think about definition.

Day one for me was the day I committed myself to the idea.

It took me 2 years to get here. T + 731.

From original inspiration to final commitment. There was no eureka moment. I knew what I wanted to do. It's a space I have spent 30 years in.

For those of you who know me, you would also know that I represent the 2nd generation.

My father worked in the same space for 50 years. When I look at it, I look at it from 2 sets of eyes.

His and mine.
Jan 28 16 tweets 3 min read
On picking specializations.

The first 2 filters, right at start for me, were fun and bills.

Would I enjoy doing the work? Would it cover my bills?

The top 2 on my list would not cover bills.

I loved writing and teaching, but money didn't add up.

I needed to explore options. If I had to work for a living, specialty I picked must leave enough time for all my other vices.

Writing, teaching, running and any other flavor of month ruling my life at that point.

This implied a business where rack rates didn't apply and you could name your price.
Jan 26 4 tweets 1 min read
My father started have issues with his knees in his 50s. So did many of his friends.

So when my knees started misbehaving, I wasn't really surprised. The surprise was the diagnosis.

As desk jockeys, we don't do enough when it comes to mobility, legs and posture. I had been running pain free for 4 years pre Covid.

Other than the odd hamstring or self inflected injuries there really wasn't a need to see a physiotherapist.

But when I did start seeing the team at @PWC_Physio common causes that led to knee issues wasn't my knee.
Jan 17 4 tweets 2 min read
Post alert. I took the bait.

How big is the retail and trade segment in Pakistan?

A case of lazy data. Thread drops later tonight. Watch this space.

@faizansiddiqi @raza_matin this one is for you. Thank you for Edo @sixtywhine.

@irfanahmad thank you for posing the question. Image Tl;dr;

If your 5-year projected e-commerce retail GMV volume for Pakistan is showing $40, $50, $60 or $80 billion for 2027-28-29 year end, you need help.

Ideally, change your medication, your therapist and the team you are using for building your financial models.

More later.
Dec 7, 2021 15 tweets 5 min read
Estimating market size. A detailed step by step guide / thread🧵

Step #1. Go to @StateBank_Pak site sbp.org.pk/psd/reports/in…

Download all payment systems reports going back to 2018.

Prepare following consolidated table in Excel. Bottom 4 horizontal rows are calculated. The table above can help us calculate growth rate for one full year of data from Jul '19 - Jun '20 and Jul '20 - Jun '21.

Can you extend it back to 2018 so that we can do two years of data and growth rates for above metrics.

Treat this as a homework assignment.
Dec 7, 2021 21 tweets 5 min read
I often help/advise clients on estimating market size.

A recent big one was e-commerce market size in Pakistan that lead to question on methodology I follow.

Here is a more detailed thread on how I go about doing such estimates.

Let's start with a quick summary. a) Start with a world view. Where do you think we are heading?

b) Find credible data. Hard market linked numbers backed by primary research?

c) Validate core assumptions.

d) Generate a range.

e) Calibrate against current and future watermarks.

f) 2 paths to a number.