Disrupting Industries and Creating Opportunities: Insights from MachineLab Ventures Founder Shahjahan Chaudhary

In this exclusive interview with Shahjahan Chaudhary, founder of MachineLab Ventures, a venture studio focused on building the next generation of fintech ventures. Chaudhary shares his background and how his upbringing in Pakistan inspired his desire to bridge the gap between rural and urban areas, as well as between Pakistan and the developed world. He discusses the role of fintech in addressing global challenges and how MachineLab sets itself apart from other fintech accelerators by leveraging a robust tech stack and a deep understanding of profitable business models.

Can you tell us a little bit about your background and how you became interested in fintech and entrepreneurship?

I was born in a village near Okara, a small town in Pakistan’s Punjab province. I wouldn’t say I wasn’t privileged because my grandfather was an educationist and my father was an Aeronautical Engineer. 

The name Punjab means ‘the land of five rivers’ and Punjab has been the fertile centre of many great kingdoms. The birthplace of the Indus Valley Civilisation, Harappa, is about 50km from my birthplace. Punjab has produced some of the greatest minds of the sub-continent: Bulley Shah, Allama Iqbal and Faiz Ahmed Faiz. Guru Nanak, the founder of Sikhism, was a Punjabi and Guatama Buddha spent much time here. University of ancient Takshashila is considered one of the oldest formal universities in the world, and also part of our amazing heritage.

The interesting thing is that Punjab in the 18th century had a literacy rate of close to 100% among both boys and girls. That changed as unfortunately the British got involved in Punjab’s politics. As a proud Punjabi, I spent my summers in villages and noticed the contrast between Pakistan’s big cities and its rural population. So I always had a deep desire to bridge this gap – not only between Pakistan’s (and Punjab’s) cities and villages but also between Pakistan and the rest of the developed world. Entrepreneurship, innovation and building things seemed the obvious route to make an impact.

Over the last two decades, I have invested in many ventures – some successful, some not so successful and some that I would like to forget! I was on the board of Pakistan Software Houses Association (P@SHA) where we setup The Nest I/o, a Google-funded incubator. Later we won the bid to setup the National Incubation Center in Karachi which I led as the Project Director and we accelerated over 100 startups.

We all know money is a great enabler and fintech can potentially address so many of our challenges as a species. And as banks have opened up their licenses for use by fintechs, the opportunities have multiplied in payments, FinOps and embedded finance. Whether its M-Pesa in Africa, TranferWise in Europe or WeChat in China – the world of fintech is transforming all areas of our personal and business lives. I’m very excited to be involved in bringing the bottom 3.5 billion of humanity to the global digital market. 

How did you come up with the idea for MachineLab, and what gap in the market were you hoping to address with this venture?

Banks have the regulatory cover and Banking-as-a-Service companies provide the rails to build digital finance offerings. We’re in the venture-building space focused on customer touchpoints and specific user journeys. We partner with corporate entities, VC firms and ambitious founders to build the next generation of financial ventures powered by this rapidly evolving ecosystem of players.

Can you explain what sets MachineLab apart from other fintech accelerators or incubators?

We’re a venture studio and we have built a robust tech stack over the last 3+ years. We leverage our tech stack and integrations to launch new fintech ventures shaving off months in development time. But we also bring a deep understanding to building business models and use cases that are highly profitable. Having built ventures with multiple customer touchpoints – like digital wallets, kiosks and agent networks – and multiple service offerings – like payments, remittances, and investments – we have developed a reputation for scalability, security and speed.

In your opinion, what are some of the key trends in fintech and entrepreneurship that are shaping the industry right now? 

Every country and region, but also every industry is going to be disrupted by this fintech revolution. In the coming few years you will see every business transform into a fintech business. The internet captured the flow of information and look what happened to the publishing industry. The next transition is the rapid digitisation of the flow of value. It will create new tech giants and kill some of the old guard. It’s an exciting time! 

Can you talk a little bit about some of the most promising fintech startups that you’ve worked with at MachineLab, and what you think sets them apart from their competitors?

Right now there is an abundance of opportunity around the world in the fintech space. As an example, our partner metal.finance is serving immigrants in the US who want to send money back to Africa. Then we’re in the process of launching a digital bank targeting SMEs in Africa. The African continent mostly works on pre-paid utility payments, and there is an opportunity we’re working on to digitise that experience.

We have worked with ENOC in UAE for a kiosk-based system for their customers to do cash-in/cash-out, remittances and access other financial services. MTN is using our tech platform in Syria to manage SIM-issuance and bill payments. There is a neobank project we’re working on that targets families and teens.

The use cases range from remittances, bill payments, and employee cards to e-commerce payment platforms for diversified groups. As I said earlier, the opportunities are endless. We also have a long association with Arbisoft because of which we have a strong interest in travel-tech and edtech. 

How important do you think it is for fintech entrepreneurs to have a deep understanding of the industry they are trying to disrupt, and how do you encourage the startups you work with to develop that understanding?

A lot of innovation happens at the intersection of two or more verticals. Our expertise in fintech only becomes meaningful when we multiply it with the domain expertise of a partner. It’s a fallacy to think that outsiders can innovate best. Sometimes yes, but that’s more the exception than the rule. Insiders with years of experience are a great bet for us. 

And that’s exactly what we look for – either large enterprises or startup founders with deep domain knowledge. We bring expertise in fintech compliance, integrations and engineering, our partners are experts in their own industry and region. That’s a recipe for success. 

Can you speak to the challenges that fintech startups face when trying to scale their businesses, and how MachineLab helps them overcome those challenges?

A lot companies launch wallets with the idea that you will acquire users fast and figure out the business model later. We work with founders to get the business model right from the very beginning. User acquisition and growth is best when married to profitability. Our experience of working in various jurisdictions also helps fintech founders and corporates address compliance and integration questions early and efficiently. Building a fintech venture is hard, building it with blinders is harder. We help our partners see the full picture early so we can make faster progress. 

As a founder and investor, what do you look for when evaluating a potential fintech startup to work with or invest in?

We’re always on the hunt for smart hungry entrepreneurs. What we really like is a combination of deep humility, willingness to grow and attention to detail. So if you have a profitable idea racing through your neutrons about a fintech venture, would love to hear. One thing that is really important is that while tech plays a role, you should always be focused on the customer. Be obsessed. And never forget that you are starting the business to make money: for yourself and your partners. So don’t drink your own kool-aid: build something that people love and want to pay for. 

What advice would you give to aspiring fintech entrepreneurs who are just starting out and hoping to build successful businesses in this industry?

The best founders are basically great learners. Continuous learning about your customers, your market and your competitors requires a deep sense of humility and curiosity. When an entrepreneur sees his business being stuck at a certain point, it’s mostly not about the business. It’s the founder and his or her own mental blocks. Success comes from a combination of capability and character. Founders should always focus on improving, changing and up-skilling themselves. The recipe for success is simple: become the person who will succeed. 

Looking ahead to the future of fintech and entrepreneurship, what are you most excited about, and what do you think will be the biggest opportunities and challenges for the industry in the coming years?

Alvin Toffler wrote a book called FurtureShock in 1970. If you haven’t read it, you should because it’s still relevant. The future is coming at us at a dizzying pace and this pace of change is getting faster and faster. Just being alive at a time like this is filled with adventure and opportunity. Change has a side effect: fear. So while I think it’s important to nudge humanity away from a tech dystopia, this digital-genetic revolution can also lead to a newly empowered humanity. I think we should all play our part in helping the best of humanity flourish and win.