With a massive young, English-speaking population and a fast-growing, tech-savvy middle class, Pakistan has many ingredients for a thriving start-up ecosystem. So why is it only now starting to live up to its entrepreneurial potential, and where is it headed?

In this episode of the McKinsey on Start-ups podcast, McKinsey executive editor Daniel Eisenberg speaks with investor Aatif Atwan and McKinsey Partner Abdur-Rahim Syed about the burgeoning start-up ecosystem in Pakistan. An edited transcript of their conversation, which took place earlier this year, follows.