Entrepreneurship is a journey without map: Q & A with Rashedul Karim Munna

Rashedul-Karim-Munna

Rashedul-Karim-Munna

Rashedul Karim Munna is no stranger in the Jute industry of Bangladesh. He is one of the most vocal personalities who have been talking & trying tirelessly to save and improve this sector for years. Munna is neither a stranger in the world of taking risk and making ideas happen. He left his secure job at NGO, defied decision of his family for safe and secure career to start his own venture. It was an immensely risky and hard decision to make but Munna took the challenge and proved that if we work hard on our passion we can move mountain. We believe Munna’s journey will help you to make your mind to take that uncharted path and leave a trail for generations. ~Ruhul Kader

Ruhul Kader: Please briefly tell us about yourself and your way to becoming an entrepreneur. 

Rashedul Karim Munn: I’m Rashedul Karim Munna. In my family I’m the fourth of my five siblings. My father was a Government service holder. I had a quite interesting childhood. I was born in Sylhet, spent my childhood in Narsingdi and got education in Dhaka due to the nature of the job of my father. Since my childhood I was very much in doing something by myself. During my school and college life I was heavily involved with debate, recitation, speech contest and other extracurricular activities. I was involved with Rotary club and Brottachary movement as well. All these experiences helped me to develop a very good people skill. In class nine I stood first in whole school which was a big achievement for me at that age. This is when, for the first time of my life, I realized that I love doing things by myself. One thing leads to another and I started in the world of entrepreneurship in later life.

I founded Creation Private Ltd in 1997. I started my own venture because I wanted to solve problem. After my graduation I started working for an NGO. My job responsibility was to encourage and train people to build and channel their capacity to make something valuable. But scope of helping people was very limited. Although we could train people, help them to produce varieties of products but we could not help them to sell those products. Which means a large part of my sincere hard work was resulting in wastage. It was disappointing. Making a quality product is hard work but selling a product is way harder. Frustrated with result I started to think a way out to contribute more. That’s how the idea of starting something my own came to my mind.

However, it was not an easy journey. In my family, due to the legacy of secure job of my father, having a job was more appreciated than becoming an entrepreneur. Like all other middle class families of Bangladesh business was not anything close to favorite professions to my family. One of the reasons is obviously risk. Moreover, in 1997 business was never a very socially respected profession as well. My parent discouraged me to start business not because that they wanted me to do something limited rather they wanted me to do something safe and secure than business.

I started my own venture because I wanted to solve problem. 

What is your passion?

Munna: I’m passionate about doing something that would not make money only but benefit people, create job and contribute to something bigger than me as well.

You studied management at the University of Dhaka and worked at an international NGO and then you gave up everything to become an entrepreneur. We all know that entrepreneurship is a risky and uncertain path to take. What was your underlying motivation behind making the leap?

Munna: I take a deep satisfaction in supporting people. My involvement with NGO was largely derived from that motivation as well. But after working with NGO for couple of months I found it very limiting. It was way more preposterous and convoluted than what I thought. NGOs run with the support of a long array of stakeholders every one having different priorities. The operation of an NGO and what they do is highly dependent on the priorities of their stakeholders. This makes scope of doing meaningful work very limited and uncertain. You can’t do what is needed unless every other people think so as well. But I wanted to do more. 

That’s what really motivated me to start my own so that I can try to do more. I started with products that have something to offer to our society. Even today when I select product, or think of a business I try to go through a list of criteria. I prefer labor intensive, local raw material based business that can be scaled with time.

Creation-Pvt-Ltd

Even today when I select product, or think of a business I try to go through a list of criteria. I prefer labor intensive, local raw material based business that can be scaled with time.

Tell us about Creation Private Ltd-struggles, people and challenges.

Munna: We started in a rather lean approach. As we had capital constraint we decided to choose a product that could be produced and marketed with a small capital and that could be produced from local raw materials as well. After much thought, we started with handmade paper. At the beginning we’re only selling handmade paper sheet. I can remember after 3 months I realized that we’re making very little money from selling individual paper sheet. So, we started to think how we can add value to this handmade paper and earn more. After conducting a small research we launched a range of customized products i.e. gift cards, invitation cards, and greetings cards, from handmade paper. This was a huge leap for us. This simple tweak in product resulted in huge profit increase. Before making this change we’re hardly making BDT 1 or 2 profits on per sheet but when we started making and selling cards our profits increased 10 times. This time we were not selling paper but design.

For the time being everything was going fine. We’re doing well but business was not growing in-terms of size. It made me very worried and I started to look for a way out. After much juggling we came to a decision that we need to diversify and add more products in our shelf. That’s when we started working on jute. Initially I considered two products jute and leather for scaling. But due to complex supply chain, especially initial process of raw materials, I dropped leather and started working on jute diversified products.

In Bangladesh, we have a quite old jute products manufacturing sector having many jute mils and factories. But these mills and factories were set up mainly for the purpose of producing packaging items for rice, wheat etc. But diversification of jute has never happened at that level. From the very beginning I knew I would never set up a jute mill. I was thinking about jute products, specially diversified, which I could manufacture and export.

We started in 1997 with a 4/5 members management team and with a team of 25 female workers. We had office and a shop in eastern plaza. After couple of months we opened 3 more shops. But again growth was very slow. I felt that if I do something shop based I would, at best, become an owner of an 8-10 shops after few years. It was a terrifying dream! However, I took it as an opportunity to explore a new avenue. From very beginning of my business life I always wanted to be an exporter someday. Although I was passionate about finding a way but it was a huge challenge. I had to learn every thing by myself.

I started with attending international trade fairs as visitor and exhibitor with the support of export promotion bureau. I collected market intelligence from those fairs. I tried to find out what could be done, how existing players in market are doing things and what we could come up with to compete. I observed other players in market, talked to people, visited factories and all.

We struggled a lot for first two years. Along with other challenges low profit margin was a huge burden. I did side projects i.e. events, design etc. for years to support my main business. I was doing events and putting whatever money I earned in buying ticket for international fairs.

However, the good thing was that I understood the reality. The day I decided to become an export oriented company I knew I have to visit countries. I have to understand challenges in international market, existing players, products and designs.

In 1997 I visited Europe and attended Frankfort international trade fair as a visitor. It was an audacious step in a sense that new entrepreneurs seldom take such steps. I think understanding existing players in international market is critical for success. And attending international fairs and meeting people over there is the best way to do that.

Between 1997 and 2001 I visited 4 -5 countries every year. Back then we were always in financial crisis. So, this expense was a huge investment for us. But I tried to do it because it delivered. Till today I attended at least 60 international fairs as exhibitor and also attended as visitor in more than 20 fairs.

I think one should not worry about capital if he wants to do something innovative. Instead you should focus on your strength, product quality, worker skill development, design and R & D.

We started with a capital of around 50k to 1 lakh BDT. Initially we only served in local market. From the year of 1998 we started to get some export order. Now we export to almost 14 European countries regularly. We are exporting to Japan, UK, and USA as well.

One of our best breakthrough experiences is working with Toyota Toso. In 1999 Japanese TV channel NSK ran a story on us that caught attention of Toyota Toso’s chief. He asked his Singapore office to contact with us that subsequently led us to working with Toyota Toso. We worked with Toyota Toso for almost 5 years. It helped us in creating our brand value and increasing our credibility to international buyers as well.

I think to make a new product successful it’s very much important that your product is unique and remarkable. If you follow someone else’s recipe then it’s quite impossible to get that level of attention to break the noise.

Right now, we’re making home textile products, household products, luxurious packaging products, fancy packaging products, hobby products, indoor gardening and outdoor gardening products etc. Instead of making and selling traditional products we develop more value added products. We have put great emphasize on R&D, product development, and design. We always try to make best use of our existing raw materials through better process and innovation which helped us to make a place in international market.

I think to make a new product successful it’s very much important that your product is unique and remarkable. If you follow someone else’s recipe then it’s quite impossible to get that level of attention to break the noise.

You said you started with 25 female workers. You started with full factory setup, right?

Munna: No. We designed a contract basis work station. It was not a full factory setup. We trained people to work with us and we paid them on per unit production.

Why female workers?

Munna: We’re making craft products. One of the reasons is that nature of work itself was female friendly. Male workers were seldom attracted to do such type of jobs. Besides, while the nature of job is contractual and you are making craft products female workers are more skilled and dependable than male workers. Using female workforce in productive sector was one of our concerns as well. We thought that female workers often don’t get sufficient opportunity to work and this could be a good opportunity for them.

Why jute not any other sector?

Munna: I said earlier I always wanted to start a business that is based on our local raw materials. We have a serious shortage of local raw materials that I realized when I was trying to expand our business. Take a look around you and you will see the reality. We have very few raw materials with which we could manufacture at volume and export.

Even our garment sector is highly dependent on import. Taking this scenario in consideration if we want to do business based on local raw material our options are limited. We have few choices i.e. black goat and jute. We have clay too but our firing technology is very poor. Soil is a very good thing to work but due to firing technology it’s tough. We have hand-loom as well but it’s very uncomfortable due to color and inability to scale.

But Jute is an exception. We have huge supply of raw material; Bangladesh is the second largest producer of raw jute, and a comparatively simple supply chain. I thought this sector has a future.

Creation-Pvt.-LtdCreation-Pvt.-Ltd

Jute is an exception. We have huge supply of raw material; Bangladesh is the second largest producer of raw jute, and a comparatively simple supply chain. I thought this sector has a future.

Have you ever thought before starting that jute is going to be a very potential sector for Bangladesh, especially when you were starting up?

Munna: Yes. The discussion that we have now in international market regarding Eco-friendly products was already going on back then. May be intensity was not same. But I was seeing a pattern. People were leaning towards recycled products and environmentally friendly products. The growth however became intense after 2000 in consumer level. I thought as we have the best raw materials why we could not take this chance.

Unfortunately, we failed significantly to take a good share of international market. We are failing still today. We are failing because we are missing market intelligence, compromising quality and falling short in meeting international standard. We need R & D, product development, and design. On the other hand, India is doing very well for last couple of years. I believe if anybody works hard and ensure quality than it is doable.

I started with a thought that instead of waiting for someone to come forward and help us why not start with what we have. Definitely, I took help from bank although bank only supports when they are convinced of the security of their money. This is not a difficult issue but initially it’s tough because bank normally doesn’t trust new comers. But if one can build trust it becomes easy and simple.

In Bangladesh we are in a transition. Our second generation is taking hold of our business and we’re already shifting to industrialization from agriculture dominant economy. We are still a very young nation in a sense that in India 5th generation is running their business. Business is an attitude, behavior. Developing that kind of attitude will take some time.

Last year jute was the second largest sector in export for us, right after garments. We exported an amount of 1.03 billion dollar of jute. Jute is the only sector that we can take to 5-7 billion dollar of value if we want. And future destination of jute is diversification. If we can do that it will create employment, bring foreign currency and make sustainable development possible.

How many people work at Creation Pvt. Ltd. now?

Munna: Right now 550 people are working at our factory. We have two factories one is located in Narsingdi BISIC and another in Tangy. Besides, we work in three different districts. We recruit contract basis in those areas. Almost 1000 people are working with us in those three districts.

What was your business size back then and what it is now?

Munna: We started with BDT 50 thousand to 1 lakh and now we are exporting in millions. Our focus on export helped us a lot to achieve this scale. If we were focusing on local market growing this much would be very difficult.

Market access is a big challenge for startups. How startups can tackle this challenge?

Munna: I consider marketing as one of the most challenging jobs for any entrepreneur regardless of location. In local market we have a very bad credit culture. Nobody pays on time which is very detrimental for a startup.

On the other hand, export is way more challenging. It starts with a debate on what comes first: strong production facility or marketing? Problem is that you can’t export 10, 20, or 50 pieces. Due to large volume sale, price often becomes only powerful competitive factors. Tackling price competition is one of the major challenges for exporters. For instance, people who are exporting on regular basis they are running their production for 26 days in a month for whole year that gives them advantage of economies of scale. Now, if you are a new comer and your volume of production is not as big as your competitor and you produce infrequently it means your cost would go higher and you would not be able to compete in market with someone who is producing big quantity on a regular basis.

Initially, it was a serious setback for us. What we did: we calculated price by considering that our factory was running for 26 days but we’re only running for 11 days in a month. It means initially we were losing money. It took us 3 years to reach at break-even in export.

Due to price competition making loads of profit by selling less is almost impossible in export. You make profit by selling more. Without container you can’t be an exporter. So, while thinking of exporting you have to think about large volume, innovative product and competitive price.

Many people around the world don’t know about Bangladesh. Whatever few people know about us know bad things about us. There is no good news of Bangladesh out there. Even many people don’t know we make clothing for them. So, branding is a major problem for us in international market as well.

To me however visiting international fairs and meeting people is important and I think our entrepreneurs should spend some serious amount of time in market development.

Briefly describe few challenges you faced at the beginning.

Munna: Entrepreneurship is a journey without map. Although I started with degrees from best the University of the Country but it was not sufficient to become an entrepreneur. I lacked character and attitude. Money is not the main investment for entrepreneurs. Becoming entrepreneurial and absorbing the whole process is the major challenge which I lacked because I had no entrepreneur before me in my family. This gave me hard time. I had to learn every thing by doing.

Second challenge was limited capital. Because of capital scarcity we could not start something big. However, this was good for me in a sense that I always tried to make best use of whatever resources we had. It made me creative as well.

Understanding export was a major challenge as well. When I decided to become an exporter it was a whole new world to me. Everything in export market is different than that of local market. I had to learn all the things from the beginning.

Saying all these so far I can recall building an organization from scratch was the most arduous challenges of all. It means putting together all the parts starting from people, production, money, team, process, system and culture.

What it takes to become a successful entrepreneur?

Munna: Trust. I have seen many of our entrepreneurs’ compromising with trust only for short term gain. But when you do that it is detrimental for your growth and future.

Everything is process. Nothing happens overnight. In international market you don’t get business in a day. Buyers give it to you one by one. It takes almost 2-3 years to roll out all these things. When this is the scenario trust and dependability will always be rewarded in long run. If possible add your capacity with trust to build a great combination. It will lead you to new opportunities, new avenues and will make your success more feasible.

If a young person comes to you and ask for advice on starting what would you tell him?

Munna: Love what you do and absorb it within. Have a vision and work hard for achieving that. Entrepreneurship is not a part time job. You have to eat, drink, sleep and live it.

Building an organization from scratch was the most arduous challenges of all. It means putting together all the parts starting from people, production, money, team, process, system and culture.

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