Eddie Bearnot is the Director of Operations at Direct Fresh- Bangladesh’s first premium online grocery store and wholesale supplier. Prior to Direct Fresh, Eddie worked at Innovations for Poverty Action as a Project Associate and at the World Policy Journal as Contributing Author. Before moving to Bangladesh, he ran a restaurant in Washington DC, USA. Eddie is passionate about startups, technology and community and is actively involved with the startup community in Dhaka.
One rainy afternoon this fall I sat with Eddie at the Direct Fresh Headquarter in Banani to delve into the details of his journey as an entrepreneur and to learn more about Direct Fresh as a startup. Enjoy!
This might sound cliché but at a certain point I got frustrated with the development sector due to its short term planning and publication bias. I’m passionate about sustainable growth and want to contribute to something valuable and lasting to society.
Tell us a bit about yourself and your company Direct Fresh.
My name is Eddie Bearnot. I am the Director of Operations at Direct Fresh. Originally from New York, I went to Carleton College in Minnesota. I then moved back to New York to work in Finance, and later to Washington DC where I ran a restaurant and did some consulting.
I moved to Bangladesh in February 2012 to work for Innovations for Poverty Action on a project, training female garments workers to become managers. While I believe the research we were doing was and is important, and that the women and factories we worked with benefited from our project, I was not convinced that it was the best way to have a scalable and long-term impact on Bangladesh. I thought there were a lot of social needs that could be addressed though business that would be sustainable for a longer period of time. Even when I would leave Bangladesh the company could provide employment and service with a social impact. That’s how and why I got involved with Direct Fresh.
Direct Fresh is an online grocery store and also a complete procurement solution for institutions. We do both B2B and B2C services. The B2B services includes hotels, expatriate clubs, restaurants and major superstores. Our B2C solution is to provide the customers all kinds of grocery items from local vegetables, fruits, and fish to imported meats and cheeses from around the world.
While I believe the research we were doing was and is important, and that the women and factories we worked with benefited from our project, I was not convinced that it was the best way to have a scalable and long-term impact on Bangladesh. I thought there were a lot of social needs that could be addressed though business that would be sustainable for a longer period of time.
How did you get the idea?
There were a couple of ideas. We all know that grocery shopping in Bangladesh is difficult, especially for working professionals and for expatriates. Expatriates are not familiar with local products or customs like how to negotiate in the bazar. For the working parents and students it can be hard to find time for grocery shopping. So we offer products which the expatriates are familiar with at a very reasonable fixed price and for the Bangladeshi working parents and students we offer a very easy online solution so that they don’t need to waste their time in traffic.
Food safety is a critical issue in Bangladesh with growing demand among consumers for safe food. The use of formalin, carbide, pesticides, and other harmful chemicals in the supply chain of food is widespread. We offer customers formalin free fruit, vegetables and fish by working directly with growers, farmers, manufactures and importers. So our arrangements give a unique value proposition. A lot of customers use us for this reason.
How do you maintain this level of food safety?
There’s a range of products which we farm ourselves. There’s a range of products which we collect directly from farmers. The adulteration in food chains actually happens in the process of transportation and resale by middle-men, so we transport our products ourselves. We also import a lot of fruits and vegetables from Thailand, Europe, Bhutan and other places. We also wash all of our produced according to UN-FAO guidelines before delivering it, so that any residual formalin that might be in the product is removed.
What are the major obstacles you have faced?
We face a number of obstacles every day. Trying to maintain our own logistics is challenging as we handle our own logistics. When delivering to customers in Bangladesh there are issues like traffic, vehicle breakdown, and vehicle maintenance, narrow roads, under construction roads and other logistics issues.
Another very big obstacle is getting users to shop online. E-commerce is still in its infancy in Bangladesh. Thus getting Bangladeshi people to shop online is still very hard. In China 9% people shop online, in India it is 1% but in Bangladesh I bet it is still below 0.01%.
We have other challenges like-getting consumers who are very price sensitive to pay slightly more for premium quality products. Part of the issue is that food safety issue in Bangladesh can’t be solved unless customers are willing to pay a little more for foods which are chemical free. But right now the market is incredibly price sensitive.
Another very big obstacle is getting users to shop online. E-commerce is still in its infancy in Bangladesh. Thus getting Bangladeshi people to shop online is still very hard. In China 9% people shop online, in India it is 1% but in Bangladesh I bet it is still below 0.01%.
Why Bangladesh?
I have been reading about Bangladesh since High School. Bangladesh is one of the best case studies for successful development in terms of social indicators over last 20 years like infant mortality rate, maternal mortality and life expectancy. There is a lot of cutting edge research being done here at institutions like iccdr,b. In college I did a lot of research on micro-finance and micro lending, and I read and was inspired by all of Dr. Yunus’ books.
Bangladesh is the birthplace of oral rehydration solution (ORS) which has saved hundreds of millions of lives and it is also the birthplace of BRAC and Grameen Bank. So Bangladesh is really a fascinating, exciting, and wonderful place to be. I had opportunities to work in other countries but I chose Bangladesh and I’m really happy about that.
Bangladesh is the birthplace of oral rehydration solution (ORS) which has saved hundreds of millions of lives and it is also the birthplace of BRAC and Grameen Bank. So Bangladesh is really a fascinating, exciting, and wonderful place to be.
Market access is one of the major challenges for any startup. How did you handle that challenge at Direct Fresh?
We started with a very critical market segmentation approach. We focused in the expatriate community like people working for embassies, and high end customers like multinational companies, NGOs, UN, World Bank and sometimes garments etc. We targeted areas like Gulshan, Banani, Baridhara, Dhanmondi, Uttara and Bashundhara. The residents of these areas are already looking for these products.
But we are now working hard to bring more Bangladeshi customers onto our platform. We are thinking about launching a Bengali website, offering discounts, expanding our delivering areas. But for now 80% of our customers are expatriate or non-resident Bangladeshis.
What was your motivation to become an entrepreneur?
My love for figuring out sustainable solutions to critical problems was the single most powerful motivator. This might sound cliché but at a certain point I got frustrated with the development sector due to its short term planning and publication bias. I’m passionate about sustainable growth and want to contribute to something valuable and lasting to society.
Do you work with the local entrepreneurs in Bangladesh?
One of the most incredible things about Bangladesh is that it is an environment ripe for entrepreneurship. There are lots of opportunities to start new ventures and make things grow. I think Future StartUp is a great example of that - people can, even with full time jobs or studies, initiate something of their own. We work with a lot of entrepreneurs. We work with small farmers, individual manufactures and local entrepreneurs who can help us in procurement and marketing ourselves.
Do you have any major failures along the way?
We haven’t faced any major failures at Direct Fresh yet, but we have had our fair share of setbacks. For example we struggled to sell some products, which expired. But these types of problems are temporary.
We are still a brand new company, and we are learning from our mistakes every day. We have been operating for only 10 months so we feel like as long as we treat every mistake that we make as a learning opportunity it is not a failure but a minor setback.
What is your personal perspective about failure?
I think failure is less an objective description and more a subjective perception. Something can only be called a failure if you've done trying. But if you are still trying you haven’t failed.
If you are feeling that you are failing then you have to reflect on what you are doing and try to understand what isn't going right. From there you can figure out what you have to do. You may need to change your strategy, change your team or change or modify your goals. Failure is not a final destination.
I think failure is less an objective description and more a subjective perception. Something can only be called a failure if you've done trying. But if you are still trying you haven’t failed.
05 lessons you have learned from your journey to date.
What are your future plans for Direct Fresh?
We are really excited about expanding our range of products in terms of farming more foods by ourselves, importing more variety of foods, building mobile applications, tools where people can grab all the ingredients they need for preparing a recipe.
What do you think what it takes to become a successful entrepreneur?
Hard work. That’s it! Hard work along with good research and support from a good team.
What is your advice for future entrepreneurs?
Focus. There will be a lot of good ideas but focus on the one which is feasible and profitable. Do your research before jumping in.
What book are you reading now? Tell us few names of your favorite books.
I've read a lot of great fiction recently. Shantaram is excellent – a great book about a foreigner’s adventure in South Asia. From a philosophical perceptive there’s a book which was really helpful to me called Letters to Young Poet by Rainer Maria Rilke. Delivering Happiness is a book that every prospective entrepreneur should read. Lastly I would say the Tipping Point by Malcolm Gladwell is a great read for anyone interested in how good ideas spread.
Credits: Interview by Maeesha Tahsin | Edited by Samantha Morshed & Ruhul Kader
