Jessica Lessin of the Information has written a fantastic article on the idea that it will be super hard to build a tech startup in the Silicon Valley in the coming years because big corporations are getting smarter and leaving little room for small companies to outperform them. She is calling it the end of tech startups!
However, the scenario in Bangladesh is just the opposite. There are countless industries that are not digital yet. There are problems that need sustainable solutions. There are sectors that have not experienced an innovation for ages. There are companies that are reluctant to change but still leading in the market.
Take bKash, a mobile-money upstart that has disrupted the entire mobile banking sector before the eyes of all banks and telecoms.
Apart from bKash, Fintech has other possibilities. Helping people to choose a better financial product is one option which SmartKompare and few other similar companies are trying to do but this is an entirely untapped industry to explore. There is localized peer to peer loan marketplace, crowdfunding and more.
Take health care. A host of new upstarts has started operation in this space. Doctorola, Jeeon, Rx71, Aponjon, Panacea and a couple of other medicine and health tech startups will transform the health care industry in Bangladesh.
Most of these startups are trying to solve problems around access to health care and better living. Many of these startups are working hard to bring innovation to the healthcare delivery system. However, there are more opportunities in this sector. Innovation around less costly treatment, using data in health care and other substantial innovation will change the face of healthcare entirely.
Interestingly, none of the incumbent health care giants in Bangladesh is trying any of these businesses. These startups are founded by outsiders and visionaries. This is because incumbents don’t see opportunities in these areas. They are too big to innovate.
Over the time, when these upstarts will take over some of the businesses of incumbents, only then these companies will start thinking differently.
We can expect that many of today’s health giants will buy one of these startups or invest into some of these upstarts.
This is true across the board.
Then there are sectors that are not digital yet. Take legal services industry. It is a massive industry. But almost on one is trying to introduce tech to this space. Whoever move fast in this space will enjoy the huge return.
Local SaaS business has been here for ages but never evolved. Ample opportunities are there to introduce new services. Localization with proper contextual understanding will result in huge opportunity. But it has to be built after properly understanding a local problem and that addresses a solid pain point.
Less costly but still a tough job
Starting a company is today’s world is a lot easier. Technology and easy distribution channels have driven down the cost of starting businesses. This is an opportunity available to both big and small companies alike. But big corporations are not designed for fast decision making and nimbler operation. They are slow, complacent, and bureaucratic in making important decisions. It is hard for them to innovate.
It is true that there are companies that are doing pretty well like PRAN or Akij but still they don’t see tech as something that can fundamentally shape the game. But the truth is that tech will define many industries in the coming years. Small upstarts will topple many big incumbents. You can see the example of Toma or Runner depending on BDcabs.
Startups will thrive in Bangladesh for more than one reason. It is not only that many of these startups will take the places of incumbents. The market is also largely unexplored. There is a saying: if you want to build a big company take an industry which is not digital today and digitize it. If you consider this, Bangladesh is a gold mine for startups.
Why big corporations will fail
However, the question remains, why big corporations, companies like Robi, GP or Beximco or Square or Akij will not be able to dominate these emerging sectors or will be the mere subjects of startups’ attack. There are enough reasons to that.
These companies, unlike many giants in the west, fundamentally slow in nature. In order to make a decision in these companies, you have to move through layers of bureaucracy. They are fundamentally risk averse. At the same time, they are not capable of thinking and acting leaner and meaner and are not in good terms with the technologies that upstarts are playing with. The collaboration within the organization is broken. They are largely complacent and will be the victims of their own success. It is hard for a big company to change and adapt fast.
Contrary to that, startups are largely different organizations. They often come up with new and better technologies that incumbents seldom get to use. They are lean and small and can launch and test faster. Internal communications and collaboration in startups are naturally better than big corporations. Startups can make decisions faster and can change and adapt faster. Since they can test, launch and decide faster, they can build faster as well which give them an extra edge over the incumbents.
Most important, startups often come from sectors or spaces that big companies seldom take seriously and often consider not potential enough to bet big.
We have seen big companies starting businesses and tech ventures out of their usual comfort zones. For instance, Cell Bazar, now Ekhanei, by GP or BDticket by Robi and there are other examples as well. Many of these initiatives are still running but people already have written them off.
Harder and bolder
However, it will not be easy to build startups. The abundance of opportunities doesn’t mean that you can easily build one. It means if you try hard, apply your creativity, and work harder than others you have a chance.
Bangladesh startup ecosystem is still in its infancy. The startups we see, the people we come across and the limitations and obstacles we face all are very early and insignificant in any measure to judge or predict our future.
If you are considering starting a company, don’t get disheartened by some bubble talk people are picking from across the ocean, or by some startup guru who never started or built a company or some investor who never made an investment. There are people who have built or are building real companies, fighting the real fight, find them out, hang out with them and let the rest go.
The most important thing of a startup is startup itself. Build your startup. Instead of running behind easy money and funding, take care of your fundamentals. Don’t blame that there are not enough funding opportunities because it is true, there is not.
Given all the opportunities and advantage over incumbents, big corporations still have a better chance over a startup in pulling off an idea, investing in something they see value in and going further even when it does not make money.
For startups, it will be difficult.
But if you have a good idea, if you apply your ingenuity, if you work harder there are plenty of opportunities and you have a chance.