Waseem Alim co-founded Chaldal in 2013 and serves as its Chief Executive Officer. Before Chaldal, Waseem worked as Director of Product Strategy at Sigfig, a Silicon Valley-based financial technology startup. At Sigfig, he led the development of its flagship product - a web-based portfolio management software now used by over 500,000 people. Waseem graduated from the Wharton School, University of Pennsylvania with a degree in Finance and Entrepreneurship.
How much has Chaldal evolved as a company?
We are now a team of around 300 people. When we started in 2013 we’re just a team of five people. Over the years, we have developed process and system. We work hard to make sure that everyone is in line. Fingerprint attendance activates the software in their phones. We are building technology in order to control more technology.
We have software to monitor wastage. We have software to predict how many vegetables we will sell the next day. We have software to mark things that are delivered.
There is a lot of software and you know that is the core. As I said, we want to build a business that scales and software is the way to do that.
We have a call center now. When we started we never thought that we would need a call center! We have CCTV in our warehouses.
We have algorithms written to detect fraud on credit card transaction. We have algorithms to lock phones if phones get stolen. We have software to monitor how much fuel is taken.
There is even more to do. We have software for planning delivery routes. If you have 3 routes where delivery has to be made in an hour, it is very easy for you to calculate but if you have 100 (routes), then human processing power cannot take that. You need software there.
We are applying software to plan delivery routes. We are mapping out entire Dhaka (city). Plot by plot we find out longitude and latitude so that it appears on our deliveryman’s map properly and we can save 10 minutes of his time.
Storing is a complex mechanism. We have tried to apply innovative ideas in storing.
For perishables, you want to do a first in and first out or else they expire and there are other issues. Rice is high volume item. It is also difficult to move it around. We have actually thought about that process in-depth. We have put a lot of thinking into it.
It is not only software, in terms of accounts, in terms of processes, we have grown so much. I cannot say how much we’ve improved and I cannot give a quantity to it. In terms of deliveries, we have grown from 2 deliveries a day to 600 deliveries, which is 300 times.
However, the most critical measurement is our future potential. At that time, when we used to deliver 2, what was our potential and what is our potential now that we deliver 600 orders.
One critical difference though is that at this point even if we do 6000 orders, we wouldn’t fail. Our system is pretty good. But at that point even if we did 15 orders a day, we would fail.
How much Chaldal has evolved is a hard question to answer but I can say that we are doing things that we never imagined we’d do ever.
Business-wise, how big is Chaldal now?
We now deliver 600 orders per day.
What is the average basket size?
20 dollars. It’s not bad, not great either. There are companies that are doing 30,000 orders.
I can see women are working here.
We have realized that women are better workers than guys. At least for packaging and kind of work they are doing at Chaldal.
They say nothing prepares you for a startup CEO job. Tell us about your experience as a CEO.
It is pretty interesting and challenging. There are too many decisions to make and too many variables to look after.
Hardest day for me as a CEO was when I missed my marriage anniversary because I had to go to deliver an order. That was my 1st marriage anniversary. Everyone was waiting for me to celebrate. This was right after I came back from the US. Zia had to go to India. We got like 25 orders all over from Dhaka. We were operating out of an apartment which was half of this apartment [indicating the room we’re sitting].
The whole day all I have been doing was taking calls and responding to calls. Then I saw that one of the cars went to deliver in Jatrabari, so they were stuck there for a while. The model back then was that someone would get the products from the market. I would sort it in the office and send it for delivery. I used to oversee sorting to prevent mistakes. But now that one of our cars is stuck in Jatrabari and we have to deliver on time we decided otherwise. I told the acquirer to sort the product on the go and I’ll drive. We went to a house, they made us wait for like 2 hours. The delivery man was up there; the customer was like counting and it took a while.
I’ve been driving around all the day. At 8pm when my wife was picking me up from the office I got a call, ‘I ordered for 5kg rice and you did not deliver it’. I told my wife I have to do this. So I went to Gulshan-1 bazaar, bought 5kg of rice and made the delivery.
Then I got another call, ‘Sir, the car has broken down’ and this was 9.30 pm in the night. It had broken down in Uttarkhan or Dokkhinkhan; I did not even know the area. I was like I can’t drive anymore; I’ll get back to you. Then I call up one of my friends; he ended up joining Chaldal later on.
So my friend and I went to that place at 11:00 pm. The road was the worst I’ve seen in my life. I think it rained and it was full of mud. At first, we tried with ropes but that did not work. So we had to put two chains. I finally got back home at 2:00 am. I started that day at 8:00 am. That was my hardest day in Chaldal. I hope I don’t ever have to do that again.
This is a good example for answering how nothing prepares you for a startup CEO job. As a CEO, when you are managing a five-person team, you are basically leading by being in the front, by doing the most. You work hard, harder than anyone else, so that your team stays motivated.
The second level is that you need to master the process. Once your startup is growing you need to start scaling up certain things. I think there are some very good articles on this. You start as a worker, and then you become a coordinator. When you are a coordinator you are setting process and then you become a leader and train the other coordinators.
My role right now is to identify the risks. What are the biggest risks for the company and how can we tackle them? Now I’m the boss. Initially, you cannot be that because then people won’t call you but right now you have to be that authority whose authority cannot be disputed. That’s my role. I don’t know what is next.
I feel like a cheerleader like this team is doing well; congrats, clap. There are things that I do personally. I have the ultimate call on what software is being made in the company. I also make the ultimate call on what sectors to put money in.
I still get calls at night like ‘sir, the prices of cauliflower have increased by 5 taka’ as they need approval and they are buying cauliflower at 4:00 am in the morning. Sometimes someone is sleeping and then I get the call, I answer by saying buy it. I always pick my calls even if it’s at 4:00 am in the morning and they know it is fine to call me.
As a CEO you must be very busy, do you have a process for learning things? How do you operate as a CEO?
It is not a busy job. My schedule is emptier than 90% of people in the company.
I try to keep learning as an ongoing process. I also work hard to keep things simple. You can never schedule a meeting with me one week down the line. You can schedule it the next day. I’ll take meetings tomorrow. I’ll take meetings today. If someone calls me right now for a meeting, I’ll be like come to Uttara. But I will never take a meeting with someone who wants to do it 5 days later unless it is an event or something that needs to be pre-scheduled.
I try very consciously not to schedule meetings too out there. I try to keep my schedule free.
My learning capacity has increased. I know what not to do. I know what not to read.
I’m still bad at managing myself. I still use Facebook a lot. I also read a lot of crap articles, mainly because it is a way of procrastination. But these days, I actually get time to read more, to do more, to think more deeply.
Grocery is not a solved problem in the world. That’s where all our thinking and decisions go. We do a lot of research around cutting edge of this industry.
Then I can just walk around and see. After this interview, I will go to the graphics design room because they have been designing something and I want to look at it.
How do you manage your team?
I think there are at least 10 people in the company who directly report to me. I try not to manage them. I don’t manage them in the sense that if they have anything to talk to me or need my feedback they email me. I discourage calls. I don’t get that many calls. They email me and I respond back.
People, who report to me, don’t have set holidays and set working hours. I try to give everyone metrics. If you hit the metric you are good to go and then optimize for more.
For example, bill collection, what percentage of the bill should be collected in a month? You need to give them a metric and let them do their thing.
I think more in terms of how to make things smoother. I try to know all the problems. I ask people about problems. I will randomly talk to them or email and ask about progress. Normally people should have a couple of things to do, not too many.
Peter Thiel’s management philosophy was that: everyone must have only one thing to do. That’s too disciplinary for me. I’m not that disciplined. I hope to implement that someday. That every single person who reports to me has only one objective in life but right now I’ve managed to cut it down to 1-2 objectives.
Tell us about the challenges.
During early days, challenges were relatively small and easy to handle but you had to respond immediately. These days, the challenges are tougher to handle. We have regulatory challenges like government policies and what the future of e-commerce is going to be like etc. These are tougher challenges but they are also less frequent and you have more time to respond.
Now I do not have to worry about running out of money tomorrow. I have to worry about running out of money in two years. So your time horizon increases and that is actually a trap. Because when your time horizon increases, you become lazy.
I think the key challenge is to keep yourself focused and keep the urgency of early days alive. Even if you have 6 months to do it, do it now.
It is very easy to fill up my schedule with trifles. Actually, it is challenging to keep my schedule empty.
As I said, you have more time to respond to challenges but they are of different difficulty level like how to convince someone to part with 10,000 dollars than to convince someone to part with 10 million dollars. Two are very different scales.
How is your growth? How do you maintain growth?
Our growth is pretty good. We eye for 300-400% growth in every six months.
I think of growth in two ways: acquisition and retention. For now, our focus is on retention. If the acquisition happens, it is good. Between the 1st order and the 2nd order, we have 45,000 people who have registered on Chaldal. Only 15,000 people have tried with us and only 5000-6000 people ordered last month. A lot of people order a lot. Still 45,000 to 5,000 is a big number.
Our retention rate is now around 60-70% which is a good number. We are working hard to improve our product.
For instance [showing a plate at hand], if I’m trying to sell this plate to you, will you buy this plate for 100 taka? no! 90 taka? no! 50 taka? no! 5 taka? maybe. Ok, 3 taka then? So that’s the strategy, keep pushing until it works.
How do you think about competition?
We thought about competition a lot when we started. Our conclusion was that if we get into something like electronics, it would be an area where Amazon or Flipkart would come in and easily kill us in 6 months.
They have an inventory of like 5 million products. Where in Bangladesh will you get 5 million products? If they bring their Indian inventory in Bangladesh, you are dead and you won’t be able to compete with their money.
We think of competition in terms of doing difficult things. If we keep doing difficult and hard things, someone at some point will get bored and tired. They just would not have the energy to fight.
Keep doing the difficult things. That’s our policy for competition. Don’t think about competition, just keep solving hard problems.
What do you think about the future of e-commerce in Bangladesh?
It is bright. You see e-commerce is same as the mobile phone. For someone sitting in Brahmonbaria, it is hard to get a drill machine. They probably won’t find a shop to get the drill machine. They can tell someone to bring it from outside Brahmonbaria but it involves huge time and transaction cost. But with e-commerce, it suddenly becomes available to them and that latent demand is there. It is just a matter of execution.
Let’s think about what would be the other options for getting this guy a drill machine in Brahmonbaria. It is probably that Brahmonbaria’s economy grows to a certain level where there are enough people requiring a drill machine, so some guy decides to bring some inventory of drill machines and selling it from their shops.
So there is a lot of ground work like building landlines but with e-commerce, it suddenly becomes like a cellular network tower and everyone gets everything no matter where they live.
In an economy like us, the future of ecommerce is bright. That is the way that we are seeing in every developed country. Unless someone invents teleportation or bring 3D printing where someone can print a 3D mouse and you would not need all that logistics, e-commerce is the best option you have.
In 5-10 years, where do you see Chaldal? What’s the future plan?
Keep working hard, find difficult challenges and solve it.
10 years is too long for us to comment on. I don’t know if there is going to be a war or something; who knows!
I know what is going to happen in the next two months and I try not to look past that. I can tell you the vision but that is all story.
You have raised investments from a diverse set of investors.
We have very good investors. Y Combinator is an investor. We have raised money from 500 Startups as well. We have two major funds who have holding stake: one from the Valley and one from China.
We have some very good people who have invested in the company, like Parker of Zenefits [former CEO of Zenefits], we have Dan Rose from Facebook. We have some top names invested in Chaldal, people like Justin Kan. They are very good people, very solid people. We have quite a lot of solid local investors as well.
Share a few lessons you have learned from your journey so far.
The lesson is Chaldal. You keep working hard.
I think you get asked this question a lot. What one needs to do in order to raise money?
You can read Paul Graham’s essays for tactical advice. Tactical advice is important, how you handle investor meeting, how to get investor meeting and all of that.
In terms of strategic advice, you need to think where the Bangladeshi VC industry is, who are the movers and shakers.
First thing is that, forget raising money. Instead, ask yourself, are you sure you want to do this? Do you have a good product or not? First, get the product tick before going for fundraising because you are still not at the stage where you can go and ask people that you want to do a Startup and people will give you money. That is not the stage Bangladesh is in right now.
That has happened in many countries. In India, it is very easy to raise money for the last two years. But that is not the case for Bangladesh yet.
So firstly, you must have a product, you must understand why you need the investment and then you need to figure out how to do it.
What I’ve realized is that you probably need less than what you think you need or you probably need more than what you think you need. You probably don’t need it right now.
You can always do with less. The best strategy is that try to do with less now because if you can do with like little money and do a lot with that, then investors will think that they did so much with so little money. If we give them one briefcase of money, then they can do so much more.
It is all about input and output. If you can show them that without any input you have done a lot, it is always attractive. There are a lot of VCs that are coming into Bangladesh nowadays. I don’t know and haven’t thought about the angel level funding so far. I know some people are doing personal investment these days.
I think there is more confidence in the market these days, so it’ easier. It is hopefully going to get easier and easier if we have some more success stories.
For raising money, first thing is you have to know where to raise the money from. Initially, it is as simple as going to people and asking for money. There is no more magic to it. You have to ask people, you have to do the hard work. You have to take the rejections and then try harder.
You have to build up the momentum, if someone wants to invest 1000 taka, let them invest 1000 taka. High targets are fine but sometimes those can be the reason for your failure.
The truth is that, whatever I aim to raise, I end up raising 30% of that. That seems to be my law. If you want to raise a billion, you should really target for 3 billion.
Interview by Ruhul Kader, Transcription by Samiul Alam. Date: This interview was taken on March 17, 2016