Tausif Ahmad is the Co-founder and Chief Operating Officer of HungryNaki- a fast growing food delivery startup based in Dhaka. Launched in 2013, the company has grown significantly over the past few years. It has already reached operational break-even, not a very common thing in Dhaka’s fledgling startup scene, and now eyes further expansion and growth.
We recently spoke to Tausif to know more about HungryNaki, online food delivery and ecommerce industry in Bangladesh. In this interview, he reflects on his journey to what he is doing today, talks about HungryNaki, early days and current state of the food delivery startup, challenges of HungryNaki, discusses automation, ambition and future plans of HungryNaki, shares his thought on management and competition and explores why having a business model is critical for building a company and why we should use difficulty as a guide in doing almost everything in life, focus on doing good work no matter how small it is and actively resist the temptation of choosing talking over doing.
Future Startup
We want to start at the beginning of your story. Where did you grow up? Tell us about your journey to what you are doing today.
Tausif Ahmad
I was born and raised in Dhaka. I did my O level and A level from Scholastica School and undergrad in Marketing and International Business from North South University. After that, I worked at an HR firm for a brief period of time before going to the University of Hertfordshire in the UK for my Masters.
I returned to Bangladesh in 2011 after completing my graduation. Upon my return, I joined Inter-speed Communications Limited, an advertising agency based in Dhaka, as a Brand Supervisor. I worked there for a while and then moved to Citibank N.A in 2012.
After working for almost a year at Citibank N.A., I joined a startup called Oscom, a daily deal site started by a German venture firm called Rebate Networks. Oscom was a sister concern of Clickbd, one of the earliest ecommerce companies in the country.
In 2013, I left Oscom to start HungryNaki with two of my friends, Sazid and Ahmad.
Working at a big company is easy because everything is in place and in order and you just go in and fill a role but at a startup, things are often not that organized or defined. You have to navigate the ambiguity and chaos and get things done. A startup demands a lot more passion, commitment and sense of responsibility than a big organization.
Future Startup
There is a prevailing, particularly in Bangladesh, understanding in the market that first-time entrepreneurs are not good enough and prior work experience helps entrepreneurs in their business. You have the experience of working at big companies and now you are running your own company, how do you see the connection?
Tausif Ahmed
My first job experience was at an HR Firm during the year 2007-08 where I joined right after my undergrad. It was a relatively brief experience but I have learned the most during those years.
It was a small organization and that helped because I could see and experience things more closely which is often not the case in a larger organization. In a larger company, you don’t see all the aspects of how a company works but in my one year experience at that HR company, I had the opportunity to work closely with the management and the team. I had the chance to see the inner workings of a small but growing organization.
I got the everyday understanding of how things work, how an accounts team works, how marketing team works, how management takes decisions and other aspects of an organization. These things are easier to learn in a smaller organization than in a larger organization. I have learned the most during those years about management, teamwork and how an organization operates.
Every organization has its own culture and way of doing things. For instance, a marketing agency works in a very casual way. A bank, on the hand, maintains a formal environment. Startups are different from either of these and often operate in an environment of lack of process or system.
Working at a big company is easy because everything is in place and in order and you just go in and fill a role but at a startup, things are often not that organized or defined. You have to navigate the ambiguity and chaos and get things done. A startup demands a lot more passion, commitment and sense of responsibility than a big organization.
However, it is hard to find a one size fits all for anything so I would not say it is always required to have previous experience.
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Future Startup
Please give us an overview of HungryNaki.com, both a little bit about the early days of the company and also about where the company stands today.
Tausif Ahmad
The way HungryNaki started is quite interesting. I met two of my other partners, Ahmad and Sazid, through a common friend. This was in early 2013. I was still working at Oscom but I always wanted to do something on my own. Before launching HungryNaki, we used to have lengthy discussions on starting a business.
After work, we would sit at Ahmad’s office and discuss what we could do. The first idea was about a fashion retail business because one of my friends is a textile engineer and the other owns a textile company.
We thought that there was a room for a creative and innovative initiative in the fashion industry in Bangladesh. We had almost three months of discussions about what to do and how to launch it.
We never thought about starting a food delivery company but the interesting thing was that we would always need food during those meetings.
Usually, we would send out a help from office or a driver to get food from a nearby shop or anywhere. It was inconvenient because there were not many food delivery options in Bangladesh at that time. Pizza Hut and a few other restaurants were doing food delivery but not at a scale. That’s when we thought, for the first time, that since we needed food like this there must be other people who also face the similar problem. Moreover, there were so many food delivery companies globally at that time. That’s when it occurred to us that why don’t we try something around food delivery in Bangladesh, particularly in Dhaka.
We realized that in Dhaka given the traffic and transportation condition, it is really hard for people to get food or at times go to a restaurant. That’s when we finally decided that this is it and HungryNaki came into existence.
Among the founders, I was supposed to work full time. Other founders would give time but they had their day jobs. I left Oscom to give full-time to this newly formed organization which did not have a name yet.
We hired three software developers and two business development executives. Six of us started the journey in July 2013. We basically started out of a room in a shared office. The initial job for myself and business development team was to gather information about restaurants and food industry in Bangladesh.
The software team also did not start working on the platform right away. Their initial task was to research on the food delivery companies around the world and understand how they work, the dynamics of online ordering and other aspects of the technology. We did not want to rush into starting a business rather decided to move with a deliberate plan.
July 2013, not much work was done. In mid-August, we realized that we’re running out of time. In the next one and half months, we worked day and night and finally launched our service.
It was hard but an extremely empowering experience. A small team working day and night to accomplish something they are passionate about. We did not have a name yet. We’re trying to come up with one. After testing with a handful of names, which failed to get any vote, when I came up with the name HungryNaki, all of my partners liked the name. We asked a few people around us and they said the name is cool.
We are a Bangladeshi company and we wanted to make sure that we have something in our name that communicates that. That’s how the name come into being.
One of our friends did the logo for us and everything was ready by 25th of September, 2013. We finally launched the site on October 1, 2013.
We had 30 restaurants and two delivery men at that time. We were covering only Banani and Gulshan area. We didn’t know what the responses would be and had no expectation. On the very first day, three people ended up ordering on our site. We did not know how but that was an exciting moment for us because out of nowhere people got to know about us and ordered. We, founders, used to talk to the customers and confirm their orders.
During the first month of our journey, we served around two hundred orders. That was a big thing for us because it exceeded our expectation. By this time, we recruited three more people to manage our call center and data entry. From there, the company grew mostly organically.
In November and December 2013, there was political unrest in the country. Although it was a bad time but it helped us because people stayed at home and office and they would order food through us. It also gave us the benefit of positive word of mouth
To date, we have signed more than 1200 restaurants of which 750 are still in operation. We have expanded into two more cities, now we operate in Dhaka, Sylhet, and Chittagong. Within Dhaka, from two locations we have expanded to almost 70% of the Dhaka city.
Digital payment is an important aspect for us. Right now almost 20% of our payments are made through online which is way higher than the industry average. This is probably because of the nature of our business. While our partnership with Standard Chartered Bank has helped, we also believe that we have been able to build that trust with our customers through our services that they are comfortable paying us in advance.
In terms of growth, we see that we have a huge potential given the socio-economic changes in the market. We are seeing a growing middle class, working women, and nuclear family that all support our assumption that demand for our service will grow manifold in the coming years. In fact, in the current situation, there is room for growth in areas that we already cover. We probably serve only 5% of the entire market in areas where we cover.
There are challenges, which is true for every business, but we see a great future for our business.
To date, we have signed more than 1200 restaurants of which 750 are still in operation. We have expanded into two more cities, now we operate in Dhaka, Sylhet, and Chittagong. Within Dhaka, from two locations we have expanded to almost 70% of the Dhaka city.
Future Startup
How big is your team now?
Tausif Ahmad
Our in-house team is 27 people now. Besides, we have a delivery team of over 100 people.
We have separate teams and departments working on different problems including technology, restaurant payment, delivery, and other relevant aspects. Our customer service team deals with corporate orders and customer experience. We have two delivery supervision teams: one on the ground and another in the office.
We have a small marketing team which is currently going through a change. We have not done much marketing in 2015 and 2016 apart from some digital marketing campaigns and events so we did not require a bigger team. However, we are planning to up the game and are working on building a bigger marketing team this year.
We have a business development team in Dhaka and two other teams in Sylhet and Chittagong.
Future Startup
You put together a separate logistic company to manage delivery.
Tausif Ahmad
At the beginning, one of our partners basically set up the delivery team and we were working with them as a third party partner. However, we have taken over the delivery team recently and now it works only for us.
Future Startup
How did you manage initial investment?
Tausif Ahmad
All the initial investment came from the founders. One of the partners invested the majority amount and the others contributed as well.
To be honest, we didn’t put a particular amount of money at once rather we invested as we go.
Future Startup
You have grown quite fast. Tell us about challenges you faced while managing the growth. I think there are two aspects to it, one is you always want to grow and in order to grow you have to design your organization for the growth and another aspect is while growing you have to manage it properly so that you don’t screw things up.
Tausif Ahmad
We have grown both as a team and as a company. We have expanded geographically. Our daily number of deliveries has grown as well. The challenges that we faced in the early days and are still facing is turning ourselves from a scrappy startup to a structured, process-oriented organization and instilling that mentality into the team.
When you are a startup you do things differently. But as you grow you need to bring more system and processes into place which is a difficult transition for most companies.
While startup culture offers certain benefits, you also need structure at the company so that you can better manage the growth. We are still struggling on that front but we have come a long way.
When we decided to expand to Chittagong and Sylhet, we did not have a setup there. We had to travel frequently to manage things. Finding right people who would love and understand what we’re doing as well as the local culture and business was a challenge.
Initially, it was difficult to convince our restaurant partners to work with us.
We had to travel frequently, talk to local people, understand local culture because the way things work in Chittagong or Sylhet is way different than how things work in Dhaka. In fact, in Dhaka, we had to face many of these challenges.
In order to get things done in a local way, we recruited local people. For instance, in Chittagong, we hired people from Chittagong. We did the same in Sylhet. In fact, in old Dhaka part, we hired people from Old Dhaka part.
Although we are a very small company but it is still very difficult to monitor other cities. We have always tried to be strategic when it comes to growth and expansion.
As I told you, the very first day we managed three orders. From there we grew almost every week. Our initial growth was tremendous. In the first month, we did 200 orders and the next month we got 1000 orders and in the third month, we delivered 1600 orders. Today, we serve between 750 to 900 orders a day. That said, monthly growth percentage has slowed down as the total number of orders increased.
Future Startup
How many orders do you serve per day? And if you look at the City-wise distribution of your daily orders, how does it look like?
Tausif Ahmad
As I told you, the very first day we managed three orders. From there we grew almost every week. Our initial growth was tremendous. In the first month, we did 200 orders and the next month we got 1000 orders and in the third month, we delivered 1600 orders.
Today, we serve between 750 to 900 orders a day. That said, monthly growth percentage has slowed down as the total number of orders increased.
Almost 80 percent of orders we serve are in Dhaka and the remaining are in Sylhet and Chittagong.
Future Startup
You charge a small commission from restaurants on per order. How does that work?
Tausif Ahmad
We don't charge customers anything extra on the food except for a delivery fee of BDT 75 for Dhaka city and BDT 50 for Sylhet and Chittagong right now. In some cases, in Dhaka city, we charge a little higher for intra-zonal delivery depending on the distance but mostly it is flat. For food, customers pay exactly what it is on the menu price.
Our earning comes from certain commissions from the restaurants. Restaurants pay that commission based on the food price they are selling. It usually ranges between 10-15% depending on the food type.
Future Startup
How are you doing business-wise in terms of profitability, break-even?
Tausif Ahmed
We have achieved operational break-even at the end of the last year which is hard to come by in ecommerce space and usually takes 5-6 years. I would not say we did that comfortably. We had seen our share of difficult times but we have managed to achieve that.
Early last year, we implemented some conservative measures and cost cutting strategies in order to ensure more disciplined investment and curb unnecessary expenses. Consequently, our cost came down almost 30% and revenue increased by almost 1.5 times. Our revenue has been growing consistently since then.
Future Startup
Do you have any plan to raise investment?
Tausif Ahmad
We have invested from our own pockets over the past years and already managed to achieve operational break-even. However, there are a lot of avenues for us to grow. We are considering our options and raising investment is of course of one them.
That said, very few startups successfully raised investment in Bangladesh. There are companies who raised investment but not as a company registered in Bangladesh. It is easier to raise investment when you are registered outside Bangladesh. Whenever we face a VC, they ask us to register in somewhere else, which we consider as a challenge. There are other aspects to it as well.
We are currently in discussion with a few investors. Hopefully, we will be able to figure something out soon.
We are looking for ways to grow faster without growing physically. As a part of the strategy, we are investing in technology and automation. We are trying to figure out how we can handle significantly more orders than what we do now without dramatically increasing our team. Introducing more automation in order to bring efficiency and improve customer experience is a priority for us as we go.
Future Startup
What are the future plans going forward?
Tausif Ahmed
This year we plan to launch a few new services that we have been working on for a while now. These are under the same vertical and we are super excited to see how it goes.
We are looking for ways to grow faster without growing physically. As a part of the strategy, we are investing in technology and automation. We are trying to figure out how we can handle significantly more orders than what we do now without dramatically increasing our team. Introducing more automation in order to bring efficiency and improve customer experience is a priority for us as we go.
For instance, we have deployed tracking system for our delivery team which means we now need minimum delivery supervision. Fewer people can monitor a bigger team. Our delivery app is almost ready which we plan to launch soon through which our goal is to automate the entire process of delivery including which delivery man should pick an order based on distance from the restaurant, the number of orders he served that day and cash he is carrying and few other criteria. Properly executed, it will make the entire process more efficient and help reduce cost.
We are also automating order placing process. Before our call center used to take an order and forward it to other teams, but now whenever there is an order it automatically goes to the designated restaurant through a device and gets printed out. We don't need to call the restaurant anymore. That way we have already cut down some calls there which means we need fewer people in my call center and our customers also get faster service.
We plan to expand to other cities in Bangladesh as well as cover entire Dhaka city very soon.
We are also considering an international expansion plan. We are still in the research phase but our goal is to go to at least one more market by 2018.
Future Startup
How do people work at HungryNaki? Can you tell us about culture and work environment at HungryNaki?
Tausif Ahmad
After three and half years, I would call it a failure that we could not manage to develop that many processes in the company. That said, we are way more structured today than a year or two ago.
Over the past years, we have been able to build a ‘get it done’ approach in the office. Work is work and there is nothing like ‘that is not my job’. We try to lead by examples instead of ordering people to do things.
The person who is working in Sylhet does almost everything of our Sylhet operations including restaurant relationships, accounts, business development and every other aspects of our Sylhet operations. Same goes for the person in Chittagong. This gives them greater exposure to running an operation and indicates how we operate as a team.
Culturally, we maintain a cross-departmental and interdisciplinary culture. Teams often collaborate to solve problems. Everyone is working on more than one aspect of the company which helps them to gain more experience.
Future Startup
What is your management philosophy?
Tausif Ahmad
I prefer showing by doing rather than giving orders. That said, I’m not a micro-manager and try not to meddle with my team unless it is absolutely necessary.
Going back to October 2013, we just had one full-time call center personnel and one part-timer. Most of the time, we founders had to talk to the customers. In those early days, we talked to our customers all day long during the Eid holidays. In fact, I and my partner, we all have experience of doing food delivery. People from the marketing team and other departments also did the delivery at times.
My personal philosophy is getting involved and doing things. We like to get our hands dirty.
Most people spend a disproportionately high amount of time in doing work that does not matter. While building a company, you can do a lot of fake works that are easy to do but that would not bring you any result. Instead of running after popularity and likes, focus on difficult but real work. Embrace the daily sufferings, grind through the invisible wall of building a company, avoid fake work at any cost for the sake of real work that matters, get some traction and then only go out and talk to people.
Future Startup
How big is your board?
Tausif Ahmed
We are six directors. Apart from founders, rest are paid in directors and most of them are close family and friends.
Future Startup
What advice would you give to people who are starting out?
Tausif Ahmad
Planning is the easiest part of any endeavor. Anyone can prepare a good plan. However, a great plan makes little difference if we don't put it into action. I sometimes attend these startup events and meet people who want to start companies. My only suggestion is that stop planning and start doing. The only thing that matters is starting somewhere and figuring it out as you go. Start small but start anyway.
At HungryNaki, we did nothing during our first one year apart from building the business. Our goal was simple, first build the business. Most people spend a disproportionately high amount of time in doing work that does not matter. While building a company, you can do a lot of fake works that are easy to do but that would not bring you any result. Instead of running after popularity and likes, focus on difficult but real work. Embrace the daily sufferings, grind through the invisible wall of building a company, avoid fake work at any cost for the sake of real work that matters, get some traction and then only go out and talk to people.
On a more practical side, make sure that you have a solid business model in place. No matter how much passion and talent we have got because it counts for nothing at the end of the day if we don’t generate revenue. It is not about making money rather if you are incapable of generating revenue it will not survive long.
The idea that you can talk through life is dangerous one and delusional at the same time. Our social media-centric cultural construct, however, attempts to convince us that talking and personal branding- these things matter regardless of our work. But life does not work like that. It is easier to choose 'talking' over 'doing' because it is easy but what moves us forward is not decisions or works that are easy rather the opposite. Use difficulty as a guide in doing almost everything in life and actively resist the temptation of joining the rat race of popularity.
Stop planning and start doing. The only thing that matter is starting somewhere and figuring it out as you go. Start small but start anyway.
Image: HungryNaki
