If you look from a particular perspective Dhaka has a vibrant startup ecosystem. It may lack a proper funding culture or a list of fast growing successful startups or big exits, but it does have endless streams of events, startup challenge competitions and what not.
The list of startup events runs long in Dhaka. In the early days, startup events were largely arranged by private entities or enthusiasts but as the interest among the young people grows and the trend goes mainstream, Government and other stakeholder weigh in. Now Government, in partnership with private entities, runs some of the most glamorous startup events in the country while the number of smaller events around entrepreneurs and startups continues to grow.
Many would agree, this sudden focus has some good results. More and more young people are now showing interest in entrepreneurship and in solving social problems. Which, undoubtedly is a good thing, especially when graduate unemployment rate, currently at over 9%, continues to grow in the country.
But many disagree.
The question arises when little progress come out of all the glamourous events. Many industry insiders suggest, the existing support structure is insufficient and in many instances, is busy with less important issues.
For instance, many complain that while Government is allocating hefty budget to sleek events in the name of startup challenge and technological promotion, doing business remains a difficult and expensive chore. Bangladesh’s position in the World Bank’s latest Doing Business Report is 176, a depressing status. One entrepreneur, who wants to remain anonymous, says “instead of spending all these money in events and other less impactful areas, it would have been way more effective if Government paid some attention to policy issues and making things easier for us.”
In theory and on paper, a gala event or a huge competition, or an award looks great but when you consider the impact, it requires a more structured and focused support system to help a startup. While it is true that events encourage more young people to start companies but then what? How do you support these young people to achieve this audacious ambition? The truth is that there is very little. The number of incubator or accelerator programs in the country is painfully slim. Startup investment ecosystem is equally dismal. Apart from some small bets, we did not see any notable investment in the entire first half of 2017.
Early-stage companies require a lot of support to survive and then thrive. Funding, mentorship, access to the market, regulatory ease to name a few. While we have events and buzz around startup, founders still struggle to find right kind of support. It is apparent that raising investment is very difficult in Bangladesh, more so if you are an early stage and pre-revenue company. But the other supports like mentorship and access to market help, a few introductions, many founders claim these are also equally difficult and at times costly to gather.
One founder who graduated from an accelerator program said to us that “if you are an outsider and has nothing to offer, it is hard to solicit any help.” Another founder quips startup ecosystem remains a club of a small group of people who often work more like gatekeepers than facilitators. People simply don’t want to support when you don’t have anything to offer which suggest a complete opposite phenomenon than many other ecosystems including startup mecca Silicon Valley where five minutes favor without any expectation is a huge thing.
The importance of more open, solid, structured and long-term focused interventions for the startup ecosystem can’t be overstated. It is common sense that startups are all-consuming business and founders should spend more time in building businesses than attending events. Similarly, asking everyone to come and build businesses is a questionable approach, if not outright wrong. When we are throwing events that have no merits, we are simply creating an environment for startups to fail and asking many wrong people to join a race they should not. Instead, we need more mentorship programs, incubators, and accelerators and more support for companies who need them.
That said, we can’t and should not categorically claim that all the events and existing interventions are ineffective and all the Government initiatives are a waste of money and means to personal gain for a few. There are events and programs that are driving real changes but we can certainly say that there is room for huge improvement both from regulatory aspects as well from the community.
Bangladesh has seen a rapid growth of startup ecosystem over the past few years. While we have made significant progress, despite many limitations, we still have a long way to go. The need for re-thinking and more rigorous and effective interventions is evident in the ecosystem and often comes out in discussion with founders and stakeholders.