In 2018, we have covered a great number of entrepreneurs, leaders, and companies doing fantastic work in Bangladesh. It has been an exciting year for us at FS to be able to listen to and tell the stories of so many extraordinary people and initiatives. We have learned a tremendous amount.
2018 has been a very different year for the startup community in Bangladesh for many reasons. We have come to see some meaningful events to take place. Relatively big investment rounds have happened. The number of startups has increased. Tech has received a lot of serious attention and much more.
We have a long way to go. There is no doubt about it. The next great thing would be a proper and big exit that would hopefully be a game-changer for the entire ecosystem. But it seems we have to wait a little longer for it to happen.
A lot of things are going for Dhaka's startup scene. In this piece, however, I would rather like to be critical and find out the disconnects, discontents, and things that are slowing us down and impeding our progress.
Here are 7 lessons I’ve learned about startups and the startup ecosystem in Bangladesh in 2018.
Startup is a long-tail game. In fact, life is a long tail game. So the number of companies an ecosystem produces has a lot to do with the overall number of successful companies that come out of that ecosystem.
If there are 10 companies, 1 or 2 are going to be big. If there are 1000 companies, 100 companies are going to do moderately well. That’s the math. Unfortunately, we do not see that many people start companies. There are solid reasons behind it. The point is we have to find ways to encourage and enable people to start companies otherwise big and small success will always be scarce.
Starting companies continues to be expensive in Bangladesh. Getting a trade license is expensive. Incorporation is expensive. Running a business is expensive. Moreover, along with the expenses it takes a huge effort to get these things done. I’m not going to list other thousand challenges here. In simple, the regulators should pay attention to how we can improve our standing in the World Bank's Doing Business report where our performance continues to put us to shame. We should work on making starting a business inexpensive and easy for people.
If you look closely at Dhaka's startup scene, particularly the most talked about part of it, there are a few big buckets and sectors where we see a lot of companies and more people are entering these sectors.
I would not suggest that it is something new to our market. It happens everywhere. But what happens in Dhaka is that most people tend to follow the same route instead of thinking originally and trying to find different ways of doing the same thing. The point is you could build many different types of ecommerce companies but everyone seems to like to build the same types of ecommerce companies with similar models and strategies.
Now take a look at the major buckets. We have a handful of ride-hailing companies trying to do the almost same thing. We have a handful of e-commerce companies. We have a handful of service marketplaces. We have a handful of payment products. We have a few ed-tech companies and some ad-tech companies.
I would not claim that we don’t have existing companies outside of these major verticals. There are some very exciting companies doing brilliant things. And in the above-mentioned verticals, some companies are redefining business as we know it. The point I wanted to make is that we could have done better. And we have to.
A majority of young techies are more interested in building things in silos - a mobile app and similar things. But there are better opportunities if you can build things at the intersection of sectors. For example, you could build wonderful companies at the intersection of digital technology and leather or food or jute or garments. We have not seen many of these things. But there is this huge untapped opportunity out there. And I’m quite sure that people are going to explore these areas pretty soon.
A majority of our local companies, technology and otherwise, struggle with efficiency and execution. Many of them are unnecessarily overstaffed. These companies need to find ways to improve the productivity of their team members. Others are not mindful of processes, systems, and a better way of doing things.
These weaknesses are going to cause disaster as the market matures and more serious players enter the market.
I acknowledge that one of the challenges for our local companies is people. Finding great people is a challenge for which we tend to put all the blame on the higher education system and universities. But I feel that companies also need to invest in their people. And we unjustly blame universities where the industry is doing very little to develop, for example, mid-level managers. Universities don’t produce mid-level managers, companies produce them through training and development programs.
I have attended corporate startup events where startup founders are made to play the role of performers. Founders come and present their nonexistent and sometimes unprepared companies in front of a group of people who are neither going to use their products nor going to invest in their companies. The outcomes of these events are a net negative for founders.
These practices should be discouraged. Often founders who are building serious businesses don’t get enough time to do these things. In many markets, such as Y Combinator, a US-based incubator program actively discourages founders not to attending events and giving talks. Founders should spend all of their time on building businesses. Our local ecosystem players should be mindful of this and should genuinely try to help founders instead of taking advantage of them.
This has surprised me on so many levels. A majority of founders, not all of them, don’t read and take reading books very casually. This is reflected in everything that people do in Dhaka. Reading is an extremely important, in fact, indispensable, exercise for founders to improve their cognitive abilities.
Most great entrepreneurs, starting from Gates to Warren to Patrick Collision of today, are voracious and serious readers. It pains me that people don’t see reading as something critical in Dhaka. I would particularly stress this point that founders should seriously work on developing a habit of reading. This is essential for building consequential things in today’s world.
A lot has been going on in Bangladesh. We have changed in so many ways and at so many levels in the past few years that keeping track of it is a challenge. Today, our per capita income is USD 1516. Just a few years ago, it was a minuscule sum. Over 6% GDP growth has become a norm. The economy grew 7.28% in the last fiscal year and is projected to grow at 7.5% for FY 2018-19. This will be the eighth straight year in a row that Bangladesh’s GDP has exceeded 6% growth. This has unleashed a lot of other important developments. If you look at the major trends in Dhaka, your mind will simply blow. We are in for an unprecedented run. It is just that we have to apply ourselves.
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Contact Ruhul Kader at [email protected]