Shohoz Founder and Managing Director, Maliha M Quadir, has a fascinating story. She was born and brought up in Dhaka. Studied in the US: Smith College and Harvard University. Worked at some of the top institutions, Morgan Stanley, Standard Chartered, Nokia, and Vistaprint, spanning multiple countries, US, Singapore, India, and Indonesia.
Toward the end of 2013, she decided that she is finally ready to pursue her lifelong dream. Starting her own tech company in Bangladesh. She left her job, raised a few million in seed investment and moved back to Bangladesh. Shohoz was born in 2014. A platform where you could buy tickets - bus, events, movie, and launch.
For the first three years, it focused solely on tickets and has built a widely recognizable brand for online ticketing in Bangladesh.
In March 2018, Shohoz formally entered the ride-hailing market in Dhaka. A few months into it, it raised US$15M in funding from a host of investors including Golden Gate Ventures of Singapore, which is, interestingly, also an investor in Go-Jek of Indonesia. The largest funding round in any Bangladeshi early stage company so far.
Shohoz claims it has over 50,000 drivers on its platform and served over 1.5 million rides in October this year (this interview was done on 29th October 2018). It has entered into food delivery, car and aims to add more services in the future. The startup has aspiration get into the truck and launch fintech products in the coming years. It aims to build a platform. “Shohoz is anything necessary,” says Maliha.
Meanwhile, competition has been intensifying in Dhaka’s ride-hailing space. All the major players in the space are trying to do everything to stay ahead and fend off competition. One app for all your needs, a platform strategy - these are the common strategic dialects we hear. Shohoz says it has a better team and a better long-term strategy in place. Can it pull this off?
In this immensely interesting interview, we sit down with Shohoz Founder and Managing Direct Maliha M Quadir and set out to find out Shohoz story, what makes Shohoz tick, what’s going on at one of the most important tech startups in Dhaka, and what is next for Shohoz and much more. Enjoy!
This was a much longer interview, so we had to break it up into two parts. This is the part one of the interview. Please come back later this month for the final installment of the interview.
Ruhul Kader
Could you please tell us about yourself and your journey to what you are doing today?
Maliha M Quadir
I was born and bred in Dhaka. An only child of my parents, I have been super ambitious all along my life. I attended South Breeze School and then Scholastica for my O levels and A levels. Then I went to Smith College in the US where I studied Economics and Computer Science and graduated in 2000. I did very well there as well.
After college, I decided to get into investment Banking which was and is one of the toughest careers. Within the investment banking, merger and acquisition is the toughest. People work very late into the night. I decided to go for it. I got into merger and acquisition and that too into utility department. The toughest.
After that, I said I have to get into Harvard. I applied to about 5 top schools including Harvard, Columbia, Stanford, and Wharton and I got accepted to all of them. The happiest day was when I got that acceptance email from Harvard. I remember I was in Dhaka at that time. It came at around 9-10 pm. It was a surreal moment for me.
Eventually, I went to Harvard. One thing that I loved about Harvard was their case study method. There are very few exams. Not that many long lectures. Instead in every class you read cases, debate with each other and solve them. I realized even before getting into Harvard that I would get to learn more there. It was similar to what we do in real life in business. We don't prepare a presentation and give lectures. We sit down with people, discuss, debate and then make a decision. My classes at Harvard was sort of simulation of that.
I used to be very shy. You would not believe it now. I was aware that I have to overcome it. Harvard helped me a lot. We used to have three-four classes per day and all were debates. These were the best and most smart people in the market and when you debate with them every day and that too for long hours, it gets to your depth.
After my MBA, I decided to move to Asia, close to home, and get some hands-on experience in technology and business. I worked at Standard Chartered Singapore for one year, at Nokia for a while and then Vistaprint. I got a great exposure to emerging market and digital and technology services while working at Nokia and Vistaprint. I used to cover India and Indonesia for Vistaprint out of Singapore.
By the time, I started following the Bangladesh market closely. I always wanted to return to the country and do something here. Again, I was very ambitious from the beginning. I wanted to build something for the mass people and eventually decided to work in the transportations sector.
When you pursue something as challenging as entrepreneurship you need a serious amount of tenacity.
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Ruhul
When did you first decide that I want to build something in Bangladesh?
Maliha
The ambition has always been there. I practically started working on it in mid-2013. In December 2013, I raised a small angel round from my network of Harvard people and moved back to Bangladesh. I started working on Shohoz in January 2014 and did a soft launch towards the end of 2014.
In the first couple of years, we mainly focused on the bus ticket - bus ticketing remains the biggest vertical for us and launch, movie, events are relatively smaller ones. We are working with over 70 large bus and ferry operators. We provide them a proprietary customized ticketing software. All these operators are using our software across Bangladesh 24/7 to run their business. They manage all their inventory using this software including the ones they sell through us.
We have focused on building our ticketing business for the past three years. After that, we wanted to expand into other areas, mainly in the transportation space. Ride-sharing came naturally. In fact, we wanted to get into ride-sharing for a long time. I met BRTA many times between 2014 and 2015. Since there was no regulatory guideline for ride-hailing business, we decided to wait. We had been following the regulatory changes closely. Then last year, we came to know that ride-sharing guideline is going to parliament and that's when we decided that this is the right time to start into space. We already had some work done. We just launched our ride business.
Ruhul
Growing up, you were an ambitious kid, competitive, and always wanted to be at the top. Was taking initiative and creativity part your upbringing and how that influences your work and life and the way you view the world?
Maliha
We started ride-hailing in January this year and now in November and we are already doing over a million, about 1.5 million, rides per month. We are only doing in Dhaka and that too only motorbike. Shohoz Car is very new in the market - we just started it.
When you pursue something as challenging as entrepreneurship you need a serious amount of tenacity. All my reviews at my previous workplaces and from my professors are almost the same: she is extremely tenacious. If she decides to do something she would do it. We started with that mentality that we have to do it no matter what.
Raising money is tough in Bangladesh. The market is tough. We already have two competitors who are doing great. These are all tough challenges. I was aware of all these challenges when we were working on launching ride-sharing in December. But we also aware of the fact that the market is young. That the competition is just ahead of us by one year. When we spoke with the investors they said one year is not enough time for a big market like Bangladesh. You can't call anyone a winner at that point in time. So then I plunge and took the risk. That was a big call but I still decided to take the challenge because you live only once.
We were about six people team in January. We were running our operation out of my dining table. I just came back at that time. We were looking for an office but we did not make any progress towards that at that time. We would work together and do almost everything together. We finally found an office in February.
Ruhul
Going a little back to the early days of Shohoz, to 2013 and 2014, when you finally decided that I want to start this company, what went into building the initial operation? You raised a few million in seed investment from your Harvard network and friends and family, moved back to Bangladesh and then how did you put things together and get started?
Maliha
I raised a couple of millions and then hired my CTO - he is from India. That was the first thing I did. I first hired the engineers and accountants.
Ruhul
How big was your team at that time?
Maliha
We were about six people team in January. We were running our operation out of my dining table. I just came back at that time. We were looking for an office but we did not make any progress towards that at that time. We would work together and do almost everything together. We finally found an office in February.
Today we are 150 people. The team is growing fast. We are hiring a lot of new people. We have launched food delivery recently and are building a lot of new things and hiring a lot of new people for that. We will become a 300 people team within a few months.
Initially, our job was developing the software and building our technology stack - understanding the requirements of bus owners by talking with them and getting requirements from them. They were not very good at giving requirements at that time. They have gotten very good at giving requirements over the time, but initially, that was not the case. It was tough to get all the requirements at once.
From the outside it seems like selling tickets is probably a simple task and probably the needs of every bus owners are similar but it is not. It is a complex operation. The needs of operators are diverse and everyone has different requirements.
We do a lot of customizations. About 80% is similar but 20% customization is always there. Yes, not all operators want customization, mostly big operators want customization. But the need for customization is there. All of these happened over time.
Ruhul
How many bus operators you managed to onboard in the first year?
Maliha
In the first year, we had four operators.
Ruhul
Was that a deliberate decision or you had challenges finding and onboarding bus operators?
Maliha
Finding and onboarding bus operators was a challenging job. Initially, it took long business development cycles. It takes a long time to onboard operators even these days. It is a relationship-driven business in many instances. We had to build those relationships.
It is a large volume and daily metrics-driven business. Bringing them from cash-first business to cashless business is a strenuous job. It took us three years to onboard 70 operators.
Transportation is a challenging industry. We had to teach them how to operate a computer and software. The good thing is that these are smart people. They understand their business very well. When they are convinced that something has to be done they essentially do it no matter what.
Today, the kind of requirements we receive from operators is quite amazing. But initially, it was a grind. There are a lot of challenges there even these days. Industries don't change overnight. It takes time to change an industry. But I think we have come a long way.
Ruhul
How are you doing business-wise, how many tickets people buy from your platform daily?
Maliha
We sell a couple of thousand tickets every day. We are not pushing the ticket business, in terms of promotions and discounts, much at this moment. We will do it in the near future but for now, we are not spending much on discounts and promotion for the ticket business. Despite that, we are doing very well. It has been growing organically. We have been able to build a brand awareness in the market. People do go to Shohoz for buying tickets.
One challenge we face is that due to the operational problem on the end of operators tickets get canceled and customers blame us for that. For instance, when an operator cancels a trip or resells a ticket, our customers often blame us whereas we have nothing to do with it. When an operator cancels a ticket or a trip and don't inform us and there is no way we would know that a trip has been canceled unless operators inform us and update it in the software. And it happens where we don’t get to know. Customers often blame us for this. We are always working hard to improve the experience of our customers.
We work with 70 operators. Our software is in use in more than 500 ticket counters across the country and more than a thousand people use our software on a regular basis. Now if an operator does not update the software about a trip which has been canceled we have no way to know it. The complaints we receive from our customers, this is the only reason in almost 100% cases - an operator canceled a trip where we could do almost nothing. That's a challenge for the entire ecommerce industry. We have at least digitized inventory and we could see whether a trip has gone or not. For other ecommerce players, it is even more challenging.
Ride-sharing is the core service here. The plan is to add more services on top of it. More of a platform concept, ride-sharing being at the core that connects everything else.
Ruhul
Could you please give us an overview of Shohoz now? You have ticketing business, you have bus, launch, events, and movie and now you have a growing ride business?
Maliha
We have expanded our ticketing business, that's true. But still, the bus ticket remains the biggest vertical there. Launch is very small. It is an even more challenging segment. We are working with a few big operators. We have events and movies but the market for these tickets are very small. We don't do many events except a few big ones. Small events are not worth doing often. Movie market is also very small as you know. These are small businesses. But we hope that these segments will grow over the next few years.
We have entered ride-sharing early this year. We are doing mostly bikes in Dhaka. We are about to launch food delivery. We have launched Car in October. It has been a few weeks and we are doing a few thousands rides there. We are happy with the progress we have made. It has been doing well.
We are working on launching outside Dhaka in a few months. We are launching in Chittagong next month. We are launching food delivery in a few days. We will start with a few areas in Dhaka, eventually covering the entire Dhaka and then we will go outside Dhaka.
Ride-sharing is the core service here. The plan is to add more services on top of it. More of a platform concept, ride-sharing being at the core that connects everything else. All kinds of delivery will come.
We have plans to work on truck transportation. We have done some work there. Last year we have spent a lot of time and resources in the truck. But we have eventually decided that before getting into the truck we would do ride-sharing and then we would explore truck. Truck and on-demand is a good match. It is a huge market and a big problem.
We are getting into logistics and delivery seriously. The gentleman that you just saw coming in he is leading our logistics business. He was a leader at TNT Express for Middle-East. He has many years of experience in the space. He has been hired for taking our logistics business to the next level.
Then we will get into Truck. As I mentioned earlier, it is a difficult market and a hard problem to solve. Since we have been working on the bus and our ambition is to cover the entire transport space, truck comes naturally. It is an obvious extension and it is basically logistics. That's is something I really want to do. It is a very tough industry. We understand that it will take time.
Ruhul
Do you have any timeline in mind for getting into the truck? What are a few other areas you want to explore as you mentioned you want to be a platform?
Maliha
We want to launch trucks by next years.
Then we have an aspiration for fintech. We are not essentially talking about payment product or wallet. There are many other things that can be done in fintech. Financing is there and there are many other things that we could explore and that is something we'll look into next year as well.
We are building a platform and at the core of it is transportation which is also a means to have more people using our product and then we want to build other services on top of it.
Moving is an everyday product. Transport is an everyday necessity. Food delivery and many other products are moving as well. We have been into transportation through ticketing for a long time. There is a lot of synergy between short-distance and long distance transportation. Delivering food is an everyday item. All of these are going to be a huge data source for us and cultivating these data we want to launch fintech products. That's the bigger dream.
Ruhul
That makes sense. If you are a transportation app which I use daily, it means you have a permanent place on my mobile phone which means you could build other things on top of it to cater my other needs. Do you plan to connect one service with other? For example, you are launching food, do you plan to enable cross-dispatching where the same driver will do both ride and food delivery?
Maliha
Initially, our focus will be on quality. We want to ensure the best possible service for our customers. Moreover, nobody has done cross-dispatching successfully yet. Every other player is also doing it separately. Because quality is very important in food.
We will focus on quality initially but the ultimate goal is to get to a point where we could do cross-dispatching. We will see how we could get there over the time. There are service level agreements and all these things. These are heavy operations and heavy jobs. There are many things involved here. Once we settle down with operations then we will look for ways to optimize and do things in a better way.
Ruhul
As a ticketing platform as well as a ride-hailing platform, you are an aggregator. On the ticketing side, you are essentially disintermediating ticket counters and at some point, you will replace counters and you become the counter for all the bus operators because customers come to you for tickets because they get all the tickets at one place and thus bus operators and other operators will depend on you for selling tickets, which will allow you to bargain better.
Maliha
We are nowhere near there. It will take a long time.
Moving is an everyday product. Transport is an everyday necessity. Food delivery and many other products are moving as well. We have been into transportation through ticketing for a long time. There is a lot of synergy between short-distance and long distance transportation. Delivering food is an everyday item. All of these are going to be a huge data source for us and cultivating these data we want to launch fintech products.
Ruhul
But you want to get there? If so how do you plan to get there?
Maliha
There are a lot of factors here. The market has to evolve. It has evolved since, but there is a long way to go. People still find it difficult to trust an online seller. There are many misconceptions as well. Many people think that it is hard to buy tickets online. That there is a lack of availability. These challenges need to be overcome and we are working on it. On the other hand, a ride is an in the moment thing. You don't wait for calling a bike. It is an essential and urgent need. As a result, people try every day and use it on a daily basis.
On the ticketing, people think of an alternative and there is a user behavior pattern. For instance, many users who failed to buy the ticket online once tend to maintain a perception that it is hard to buy or find the ticket online. So they don't try online anymore.
On the other hand, when it comes to ride, you not only use it daily and you try daily even if you could not find one the other day. For instance, initially there was a supply problem in the ride space and people usually could not find a ride when they needed one. Despite the predicament, people continued to try the service because you need it daily and it is a more urgent service.
This is a very common phenomenon that essential and urgent services often get traction quickly. I believe our ride business will eventually help our ticketing business vice versa and as we go.
Running a startup is an everyday balancing act. Balancing process vs speed. Present vs future. Growth vs sustainability. These are the things a founder needs to be mindful of on a daily basis.
Ruhul
What are some lessons you have learned?
Maliha
Don't wait for regulation to change. You should always operate with a sense of urgency. That's something I regret. Often we unnecessarily wait for things to happen whereas taking action can make a huge difference.
Hire people when you need to. I feel that I always operate in an under-stuffed mode. That's a challenge when you are growing fast. The lesson would be you need more people than you believe you need.
Being said that, I do believe in doing more with less. For startups, it is critical to find this balance where you are not overspending and at the same time, doing more with less without hampering your growth. This is a balance you have to find.
Running a startup is an everyday balancing act. Balancing process vs speed. Present vs future. Growth vs sustainability. These are the things a founder needs to be mindful of on a daily basis.
Don't wait for regulation to change. You should always operate with a sense of urgency. That's something I regret. Often we unnecessarily wait for things to happen whereas taking action can make a huge difference.
Note: This was a much longer interview, so we had to break it up into two parts. This is the part one of the interview. Please come back later this month for the final installment of the interview.
Cover photo: Shohoz Founder | Courtesy
Interview date: October 29, 2018
Ruhul can be reached at ruhul@futurestartup.com
