How Pathao Was Created
Pathao is one of the most successful ride-hailing companies in Bangladesh. Founded in October 2015, from a tiny operation, the company has grown to become one of the most important ride-hailing companies in Bangladesh over the last few years. Pathao Founder and CEO Hussain M Elius is one of the most impressive individuals and entrepreneurs we’ve had the pleasure to interview at Future Startup for multiple times.
In an interview with Future Startup, published in June 2018, Mr. Hussain M Elius explained how Pathao was founded, talked about his entrepreneurial journey and what it was like in the early days of Pathao.
Here is a short version of the story. You may read the full interview here.
Hussain M Elius: Pathao started as a concept; as a small initiative. We had a secret Facebook group, where we asked all our friends if they wanted anything delivered they could use our service. For us, it was an experiment. It soon evolved from there. While we were doing deliveries with our motorbikes, we thought, can we utilize our bikes in a more efficient way? Would people in Bangladesh like to use a motorcycle as a transportation service; as a ride-sharing option?
This question led to us building another MVP around the idea. Unlike many other countries around the world, such as Vietnam or Indonesia, Bangladesh did not have a motorcycle as transportation culture. With Pathao, we have helped create that culture. We realized that there was a pent-up demand for a service which would save people time and energy.
At first, we started small. We had only 5 bikes and everyone would call my personal number and I would schedule the rides in an Excel sheet. It was a completely manual operation. It was tedious. Everything changed when we launched our app in December 2016. That’s when things kind of blew up and we ended up changing our entire business model around our app.
Back then we had maybe around 30 employees; currently, have 500 people working in Pathao, separated by 4 large offices in Dhaka and 1 large office in Chittagong and an office in Sylhet. That number excludes the delivery agents and our riders.
The past year was a journey of expansion and scaling up. Not a lot of companies in Bangladesh have had the opportunity to scale up. We saw that opportunity open up to us and we took it.
Launching a business is comparatively easy. It wasn’t our first startup. However, scaling a startup and making it into a company, and turning it into a business from a product, is a different kind of challenge.
By October 2017, we had launched our Rides service Chittagong. At the same time, we launched Pathao Cars in Dhaka. In January, this year we launched Pathao Food. In a three-month time, we became the largest food delivery service in Bangladesh, ahead of our competitors.
Question: Was there any major inflection points that you could share with us?
Hussain M Elius: Launching the app was a big part of it. We did not have any engineers when the app first launched. The first iteration was built by just me, Adnan and Fahad. We rolled something very simple out at first. Our core philosophy back then was and it continues to be one of our core values: “done is better than perfect”. Now we call it ‘bias to action’.
All it means is that we don’t stay busy with just making plans. Even if the plan is not perfect, we get down on the ground and we roll with it and push it through execution. That way we can incorporate market feedback faster and build product or operations around how things actually work and take the path-of-least-resistance forward.
For example, before us, there have been a few ride-sharing companies. So what did Pathao do differently? We rolled our sleeves and got down on the ground. We stood in front of universities in Banani area and did hardcore sales to put people on our bikes.
We would ask people where they wanted to go and tell them that “I’ll take you there on this bike for a 100 taka”. They would be very confused and scared, naturally, since we are taking them in a bike and it’s an alien concept to them. But we kept up and pushed people to get on the bike and take the first few rides. We did this for three days and gave them our card to call us and book.
On the fourth day, they would start calling us. After the fifth day, they started talking to their friends about us. And that’s how we got initial traction. Instead of spending time on a lot of planning, we directly engaged in the market.
We pushed our customers from the ground level. Since we addressed a need in the market, our service quickly got product-market fit and expanded.
We cultivated a sense of community in our users from the very beginning which has helped us to build a loyal user base who not only used our services but also told about us to their friends.
Now the times are different. Our focus is now on what the customer really needs and wants. We launched Pathao Food and we did it keeping in mind the common people, a service that could cater to a large group of people. Our competitors have 600 restaurants over 13 areas in Dhaka; we got down on the ground and enlisted over 3600 restaurants to start Pathao Foods. We also thought about the affordability of people.
A common consumer would not be willing to spend tk. 400 on an average for a regular lunch which makes a lot of existing platforms exclusive for people who could afford and it limits your market size; there needed to be a place where people could order anything of any value.
We launched the service all across Dhaka, believing that everyone should have this service. And we have received tremendous response from the market. This idea that making the product for a large group of people and making sure that there is no entry barrier for customers is critical in an emerging market.
This is an excerpt from our interview with Elius, you may read the full interview here.