Zulfikar Ali is the founder and CEO of BDTax, a digital tax processing platform based in Dhaka. Founded by Zulfikar Ali and Shah Rahman in 2017, BDTax started with an ambition to provide an easy online platform for taxpayers in Bangladesh to prepare and submit their returns. The current version of the platform allows taxpayers to prepare their return online, download it and then submit the return in their NBR tax circle or at the tax fairs. Currently, 35000 taxpayers use BDTax.com.bd platform to prepare their income tax returns.
We recently caught up with Mr. Ali over an email to discuss his winding path, how BDTax came into existence, what inspired him to embark on an entrepreneurial journey, his lessons from raising investment for BDTax, the state of BDTax’s business today and its ambition going forward, lessons he has learned from his journey so far, why perseverance is the common thread that connects stories of all entrepreneurs and much more.
Future Startup
Please tell us about your background and what you are working on now.
Zulfikar Ali
I left Bangladesh in 1997 after completing my HSC from Mirzapur Cadet College to go to the United States and attend college. I received a scholarship at the University of Wisconsin Eau Claire so that is where I chose to go to complete my undergraduate degree. After graduating from UWEC in 2001, I needed an employer-sponsored visa in order to work in the US. Unfortunately, the US tech market crashed after the dot com bust and in the meantime the 9/11 terrorist attacks happened, so finding a job where I could get h1b sponsorship became a challenge.
I didn’t let that stop me, however, because I am always up for a challenge. My first job out of college was part-time at a call center selling mortgages over the phone. My end goal was to find a tech job with the h1b sponsorship and prove to myself that I could establish myself on my own in this country. That part-time call center job taught me a lot including how to accept rejection and keep going. After I left the call center I found another tech support job at a subsidiary of Wells Fargo.
At this point, my career and life was still uncertain since I didn’t know when I would find a job with the sponsorship that I needed. On one particular weekend, I came up with the idea to create an employee tracking software with the help of my roommate. On the following Monday, I showed it to my boss and he so was impressed with what I had done that he made a recommendation to the technology manager to hire me full time with the sponsorship. He did and I was so happy because I thought I had really made it.
I continued working with that company for three years and during that time I became engaged in a project with Wells Fargo. Due to my impressive performance, one of the Wells Fargo managers offered me a position with a pay increase of triple the salary of my current job. I was beyond thrilled. It was then that I started my career at Wells Fargo and within a short time, I quickly moved up the ranks and landed a vice president position at the age of 30.
Future Startup
What motivated you to start Bdtax.com? How did you start Bdtax.com?
Zulfikar Ali
While working at Wells Fargo, I was constantly tinkering with the idea of starting my own company. During the nights and weekends, I would do some freelancing software projects to make some extra money on the side. In 2007 I officially set up a company called NOCHALLENGE Technology. “NOCHALLENGE” means to me that anything is possible. I hired my very first employee in Bangladesh in 2009 and it was a big moment because now I was responsible for someone else’s salary.
While working full time at Wells Fargo, I was leading a small team for freelancing projects, while simultaneously working on developing a couple of software products. A few of those that I was proud of include mypilotlicense.com, radiobanglaonline.com, and ebanglabooks.com. I tried at least 9 other business ideas and all of them failed. In 2014, I was leading a team of 20 people in Bangladesh doing software development work for my US-based clients.
In 2014, I decided to quit my full-time job at Wells Fargo to focus strictly on NOCHALLENGE. In 2013 we had our first baby, a little boy named Zayan and he was only a year old when I quit Wells. It was very scary as I wondered if I would be able to support my family with being all on my own. When I told my friends and family what I was doing, most of them told me not to quit my stable full-time job. But my thought was I am not getting any younger, so it’s now or never to give this entrepreneurship gig a try.
Sometime during 2014 while I was doing my own taxes with the help of a software called Turbo Tax, the idea of BD Tax popped into my head. My thinking was why not develop tax software for the Bangladesh market? I started doing some research and found out at that time that only 1.5 million people paid taxes in Bangladesh. I saw the opportunity so clearly since the population of Bangladesh is over 160 million people and has a very fast growing economy.
When I told others of my idea, I was discouraged because their first question to me was, “who will pay taxes in Bangladesh?” But I ignored them because I felt that I had found my calling. I thought why not build a software platform where millions of taxpayers in Bangladesh can prepare, submit, and even pay their taxes all online? It will really be a tremendous help for both taxpayers and the Bangladesh government because it will greatly increase national revenue which will then support the rapid growth of the economy. Realizing the great potential this idea had was very motivating for me to develop bdtax.com.bd.
Future Startup
What went into building the initial operation of Bdtax.com?
Zulfikar Ali
To fund the initial development of bdtax.com.bd, I cashed out my 401K retirement fund. I hired several income tax professionals in Bangladesh, I learned as much as I could about the tax laws in Bangladesh and I personally designed the software and worked closely with my software engineers for the next two years after that. In November 2016, we had a beta launch and within 30 days without any marketing investments, we got a few thousand people signed up.
I continued to get more and more motivated as I saw the initial traction among the taxpayers in Bangladesh. I was traveling back and forth between Dhaka and Minneapolis to make sure there was a solid product which can solve many if not all of the taxpayer’s problems. As time went on, I started meeting with the NBR officials and tried to convince them that they should partner with private software companies and give them access to their database which would make taxpayers job easier.
In addition, the income tax revenue of Bangladesh would increase significantly. One of my proudest moments happened in 2017 because bdtax.com.bd received a Bangladesh Startup Award. This great event was organized by the ICT Ministry and Grameen Phone. I continued to get more and more energized. Also in 2017, we acquired 17,000 new customers. In 2018, we won the championship title in the BASIS National ICT competition in the FinTech category. We closed out 2018 with 35,000 total customers.
I knew at that time that we were onto something big. Along with BD Tax, I was simultaneously running projects for my software consulting firm as well as being an active father to our two boys. It was a very stressful time with constant travel, worrying about funding and investments, and worrying about the future in general. But I knew that we were building something big and that it would not happen overnight. Each and every day when I wake up, I tell myself to continue to be patient and do the best I can for that day. One day at a time.
Future Startup
You have raised investment money, could you tell us more about that i.e. how much you raised and your lessons from raising investment?
Zulfikar Ali
I initially invested $50K from my retirement fund. After that, I was funding the project with income form my consulting firm. In the meantime, I started talking to VC firms both in Dhaka and Silicon Valley. In early 2017 I asked for $1 million in investments from several VC firms, but they all said no. It was then that I realized that I needed to raise $100K on my own to prove to the large investors that this was a viable product with very large potential.
I made a list of my friends whom I thought can afford smaller investments and than started calling people and asking for money. It was a very hard thing to do. I had to sell my vision to them as we didn’t have any revenue at that time coming in. Persistence pays off because within 30 days I raised my first $100K from my friends and family. Next, we needed additional funds to grow and scale the product. Those initial investors who believed in the idea started telling their friends.
Within a one year timeframe, I raised $400K in additional investments. At this time we are in need of more funding to scale the product even bigger because we are projecting to serve 1.5 million taxpayers within the next five years. In the meantime, I kept my relationships with the largest investors warm. I continuously sent them updates and accomplishments to keep them up to date with what we were doing. Currently, I am in talks with a $3 billion NASDAQ listed company to join us as a strategic investor.
I can’t disclose the name, as we haven’t finalized the deal yet, but this strategic partnership will set us up to become a $100 million FinTech firm within the next 5 years. This is exciting news because it seems like all the stars are aligning now.
In order to raise funds for anything, first I would suggest you fully understand the market. How many customers will it have? Hundreds, thousands, millions? Large investors are looking for scalable products. Next, you would need to build an MVP (Minimum Viable Product) and test the market. With limited traction, you can raise funds from angel investors and then keep looking for a larger company which can be a strategic investor. They can provide not just money but also industry expertise to scale up quickly. Be very strategic about who you take funds from because these angel investors would likely be your advisor as well.
Future Startup
Could you please give us an overview of Bdtax.com in terms of services you offer, your business/revenue, users, team size, operations, size of your business, etc.?
Zulfikar Ali
Bdtax.com.bd is a DIY (Do It Yourself) online income tax platform. Currently, around 35,000 taxpayers are using the system. The taxpayers don't need to fully understand the complex forms and calculations so this is very user-friendly. You can go in and create your account with your email address and answer a few short questions. After that our system will auto calculate your tax return based on the answers you have provided. Our system will also guide you regarding how to get your tax rebates.
Starting with the 2019 tax season, our customers will be able to easily prepare, submit and pay their taxes online. We are working diligently with the leaders of NBR as well as Sonali Bank to make this a one hundred percent online tax return process. This fully integrated online service will save significant time and money for the taxpayers. During the tax season, we will provide online chat support from 8 am to 2 am. We will respond to questions via our chat service within less than one minute.
We have expert tax consultants ready to answer any system or tax-related questions that you may have. Including our software engineers, support team, and our marketing people we are 15 team members strong. In order to support the tremendous demand of the platform, we are planning to scale up to a 35 personnel team in 2019.
Future Startup
How have you attracted users and grown Bdtax.com? Could tell us a bit about your process (how you executed your growth strategy and activities you carried out)?
Zulfikar Ali
Our main growth strategy is leveraging social media usage in Bangladesh. We have over 160K followers on Facebook and are growing rapidly. We will continue to invest in our social media outreach efforts going forward. We also publish blog posts related to tax matters which are very popular among our customers. We also have plans to collaborate with A2I and deploy bdtax.com.bd to rural areas through 4600 union based digital centers.
Future Startup
What’s your business model? How have you grown your revenue?
Zulfikar Ali
We charge a small annual fee from our customers for using the site. As our customer base grows, we will be offering personal finance FinTech products in the coming years.
Future Startup
What are the biggest challenges you’ve faced?
Zulfikar Ali
Every single step of this journey has been challenging. But working through these challenges is part of an entrepreneurs job. Every challenge we faced and overcame so far has gotten us further along. I would give equal importance to product development, fundraising, customer acquisition, and government relations.
Future Startup
How do your sales and marketing work?
Zulfikar Ali
We leverage social media and word of mouth.
Future Startup
What are some lessons you’ve learned?
Zulfikar Ali
Patience. As an entrepreneur, patience is the key to success. Once we started this company, there was lots of excitement at the beginning. But as time goes on, we have been faced with tough challenges continually. Often we get discouraged and we want to give up. There are things like fund issues, people issues, regulatory issues, and the list goes on. The main focus is on being patient and keeping an eye on the bigger picture and making little steps every day works for our team. Also, we celebrate every little win we get, whether it be getting a cake or organizing a dinner with the team. With startups, keeping team members motivated is very important. I do share everything with my team, even in investor meetings. That way we are all in sync with our mission.
Future Startup
What are your goals for the future?
Zulfikar Ali
We are planning to serve 1.5 million taxpayers by 2024.
Future Startup
Have you found anything particularly helpful or advantageous in the process of building Bdtax.com?
Zulfikar Ali
I have learned a lot and in the near future, I intend to write a book about my journey. One thing I would note here is that my early investors believed in an idea and gave me the funds to build it. They gave their hard earned money and invested in me. I am very thankful to them for all of it.
Future Startup
What’s your advice for other entrepreneurs who are trying to build a business?
Zulfikar Ali
Think big but take small steps. Slowly each step will get you to the bigger target. The entrepreneurship journey is unique to everyone, but one thing all entrepreneurs have in common is perseverance. If you believe in yourself and want it badly enough, you will make it happen. No one else except for you is responsible for your actions.
Future Startup
Where can our readers go to learn more about Bdtax.com?
Zulfikar Ali
Taxpayers can go to bdtax.com.bd and sign up with two clicks and start preparing their taxes. It’s simple as that.
