Amarlab is an on-demand at-home pathology service company. Founded in 2017, the company has experienced excellent growth within a short period of time. We featured Amarlab about a year ago at the beginning of the global coronavirus pandemic. Like every other digital service, the digital healthcare landscape in Bangladesh has since changed 360 degrees. Today, people are simply more open to trying digital services which was not the case before.
Owing to the shifts in the market and a relentless focus on growth, Amarlab is a different company today. In the last one year, the company has seen 6X growth across all important metrics, raised half a million in pre-seed investment, and expanded its operations in two cities outside Dhaka.
We recently sat down with Amarlab co-founder and CEO Tazin Shadid to understand where the company stands today, its evolution, growth, and strategic ambition. We discuss Amarlab’s product, team, business, strategic direction, growth, priorities, fundraising, challenges, culture, and much more.
Ruhul Kader: Thank you for agreeing to this interview. What are you busy with these days?
Tazin Shadid: We have some ambitious user growth targets, so we have been head down focused on it. We get a lot of repeat customers, which is a good thing to have. Many people need to worry about making sure that customers stick with their product. We don't have to worry about recurring customers.
The challenge for us has been convincing people to use our service for the first time. Once people use our service and realize how easy it is to get diagnostics done from home, they become regular users.
The best example is my mother-in-law. After going to the USA this time, when she had to go to the clinic for a test, she was like don't they have anything like Amarlab here. She was like why would I have to go to a center, travel, wait there, do all these things to do a test when I could do it sitting in my home.
So we have some advantages in retention. The challenge has been to attract new customers — how can we make more people use our service for the first time.
We serve several thousand patients every month. We are working to significantly increase that number. By December, our goal is to get to 500 users daily. This is our north star. All other activities — building the team, strengthening the operations so that we can serve the increased demand, introducing automation, — are aimed at getting to this point. For that, we need significant efforts.
Some of these things we need to coordinate with our partners. For example, among our partners, only a few are equipped with digital tools and automation. Many labs and hospitals still don't have digital reports which we now prepare for them. We are working with our partners to automate these things so that we can serve our customers more effectively and efficiently. Without automating these things, we can’t deliver instantaneous results for our customers.
Keeping the Northstar in mind, we are separately working in all these areas.
As the organization grows, maintaining company culture gets challenging. As I told you before, culture is important to us. An organization is not only about numbers and money, it is also about work culture, people, and all that. We continuously work on our culture. Just recently, we have hired our first VP of People, Learning, and Development.
Besides, one of my major roles is raising investments. We raised half a million dollars last year and have some ambitious goals this year.
We expanded to Chittagong last year. This year, we plan to expand to other divisional headquarters. We also want to expand our cloud lab model and open a few more cloud labs. For these expansions and also for the digital transformation that we are helping our partners with, we are working on raising investments. That is currently an overview of my focus.
Ruhul: A lot of things are happening.
Tazin: Yes, it is an exciting time. From last year to this year, we have turned into a completely different company. We have these regular check-ins with Accelerating Asia. In our last check-in, I was sharing — from last January, when we started, to this January, our revenue, users, and every other metric have grown 6X. Now we have to grow even faster. We are approaching those tipping points.
Ruhul: The last time we spoke, it was the very early days of AmarLab. As you mentioned, you are a very different company today: you have seen excellent user growth, the team has grown, there have been changes in your product strategy. Could you please give us an overview of Amarlab today in terms of organization, people, operation, and product? For instance, you did not have a cloud lab when we spoke last time and now you have one cloud lab. You had a few products in those days that you discontinued.
Tazin: We have grown as an organization — we are now 60 plus people and growing.
Ruhul: When we spoke last year, it was like 20-25 people?
Tazin: Yes, it was 25 I guess. Towards the end of last year, we crossed 40. Since we are obsessed with customer experience, we try to align everything accordingly. For instance, there are partners who offer a 4-hour window to patients for home collection, we try to give a one-hour window. If we ask people to wait for four hours for home collection, we think it is a bit of a stretch for many people. As a result, the number of medical technologists has increased. Our customer support team has also grown.
We have some internal calculation of how many customers a field medical technologist or a customer support representative can serve. Our team will grow as order grows. We have people in our pipeline which is a good thing.
We have a tiny marketing team built recently. We are now building our sales team. We have a Head of Business who joined us from a senior position in a reputed bank. We now have senior people in many positions. Before people did not know much about Amarlab but it has changed in the last one year. We have been able to build a reputation in the market as an organization that cares. The goodwill we have been able to build in the market is paying off in attracting better talents and so on. When we recruit we get a lot of high-quality applications, which is a good problem to have. This is how the organization is growing.
Last year, when we saw a surge in our orders during COVID, we made a conscious decision that we wouldn’t depend on COVID for growth. That decision has brought fruit. Today, we have more non-covid patients. Many people think that our growth is partly due to COVID. But COVID is only about 10% of our orders. We have been to make people rely on us for their regular medical tests for both chronic and non-chronic patients.
I have been working in the public health sector for a long time. We have always wanted to promote preventative healthcare. To that end, we now see that a lot of people are doing full body check-ups, executive health checkups, etc. We have some exclusive offers through our partners. For example, we have a partner Dr. LalpathLabs, one of the largest diagnostic chains in the world with a presence in 27 countries. They offer a health package in collaboration with us, which you can't find anywhere else, where you can do 22 tests in BDT 1000. The goal is to encourage people to take their health seriously and invest in preventative healthcare.
Out-of-pocket healthcare costs are very high in Bangladesh. If we want to change it, we have to encourage preventative healthcare. If we can identify our health challenges early, we can address them instead of finding out challenges in a moment when we either need immediate medical support or hospitalization. But often we end up finding our challenges when it is almost too late. People are however slowly learning the importance of preventative healthcare but we have a long way to go. So our organization's growth is following this curve.
As you rightly pointed out, in services when we were speaking last time, we wanted to do everything. We used to say we have four pillars: drugs, doctors, diagnostics, and data where we want to work. Now we have narrowed down our focus and we want to focus only on diagnostics. We want to be the healthcare backbone for Bangladesh. We have all these labs and hospitals who are our partners and they are providing diagnostics service through us. Many of these partners are outsourcing their entire home collection to us such as Popular, Islamic Bank Hospital, Trauma Center, etc. They now see that we are the expert in the at-home collection.
Besides, almost all major digital healthcare startups are now partnering with us for diagnostic services. For example, if you go to the Maya app and want to do some tests, you will see Amarlab popping up and you can order our service from there. We have done the same with several other partners such as DocTime, Pulse, Sajida Foundation's home care, elder care services, etc.
So we have these lab partners on one end, we have these service providers on the other end, and then we have corporations who are getting our service for their employees. From that perspective, we are like this hub from where everyone is taking diagnostic services. We are becoming the default choice which we want to be for diagnostics. So we are focusing solely on diagnostics.
One major byproduct of this is data. We are working with some very interesting data sets where we are seeing health trends across locations and times. For instance, on average people in old Dhaka areas have higher cholesterol levels compared to other parts of the country. We can deduce that to the food habits and lifestyle of people. So we are seeing these large-scale interesting data sets where we are noticing these types of fascinating trends.
We are looking into these data anonymously removing the personal details. We can also give people access to see their health trends based on their previous reports. For example, I regularly do lipid profiles and I can see my trend. For example, we now know that a significant percentage of people in Dhaka are vitamin D deficient. We can see these data from our collective reports. So health data is another area we are focusing on. This is going to be valuable both at the individual level and at the community and national level.
At an individual level, obviously, it helps you. You can see where you stand healthwise. You can have all your health records in one place, which is not the case now. For instance, even today, when I take my mother for her doctor visit, I have to find and organize all her 15 years of treatment reports and take them with me. But if we have all these reports digitally, I can simply give the doctor the link and he can see it online in one click.
At the national level, nobody has this data. Many people have health data but they don't maintain data. We are putting all the data together removing the personal information. We can run a lot of analysis on this data which can be useful for public health, pharmaceutical companies, and many other partners.
Ruhul: That data part is fascinating. It can be a game-changer for public health and give you a beautiful enterprise business. Similarly, as you mentioned, it can be very useful for individuals. Since, as you said, many hospitals don't manage these data and if your automation initiatives help hospitals to save these data and eventually if you can give patients a login or identification to their data, it can change everything.
Tazin: That is the goal. Ultimately what will happen is that everything is plugged into one system and go from there. Initially, customers can log in and they can see their reports and they can see their trends. These things will be accessible to the customers. On the partners' end, we are encouraging more partners to go digital. But digital transformation is not easy for a lot of our partners. We have work to be done there.
Ruhul: Last time we spoke you were working with some 15 lab partners and you had two types of partners: premium and regular and you used to earn a commission from the premium partners. How does the model work now?
Tazin: The model remains the same. Our lab partners have grown but we are very careful in terms of onboarding partners. We do a lot of quality controls and we don't want to work with any and every lab partner. We even cross-check test results from different labs to see the quality. We check the quality, equipment, process, and everything when we onboard a lab.
Obviously, outside of a premium partner, we can work with anyone. For example, a few weeks ago, one of our regular clients wanted to do a few tests from ICDDR’B. ICDDR B is one of the partners but not a premium partner. But we went there and we helped the customer to get the tests done.
But we always try to work with premium partners. It allows us to have a deeper collaboration where we can offer premium packages, address costs issues many customers face, offer discounts, etc, and encourage more people to do tests.
A large number of patients don't follow through with the doctor's test prescription. There are lots of issues and frictions. It is not only about access and transportation, there are issues of costs. For instance, many people come from outside Dhaka for medical treatment. If they want to go through all the diagnostics tests and reports after seeing a doctor, they have to stay 3/4 days in Dhaka which is infeasible for many people. It is expensive and there are many other challenges. We keep that in mind and see how we can reduce the cost.
This also tells about our ambition to be everywhere in Bangladesh not just in Dhaka. It is not enough to solve problems in Dhaka alone, healthcare is a nationwide problem.
This is also a challenge in many markets such as the USA where we found only one newly founded company that offers a similar service. But they were where we were two years ago and take quite some time to schedule whereas we can deliver your report the same or the next day.
Ruhul: How long do you take to deliver the report after sample collection?
Tazin: It depends on several issues such as the type of test because different tests have different requirements and timelines. We have all these details on our website and if anyone wants to speak with our customer care team before booking a test, they can.
Then there are issues of convenience and timing. Many people prefer the office, and others prefer the home. While we are bringing this much-needed innovation in healthcare, we depend on our partners for delivering healthcare and their timing is also important.
Ruhul: How is your Chittagong expansion going?
Tazin: Chittagong is actually going better than expected. Our growth in Chittagong is much faster than in Dhaka. We are getting a lot of engagement from customers and partners. One major reason for this is that there has always been a demand for such a service, which is the case in many places.
Second, our partners are working very closely with us. Our regular partners such as Popular and Ibn Sina are already with us and some of them entirely outsourced their home collection to us. Besides, we have many local hospitals and labs in Chittagong such as Chevron that are working with us.
That's one of the reasons we are trying to accelerate the expansion. We have been operating in Dhaka for a while now. The need is much more acute and higher outside Dhaka. We want to expand to our divisional headquarters as quickly as we can.
Ruhul: You have launched a cloud lab. Can you please talk about what it is and how does it work?
Tazin: The name to some extent comes from the idea of cloud kitchen. Cloud kitchen as the name suggests is a kitchen where foods are being prepared and delivered to people's homes and offices and there is no restaurant or in-premise eating place.
The concept of cloud lab is almost similar. We work with partners and that is still our core business. But in many instances, we do some large-scale projects with our corporate partners, with schools — for instance, in the last two months we worked with 10 schools where we probably did tests for 400 students at once. Now transferring all these 400 tests to a partner lab is difficult and many of our partners are not set up like that either. That's when the idea came that we do a small lab for basic tests where we can provide better support and deeper discounts to our customers and corporates who usually don't go for regular testing.
Many of these customers don't take tests. We can offer them really good discounted rates to encourage them to take our tests. We are doing this now with several companies such as factories, banks, schools, etc.
Our cloud lab is a cloud lab model. There is no access to people. We are not establishing diagnostic centers or anything like that. It is basically small rooms with equipment. We mostly do the bulk tests from there.
I want to emphasize that it is a second source of revenue for us and our partners remain our primary source of revenue and primary focus. We want to give a platform to our partners and we want to be a partner-driven platform.
I give an example from my previous employer Microsoft. Microsoft works with these partners for distributing windows all over the world. But they still have the Microsoft Surface line which is like another channel but not the main channel. For us, cloud lab is similar where we could experiment with a lot of different things but we will still focus on our premium partners. Both will operate together.
Ruhul: It is basically for bulk and special cases. But do you see cloud labs as a potentially more potent way for expanding to remote and rural areas where there are no diagnostic centers?
Tazin: Yes, the lack of proper diagnostics services is a major challenge in many remote areas. For instance, some of our partners such as Ibn Sina and Popular have a presence across the country. But they are still mostly in urban and semi-urban centers. If we now decide to expand to remote locations, the cloud lab model can be really potent for those locations.
We have some experience of working in remote areas when I and Zahid bhai worked at Spreeha. We worked in some very remote areas including Bandarban and Ruhynga camp. Since we have done this before, it is not very difficult for us to set up cloud labs in remote areas. Moreover, cloud labs are not very hard to set up. This can take healthcare to a lot more people.
Ruhul: How is your B2B business doing? You have built some partnerships and I think you are also pushing the service.
Tazin: We have a few models as I mentioned. One B2B model where we work with labs as their home collection partner. Not just like a premium partner, they outsource their entire home collection service to us. That's a completely different model than our partnership with labs. They tell us you go collect home samples for us as a partner. That's one B2B model.
Ruhul: It means they simply outsource any and every home collection to you and you work as their home collection team. In that case, your relationship with labs changes as you work as their full home collection partner.
Tazin: Yes. In one model, we are giving them the customers and in another, they are giving us their customers. So that's a different model. Ultimately, we hope that everyone outsources their home collection to us. For us, this is our expertise.
This is a difficult service to deliver. We did not realize it in the early days. Many people tried and failed. Because you're going into someone's bedroom and it is not like food or grocery delivery service. You have to look into the small details. For instance, from the attire and hygiene practice of your medical specialist to how he does the job, everything matters. This is not like collecting samples in a lab. The medical specialist travels to the house of people, everything is different. It takes different training and mindset.
Then comes waste management. There are rules for managing medical waste which many people disregard. But we have a built-in process and space in the collection kit for medical waste. Since we understand the home collection domain, we hope that more and more labs will eventually work with us for home collection.
Our next B2B business is where we work with digital healthcare service providers such as Maya, DocTime, Pulse and serve their customers with diagnostics services. For instance, a customer of DocTime needs diagnostics services after doctor consultation, we provide that.
The third is where we are trying to work with companies and organizations to provide corporate healthcare solutions. Grameenphone is one of our partners. They take our service for their employees as well as for their GP Star loyal customers can also access our service at a beneficial price.
This third area is where we are focusing more now. As I mentioned, in the last two months, we have made a lot of drives where we organized health camps in schools and an entire market in Gulshan. We are trying to attract these types of groups. There is a huge opportunity both in terms of business as well health and impact perspective.
Ruhul: One of the things we have seen about B2B corporate partnerships is that people do these things with enthusiasm but rarely do they work. What is your experience?
Tazin: I would say this is not only about our country. It’s the same everywhere. Let me give you a quick example. When I was working for Microsoft in the States, we had excellent healthcare benefits. Everything is free. But no one goes for annual checkups. Because it is a hassle. Then they arrange a camp in a conference room in the office for one week for anyone to go and get the test done. Sometimes these service providers sit on every floor. Still, people don't go. It takes only two minutes to go and get the test done and the entire thing is free. People still don't go. Then they provide more incentives such as if you do the test in your office on the same floor, you will get a $100 gift card for you and another $100 for a charity of your own choosing. So you get $200. Even then people don't go for tests. It takes a lot of effort from both the organization and the healthcare service provider.
Our experience is almost similar in Bangladesh. We have partnered with a lot of companies. Although the benefit is there—the company or health insurance is paying for it, people don't take the service. There is work to be done here. We have to build awareness regarding proactive healthcare.
We have learned that there has to be a continuous effort. I can't move on after a partnership. In order to grow our user base and give our services, we will have to work continuously.
The only difference we have seen is when it is mandated. We have some partners like that and it works differently. In that case, people don't have many options. For example, if you work for an airline, you have to do a test. You can't avoid it. If you are a migrant worker or a factory worker where tests are required every other month, you have to do them. In those instances, it works. In other instances, you have to work continuously, remind and build awareness.
Ruhul: The B2B lab customers who are outsourcing their home collection to you, this is an interesting development. How and when did you launch the product, did you anticipate that this would happen when you started?
Tazin: We did not foresee this. This is an interesting story. I was presenting to one of our potential investors — Osiris Group. In the end, it did not work out but it was an excellent meeting. Their global head Tanvir Gani bhai, who joined us from Hong Kong, was the one who gave us the idea. He gave us a lot of time and we had an interesting conversation. We actually went to the same school.
Ruhul: St. Joseph Higher Secondary School? I'm meeting St. Joseph people everywhere these days. Why is that?
Tazin: The St. Joseph School system did produce some amazing leaders in the country and abroad. It is a great network to be part of.
Anyways, during the meeting, he asked me why we are only doing retail. Instead, he suggested: “you tell these hospitals and labs that I will do the home collection for you, you outsource it to us.”
And we tried and it worked. We started with one partner and then Popular got onboarded. Then Islamic Bank Hospital came on. That took off from just that one meeting. Although Osiris did not invest in us, they contributed in a huge way from that perspective.
Ruhul: What's your plan for this business now?
Tazin: We will continue this. Most of the good labs and hospitals understand that it does not financially make sense for them to use the same person to do the home collection.
One person can collect 40 samples when they are doing it in a lab but when they are going for a home collection, it is one sample in an hour. Although many labs charge more for home collection, it still does not make sense for them.
My business model is different. So I don't have to charge the customers extra to provide that service. So we want to work with more labs and hospitals going forward.
Ruhul: How does the relationship work in terms of revenue model? Do you get a commission per test, or how does that work? Also, how does the product work? Is it like the lab partners put your name on their website or integrate your service into their system so that when someone places a home collection order, it directly comes to you, how does that work?
Tazin: How the product works vary from partner to partner based on their technical capacity. For instance, Popular, one of the largest labs in the country, has integrated us into their home collection system. They have a form on the website and when a client fills it up, we have direct access to the form and we can see it. Clients can also see us on their website and across systems as their home collection partner.
For others, they have our name on their website and when someone calls for a home collection, they send the client to us. Some partners give us patient information after collecting them and we then collect the samples.
There are different types of options based on where our partners are technically but ideally as the digital transformation happens, the best option is when we are integrated because when we are integrated we can directly get the data from the system.
Tazin: Financially, the model is different from the regular one because it is their customer that we are serving so revenue sharing is a bit different than when we are giving our customers to them.
Ruhul: Business-wise, you mentioned you have experienced 6X growth which is a significant number but would you like to break it down a bit in terms of the number of orders, etc?
Tazin: We serve between 1500-2000 orders monthly and we have just crossed 25,000 orders.
We now want to grow this number many times. As I was saying, we want to get to 500 collections a day by December. That's where we see a 10X growth. Since we now have a business team, we are now working on the goals and planning regarding how we can reach the goals.
Ruhul: Since we are talking about growth, what does the growth equation for Amarlab look like? Say for instance, if there are three variables A, B, and C, what are those three components you see in the equation?
Tazin: We are focusing on corporate and trying to be really good at it. Our retail business has been doing very well. We don't necessarily need to do anything much. That's purely through word of mouth and the love of our customers. We call every customer after they take our service. We take ratings from our customers every month from 1-10. 10 is the best service they have ever received. Our average rating is always above 9. Last month it was 9.08.
We have loyalty programs for our customers. We can see that people are inviting and referring to others all the time which is a very good thing. So we believe retail will grow on its own. Right now, we want to focus on corporate clients and grow the number there. As I mentioned, we want to work with large factories and organizations that need mandated health care. We want to focus on these areas now.
Ruhul: You want to focus on the bulk numbers?
Tazin: Yes, we want to focus on the bulk numbers.
Ruhul: From the P&L perspective, how do your numbers look? What are some of the cost centers and where does the money come from? How does your unit economics look?
Tazin: One of the major areas we are investing in is tech. We are improving our products and growing our team. We are adding new features in our app such as health data and also looking into automation. We don't have a rider app as yet. Our app is for clients only now. We are looking into a rider app as well where we can make the commute of our riders more efficient. It is a big source of cost both in terms of resources and growing the team.
We are growing our sales channel and team, which is a cost center for us. Another is expansion. Anytime we are going to a new location, there is a cost associated with it. For instance, we have started in Savar last week and we are looking into expanding across the outskirts of Dhaka. We have our existing partners Ibn Sina and Popular who have a presence there. We have also onboarded Enam Medical which is one of the big providers in Savar.. With the expansion, our team is growing which is also a cost source.
However, we now understand the dynamics of expansion and can scale relatively easily. These are some of the main areas where we are investing and plan to invest more in the coming days.
Tazin: Our average ticket size is BDT 3500 on average. We get an average 30% margin per test. It varies depending on our partnership with the labs and the type of tests but on average, this is what we can maintain. That is why it is a pretty good revenue model as we grow and have more users, our revenue will grow and costs will come down.
Ruhul: How much has the market changed? When we were speaking the last time, you were saying the market was in its very early days. It still is in its early days, I think, but what are some of the changes you are seeing in the market after a year?
Tazin: An increasing number of people now recognize that you can do so much without traveling physically. The market is not yet there where this is a mainstream understanding but people are getting comfortable with the idea that you can essentially take healthcare without leaving your home.
It is not just diagnostics, our partners in telemedicine, medicine delivery are seeing excellent numbers. One of our partners is DocTime which operates in telemedicine. They're doing like 600 consultations a day. This was not possible even a year ago. But people are now considering this as a viable option. We believe people will increasingly trust digital healthcare services.
Recently, we have done a small study to understand our slow new customer growth rate. We have an excellent retention rate. But our new customer growth is not that high. We wanted to understand the phenomenon. The first barrier we found is the trust in digital services. People are used to physically going to hospitals and labs for tests. Many people worry whether sample collection from home is safe and whether the quality will remain the same. But sample transportation is a common process across the world. Even in Dhaka, many labs, if it’s a chain, don't run the tests where they collect the samples. So these issues are a matter of education. It’ll take time. But the transformation has started to some extent and it will increase further in the coming days.
One of the challenges for us is market education. We still need to explain the model. When people come to us, they ask where is your lab?. But we don't provide tests from our own lab, we help you to choose any lab you want. This model is still very new in Bangladesh. A lot of companies now provide home collections in Dhaka but most of them do it from their own lab. We give you the choice to do it from any lab you want.
There have been some positive developments where people understand the service but I think we have a long way to go. The good thing is that it has started.
Ruhul: One of the challenges I think is a lack of sense of control. When we are taking an offline medical service, we to a certain extent feel a sense of control that we will be able to see a doctor, get the test done, and get the reports within a scheduled time. But when we are doing the same thing online, people can't conceive that a three-hour test is really going to happen in three hours and if it does not happen, they don't know how to deal with it. So there is a sense of lack of control. Do you have any response to that? How can you offer people a sense of control?
Tazin: We can offer precise time windows for collection. That does not mean that we don't miss it ever. We do. Things happen beyond our control. In those instances, we fail to maintain time but in any other instances, we can serve you on time. In terms of report delivery, customers get the digital report delivered as soon as it is ready. If they need the physical report, we deliver it to their homes within a certain time.
We are operationally efficient to offer an hour window for collection whereas many others provide a 4-hour window. Sometimes we can provide a half-hour window. We try to maintain that. We take individual feedback and check them. There are issues like labs delaying report delivery in which case we can't deliver reports. But in general, we can provide an excellent service level agreement.
Ruhul: How does your distribution work as in how do you collect samples? Is it centralized or do you have teams in different locations for collection in those areas?
Tazin: We work from several different zones. Savar is a separate zone. In Dhaka, Mohammadpur and Dhanmondi make one separate zone, Gulshan and Badda make another, etc. We have divided different areas into separate zones and serve accordingly. As we grow, we plan to divide the greater Dhaka into more hubs, make the hubs smaller, and increase the overall number of hubs.
The advantage of hubs is that I can serve my customers faster. Our advantage is that we have a corporate partnership with our labs which means if someone from Uttara wants a test from Popular we can do that from Popular Uttara. We will gradually make these zones smaller.
Ruhul: How many active zones do you have now?
Tazin: We have three now. We are taking advantage of our offices. We have an office in Banani and another in Mohammadpur, Ring road. We are using these locations as our zones.
We can collaborate with hospitals and labs that we work with. We are also looking into working with pharmacies where we can partner with them in terms of locations. We are looking into how we can make this even more efficient. Our operations team is looking into a continuous improvement.
Ruhul: You tried medicine delivery through partnership before?
Tazin: As I mentioned, while we try to meet all the needs of our customers, we do it through partnership. We don’t do medicine delivery ourselves and we don’t want to do it either. We want to focus solely on diagnostics.
Our latest version of the app which is scheduled to launch sometime this month will have different services but all of them are through our partners. Our core area is diagnostics and health data. We want to work on these things. But our clients will have the option to take the services of our partners through our app.
Ruhul: You raised a pre-seed round last year, what is your experience of raising investment? What are your takeaways and lessons?
Tazin: It is a new experience for me and an interesting one. Every time we meet an investor I learn a lot. I mentioned the story of Osiris and we have a lot of similar stories.
Investors offer different opinions and advice. It is about being able to parse them and decide what to accommodate and what not to. Healthcare is a different beast. Many people necessarily don't understand healthcare. So we need to be mindful as well when people offer feedback. You can see the list of feedback from one investor there (in the office whiteboard). Some of these we might be able to accommodate but others we would not be able to. After every investment piece, we go through it and try to understand.
One lesson is that, apart from the feedback and inputs you get, you get more practice and you get better. Especially through Accelerating Asia, every week they have pitching events. Throughout the three months, you are always pitching to someone: angels, VCs, and LPs. I maintain a database to track where we stand with whom. I think we talked to 50 plus investors in order to close our pre-seed round.
In Bangladesh, I think we are in the infancy when it comes to local investors. In particular, we don't yet have standard term sheets. Many investors share terms sheets for pre-seed that are applicable for Series B. One investor we worked with took us to a lab we stayed away from, learned about our process, and launched a similar service afterward. So we had all kinds of experiences.
Having said that, I have learned a lot. I love to learn and my learning hats are always on.
Ruhul: What are some of the lessons or takeaways you would like to share with other founders who are raising pre-seed investment?
Tazin: One lesson is that you should continue doing it and not get disheartened when people say no. You will hear more Nos than yes. I have seen many people who are doing well and have good ideas but after a few rejections, they stop trying. But entrepreneurship is difficult and you can’t have it any easier. Now that I think about my previous experience, especially our first venture which was in fintech, I can connect. We gave up too easily. We did not raise money and once ran out of money, we quit. We had a lot of interesting ideas. But we did not try hard enough. To that end, I would say not to give up. Continue doing it. That's one thing.
Second, raising investment from anyone is like a relationship. You have to try to pick the right partner. I see a lot of young founders take money from anyone who would offer it. It hurts really bad later on and complicates the later rounds of funding. You should keep in mind that you also have to say no to some people. Many founders don't practice this. It is very important to have the right investors. Not all investors could be right for you. If you think about it, it is going to be a long journey with you and your investors. It is hard to find exits in Bangladesh. So when you are raising investment, it is at least a five-year journey. So it is important that before you get into a relationship, both parties are happy and understand what they are getting into.
Finally, maintain some sort of a framework to track all these conversations and communication. It is easy to track 3-5 communications relatively easily, but when you're dealing with numbers like 50, that's different. There are a lot of tools and templates out there such as Airtable templates, Trello templates, and others that you can use to keep track of all of it.
Raising money is a full-time job. It is important how you balance your operations and raise money. The advantage we have is that my co-founder Dr. Zahid, he focuses on operation when I focus on the investment. For strategic decisions, we do it together. It is important that your operation is running smoothly because you want your business to grow and not focus only on fundraising.
Ruhul: As you mentioned, maintaining relationships with investors is critical. How do you maintain relationships with your investors? Do you have a framework for doing it?
Tazin: It is very important to maintain relationships with investors. Even with the ones who said no. Probably they said no because you are not at the right stage for them.
We maintain a database of investors who said no to us in our earlier round and send them regular updates. Many of them regularly help us by connecting us with people. Every month we send out a newsletter to our investors and close networks with real numbers and transparently. It often brings new opportunities.
Ruhul: When we spoke last time, we touched briefly on organizational culture and your take on culture. You are a growing organization. The team is growing and the challenges must be different now. What are the challenges now in terms of creating and maintaining a culture?
Tazin: The biggest challenge now is the company culture. We now have people coming from different places and with different ideas. I and Zahid bhai have been working together for 15 years. We understand each other well. That's not the case anymore. Our CBO is from banking. We have people who are from different organizations. So how we maintain the culture has become very important.
I just finished reading Ben Horowitz's What you do is who you are. It is a fascinating book and hands down one of the best books I have read on culture. Many times we see company culture in a way that is absurd — leadership gets together and selects a number key words or values and that’s their company culture. The book suggests what you say is less important than what you do. There has to be consistency between what you say and what you do.
To me, what you feel, what you say, and what you do — at the intersection of these three is where culture and values stand.
Our leadership team works on this regularly. For instance, we were recently reviewing Netflix's Culture Code that went viral a few years ago. They have some interesting concepts there such as “we are not family”.
We sometimes hear companies saying that we are a family. But honestly, a workplace is not a family. It is more like a sports team where you're working together and if a player does not play well they can't be in the national team, for example. Same with work. Family is a different concept. So we are always thinking about how we’re going to work as a team. It doesn’t mean we’re not gonna have a relationship. We will have a relationship. We are coworkers. We care for each other and have each other's back.
We are always talking about these things. We have regular sessions where we — the leadership team — study these things together and then compare what we learned.
Every Thursday we dedicate our second half of the day to learning. The leadership team comes together. We talk about things outside work. We have a channel where we share knowledge, ideas, podcasts we listen to such as Masters of Scale and How I built this, etc.
We are at an inflection point where we really need to think about culture. Before we were a small team. It was easy to instill values in people. As we grow as an organization, we need to be careful and pay greater attention to our culture.
Ruhul: Excellent points. As you transition from a small team to a growing organization, you’ve correctly pointed out that getting the culture right at this stage is extremely important. Your thoughts offer an excellent template about how to do it. That was the last question. Thank you for taking the time to speak with me. It is always an excellent learning opportunity for me to speak with you. Any parting thoughts?
Tazin: It is always a pleasure to see and talk to you. I get to reflect and see where we are now. It is fun to talk about these things. I told you you should start a podcast, we don't have a podcast about entrepreneurship in Bangladesh. You have a good platform and I think you should start a podcast. And thank you for having me.