MJ Ferdous is the Chief Operating Officer of Brain Station 23, a Dhaka-based technology services company serving customers across 25+ markets. Brain Station is one of the largest IT outsourcing companies in Bangladesh. Over the past years, the company has experienced excellent growth and is now eyeing further expansion. Mr. Ferdous is also a director of the company.
In this fascinating conversation with Future Startup’s Ruhul Kader, Mr. Ferdous talks about his path to what he is doing today, his experience of working in Europe in the early days of his career, and what Bangladeshi tech companies could learn from European markets, the operational dynamics of Brain Station 23, how Brain Station is designing its organizational structure for scale, the dynamics of software outsourcing business, the critical importance of culture, the future of IT services market, Brain Station’s operations today and its ambition going forward, designing scalable organization, the critical importance of patience when you are in a leadership position, lessons from his journey so far and much more.
Ruhul Kader: Thank you for agreeing to this interview. Can you please tell us about your background and your journey to what you are doing today?
MJ Ferdous: I was born in Narsingdi. When I was six months old, we moved to Dhaka and I grew up in the Dhanmondi area where I spent most of my early years. When I was in school, I wanted to be a pilot. But that dream didn’t fly partly because I didn’t know how to pursue it.
I got introduced to computers in 7th grade. This was in 1993 I guess. Computer skills such as Microsoft Word and Excel started to gain importance in the job market around this time.
We had an internet cafe in our area that I used to frequent. I was a quick learner. Our cafe owner noticed that and he was quite impressed with my skills. He gave me free access to the cafe so that I could teach others who were there for training. So I had an opportunity to use a computer for free and work as an assistant teacher. Probably the seed of working in tech was sown during those early years.
The elder brother of a friend of mine had a computer hardware business. My friend knew a lot about computer hardware. I learned a lot about hardware from him. We used to go to their house to play video games. We did not have many classmates who had computer skills. Learning opportunities were limited as well. So we quickly became close friends since not many people knew tech stuff, especially computers.
Although I wanted to study CSE after HSC, my parents wanted me to study medicine. So I took the medical college admission test exam, which I didn’t pass. Instead, I got a chance in Pharmacy at University. But I was interested in Computer Science. So I didn’t go. We had a few newly established private universities that were doing great such as AIUB, NSU, etc. But they were not as reputed back then. So initially I planned to go to India to study computer science. We had several computer training institutes such as NIIT back in those days. I knew a few trainers there who studied computer science from India. But my father was abroad at the time. So I had to stay in Bangladesh. So I eventually went to AIUB where I studied Computer Science.
In my first semester, I didn't have a personal computer. So I didn't take any programming language courses. Instead, I took other fundamental courses. I did an impressive result in the first semester. I bought a computer in my second semester and took a programming language course where I did excellent result. I felt confident after that. My SSC and HSC results were average whereas most of my classmates in the university had excellent results. But I did very well at University. I got progressively better grades each semester. My teachers also started to take notice of me which grew my confidence. I was one of the toppers in my class and also received a scholarship. I graduated with a CGPA of 3.9 on a scale of 4. I was the highest CGPA holder in our convocation.
I was supposed to join as a teacher at my university after graduation. But I was an excellent programmer. So my teachers suggested that I would do better if I work in the tech industry instead of taking a faculty position. So in 2004, I joined a software company with much less starting pay than a university lecturer.
As you asked how I came to where I'm today, I wanted to be an entrepreneur when in university. It was in my last semester. We're assigned to go to the industry to do a project. Instead, I and three of my friends decided to work on a real project for a course where we made software for a private company. we're also thinking about whether we could do anything together. But I did not get any payment for that software. I was very unhappy about it. Since we did not have a written agreement with that company, they did not pay us after the delivery of the software. After that, I lost interest. Moreover, we're all from middle-class families, so we didn’t have a lot of financial freedom. So eventually I chose not to pursue entrepreneurship. After graduation, I thought I would focus on my job first and see what happens in the future.
For the next two years, until 2006, I worked in Bangladesh. In the last company I worked for in Bangladesh at the time, I was in a very good position. I was in a technical position and was managing a team of 14-15 people. We used to manage a Canada-based outsourcing client. Meanwhile, I got a fully-funded scholarship for a master's program at the Italian university Politecnico di Milano. I applied on the insistence of a friend of mine. It was a good opportunity. Apart from the scholarship, they were giving me an additional 10,000 Euro per year to cover my living expenses. So I moved to Italy in 2006 to do my master's.
While doing my Masters in Italy, I got a paid internship and research opportunity at Rockwell Automation. It was an interesting opportunity funded by the local business association offered to meritorious students. I was recommended by one of my professors for the internship. Rockwell Automation is an American company. They had a branch in Italy. They build system software for pharmaceutical companies and supply hardware. I was tasked with developing a warehouse algorithm. After my internship, I continued working at Rockwell Automation for another 8-9 months as a part-timer on a contractual basis since I was on a student visa. I was a Dot.Net-based developer from the very beginning. But at Rockwell Automation, I had to work on Python. I worked there for two reasons: one for the research which was part of my academic program. Second, since they were an international organization, English communication was okay there. Since I was looking for Dot.Net-based or Microsoft platform-related work, I later changed the job and worked for another company.
Being in Europe allowed me to work in international IT firms which I did not have before. My plan was to build an outsourcing business and do something in Bangladesh. I was not getting much success there because everyone was telling me that you are too young to start a business. You should get some more experience and so on. I was not ready to return to Bangladesh and do something here. I was not feeling comfortable.
In 2009 during a vacation, I was invited to speak at a session organized by Microsoft Bangladesh. The technology I was working on at the time was not common in Bangladesh. I was working on Sharepoint. Microsoft was relatively new in Bangladesh. Microsoft Bangladesh organized a Microsoft Day event. I met Omar Al Zabir, one of Brain Station's strategic partners, in that session. He was also a speaker there. He later asked me whether I would be interested in joining a project of Brain Station.
Brain Station had a partnership with an American company. I was hired by that company directly as well as working with Brain Station since they had a relationship with Brain Station. For the next five years, I worked on multiple projects for Brain Station in different projects. Eventually, I got settled here although I had two years left of my Italian visa.
Between 2009 to 2016, I did a lot of community activities educating people about SharePoint. At one point, Microsoft took notice of my work and offered me a job. Microsoft wanted to promote and sell SharePoint in Bangladesh. So they were looking for a local expert with good community access. We already started working with Robi on this technology which Robi initially wanted to take from a Philippine company. I was well known in the community in Bangladesh because of my work and networking. I'm no more involved in these activities but I had good connectivity with the student community back in those days.
I eventually joined Microsoft in 2013. For people who work on the Microsoft platform, Microsoft is a dream place to work. So it was the same for me. The only problem for me was that since the role was not on the development track, I was not comfortable in that role. In fact, I did not join Microsoft when they first offered me a position because I wasn’t comfortable with the role. They were offering me non-development roles. When they finally offered me a role related to SharePoint—and it was a better offer compared to previous offers, I joined Microsoft. I had an understanding with the management of Brain Station that if the company grows bigger and if they feel that they might require me here, they might request me to come back. 16:44 But they are happy that I was joining Microsoft. I was working as a Software Architect at Brain Station and was leading a number of projects.
Going to Italy for higher studies, then returning to Bangladesh and joining Brain Station was a turning point for me. And joining Microsoft was another turning point.
After joining Microsoft, I had to go through a transition. Before I was working on one type of backend solution. Since Microsoft had many different types of solutions, I had to master those as well including Enterprise Architecture. So I got better technically—to be specific, developed technical skills on enterprise products. Second, I also learned a lot about sales. Since I had to work with the pre-sales and sales team, it helped me to understand business. Before I was mostly thinking about business. But now I was able to convert many things into reality. My experience at Microsoft helped me develop my business acumen. That's when I started to think that I would work at Microsoft as long as I feel like it and then I would start my own business. I was also looking for investors and was in discussion with several companies interested in investing in IT but don't have the right people who could execute the business. Because I was not confident about starting the whole with my investment and starting it from scratch. My plan was to start with a sizable team and operation because I did not think starting from scratch made sense for me. Moreover, when you work for an MNC and get used to a certain standard of lifestyle, it is very challenging to think otherwise. From my position, it was difficult to consider starting something small. The risk was there as well whether things would work out or not, etc. Therefore getting enough financial backup was important for me.
In the meantime, I was connected with Brain Station in an advisory capacity. I used to meet the CEO quarterly or after a certain period and used to share my two cents. Since Raisul bhai was alone, it was becoming challenging for the Brain Station to grow after a certain point.
So when Raisul Kabir, the CEO of Brain Station insisted that I return to Brain Station, I agreed instead of starting something new. He helped me to become a shareholder of the company. So that’s the latest turning point of my life where I transitioned from tech to operation.
Ruhul: I want to go back to your Italian experience a little. How long was your Master's Program in Italy?
MJ Ferdous: It was a two-year program that I completed in one and a half years. I was the first student at that time who completed it in one and a half years. My goal was to return to Dhaka as soon as possible. Hence I took more courses each semester than my peers.
The contents were quite easy for me since I had working experience. Most of the students with me were from academic backgrounds. Few came from the industry background. I could understand things easily because many of those things I did practically. I even got a distinction in project management. I wanted to complete the program and return to the country.
However, when I got the job at Rockwell Automation I had to change my plan and stay in Italy. I went to Italy in 2006 and returned to Bangladesh in 2009. So I lived in Italy for almost three and a half years.
Ruhul: Can you talk briefly about the Italian tech scene from those days? Any difference between the two markets and any lessons that we could learn from them?
MJ Ferdous: I wouldn’t say that I had seen a lot of major differences. We have world-class talents, so there is no difference there. But you know Italy is famous for machinery because of its quality. I don’t know about now but in those days their cultural understanding of commitment and ownership was different. We have come a long way since then. But in those days, I found their average quality to be good compared to our market. I’m not saying our quality is not good. We have great people. We have talents that are leading global organizations. But the culture of quality, at that time, was better there.
When I was in Italy, I faced few issues of commitment and ownership. People were mostly on time and delivered on their commitments. And when I returned to Bangladesh, I faced challenges in these areas. We had cultural challenges in areas like commitment and ownership. But it has improved a lot since then.
I was a senior software engineer at my second job in Italy. I directly managed an Italian graduate. Although it was difficult initially because he wasn’t used to reporting to an Asian, he was good at his work. He took his responsibilities seriously and was always on time when it comes to deliverables.
We have great people in Bangladesh. We've excellent programmers who are working for the best companies across the world. But many of them would do even better if they have guidance to work in a multicultural environment with ownership and transparency.
Ruhul: That’s an important observation. I agree with you on the fact that we need to improve our average quality. Why do you think this is the case and what can we do to overcome these challenges? Do you do anything at Brain Station to push your average quality?
MJ Ferdous: Obviously, this is an observation made based on my experience from many years ago. I believe we're a different country now and have overcome those challenges.
Culture has a lot to do with this. Many of these things are cultural. For instance, to many of us, work is not a sacred thing. We see work as something that we've to do because it provides our livelihood and so on. We rarely pursue work for the sake of work.
In Italy, I saw that only studious students go to universities. Rest go to technical education after completing elementary school. I could see that the motivation for education was different. It is not the same for us. All of us who are in school don't take our studies seriously. We study for grades. Then for jobs. I saw my classmates in Italy to be highly dedicated to their studies. They enjoy studying.
In our culture, many of us don't enjoy what we do. Be it learning new things or work. You will see in our graduates who do well in engineering schools, they enjoy programming. They love it. And they usually do very well in later life. But this is true for only a small percentage of the people.
Our education system needs work. If we want our students to enjoy their education, we've to guide them accordingly. There is a general lack of passion. This is something we need to solve. The education system should be designed to make learning interesting. We still focus more on theoretical knowledge. There are students who love programming but they don't get the necessary support. If I talk about Italy, they allow a student to take an exam up to four times a year, which is not the case for us. These are on the side of education.
Industry-wise, we've to improve our culture. I think the entire industry should pay attention to this. Brain Station has been trying to build a world-class organization. In Brain Station, we've tried to build a culture that supports human flourishing. I've come to know that there are many good software developers in European countries such as Romania who are giving their service to other European countries. If we want to compete with them we've to beat them in quality. We're now competing with India and Srilanka to some extent. But if we want to compete globally, we've to align culturally. For instance, we miss a lot of opportunities in system software or security software development because of apparent quality concerns.
Ruhul: You talked about the importance of the joy of work. When you enjoy something, you give your 200%. I think we lack this quality in our culture. How can organizations deal with this challenge and encourage people to find passion in their work?
MJ Ferdous: I think companies can try two things to address this. One is building a culture that inspires good work. The company has to build a culture that reminds people of this and has to communicate it regularly.
The second is exposure to a similar culture that you want to emulate. Humans are mimetic. When you put them in an encouraging environment, they quickly adapt to the environment. Have regular discussions with your people to build a healthy work environment where employees put their best effort to thrive.
Companies that can afford it, can send their people to international partner companies for short-term exposure. It should give them cross-cultural exposure, and experience the kind of culture you want to create. And hopefully, it will inspire them. Habits are contagious. When you put people in a positive cultural environment, it should improve their performance.
I would say my time in Italy has changed my approach to work. While I was in Italy, I was very careful. I put my maximum effort into my work. I felt like a representative of my country. I also got excellent training in good work ethics. In general, I am a sincere and careful person. I take my work very seriously. But still, I was quite relaxed before going to Italy. In Italy, I was very concerned. I would check things multiple times before submitting.
When someone moves outside Bangladesh, it changes their perspective and puts them outside of their comfort zone. To change the perception of an individual, it is useful to put them in a different environment. So short-term international working experiences help people grow and improve their work ethics.
I think you have come across this. If you meet two developers, one who has no international exposure and the other who has worked on an international project, you would see after a while the second person starts to change. He grows and learns faster. He takes work and commitment seriously. His communication skill improves.
When we work with a foreign client, it helps change our orientation. Culturally we're more relaxed and don’t worry much about repeating our mistakes. We don't see mistakes as an opportunity to learn. We need grooming and training to change this kind of perspective. We've to ensure organization-wide training and grooming.
This would not happen overnight. Cultural change takes time. But if we put time and effort into it, it is doable. In my experience, the result is always extraordinary.
Ruhul: How long did you work at Microsoft? What are the most important lessons from your time at Microsoft?
MJ Ferdous: I was in Microsoft for four years and eight months. One major lesson is that large organizations run on processes. Some core processes rarely change unless there is a new CEO. Some processes change every year. These processes are situation-based and evolve continuously. This is one thing that I've learned—process.
The second thing is governance. Most small companies are centralized. Everything is CEO-driven. The CEO takes all the decisions from recruitment to other small matters. Now a CEO is not an expert on everything. The second nature is that the CEO wants to control everything. The CEO does not want to give autonomy to different departments in the organization. There are some mental blockages as well I think.
International organizations and large companies like Microsoft operate completely differently in these areas. What do they do? They develop these policies and then let things go. They give the departments complete autonomy. They set some KPIs and goals and if those targets are met, everything is fine. If those KPIs are missed, they pay attention. They audit some of the things every year to see whether the process is working. But they don't bother with what is happening at the micro-level. What is happening in Bangladesh, they know nothing about it. If something big happens, they would know. Otherwise, they don't bother with small matters.
This is a barrier for small companies that want to grow big. If you want to be an international company, you have to address these things. You have to give up micro-management. For instance, you have to give up shares for raising capital or onboarding a partner, you might have to go public, you have to maintain governance, etc. These companies face challenges in these areas after a certain stage. As a result, they can't grow beyond a certain size. So in most cases, this is what happens.
Bangladeshi companies that have grown big were small once. How did they grow? They gradually solved these blockers and overcame them. But still, we don't have companies like TATA, Infosys, etc. The companies that have done a good job at solving these challenges have grown. There are family businesses in Bangladesh that have done a phenomenal job because they have adopted these strategies.
Many companies get stuck after a certain level because management wants control. When you are always trying to control your people and organization, your vision will get stuck. You have changed your priority. Moreover, when you grow, you have many issues to deal with. Unless you let go of control, you will not be able to manage all of them. The process does not work in many companies because the owners don't want processes to work. At times, the personal interest gets involved. If you look at examples of successful companies, process and governance are two key things. You have to allow decentralization. If we can do these things, I think our local companies can also go global.
For MNCs, systems and processes dictate the operation. Although these systems get updated from time to time, they run the organization. As a result, operational excellence does not depend on any one individual. The organization operates like a machine that runs itself. This is unlike the majority of our local companies, both big and small, where most things are centralized and need the CEO’s approval. Often leaders micromanage everything and rarely allow different departments to function autonomically. It slows the organization down and creates a tunnel vision because the CEO is not an expert on everything.
I think large international organizations like Microsoft operate differently. The management structure is different. They have centrally designed policies and systems. Departments and functions enjoy complete autonomy within the purview of those policies. As long as the departments achieve their KPIs and follow the policies, the management does not bother about what everybody is doing. There is little micro-management.
Our management culture in local companies is the opposite which is a major barrier to growth. We need to improve our company culture, management, overall quality, etc. Bangladeshi companies that have become large organizations solved these internal issues. And many companies, despite having excellent potential, don't grow after a certain stage because of these limitations.
If you want to grow as an organization, you can't micromanage. You have to develop and implement processes and systems. This requires a shift in mindset. Leadership has to give up on the idea of equating control with power. The real power lies in empowering people.
When a company owner or leadership can go beyond their personal achievements, that’s when a company starts to grow. If we start practicing decentralization in terms of management in our companies, we will be able to become international.
Ruhul: Can you please break down the process and governance. How can early-stage companies approach establishing process and governance? Is it about writing down the SOPs or what is the path to doing it?
MJ Ferdous: Of course, writing down the SOPs is important. However, it depends on the size of the company. The process development for a 50-people company will be simpler than for a company of 500 people.
It is not possible to implement all the processes overnight. It has to be incremental. The company has to take an agile and experimental approach. For instance, you can start with HR, then accounting, operation, and so on.
Instead of trying to design and implement organization-wide policies, it is better to start small and then scale gradually. You can start with one department and then go from there. Almost all companies have some policies. But along with policies, you have to implement the processes. For instance, we have a policy for promotion and salary increments. But you have to define the implementation process and legal requirements before execution.
While designing processes appear simple, they are not. You need to be mindful of nuances and consider the state of your organization. There is a logical step-by-step approach to doing it. You may take advice from consulting firms or experts to design your processes, modify them, and then execute them. For execution, the department for which the policy is made should be given the authority and know-how about the execution process. Through this process, things will gradually improve. It is an incremental and gradual process that we're doing in our organization.
Ruhul: You are a Director and the COO of Brain Station 23. Can you briefly tell us about what your role entails and your work at Brain Station?
MJ Ferdous: In 2018, when I returned to Brain Station, we're a company of fewer than 200 people. Today, we're an organization of over 600 people. The company has grown almost three times since 2018.
Initially, when we started thinking about the process, I noticed that we had both many policies and well-defined processes. But the processes were not being implemented properly. My first goal was to ensure the proper execution of the existing policies and processes. Since I had some gap in between, it took us two years to restructure the whole thing. For instance, streamlining responsibilities for people. We didn’t make any major changes. Instead, we focused on streamlining the existing operation. We brought some major changes in the third year.
For the first two years, we studied the company, the challenges we're facing, how to structure it, and so on. It took us two years to figure out the whole thing. After two and half years, we've started to build a new well-defined process for the company which we're calling the Entrepreneurial Operating System (EOS). We're currently working on implementing the process.
When the number of our employees crossed 400, we started to face managerial issues as it was becoming hard for us to manage a large organization. We then divided the company into separate units. Each unit has its P&L so that we can understand each unit independently, see their problems and challenges, etc.
Before it was one organization. Now you have a lot of smaller units within the organization which makes management simpler.
International organizations operate this way. They break down the organization into units. When a certain unit does not perform well, they shut it down so that it does not create an overall large impact. We're implementing this strategy.
We’ve divided the organization into units. Now each unit has a team that takes most of the decisions for the department. When a unit of the company doesn’t function well we shut it down to avoid any major issues. We've started to implement our processes unit-wise. For instance, we meet with our leadership on a monthly or weekly basis.
We have a scorecard system that indicates how well a unit is functioning. Then the management makes the decisions based on the scorecard. If a unit is not performing well, management thinks about corrective measures. If it is doing very badly, management considers whether to shut down the unit.
We're also working on implementing a few other processes to strengthen the organization. For example, we had the ISO certification from before. We're now implementing it properly. We're practicing CMMI. We're putting together a process for measuring all the projects. We're doing all these things so that we can establish Brain Station as an international IT company. And let's say if the company becomes an organization of 4000-5000 people, it doesn’t become an issue for us and we can manage the size. We're building the foundation for that.
We hope to complete the entire process within the next one year. After that, we will just scale it up. we're now building the foundation. Once the leaders we're training are fully trained to take the leadership role, scaling up will become easier for us.
My role here is that of an integrator. we're three working partners: Raisul bhai, Mizan, and I. Mizan are responsible for some units. I'm responsible for some units and as well as I'm also responsible for the overall integration of the whole thing. You can call me the CEO of this whole initiative where Raisul bhai is like the Chairman where he offers insights and directions but I look after the operation and Mizan assists me with his SBUs.
Ruhul: What does a typical day of yours like?
MJ Ferdous: I usually have to attend a lot of meetings every day. Let me show you my calendar, which is almost booked. There are meetings of SBUs. I know everything about these meetings. I am sometimes optionally invited to meetings of SBUs which I randomly attend sometimes and check how they are going and if they need support from our side. In some meetings where they report directly to me, I've to attend them. And I've some meetings with SBU leaders that I've to attend. So there are some scheduled meetings. Approximately 50% of my weekly working hours go to different meetings. Then there are other unscheduled meetings as well.
I work around 50-60 hours a week. The rest 15-20 hours is when I do some real work. This is when I work as a person. These are kind of my extra hours.
On average, on weekdays I work around 10 hours per day. On weekends I work around 5-6 hours per day. On weekends, I only attend important meetings. I usually try to spend time with my family on Saturdays. I usually do some work on Friday.
Ruhul: How do you approach your work i.e. what is your philosophy about work, management, and how do you stay productive?
MJ Ferdous: If you ask about my management philosophy, I would say I follow three rules:
First is delegation—I delegate and distribute responsibilities among my colleagues.
The second is experimentation. I suggest to everyone that whatever you are trying to do, start small, see the output, and scale it.
In doing almost anything I take an experimental approach. I start small and then based on the result, I take the next step and scale. Starting small has many upsides. It helps you to avoid major failures. The cost of learning is low. Reduces your chance of mistakes. It is easily manageable. I always follow this rule. It is better to learn from making small mistakes by starting small than to learn from making big mistakes by starting big.
Third, I believe you should do everything smartly and effectively. People vary in many ways. But if you do anything with care, your chance of doing it well increases. Think before you act. Run a simulation, and see the potential outcome and side effects. Once you are happy with the simulation results, start working on the actual plan.
I prefer proactiveness. I want my colleagues to listen to my suggestions and follow up with me if they have any ideas or issues. I try to give proper direction to people so that they can operate.
I no longer get into technical stuff. I rather check milestones. I give the team a milestone to reach and check back only if there is a delay. When I see the team is not performing, I make some suggestions to guide them. I only get involved when things are not working.
For other non-technical teams such as operation, finance, etc, I usually have some regular plans. For instance, we've cashflow meetings and some business-related meetings. I usually monitor their progress through tools such as excel.
I empower the teams. This is the culture of Brain Station. We empower our people. Our people enjoy a lot of autonomy and flexibility. We don’t have a fixed hour for coming and leaving the office. You can have your own schedule as long as you are doing your job. We give ownership to our people. Both in terms of work and in the literal sense of owning a piece of the company. We are working on plans where we plan to introduce employee share option plans. We believe when we empower people, they own the company in the literal sense and they give their 100%.
For example, an account manager works on pricing. It does not make sense that he takes approval every time for pricing. Every team does not need my approval. They can take approvals from their immediate manager. If I am their immediate manager that’s when they should take approval from me. But before taking approval, they need to do the pricing of the service or their respective task according to our policy. For instance, our policy has how much to charge per developer, they should simply follow that and do the pricing. I look at critical issues.
The other thing is we have a legal adviser. When we finalize a contract, it goes through legal vetting. So every document has to have legal vetting, and manager approval, then it is good to go. This is how I try to manage the operation.
I don't like working on an ad-hoc basis. I like to plan rather than adapt to new changes. This is my style of work.
When we face any issues with a client, I usually try to listen to the employee first, and then I listen to our client. I try to listen to both sides before making any decision. I try to find a balance. I don't encourage a customer who is unnecessarily blaming my developer. And I also don't like it when customers are not served well. We listen to both parties and then make a decision.
One of my limitations is that I can't make instant decisions. I need to think. To that end, I'm a slow thinker. I’m a deliberate decision-maker. I prefer to move forward step by step and think through before making any decision. I am not very good at making decisions immediately. I can analyze a situation very well. But if you ask for an immediate response, I would not be able to give you one. I need to think before responding to anything. Some people are good at instant things. But that’s not me. I can read a journey very well and give a good opinion if I've time to think.
Ruhul: What I gather from our conversation so far is that one of your key jobs is making good decisions. Your approach is, as you mentioned, thinking it through. Is there anything else there to your decision-making process?
MJ Ferdous: I don’t have a fixed framework per se. But when we're working on a major decision, we try to use some of the commonly used frameworks.
While making a critical decision, I point out all the aspects related to it. I sometimes use metrics or write on board to get an overview of the related aspects before making any decision. I usually prefer to simulate a plan based on the assumptions before finalizing it. Based on the success rate I finalize a decision.
Ruhul: You mentioned the Entrepreneurial Operating System. Can you briefly talk about it? What is it? How does it work?
MJ Ferdous: Worldwide a lot of companies follow this framework. We're working on adopting this process. It has six major steps. You have to have a mission and vision. Against the vision, you have to have processes to execute the vision. To manage these processes you have to have relevant data. And you will have to integrate people and the data process.
Finally, you have to continuously monitor to understand whether people are working based on the data by using traction where you will have meetings, goals, etc. When facing a challenge there will be issues where possible solutions will be discussed and you apply the solutions to address the problems. Through solving the problems you will grow gradually.
Through these six steps, we implement the Entrepreneurial Operating System. It is hard to summarize EOS. It is a robust system. It is like a company’s operating system which helps the company to operate systematically and grow.
Ruhul: Can you give us an overview of Brain Station today?
MJ Ferdous: Currently, we're a company of 630 people. Operationally, we're divided into multiple units and each unit is divided into small departments. The units are divided into two sections which we call towers, where I look after one section and the other one is looked after by our CTO Mizanur Rahman. This is how we operate in Bangladesh. Our operation outside Bangladesh is structured differently where we mostly operate through partnerships. We're doing different projects there. Those projects are also under either of the towers.
We generate a sizable revenue annually. We've realized that to significantly grow our revenue we've to expand internationally. We're working on opening a branch in the Netherlands and also doing another branch in Dubai. We've plans to create branches or subsidiaries in at least 15 countries. Subsidiaries will generate revenue from those regions so that we can grow our revenue as a whole within a short period. Revenue growth means we will be able to create more employment opportunities. Our target is to take the team size to several thousand people in the next 3 to 4 years.
Our partnership with foreign companies is of two types. First is where the partner wants to open an offshore development center and we work with them. Second is where the company is already well connected in the market and can get good business for us using our portfolio, we enter a sales partnership with them. Currently, we're working with 8-10 international partners which include both individuals and companies. Our service has expanded to almost 25 countries through our partners. This is how we plan to expand—through going physically and through partnerships.
MJ Ferdous: Since we're a service company, we provide talent service which is to say we usually sell skills. In most cases, this is monthly service-based. We have an excellent retention rate. A significant percentage of our revenue comes from recurring customers. We're growing at an approximately 40%-50% rate revenue-wise, our people growth rate is a little more than that, piggybacking on the rapid growth of our existing business.
We get new projects through our international partners. We prefer projects where we've domain expertise.
Locally our sales team makes initial presentations through expert engagement. In the case of international projects, as they are resource-based, in many projects our management team is involved. We're now trying to transition from this where the marketing team and SBU head will play these roles. Because we can't give presentations to all the customers. If we can make this transition successfully and people get ready, we will be able to generate more revenue from international projects.
The process is quite simple. The team usually makes the initial presentation and we get involved in the final stage of the discussion. In the case of small projects, the unit heads can finalize the deal themselves.
We've both sales and the marketing team. Both teams work collaboratively. The marketing team is usually responsible for creating marketing and communication materials.
Ruhul: Your business has a couple of components such as people, skills, marketing, etc. But as you see it from the inside, what are the foundational pillars of this business? What does it take to succeed in the technology service business?
MJ Ferdous: Basic things. You have to deliver quality service to your clients. You have to make sure that you have people who understand and can deliver service based on the needs of your clients.
You need a strong team and gradually need to build a strong HR system to ensure your team is productive. As your company grows, you’ll have to look after the financial side and for that, you will need a finance team.
Most companies have an accounting team, but no finance team. There is a difference between the accounting and finance teams. The accounting team analyses the already existing data and gives a summary based on that historical data. The finance team forecast the future trajectory. Every company needs a finance team. Most companies lack in this area.
If you are a product company, you have to invest in marketing. If you are an enterprise business, you will need a sales team.
Ruhul: Brain Station has seen excellent growth over the last two years, what are some of the things that have contributed to this growth?
MJ Ferdous: Tech as an industry has seen phenomenal growth over the past two years throughout the coronavirus pandemic. We've benefited from the growth of the overall industry. There has been a growing demand for our services. We did not lose any of our regular clients during COVID while we got new clients. This has been one of our major wins.
The first six months of COVID were challenging. We struggled at the beginning when many of our clients were going through a difficult phase. Some clients didn’t have enough money to pay us. They wanted to shrink the team. But we gave them discounts for a certain period instead of shrinking the team. It has helped us to build loyalty and retain all our clients.
We've also entered some new markets in the last few years where we did not have a presence before such as Japan, Trinidad, Dubai, etc, which helped us to grow too.
The other factor that has contributed to our growth is technological expansion. We've trained our developers in new technologies outside the sectors we usually work in. It has allowed us to provide new services to our customers.
Ruhul: You briefly touched upon your plans, can you tell us more about your plans going forward?
MJ Ferdous: We want to expand globally and establish Brain Station as an international IT company. We want to make sure that we meet international standards. We want to provide excellent facilities and benefits to our employees that usually employees of large multinational companies get. We want to build a culture that is of global standard.
We plan to continue the international partnerships and build next-level leaders in the company.
We want to fully implement EOS so that the leaders of each unit can lead their teams smoothly, which we believe will also reduce our management overhead.
Ruhul: What does the growth equation of Brain Station look like? What are some of the key components there? If you say A, B, and C are the variables in your equation, what are those?
MJ Ferdous: We need a significant turn in our partnership. The growth we're targeting is exponential growth which will require some boosting in the next few years. We’re eyeing large partnerships and large clients.
The next phase of growth will be challenging for us. We've exhausted most of our low-hanging fruits I would say. We need to expand to more countries with a substantial presence. However, we currently have resource limitations, so partnerships with international companies can help us fill the gap. If we can do some boosting through our international partners, I believe we will be able to achieve our desired growth.
We don't know if our plan will work, but we can hope. For example, a few years ago we had an opportunity to provide 300 people for a company in Japan. We need to onboard this kind of big partnership and that’s when we will be able to execute our plan.
Although it will be difficult to achieve this growth organically, I believe we can achieve it if we can execute our strategies.
We need more high-quality people. One approach to getting better is training our people. In fact, we're planning to establish a training institution. If we can connect the training with job opportunities, we will be able to achieve significant growth there as well.
Ruhul: What are the major challenges and risks for Brain Station now?
MJ Ferdous: The world is changing every day. Global issues like war, global warming, natural disaster, etc, are major challenges because our economy depends on what happens across the world. We live in an interconnected world today. Moreover, as a country, we rely on bilateral relationships for the smooth functioning of our economy. So a lot of things depend on the macroeconomic realities.
The competition is a challenge. We not only compete with local companies, but we also compete with global companies. We've to innovate to stay ahead in the market.
Talent retention is a challenge. Remote work has become a new trend across the world. The pandemic has accelerated the trend. There is a high demand for technical talents and many people are leaving their regular jobs for outsourcing and remote jobs. It is a challenge for us because many of the talents we want to keep or hire are finding their home in these types of work.
Interest in freelancing has been on the rise. There is encouragement from the government for freelancing as well. Although what people don’t understand is that freelancing doesn’t offer many growth and learning opportunities. As a result, it gets hard for them to return to the industry after a few years. While working as remote employees is okay, individual freelancing is disadvantageous in the long run. In many instances, companies can't afford these people due to their high existing earnings.
Ruhul: What do you think about the IT outsourcing industry in Bangladesh? What are the challenges and opportunities in the sector?
MJ Ferdous: Government has set a target of $5 billion in export for the industry. I think we can achieve much more than that. The government has been supporting the industry. Freelancers have been a major contributor. But I think if the industry collaborates more, which is quite limited now, such as pursuing international opportunities jointly, it will create a huge impact.
We're seeing a lot of new companies in the industry. If they follow a consistent operational strategy, they should grow themselves and contribute to the growth of the industry.
I also think companies like us who are already quite established in the market should be given more opportunities. If these companies get more government and industry support they can grow even faster since they already have the know-how. We've to create an ecosystem of support. We've to take the initiative to introduce our local companies to the international markets. There are a lot of untapped markets. We are not in African countries. We don’t have a strong presence in the middle east. Most Bangladeshi companies are focused on either US or European markets. Brain Station 23 is the only Bangladeshi company working in the Caribbean region. This can change if companies get government support to enter new markets.
Finally, accepting international payments should be made easier. Even these days, not all the money earned by Bangladeshi freelancers comes through legal channels. It is still difficult to receive international payments. That should change. Nowadays some freelancers get money through Pioneer, Bkash, etc. But there are still challenges in getting payments that need attention.
Ruhul: What are some of the technology trends you are bullish about?
MJ Ferdous: I think integration is an important factor in today's world. When you are building a product or offering a service, providing the option to integrate your product with other products and solutions is important.
Machine learning has grown in importance across the market. It is now everywhere. Everything is increasingly becoming AI-driven. These are some of the technologies I believe we should pay attention to.
Some Industry 4.0 technologies are gaining rapid popularity. We should pay attention to that and develop our skills there. The demand for business intelligence, data warehousing, data analytics, etc is growing. We're also seeing growing demand for AR, VR, etc.
The traditional platforms we use today such as PHP, Python, Dot.net, Java, etc will always be there with new specialized technologies. We don’t have people who are good at many of these platforms. For example, we had to hire from India to work on IBM Filenet. It’s hard to find implementation experts for Oracle.
Our developers can do coding. But people who can do platform customization are rare. We need to develop expertise in these areas. Almost all tech companies are developing their own platforms and platform customization is going to be an important skill.
If I summarize, the main demand in the future will be centered on AI. So if we can build a workforce skilled in technologies related to AI, we're eyeing a huge opportunity.
Ruhul: What suggestions would you give to entrepreneurs who are working on early-stage businesses, in terms of building, running, and managing operations?
MJ Ferdous: As I mentioned in my management philosophy, start small. Make all the mistakes you may. Ensure the results you want to see by doing it small. Once you have learned everything, then scale it. Always try to do things as best as you can. Don’t do things half-heartedly. If you are not sure that you will be able to do it the best, don’t do it.
If you are in a leadership position, be patient. Often things will not happen at the speed of your expectation. You have to allow your people time. You have to allow things time. If you are not patient as a leader, you will become dissatisfied with small issues. It will not only create more challenges for you, but you will also become unhappy. Your sense of dissatisfaction will rise. This kind of dissatisfaction makes it difficult for people to be truly happy. They don’t feel 100% satisfaction even when they get the expected result.
Almost everything takes time to happen. Nothing in life is like food delivery, you tap some buttons on your phone and food arrives at your door 30 minutes later. You have to learn to wait at least a few years before getting the expected results.
Ruhul: That was the last question. Thank you for being generous with your time and insight. Any parting thoughts?
MJ Ferdous: Our local entrepreneurs should focus more on the international market. It has multiple benefits. Yes, you might get much bigger opportunities and earn in foreign currency.
At the same time, it will push your quality as a company. When you serve international clients, you will have to maintain international standards. It will push your company ahead of your local peers. This has happened to us.
We've learned to grow and maintain quality. The companies that target only the local market don't have this learning curve. They don’t have the incentive to invest in quality. So going international has many benefits.
As I said before, there are a ton of opportunities for our technology companies in the international market. Our tech companies should utilize it to strengthen their business, increase revenue, and grow as organizations.