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Future Startup Interview: Asif Khan, Co-founder, EDGE Financial Group

Asif Khan is the Co-founder of EDGE Financial Group. The group runs asset management firm EDGE AMC Limited, independent equity research firm EDGE Research & Consulting Limited, and recently launched VC fund EDGE Ventures Limited. Officially launched with its asset management arm in 2018, the group has made a name for its high-quality work within a short period of time.

In a recent interview with Future Startup’s Ruhul Kader, Mr. Asif spoke on a wide range of topics including his personal finance and investment philosophy, how should people think about investment during tough times, the evolution of EDGE companies, the state of EDGE’s business today — we cover all three companies of EDGE, challenges for the company and its ambition going forward, how EDGE has built a culture of continuous learning and rigorous knowledge seeking, his lessons from building a financial services company amidst a difficult economic environment, his lessons in doing good work and building companies, advice for young people, the secrets of exceptional entrepreneurs and investors and much more. This is our second interview with an EDGE co-founder. You can read our interview with all three EDGE co-founders from 2019 here.

The interview is a brilliant and sublime read in its entirety. We hope you enjoy reading it as much as we enjoyed doing it.

Be bold! And enjoy.


Ruhul: Thank you for agreeing to this interview. What is your personal finance/investment philosophy?

Asif Khan: My philosophy is to start saving early. The earlier you start saving, the more you can compound. I also believe that a person should not consider only one set of investments — be it stocks, bonds, or land. Instead, you should diversify and have exposure to multiple asset types. Certain assets underperform in certain periods. If you're dependent on one, you will not maximize your return potential or be exposed to a lot of risks.

The other issue is whether to make all investments yourself or outsource some of them to professionals. If someone has the time and ability to manage all their investments then he or she can definitely do it by themselves. However, that is rare and that is why in the rest of the world most people rely on fund managers.

However, one thing to note is that all fund managers are not the same. An investor needs to carefully study the different options and choose the right ones to trust.

Ruhul: Could you illustrate with examples how you invest in practice, if you would like to share?

Asif Khan: I can tell you what I'm thinking right now. I have exposure to equities. I have exposure to fixed income. I don't have direct exposure to real estate, but there might be some inherited property. I also have exposure to EDGE. Although it's our own firm, that is an investment as well. Finally, I have some startup investments, some are direct and some are through the IDLC Venture Capital Fund. You can see, it is a diversified portfolio.

However, the allocation in this portfolio is not fixed. The percentages keep on changing. Based on the economic situation and outlook, I regularly change the weights. Sometimes equity may go as high as 60%-70% and sometimes as low as 10%-20%. It changes based on the economic condition and current valuations in each asset class.

Ruhul: When you invest in public companies, how do you choose which company to pick?

Asif Khan: The investment methodology that we follow is called value investing. Simply put, we want to invest in companies where the owners are good, the management is capable, and they are producing something of value to society. We want to buy these businesses at less than their fair value. That's our broad thesis.

Say DSE has about 350-400 companies. We filter on governance, and management capability, and then filter on valuation to decide which stocks to invest in at a particular time. Sometimes, most stocks can look expensive and that's when equity exposure in our funds comes down. Sometimes a lot of stocks can look cheap relative to other asset classes, that’s when I want to invest more in stocks.

Within the stocks, we focus on different sectors at different times. For instance, right now, currency depreciation has been happening, and interest rates may go up further from here, so, we would avoid stocks that are vulnerable to depreciation such as consumer discretionary stocks. For instance, we’re avoiding consumer electronics. We are also avoiding companies with too much debt because if the interest rate goes up further, they will suffer.


Ruhul: We are going through a tough economic condition globally and locally. One approach to operating in any situation, as you said, is diversification of your exposure to different asset classes. But I wanted to get your thoughts about this particular time, how people should think about investing, and personal finance when they are in a tough economic condition. I was reading a book called The Great Depression Diaries by Benjamin Roth. It's a personal diary of the great depression period in the US. He talked extensively about the extent of delusions of people. It seems people almost always suffer from survivorship bias that my stock will not go down, everybody else's will do but mine will not. So how should people operate during a tough economic environment?

Asif Khan: Broadly speaking, when risk goes up, riskier assets see price fall. Some of these riskier assets are stocks, venture capital investments, etc. Real estate also has some risks depending on the type. Bonds are usually safer.

In general, in an economy when risk goes up significantly, prices of these risky assets fall. As a smart investor, you need to reallocate from risky to safer investments before the prices fall because every time you are having to consider whether the bad news is already priced in the stocks, or priced in the economy. If it's priced in, there is no point in rebalancing. But if it's not priced in, then you can sell some stocks, sell some private companies if there's an exit opportunity, and reallocate. Then you basically wait for prices to fall. And once it has fallen enough, you think there's enough safety, you get back into stocks again.

In the current context, things can be a bit tricky because when economic stress comes, governments have different policy tools and based on what tools are used, the impact can vary. For example, if the Bangladesh government decides to keep money printing low, money supply growth low, and hike interest rates then this strategy of selling stocks makes sense. But if the government decides that they need to stimulate the economy, and print a lot of money, then stocks and real estate will do better. In a high inflationary environment, these assets tend to outperform. Sometimes this policy directive that the government will take can be unclear. You have to closely follow the situation and decide. Simply put when economic uncertainty goes up, you are better off being defensive.

The other thing is that people have to be careful about their personal risk tolerance level. Some assets can seem undervalued. But in strange times, they can fall even further. If you see that your sleep is getting impacted, and your mental health is getting impacted because of an investment, it means that you do not have a lot of risk tolerance. We have all sorts of investors. My feeling and theory is that you should not take so much risk that it impacts your everyday life. If that is the case, you need to sell shares or sell risky assets, regardless of the valuation to a certain degree.

Future Startup Interview: Asif Khan, Co-founder, EDGE Financial Group
Part of EDGE Team


Ruhul: I have a couple of questions about Edge Asset Management and the Mutual Fund industry. The first question is, in a 2019 interview with Future Startup Ali bhai said and I quote "our ambition is to democratize the economic benefits of the capital market in Bangladesh. There is a huge gap in the demand and supply of financial services, especially when it comes to investment management services in the capital market. The number of reliable and performance-driven organizations is slim. We think that with the expertise and experience that we have, we will be able to play an important role in bringing meaningful changes to the sector". We are in 2023, where do you stand today in terms of that ambition?

Asif Khan: I think we have made some good progress. I'll talk about the dimensions of progress. Back in 2019, I think we used to manage about 30 to 35 crore taka. Now we manage about 140 crore taka. All sorts of investors have joined in. Small investors, high-net-worth investors, and institutions have put their trust and faith in EDGE. That's number one.

Number two, we have broadened our product offerings. We had two mutual funds at the end of 2019. This year (2022), we have launched a Fixed Income Fund, which is a dedicated bond-type fund. We have launched a Shariah Fund. For each of the products, we have tried our best to make the product a good solid one. For instance, in our Shariah fund, we have tried to make it fully Shariah-compliant and more stringent than some of the established practices. The Fixed Income Fund is a pure fixed-income fund with no equity exposure. As equity market people, we had to learn how to invest in fixed income over the years.

The third one is technology. We now have our own customer portal. It has been built in-house so that we have maximum flexibility in adding features. Our customers can come to our portal and set up their profiles easily. They can track the performance of their investment and do everything from investing to redemptions. The interesting bit we have done is that each customer will have their own individual return performance. Normally mutual funds show their long-term returns. But different investors come in and out at different times. Naturally, his or her return will be different. Our portal shows the custom return for each investor.

We feel that in the asset management industry, we have built some goodwill and brand value.
The bad thing is that investors are still skeptical about mutual funds and so the industry is still small. But I think it's a matter of time before the industry grows larger. We'll have to give it time. Nothing grows in a short period, especially sensitive things such as financial products. More so in a market like Bangladesh where financial literacy is not high. I think in another 5 to 10 years we should be able to increase our size.
You also have to understand the timing that we got in. When we started in 2018, it was not a good year. 2018-2019, the stock market was falling, then came COVID, another two years and now right after COVID, we have the Ukraine war and commodity prices, it's been a period of volatility. That has some adverse impact. Overall, I would say we have done well given all the challenges.

Ruhul: Despite the challenges, difficult market, and economic environment, you have grown as an organization, what are some of the things that have worked for you in terms of growth?

Asif Khan: We’ve managed to hold the integrity levels in how we deal with customers and sell our products. We don't try to over-commit. We never tell investors that you're gonna get rich overnight investing with us, etc. We make it clear that for the equity products you need to invest at least three to five years and the return can be volatile. We don't guide more than 10% to 15%. That's the optimistic scenario of return. There are times when we tell investors that this is not the right time to invest, even if it means we’re not getting fees. I think by and large, our clients understand it and it tends to spread it around.

The other is performance. At the end of the day, it doesn't matter whether I'm ethical or not. If I cannot generate some returns, people will not want to keep their money with us. We have tried our best to generate the best possible return for our clients considering the circumstances. That has been done through rigorous research, risk management practices, and reshuffling of portfolios when times change. Our return performance has been fairly good.

Ruhul: Could you talk about that performance in the context of the industry?

Asif Khan: I don't want to name the names, but in general, I think we will be in the top 10% of all the mutual funds. We also beat the index by a wide margin.

Ruhul: As you mentioned, you have changed your strategy and reshuffled your portfolio depending on what's happening in the market and those kinds of things. We discussed your personal investment philosophy earlier, could you talk about how EDGE as an organization looks at investment?

Asif Khan: I'll give you some practical examples. 2018, 2019, and the first half of 2020 were bad times for the stock market. The market fell about 40% in that time period. We kept equity allocation as low as possible to protect our clients. After mid-2020, we could see that the rest of the world was going for interest rate cuts, and Bangladesh also followed. Once interest rates fell and bond market yields also came down we could see that things are about to change. We quickly reversed our position to a more aggressive stance in our equity funds. We increased our equity exposures significantly and rapidly. That's one example of where from negative we turned optimistic and then aggressively built our position.

The other thing happened in late 2021 when we started seeing commodity prices go up. We could see that Bangladesh's balance of payments situation would be impacted. We felt that now is the time to again get defensive. So, we started reducing our allocation in sectors such as consumer electronics, where we had good exposure because they would see cost pressures coming from currency depreciation. Also reduced from some companies which sell to the lower income group who are the most vulnerable due to both COVID and post covid environment. We reduced exposure to any company with a lot of debt. We replaced those exposures with consumer staples and branded products like MARICO, which have a lot of pricing power. We also added a lot of pharma exposure because pharmaceuticals are defensive. This is one example of combining our economic research and company-level research to reduce the risk or increase the risk based on the situation.

Ruhul: Generally, do you have any sectoral preferences when it comes to investing?

Asif Khan: We do have a list of preferred sectors. Now you can have a preference for a sector because of the sector’s health and characteristics and you can also have a preference for a sector because of the companies in the sector. In the Dhaka Stock Exchange, the challenge with some sectors is that I might like the sector but the companies in the sector don't have good governance. So even if I like the sector, I don't like the companies in the sector. Then there are some sectors that we don't really like but then there are some great companies in the sector that we might take a look into. One example is that we generally avoid government-owned companies. Because their dividend policies and capital allocation is always unpredictable. They hold a lot of cash and don't distribute that.

Ruhul: What are some of the sectors that you are bullish about regardless of the economic condition?

Asif Khan: In Bangladesh, the per capita income that we have in almost all sectors should benefit from a top-down perspective, whether it's consumer goods, pharmaceuticals, construction materials or banking. Theoretically, everything should grow. But since we are filtering on governance, filtering on quality of the company management, a lot of the companies don’t make it to our watch list.

If you look at the trends, generally when incomes grow, people's consumption increases, and they want more branded products. So, consumer goods are a good play in a country like Bangladesh. But theoretically again, so is pharma and so is construction. What we think is that you bet on the right companies, but you also have to bet on the right company at the right time. For instance, when things are bad, you want to avoid cyclical companies. When things are good, you want to add cyclical companies.

We are active fund managers. We actively buy and sell. That is where our skill comes in. We have to identify where we are in the economic cycle, and what is being priced in the market and position ourselves accordingly for the next period.

Ruhul: Could you talk about that skill — being able to see these changes in real-time and make decisions? I think there is a lot of research and reading involved, trying to understand what's happening in the market and what's going on with the companies. Could you talk about it in the context of yourself as an investor and at the same time, also Edge as a company? How that kind of detail orientation or a need for a deeper understanding of things is built into the culture of the company?

Asif Khan: We are a research-driven company. But this research is not theoretical. This is practical research that we do. I'll give you a few examples. It starts with studying typical things like financial statements and annual reports. We talk to company management, their competitors, and customers. We look around for customer feedback on social media. We check Google reviews. We use all sorts of sources to generate our views on a company. That's the research process.

We inherited this DNA from companies we worked for before starting EDGE. In the background, our founders were all equity research analysts in the past.

We nurture an environment of learning. Every day, we share reading materials with the team. We encourage everybody to share any interesting insight, not just on Bangladesh. If something has happened in India, which we can do in Bangladesh we will share it.. For example, once India brought UPI, it totally changed the digital payments ecosystem. Naturally, we were thinking that something like that could come in Bangladesh as well, and Binimoy actually got launched, which could have all sorts of impacts.

We also play devil's advocate. One of the things we have to do, which is necessary for our industry, is that we don't basically fall into groupthink. You have to challenge each other. Just because UPI came in and disrupted this ecosystem in India, doesn't mean that Binimoy will also do the same in Bangladesh. So someone will be asked to do the counter rebuttal, in what circumstances can Binimoy not disrupt the system? Even our interns can challenge any assumption with logic.

Ruhul: Do you have processes and systems to gather and synthesize this knowledge and also have these internal discussions and debates?

Asif Khan: On the EDGE Asset Management side, we have clear processes. Every week, we have at least one investment committee meeting that includes the portfolio managers, and key analysts. We discuss a wide range of topics such as what's happening in the economy, how it's going to impact the stock market, what's happening in key companies, whether any company reported any results, has our view changed on any company, can our views change for any companies that we look at, is there a stock we should add, is there a stock we should reduce and so on. That meeting drives our thoughts.

Oftentimes we would think, okay this looks interesting, but we need to answer three more questions before we draw a conclusion. We will then assign responsibility to a team member to figure things out and come back to the next meeting with some solid understanding. We will make a decision in the next meeting.

On the research side, clients are always asking us queries that push us to be on top of key developments. We have developed an approach to looking at companies. There are thousands of variables that can impact a company. But we don’t focus on all of them. Instead, we focus on the top three factors, which usually cover 80 to 90% of what's important about a company. For instance, for Grameenphone, the number one factor would be regulation — the relationship with the telecom regulators. That's going to explain 50% of its stock price, maybe another 20%-30% will be competition because telecom is a competitive environment. You don't need to follow anything else to understand Grameenphone. For a cement company, maybe it's currency depreciation, and freight costs, that determine the majority of their profitability. For each company, we identify the top three issues and we follow those aspects proactively to decide whether it is a buy or sell at the current price.


Ruhul: You briefly talked about the mutual fund being a small industry and the deficit of trust in the market. How do you think you can overcome that deficit of trust? At the same time, many people don't understand how a mutual fund works and what it is and why it's interesting as an asset class, and what are the risk factors, how returns work, those things. Could you please break down how the mutual funds work, what are the risk factors and how returns work?

Asif Khan: Fund managers with long-term vision and willingness to deliver value to the customers and then grow will have to continuously educate the investors. And while doing the education and talking, they have to also demonstrate performance.

Investors have to realize that this is an asset class that is not all manipulation and speculation. There is legitimate value in buying into good well-managed companies for the long term. They will need some confirmation from the people they know. So there is a sort of multiplier effect of some sort. As investors grow, they will tell their friends and family, and that's when the trust really builds.

But if you look at an analogy of the US market or the Indian market, this sort of industry actually grows when you have a long period of good stock returns. So Bangladesh had a long period of strong returns from 2000 to 2010. But post-2010, it has been a volatile market.

Markets go through cycles. My feeling is that EDGE has to survive or grow slowly until we get a five or seven-year bull market. Once investors see consistent returns for a long time, they will get attracted. That's what has happened in India. A long period of bull runs in the stock market has attracted a massive number of people into the stock market.

The other bit is regulatory. We have to make things easier for investors. The current processes can be simplified much more. It's still very paper-based and very cumbersome. To uphold the trust, the bad actors need to be penalized. You can't let some people steal other people's money and let them get away. If you do that, then trust is gone.

Your other question was about how mutual funds work. It's simple. If you want to invest in stocks, you would open a brokerage account personally, and you decide which stocks to buy and sell. Now, if you don't have the time, you will go to a fund manager such as EDGE and ask about their different funds (aka products)

A fund is a separate entity just like a company. When you put money in a fund, there are hundreds of other people that have put money in that same fund. By putting your money in that fund, you become one of the owners of that fund. The fund manager is not the owner. The fund manager only takes all that pool of money in that fund and invests according to the mandate of the fund. The equity funds will invest mostly in equities. The balanced funds will have a bit more fixed deposits or bonds compared to the growth fund. A different type of fund like a fixed-income fund will not be able to buy stocks, it will only buy government bonds, corporate bonds, and government treasuries. Another type of fund is Shariah funds which will only invest in securities permitted by the Shariah investing methodology.

The strategies of each fund will differ. The returns of each fund will differ. The risks will differ. But at the end of the day, what you are doing is, you are taking your money and instead of managing the money yourself, you're identifying who is the right person who can manage the money on your behalf.


Ruhul: Coming back to Edge, you talked about you now having 140 crore assets under management. Can you give us an overview of the company? How big is the team, and an overall overview of the company?

Asif Khan: We have three companies right now: EDGEe Asset Management, EDGE Research, and EDGE Ventures. The Venture's operation has not started yet. So we'll just put that on the side. It's a licensed venture capital firm. We've already got the license, but we don't have a fund yet.

On the Asset Management side, the team size is roughly eight people. On the Research side, we have another six people. Altogether, including the support staff, we have about 14 people in total across the two companies.

We are a fairly small team. We have kept it small consciously. We have been a bootstrapped company. We want to be very cost conscious. Obviously, with the volatility in our business being cost conscious helps. We are also particular about the type of people we want to have at EDGE. They have to match our culture.

Ruhul: We talked about this in our previous interview as well. Have you thought of raising external investment or you wanted to build a bootstrapped company?

Asif Khan: I think I need to clarify the bootstrap part. By bootstrapped, I was referring to the fact that we want to generate enough profits and reinvested it in the business for growth. For fast growth, you need to invest in marketing, in systems, and in technology. You can do that by raising external capital.

We are a fairly young company. We didn't want to burn through our existing cash or raise much capital. We wanted to grow slowly. We also felt that the market wasn't/isn’t ready for rapid growth. Trust cannot be bought, it has to be built and earned, especially in financial products.

Ruhul: What are the challenges for EDGE AMC now?

Asif Khan: Financial literacy is a big challenge. Typically, in a sophisticated market, you only go to the client and explain why EDGE is better than others. Here, you have to start much earlier. You have to make people understand why they need to save, then you have to explain why equity markets or fixed-income markets are good investment options, only then you can come to say that EDGE is the right partner. This takes a lot of time and investment. So a typical sales cycle can be very long when it's outbound.

So far, most of the success we have had is inbound. People who already understand that these are good products to invest in.

Ruhul: What are the priorities for the next couple of years?

Asif Khan: On the asset management side, we already have four funds. We feel that we don't have to add any more products. The portal is also ready. We have also done a new website. We just have to deliver our performance in the best interest of our clients. The other area we have to invest in is in marketing and sales. That's our focus now.


Ruhul: Moving on to EDGE Research and Consultancy. When we last interviewed you, it was also the early days of your research wing, you just started working with a couple of clients — about five, or six clients at that time. Can you talk about where the EDGE Research is today? How big is the operation? What are some of the things you are doing?

Asif Khan: Research is now a team of about six people. Four are full-time. Two people are studying and also working with us. We have expanded in many different directions. The only product we had in 2019 was equity research, which foreign fund managers used to buy from us.

The number of clients had gone up to about 15 foreign fund managers. We added two more subscription products. One is a debt-focused product, which foreign banks are buying from us. These institutions have dollar financing in Bangladesh. They do trade financing as well. We added this service for both local and foreign institutions who want to know what's happening in the economy and the banking sector.

We then added a macroeconomic research product. We felt that businesses need insights into where the economy is heading, where interest rates are heading, where exchange rates are heading, etc. The value of that has become clear in the last three, four, or five months. If you could accurately predict economic events, it can put you in an advantageous position. For instance, if importers knew the dollar would get so scarce, they could have opened LCs much ahead of time. Information is money.

We send this research regularly to our clients depending on which product they subscribed to. For example, someone who purchased our macroeconomic module will get a daily news summary and a weekly commentary. we publish a monthly deep dive on the economy. Anytime there is a budget or monetary policy or anything worth talking about, we add something or release a thematic report.

Similarly, when you spend time in a market, you get other requests. Over the last few years, we realized that there is demand for other sorts of work like due diligence, market studies, etc. We have done some work with IFC on green bonds. We were part of the consulting team there. We have worked for the Norway Government on renewable energy. We have recently published a policy paper for the Nordic Chamber of Commerce on the logistics sector. So we have expanded in various directions.

These are more ad-hoc in nature, but the core work is research. The research work we do is practical-oriented. Because at heart, we are investors. We are used to taking the information and applying that in real life. That's the uniqueness of our work.

Ruhul: How frequently do you publish these research reports for your subscription research service? And how does the pricing work?

Asif Khan: Each product has multi-tiered pricing. Equity research can be as low as $3000/$4,000 to as high as 12,000/$13,000 per year. It depends on how much analyst time the client wants, whether they want conference calls, corporate and expert access in Bangladesh, access to our financial models, and forecast models.

The debt market research is also similarly priced. It also depends on several aspects. Macro research is a standalone product and is much cheaper. By and large, most of our clients right now are foreign clients but now we are getting some local clients as well.

In terms of frequency of publishing, we typically publish something every week.

Ruhul: How does your distribution for the subscription and other products work?

Asif Khan: Most of our early clients on the subscription side came because we either knew them or worked with them when we were on the equity research side. We knew all the funds and we reached out to them individually when we launched EDGE Research. On the debt and macro side, it was also somewhere outbound, we reached out to them and then it worked out in some instances. After a while, we also started to get some inbound referrals. People looking for a service provider asked around, and someone referred them to us that they need to talk to these guys.

We feel that this is one area of weakness for us, we haven't been able to set up a strong distribution and strong marketing channel.

EDGE does a lot of research. Every single day, we are sending out research and a lot of content, but we are not promoting that on social media or our website. We have finished the Asset Management website as I mentioned. We have also just launched our new website for EDGE Research.

On an individual level, we have started writing more frequently in newspapers and on LinkedIn. For instance, I write a lot about the economy. People connect me as someone who follows the economy and naturally, when someone needs a product, they can come to me. There's a lot of improvement scope here.

Ruhul: Can you talk about the dynamics of research as a business? What are the components of the business? What is a research company? How does a research company work? What is the business model and what is the growth flywheel?

Asif Khan: One way to look at research is to do an analogy with IT. Companies either have in-house IT teams or outsource their IT work to third-party companies. Now, why would a company outsource IT work? One, maybe you don't have that skill in-house. So you go to an expert who has that skill. Number two is that maybe you don't need it throughout the year, you may need it for a month or so and there's no point in building your team for one month's work and paying them for 12 months. So outsourcing is more cost-efficient for you.

If you draw the same analogy on the research/consulting side, people come to us because they feel that their needs are ad-hoc. They pay us for the project they need our service for. That's cost-efficient for them. Sometimes people come to us because you can't even build that skill set in-house. It's hard to build and you need an experienced veteran.

Research firms also enjoy a bit of economies of scale. Take, for instance, 10 companies that need research on the economy and each builds its research team. Theoretically speaking, consider they each spend, conservatively, 12 lakh taka per year on their research team. 10 companies spending 12 lakhs each means 1.2 crore talk of total accumulated cost. That’s a conservative estimate. If a third-party firm does that same research because they can take advantage of the economies of scale, consider they can do it for an annual cost of 36 lakh taka. That’s roughly 3 lakh taka per company. This is a hypothetical estimation but there is a clear cost benefit when you are working with a third party, you can spread your costs over multiple clients. The third-party firm benefits because it is doing the research and then selling the same research to multiple players. The companies benefit because they are sharing the cost with nine other players or 19 other players. Which is why people usually go to a research firm.

Going back to the more fundamental level question, research is a broad term, it could mean so many different things. Research could mean marketing research. Research could mean HR research such as you want to benchmark your salary compensation with someone else. There are many different areas.

At EDGE, the research we do is related to investments.

If you want to invest in a company, you need research to understand their margins, and forecasts business model, we can help. If you want to enter a new company or acquire someone, we can help. If you want to study an ecosystem or an industry, we can help. These are the research we are doing.

If you look at our existing subscription modules, we're helping fund managers on the equity side, we are helping foreign institutions on their debt side, and we are helping local institutions on the macro side. These are all investment and finance-related research.

Ruhul: How big is the market for a company like EDGE Research and Consulting?

Asif Khan: We have never really looked into that. To be honest, the research business was an experiment. We weren't even sure whether it was going to work. We always thought asset management would be the core focus for us. Only now we are realizing that there's demand in the market. In a numerical sense, we have not done the math. But there is a big scope.

You have to understand that Bangladesh's economy is $400 billion in size. Things change very rapidly. The need for these services will only go up. Changes are happening in the market that aids the growth of this business. I wrote on LinkedIn that family-owned businesses are going through changes and need to change. We’re seeing the third generation taking over family businesses in Bangladesh. These people are data-driven and analytical, and quite often family companies don't have the skill set to do that work by themselves. As a result, I would guess that demand for such services will grow. But what is the size of the market? Hard to say. You also have to be clear about defining what is research because again, as I said, it could be many things.


Ruhul: You have been quite active in the startup scene. You provide due diligence and research service. You have invested in several startups. You have a venture capital license. Can you talk about your work in that space?

Asif Khan: The idea of looking into startups came when we started EDGE. We thought we had expertise in the public equity market, but we need to understand the private space. Startups were getting popular around the world at the time.

We thought the best way to learn would be by getting involved. So we decided to invest our own money. First, we'll make mistakes and along the way, we will learn. Only then we can go and launch a public vehicle or a venture fund and ask investors to give us money. Till now we have taken exposure in about five startups of different stages. We have made mistakes and have learned a lot. Hopefully, we'll be able to apply some of this knowledge and eventually launch a fund. I cannot say with certainty when the timing will come. It could be late 2023 or 2024, depending on the economic situation and whether we are confident that we can raise capital.

Ruhul: How different is evaluating a private company vs a public company?

Asif Khan: There are both differences and similarities. When you're looking at a concept like the addressable market, competitors and how each company is positioned, strengths and weaknesses of each, you more or less apply a similar framework.

The difference is that in early-stage companies, the focus on the founding team is much more prominent. The company doesn't have a lot of traction yet and you have to decide based on your understanding of whether the team has the right skills, mental toughness, and sometimes domain expertise to make this thing happen. There is much more focus on the founder in an early-stage company whereas in a mature company, it's run by professionals and if one CEO goes another can come for example.

The other area of difference is that quite often these startups have a fair bit of technology involvement, whereas in conventional businesses that tech angle is largely missing. So you have to understand how the startup business model will be different from the traditional ones and how that impacts the income statement and balance sheet. And clearly, there are stark differences. In a conventional business, a big part of your expense or cash outflow is like capex, you invest in fixed assets. In startups, a big part of the cost is customer acquisition. The accounting treatment for the two is different. These nuances have to be understood fairly well when you're looking at startups versus conventional businesses.

Ruhul: What are some of the important lessons you have learned from your exposure to startup investing yourself, and also broadly doing due diligence kinds of things?

Asif Khan: There are several lessons. The first thing is that when we started investing early on, we did not have a mechanism to search for deals. Deals came to us by luck. When a deal came to me, I took a look and if I liked it, I considered investing. Compare that to a situation where you are proactively sourcing deals and if there are like five startups in one sector, you're talking to all five before investing in one. You have a much more holistic picture and situation.

Secondly, we felt that we need to have a working hypothesis on a sector even before talking to a startup. Consider, you're a logistics startup, and you came to me. If I start my research only after you come to me, I'm already too late. I need to have a good understanding of the logistics ecosystem and then once you come to me, I can relate how your particular solution will impact the ecosystem and whether it's gonna work or not.

We also generally prefer to invest in companies with more than one founder. There are exceptional cases where solo founders work. But in a country like Bangladesh, where doing business is tough, we prefer more than one founder, preferably with some domain expertise. Finally, I am more careful about simply following models that have worked in other countries. Just because a business model has worked in Indonesia, India or Pakistan does not necessarily mean it will work in Bangladesh.

Ruhul: I think that the thesis of taking models that have worked in Western markets or big markets and replicating that in other markets is almost about to die. It has run its course. Investors have been doing it for a while across markets and we can’t say the results are very good.

Asif Khan: I agree with you. Generally, I spend a lot of time understanding why a model will or will not work in Bangladesh.


Ruhul: Could you please talk about the culture at EDGE? How much of it is a reflection of you, founders? People talk a lot about building a culture and being intentional about culture, but I have not seen many companies in Bangladesh that have done that well. From your experience, how do you build a great culture and be intentional about it?

Asif Khan: I'll start with the second part first. To be honest, we have not built a culture deliberately. It wasn't intentional that I want this culture, I'm going to do ABCDEFG to ensure that culture is there. I agree with you that the culture at EDGE today is a clear reflection of our personalities — me, Ali Imam bhai, and Safwan.

Then the question becomes what is the culture at EDGE? I'll start with this. First, we are a management-owned company. If you look at the financial sector of Bangladesh, a lot of the companies are not management owned. You have a separate owner and separate management. We feel that this structure gives us a lot of advantages. We can invest for the long term and have a long-term horizon.

Before starting our own business, we worked for other companies. Even though we are owners, on a given day, I also think like an employee. For example, if I decide I don't want to go to work today, I can theoretically do that as an owner. But the idea is that I'm also a paid employee, and that compels me to go to work every day.

The other bit of EDGE culture is that we believe in a flat structure. As I said Ali bhai is the CEO of Asset Management and I am the CEO of Research. But we don't have separate rooms. We all sit together. AMC has a room. Research has a room. Because the team is not large, we can afford to have a flat structure now, which we think has worked well for us. Even now after five years down the road, there are small things that, if required, I will go and do. For instance, I need to get something photocopied. If I’m free I usually go and do that instead of telling someone else. That's the very opposite of Bangladeshi culture. On this side, this is a reflection of our personality that there is no need to be egoistic.

The final bit is the learning side. When we went for entrepreneurship, it wasn't to just make money. We wanted to do something of our own, like create a legacy of some sort and we all enjoyed learning. EDGE allowed us to earn some money, but also do what we enjoy, which is learning. Our teams are encouraged to learn.

We have regular discussions on random topics. These discussions are not just limited to finance and investing. We talk about education, politics, history, health, and all sorts of things. And these discussions are not planned. We don’t plan that on that day, we'll discuss this topic. It's spontaneous. Again, I think that at this size, we're able to do this. But as the company grows, we will have to find some sort of structure. As I said, on the research side we’ll have to specialize. Similarly, the learning environment will become more structured in some way. But we'll always try to have a bit of flexibility as well.

The other thing I want to mention is that EDGE has extremely low staff turnover. We treat our people almost like partners in the business. They can always offer their critical feedback. They're encouraged to challenge the founders. They can question our decisions. That's again very counter to Bangladeshi culture. Bangladeshi culture maintains a high power distance. But globally, any asset management firm with a high power distance will not survive. The nature of work requires us to challenge each other. It's not a general thing, it's an absolute necessity.


Ruhul: Was there a turning point in EDGE's journey in terms of an inflection point? You started working at the firm in 2017, you got the license in 2018. Was there an inflection point over the past years that helped you find a growth level for the company? At the same, was there a time when you thought, this is not working, let’s shut this down?

Asif Khan: I'll start with the other side. Remember, when we started in 2018, the market fell. In 2019, the market fell, in 2020, the market fell, then COVID happened. Mid-2020, I was thinking, this is not working out. This company will not survive and maybe we need to sell the business and do something else. This is a topic I brought up with my partners at that time. I said, guys, this is a disaster. We don't know what's going to happen to the world. We are in a difficult spot right now. What to do? Do we continue this or not? It's a lot of personal sacrifices for each of us.

The unanimous answer from everyone was that we want to continue EDGE. We will just have to fight against all the challenges. Moreover, we are not having a bad life either. There are benefits to EDGE like flexibility, etc. Maybe in money terms back then we were not making a lot of money but there were other benefits. When in the worst of times, all of your partners say let's not give up and give it a shot, that sets the tone for EDGE.

In 2021, interestingly, the stock market did well. That was one important point in our journey.

The other bit is in 2022/2023. The macroeconomic situation is the worst in 10/11 years. All sorts of companies are cutting costs and laying off people. This is a very challenging time. We also see some impact on some of our product lines.

At the same time, what has happened is we're getting a lot of inbound requests for all sorts of services. In the worst economic situation, now I think I might need to hire new people, otherwise, I would not be able to deliver all the client requests that are coming in. That gives me a bit of confidence that if this is the case in a bad economic situation, what's going to happen in a good situation? We'll just have to survive these challenges.

Ruhul: I think it was a good decision because I was reading about the last financial crisis that happened in 2007/08. Some of the very successful FinTech companies, financial companies started in the middle of the financial crisis. Because it was such an opportune time. Nobody was starting any FinTech company. So you have three/four years, nobody is competing with you, to build the position and brand equity and all those things. As you said, the peak is not a good time to start or invest because you have already reached the peak. There is no up from there. Probably that was the lowest moment for you, or was there any other lowest point in your journey when you thought, okay, let's shut this down?

Asif Khan: In the EDGE journey of five years or so, that was the lowest point.

Ruhul: What are the major risks and opportunities for EDGE now?

Asif Khan: We feel the risks are not specific to EDGE. These are all macro-level risks, which can have ramifications for EDGE. For instance, if the banking sector has a problem that can have ramifications for us. If our foreign exchange reserves fall too much, there is a ramification on any business and EDGE is no exception.

Some businesses are cyclical. And some businesses are non-cyclical. EDGE is in the financial sector, which makes it very cyclical. We are sensitive to economic fluctuations. That macro concern is a risk.
The political situation could also be a risk, theoretically. These are the general risks for EDGE.
On the internal side, when you grow as a company and as an individual, you have to adapt to the situation and you have to keep the relationship between the founders healthy, a good working relationship of mutual trust and respect. Quite often that can erode over time. We'll have to ensure that that doesn't happen. Those are the risks.

The opportunities are endless. There are a lot of things that can be done. On just consulting itself, there's a lot of work to be done. On deal advisory, there's a lot of work to be done. Asset Management, that addressable market is very large. For us, it's a question of prioritizing. We can't do everything at the same time. But when you are a founder and inbound queries come, there's a tendency to say yes to everything. Someone needs a service, reached out, and is willing to pay you money for it. It is hard to ignore that. But we have to be able to say no to things that are not core to our business.

There are a lot of opportunities in Bangladesh. If you look at the service sector, there aren't many companies that are known for high-quality work in any sector. There are some for which I have super respect. But there is room for a lot more in different verticals. We can hopefully create in the vertical we operate.


Ruhul: That was the last question about EDGE. I have a few quick questions. As a Co-founder and CEO of EDGE Research, what's your philosophy about work? How do you approach and see work?

Asif Khan: Generally, I want to do things that I find interesting. There has to be an intellectually stimulating part. As a result of which we have horizontally diversified ourselves as a company. If you think of EDGE, we are a single country focused, but in multiple verticals — in asset management (equities, fixed income, and Shariah funds), transaction advisory, subscription research, and consulting. I do this and I think the rest of the EDGE team does it because we like to try out new things.

The number two is that while we have office hours, we, EDGE founders and team, also believe in work-life balance. We don't want to work for very long hours. We don't expect our employees to pull all-nighters. We are genuinely flexible. As long as we are delivering our work on time, we should be fine. That's been the case so far. I cannot say what happens if we grow much larger. We might need a little bit more discipline.

Finally, I prefer to learn every day and improve every day. That's what makes life interesting and exciting.

Ruhul: How has your thinking about building a company changed over the years? You mentioned today and also in our previous interview along with Ali bhai and Safwan bhai that you wanted to leave your mark and build a legacy. How has that thinking evolved?

Asif Khan: It has not changed much. Broadly, it's been the same. We want to build a good organization. EDGE is our experiment. When I read a book, and learn something new, I will go to Ali bhai or Safwan and tell them that look, I have learned this new thing, let's apply this. In many ways, EDGE is our way of expressing all the new things we have been learning. Before that, we would learn something, but we didn't have the space to implement that.

Generally speaking, we don't have any profit targets, employee targets, none of that. The only thing we have is we want to do work that is interesting and it has to have an impact on our clients and the country. There has to be a positive impact. If someone comes and says, look, I want you to do a valuation exercise, just like rubber stamp work, it has no value, as it is not high-quality work. That's not something EDGE as a firm would be interested in doing.

Ruhul: What are some important lessons you have learned particularly about building a company?

Asif Khan: These are lessons every founder has learned. In the tech world, there's a term called technical debt. Similarly, I think there are these debts that accumulate in small businesses. We are a small business, let's be very honest. Do I have files for all my employees? Is there an HR file? Am I up to date on compliance? At the beginning of your founder journey, you are so focused on building the product, so focused on getting customers that these works to fall behind, company secretarial work, and compliance work. But at some point in your journey, you have to wake up and sort it out. Otherwise, the debt will become too large, and it will cause problems.

Number two is hiring. We have learned to hire better over time. We had to learn how to communicate our values with potential candidates. We now are better at figuring out how to look for the right people and how to communicate to the right person who we are because there has to be a fit, I cannot lie my way as a company.

Number three, I would say a distant third, we just realized that we are not good at marketing. There's scope to improve on this significantly. None of us come from a marketing background. That's part of the reason. But there's a lot we can do in marketing. I can see some other companies in the same industry that have done fantastic work. They have promoted and built their brand.

Ruhul: You mentioned this interesting point about having experience working for other companies before starting your company. There are different opinions about starting companies. Some people say it's useful to have some sort of work experience. Others say it can make you incapable of leaving a paycheque. From your experience, what are the advantages and upsides of working for other companies for a few years before starting your company?

Asif Khan: I'll tell you a real story. Ali Imam bhai, my partner, wanted to start an asset management firm in 2012. He took the initiative, spoke to potential investors, and asked me, Asif, let's start something. I wasn't confident back then for several reasons. I wasn't confident in my skills that I would be a good fund manager with only a few years of experience. I didn't have the capital and the savings in my bank account which gives me a bit of comfort that if my entrepreneurship fails, I would still have something to fall back on. And I didn't have a network of potential clients.

I feel that working in other companies gives you time to build up savings, build relationships, and also self-confidence. Now some other people could be way more confident than me. There are those people. For me, I stuck to my character.

However, I generally feel that people who start a business in a sector where they have previous work experience have an advantage over people who don’t because they have that domain knowledge and expertise. When you have worked in an industry, you develop a certain understanding. It can be difficult for someone from the outside to develop a similar understanding. From the outside, you might think that I would just disrupt that sector and solve that. But there could be a genuine reason why it might not work that you miss due to your lack of exposure.

In general, I feel that most people should have some experience. It doesn't mean that young founders cannot be successful. They may be but from a probabilistic standpoint, if I were to invest in startups, I would probably have a preference for founders who have worked for several years and preferably in the sector where they are trying to build a company. There's a term called founder market fit. I would want to look for that, at least for the Bangladesh market.


Ruhul: Advice for young people.

Asif Khan: General advice I give is that you have to learn every day. But don't think learning is just an academic exercise, you have to internalize the concept and realize learning can be fun. The moment a person understands that learning anything new is fun, their entire life changes. For me, the number one point is that you need to proactively learn and don't just go by the university syllabus. You decide what you want to learn, and in which medium you want to learn and go for it. If you want to learn from podcasts, books, some brothers, from articles, choose your method and medium.

Number two is that we all talk about networking, that networking is good, etc. However, this concept has to be almost internalized or understood by each person on their own. Technical knowledge, at one point, has a limit. But who you know opens up a lot of opportunities.

I understand some people are introverts, and some people feel shy to approach people but there are many different paths to the same destination. You play to your strengths and weaknesses and you can still connect with people. Some people are good at face-to-face meetings. In a room full of people, they can connect with people, and others may be better off sending a well-researched LinkedIn message or even a cold email. I get so many messages from people and I try to genuinely respond to a lot of them as long as they make sense. Don't be afraid to network. Be bold, and aggressive, but courteous. Dedicate time to learn networking and communication. The right choice of words can make a big difference when you are communicating. I think these are the two things: learn and network.

Ruhul: Book that has influenced you the most.

Asif Khan: I read a lot. There are a few books that are generally philosophical that struck a chord with me. There is this book on minimalism by this gentleman called Fumio Sasaki called Goodbye, Things. It was a profound read and I could immediately connect to the concept. I'll tell you whenever I'm feeling down with economic worries, market, etc, it's mostly about money. The moment I think about that book, it gives me a certain peace. Because the book says that one really doesn’t need a lot of money to be happy.

There was another book on stoic philosophy that I read called A Guide to a Good Life. It was about all the Stoic philosophers, which is similar in a sense, and had an impact on me. I think these two books are fairly impactful.

Ruhul: Any books in terms of investing, say three, or four books that you'd like to recommend to other people?

Asif Khan: The challenge is investing in such a big universe. If you do equities, there's a set of books. If you are on a fixed income, there is a set of books. On private equity, there is a set of books. The same is true for real estate. No one book can capture everything. There is none.

Generally, for the equity market, there are two very small books I tell people that you can start with. One is The Little Book That Builds Wealth. The other one is The Little Book of Value Investing. They're short, to the point, and specific. These books communicate the essence easily and directly. These are not meant to make you experts but these are books that are meant to make you excited about the subject so that you follow on.

There are some books I feel that everybody should read, like biographies of good business people. One book that had a big impact on me was the book by Sam Walton called Made in America. It was about his journey. That one struck a chord with me. I felt that I learned a lot about business by reading that book. There's a book called Valuation by McKinsey. It's almost like the Bible of valuation, one book that covers everything on valuation. For the conceptual and technical bit, that book has been a great reference book for me.

Ruhul: What are some of the books you're reading now?

Asif Khan: My reading is very thematic. Previously, I used to read all different types of books. But now, I bunch together several books on a theme and read them accordingly. Currently, I am focusing on two areas. Since we are building out our deal advisory practice, I read about three/four books on investment banking, and I have three/four left to read. I start with the general beginner level, and then I go on to a more advanced level and more specific. I'm reading a few books on consulting also. We are getting so many inbound requests on consulting that I feel that's another area we need to strengthen ourselves so it could become a potential area for EDGE.

Ruhul: As you mentioned, learning is one of the most important things one can do. What's your approach to learning? Do you have any framework that you use to learn things?

Asif Khan: Generally, I have a bit of OCD. I like to start from scratch and then broaden up. If I don't do that, I feel like I'm missing out on something. For most of the topics that I learn, I start with something basic. It could be a blog post, a podcast, or a book on a beginner level. Then I decide, I need to add more layers to it, more depth to it. Sometimes on certain topics, I don't go to that depth because I'm not interested, or maybe because that's not relevant to the Bangladesh market, so I will focus on something else.

I try to take a lot of notes. When I'm reading books or listening to podcasts, I almost always take notes. Sometimes I re-read books. Sometimes I read reviews of the books by other people as well just to have a holistic understanding.

Even now, concurrently with the books that I'm reading, I've been watching some YouTube videos on deal advisory. I have been listening to podcasts. Multiple mediums. Because each medium has some strengths and weaknesses. I feel books are great at certain things, but not so great at some other things.
So attacking that subject from multiple dimensions helps build up a strong base.

The other bit is that learning is always 10 times more fun, and better when you're applying it in a real situation. These two subjects, that I’m reading now, are things that we are applying.

If I talk about some other concepts or subjects that I have read about in the last few years, quantitative investing (algorithmic trading and quant investing) was one area. EDGE hasn't gone into that area yet, but we have spent some time and done some of our research. We don't have a product out but this is a big market in the rest of the world. Venture capital investing was a big theme for me. I read a lot of books on VC investing, and angel investing. Entrepreneurship, building a startup is another.

I read a large number of books on marketing, sales, digital marketing, and growth hacking. Because all of us came from finance, we had to understand sales and marketing. I even did some online courses on these topics. Generally, as I said, I go by a theme and then try to do courses on Udemy or Coursera, and then books and podcasts, and then that practical application.


Ruhul: What are some of the biggest life lessons?

Asif Khan: I try to avoid giving out life lessons. Because I think that most of the time people go by one size fits all, but in reality, it's not. I don't think it works. I think for each person, the answers can be very different because priorities are different. I can only tell you what I have learned. I will not preach to others, I will tell you what I have learned.

For me, I have realized that what gives me maximum happiness is not wealth. It's usually my connection with my family and friends. I'm a fairly social person.

Learning interesting things, and mixing with people smarter than me from whom I can learn is something that I enjoy. I like humble people. I don't like people who are arrogant in general. Arrogant people can sometimes be brilliant. They can be super sharp, and super intelligent. But I would prefer not to mix with them. I would prefer to mix with a person who is not a super achiever, but a good human being.

I want to take care of my body on the health side. I don't think I have reached my goal but I am working on it. I have an exercise regimen. I work out. I have a setup at my house. I walk. I'll add a couple of things on the entrepreneurship side. It was an epiphany moment for me when I first realized that good entrepreneurs are great judges of human character. Some of them have intuition, but some of them have made a deliberate strategy of looking at a person and sizing him up. I want to learn and replicate that skill.

Good entrepreneurs are also visionaries. They can look into the future. Because the world is never static, it gives them a huge advantage. The methods of doing business are not always the same. Let's take a retail distribution. Now it's mom-and-pop stores. In the Western world, it is organized retail. Whether it's Mom and Pop or organized, the internet has huge implications for all the players that are working there. People who are entrepreneurs and visionaries can catch these inflection points. They catch the inflection point and can sometimes go in early, and influence the policymaking to an extent that that reality comes in earlier.

Ruhul: As you mentioned, these are critical. At the heart of entrepreneurship are people, you have to work with a team. If you don't understand people well, it can create all sorts of problems. At the same time, building a company is not only selling to yourself a better future but also selling that future to other people, your stakeholders, your teams, and everyone else. Are there methods or ways of learning these skills? Do you think there are some frameworks that people can use to develop these skills?

Asif Khan: For certain things, you people cannot bypass experience. There are things you have to experience to learn. You will have to make mistakes and learn the importance of those things or learn the right ways for those things. As I said, one size doesn't fit all. What works for you and what works for me are different.

Some things you have to experience. For instance, taking care of health. We have been taught about the importance of a healthy lifestyle since childhood. But only when something happens to you, do you realize that I am now living on borrowed time, and I have to take care of my health.

The other thing I think will make a huge difference is having a solid mentor. But you have to choose the right mentor. The right mentors are people who have lived through difficult times, and who can help you make the big leap. The challenge with the right mentors is that most often these people don't have free time. They're busy people. But if you find a good mentor, a great mentor who has some time for you, that person can make a big impact in shaping your life, guiding you in some way or form.

Ruhul: Do you have mentors or people you go to for advice or consultation? How do you build good mentor relationships? Is there any playbook there?

Asif Khan: I don't have a playbook. Generally, my concept of life is that I try to be brutally honest. I try to be very clear about my strengths and weaknesses. I'm generally an open book. I believe that I have to give back to other people. Whether it's my mentor, or someone else if I want something I want to give back. Now giving back doesn't have to be about money, it can be different things. That's been the playbook if you say there's a playbook.

I go to different people for different kinds of issues. If it's a family thing, I consult with one set of people. If it's about business, there's another set of people that I would consult. I have people whom I consider my mentor. There is one gentleman, I'm not naming him, who has become like an elder brother to me. I place a lot of value on what he says. Now, that doesn't mean I blindly trust and follow whatever he has to say. Sometimes he would say something, and I would listen and disagree. It's a relationship of mutual respect. Generally, I value his opinion a lot.

Ruhul: Do you have any unusual productivity habits?

Asif Khan: I have figured out that my productivity is not static. It goes up and down all the time. There are days when I'm very productive and there are days when I'm not productive. I have learned to accept that. In the past, I would feel guilty that now I'm not working and doing other stuff and watching Netflix. That I’m not doing anything productive or doing less productive things. But now I'm more accepting of myself. Instead of feeling guilty, I tell myself that I'll make it up in some other way. I will know when I feel like working. And when I feel like working, I can go hours and hours and hours of doing good work. It's not a hack or a habit. It's just who I am.

Ruhul: What makes a great investor? So people talk about Warren Buffett and Buffett's partner. I don't see any equivalent example from Bangladesh. Is there anyone we can draw a parallel with?

Asif Khan: I'll give you some characteristics of good investors. First of all, they, typically, have a long-term investor mindset. They know nothing good can happen in the short term. If you want to build some legacy, it takes a long time. As an investor, you need to have patience.

You need to be able to have high conviction in your research and your decisions to be able to stick through volatile times. At the same time, there's a clear balance in the sense that you also have to have a healthy degree of skepticism and be able to change your mind when things change. If you have looked at Warren Buffett, for example, he has not stuck to the same investment philosophy. He used to invest in cigar butts, then he moved into growth companies, and at the late stage, he purchased airlines and railroads stuff that he wouldn't invest in his early life. He has not just done equities, but he has done other asset classes as well, such as insurance business, bonds, and other stuff. He has been flexible enough to kind of adjust and adapt.

Other great investors such as Stanley Druckenmiller, George Soros, and so on, have also changed and adapted throughout their careers. One day they are extremely bullish and the next day, some new information comes in, and they can completely change their stance. That flexibility was also part of their thing.

Then other characteristics would be that they learn from their mistakes. They try to avoid making the same mistake twice. Everybody makes mistakes. The key is not repeating the same mistakes. They try to learn from other people's mistakes. It is even better to sort of learn from other people's mistakes, then you don't have to repeat the same mistake and don't have to face the difficulty. These are the top three that come to my mind.

Ruhul: These are interesting topics. But having conviction and also being flexible, are kind of competing values. In life also, you see a lot of these kinds of dichotomies. There is sort of a thin line between being certain about certain things, and then also being a little bit skeptical. But if you're certain how do you be skeptical as well?

Asif Khan: I don't have a clear answer to that. You are very right. These are contradictory values. But good investors somehow have this characteristic, and how they have both sides is hard for me to explain. The only thing I can tell you is that look, you do your research, and you take your call, but once you have made the investment or once you have taken the call, you have to keep in mind that you could be wrong. And investors are wrong quite frequently, even good investors.

The way smart investors do it, I assume, they are open to new ideas and information. They don’t marry their opinion. Let's say I'm very positive on a particular stock and you are negative on a particular stock. If we can talk with mutual respect and ask each other about our position and understand, that can change my conclusion as well as yours. Most people are too emotional. They get married to their thoughts and ideas. That's why confirmation bias kicks in. But if you can keep an open mind that I may be wrong, that makes all the difference. Yes, I am sticking to my position and conviction. But is there anything else that I'm missing? The moment you do that, and you can have a civil discussion with the opposing side, that's where you benefit.

Ruhul: That's a great, great point. It takes a certain level of courage and detachment to not see your ideas as yourself but as something separate from you.

Asif Khan: I'll give you one example. You would remember this because I called you up and spoke to you. After getting the venture capital license. I asked some questions of people in the ecosystem, what is limiting Bangladeshi startups from doing well? Is it a market issue or is it a founder issue? I have spoken to a lot of people.

Now the question is that if I knew there were these challenges, why did I even get a venture license? I took the license. Yes, I'm ready to kind of go into that business. But also, I had to be sure about the challenges because only then I can work around those challenges. These are the issues. These are the problems in the ecosystem that are stopping a founder or a startup from being super successful. If I know that, then I can kind of think of how I can solve that problem.

Ruhul: You have this interesting way of looking at life. That it's not material things that make us happy. It's the relationships that we have. There is a spiritual bend to it. One final question is what do you think about life and death? Do you sometimes contemplate the fact that we try all these different things and then we will die one day? It's a short life in all measures.

Asif Khan: I’ll start with the fact that I'm a religious person. I pray five times a day, I fast, and I give Zakat. As a religious person, my beliefs in life and death come from the religion itself. I think part of the reason this concept of minimalism, or stoic philosophy appeals to me is that there are a lot of commonalities between stoicism and Islam in many different ways. As a child, I would sometimes think and feel so sad that I would die and would not exist one day. I would feel really upset. But nowadays, it doesn't come to me.

The other bit is that we as human beings are supposed to put in our maximum effort, we are supposed to strive but it doesn't have to guarantee that my input will bear an equal output. The struggle is part of life. Yes, I'm a human being and as a human being, I will have all sorts of characteristics — anger, jealousy, envy, greed, all of that. But I would say that I have learned to minimize some of that because of my perception of life. The idea is that I will try my best, if nothing happens, nothing happens, because that's what God has ordained for me. Allah has given me a lot in some ways, in some ways, he has not given me and maybe that's the best for me.

Ruhul: I think this is a good place to end this conversation. Thank you so very much for taking the time to speak with me. This was a wonderful conversation.

Asif Khan: Thank you for covering us again. Although this time, it's just me, I hope I did justice to my partners in reflecting the EDGE story and the culture.

Thank you Ayrin Saleha Ria for reading a draft of this interview.

Mohammad Ruhul Kader is a Dhaka-based entrepreneur and writer. He founded Future Startup, a digital publication covering the startup and technology scene in Dhaka with an ambition to transform Bangladesh through entrepreneurship and innovation. He writes about internet business, strategy, technology, and society. He is the author of Rethinking Failure. His writings have been published in almost all major national dailies in Bangladesh including DT, FE, etc. Prior to FS, he worked for a local conglomerate where he helped start a social enterprise. Ruhul is a 2022 winner of Emergent Ventures, a fellowship and grant program from the Mercatus Center at George Mason University. He can be reached at ruhul@futurestartup.com

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