Umayer Islam is the founder and CEO of Homefectionery. In this candid conversation, Umayer opens up about his path to entrepreneurship, sharing how he's tackling the everyday lunch problem for office-goers in Bangladesh.
Dive into the journey of Homefectionery, its community-centric business model, and its unique strategies for stakeholder management.
Learn how Homefectionery has built a sustainable business by prioritizing quality, transparency, and partner empowerment. Gain valuable lessons on problem-solving, team building, and creating a culture of ownership in a startup.
Enjoy this brilliant conversation with the one and only Umayer Islam.
Ruhul Kader: Thank you for agreeing to this interview. I’m super excited to speak with you today. We do these founder interviews; I hope you have seen a few of our previous ones. We have a standard boring format, we'll follow that.
Umayer Islam: You interview successful people doing good business, not someone typically like me who just sells rice. I introduce myself as a 'bhat babsayee' (rice businessman).
Ruhul Kader: I appreciate the fact that you've been doing this for quite a while. I would say you've been focused on doing the work instead of trying to get attention, which is increasingly rare these days.
Umayer Islam: That's not my thing.
Ruhul Kader: How did you come to develop this philosophy that my job is to do the work, set the stage for people to do the work, and stay behind the curtain? Is that intentional?
Umayer Islam: I never consciously thought about it. Reflecting on it now, I realize I often use Fazle Hasan Abed's image to illustrate my personal and organizational goals when presenting at gatherings or forums.
Although Abed is no longer with us, his legacy endures. He built one of Bangladesh's biggest brands, globally renowned.
As a BRAC graduate immersed in its ecosystem, I noticed Abed's approach. I never saw him participate in any of these programs. He was actively participating, but then he was not. Instead of celebrating himself, he focused on empowering others to achieve results. He had a unique ability to select the right people and place them in the right positions. While he played a crucial role, he wasn't interested in self-promotion. Consequently, even after his passing, his creation continues to thrive. Sure, there are controversies, but that comes with the territory.
I've inadvertently adopted this philosophy. It resonates with me, even though I didn't deliberately cultivate it.
My core team knows I'm quite the pakhibaj. I prefer finding clever solutions, then training and delegating to others.
I tell them, "It's your responsibility now; I'm stepping back." I aim for an autopilot approach rather than micromanaging.
Oftentimes I feel like whatever I learned till yesterday doesn't solve my problem of today.
Ruhul Kader: That's intriguing. There's a theory that truly powerful people operate behind the scenes. Now, you mentioned picking the right people and creating systems for them to work. Can you give an example of how you do this?
Umayer Islam: Anyone who's worked closely with me will tell you I'm an open book. I don't keep secrets. Instead of hoarding knowledge, I share everything I know and ask others to do the same. When you open up and share your notes and insights, I've noticed people start to trust you.
They realize you're not holding anything back. You're giving them full access. People then think, "He's helping me with all this, which was actually my job. Why don't I start exploring?" I believe this openness serves as inspiration.
Secondly, I always try to be in the trenches instead of just telling others to go there. I'm the first one to get my hands dirty.
Let me give you an example from Homefectionery. I believe our lunch innovations are unparalleled in the country.
Our business operates in what we call a 90-minute window. Everyone wants their lunch between 11:45 AM and 1:00 PM. We have to prepare and deliver all lunches within this timeframe.
We can't cook at midnight because the food won't stay hot. So we start preparing in the morning and finish within that 90-minute window. We've been doing this from small kitchens since the beginning.
We started a small R&D kitchen to experiment with new menus, create recipes, and continually surprise our customers. It's a long story, but let me focus on one instance.
Imagine packing around 20,000 boxes from one kitchen in a 30-45 minute window to meet that 90-minute delivery timeframe. We use paper boxes with food in zip locks inside, not typical plastic containers. It's a complex operation.
As our orders grew, we had to find an optimal approach, experiment, and innovate. Today, our kitchen workers use line production—each person does one task and passes it on to the next. Through continuous experimentation, we have improved on timing, reducing the time to prepare a box to about 15 seconds. This didn’t happen overnight. It took bold experimentation and multiple iterations.
I didn't learn this from formal R&D experience. When I stand in the line packing food, I am constantly pushing the team to improve speed to see how quickly we can pack. We regularly changed things, eventually arriving at line production.
Our experiment with line production for packing for food also happened organically. Like many other things at Homefectionery, we just did it in one fine morning without any grand preparation.
Interestingly, we implemented line production on our busiest day. I walked into the kitchen in the morning and announced we were doing line production today. Everyone was panicking, but I said we'd try it today. Despite initial resistance, we packed everything in about 45 minutes. Everyone was amazed.
After that experiment, I told the team, "This was your training. We're doing this regularly starting tomorrow." And they were on board.
Our central kitchen has a capacity of 2,000, but if I told my team tomorrow we need to serve 5,000, they'd say, "Alright, we'll do it." That's how we operate. You show them how it works, make them believe in it, and even if I'm not there tomorrow, they'll make it happen. That's the beauty of working with a team that delivers.
Ruhul Kader: That reveals a lot about your problem-solving approach. I'll circle back to that later. First, I'd like to learn more about you. We typically begin these interviews by discussing the person and their journey. Could you tell us about your background and how you came to start Homefectionery?
Umayer Islam: There is a story that originally triggered this business. During COVID, I was part of a startup, working kind of the country director for the business. When the lockdown was announced, I was told to lay off some 70% of the workforce. This is just to give you the context. I inquired about the health of the business and found out that we had enough runway to continue for a while without going through such a massive layoff. COVID was unprecedented. No one had experienced anything like it before. I knew that the company was right to pursue such measures to stay on the safe side.
I'm a people person. In every job I've had, I've known everyone from the CEO to the cleaner. I was aware of their challenges. Even now, this is how I approach work. Everyone talks to me. My door is always open.
I spent a week in continuous board meetings, fighting against it. They wanted me to sign the layoff announcement. It was incredibly stressful and emotionally taxing. Eventually, I realized I was fighting for others, not myself. The company wasn't asking me to leave; they wanted to cut costs as a precaution. After some thought, I decided to resign instead of laying off a large portion of my team. I told management I couldn't bring myself to do it, so I was stepping down. I had equity in the business, which I forfeited.
After I left, many of my colleagues eventually lost their jobs. They would come to me, sharing their experiences and the family problems they faced due to unemployment. I realized how difficult it is when you cut off a breadwinner's income source.
This sparked my thinking about whether I could build something substantial that could empower many people using my knowledge, network, and skills.
From there, I developed three different prototypes, sharing them with trusted individuals and seeking their advice.
I identified an interesting demographic: women. In our culture, many women stay at home, and going out isn't always an option for a large portion of them. I found this an intriguing problem. This led to thinking about how we could work with and empower these women at scale, which eventually resulted in Homefectionery.
Initially, it wasn't conceived as a lunch subscription platform. However, we ultimately chose that route so Homefectionery could empower many women without uprooting them. They can stay at home and don't need to acquire new skills. They can use their existing abilities and start earning from the comfort of their homes. That's how Homefectionery began.
We've undergone several changes throughout our journey. Today, we're in the lunch business. However, our ambition and model remain consistent.
Ruhul Kader: I'll return to the Homefectionery story in a bit. First, I'd like to learn more about you. Could you tell us about your educational background, your first job, and so on?
Umayer Islam: I completed both my BBA and MBA in marketing at BRAC University. Interestingly, I initially enrolled in the English Department. After the first semester, I realized English wasn't my thing, so I transferred to BRAC Business School.
I was born and raised in Rajshahi, where I spent my school and college years living with my parents. I moved to Dhaka for my undergraduate studies.
My working life began at British American Tobacco Bangladesh (BATB) in their HR department, particularly working for Battle of Minds, BATB's prestigious business competition and recruitment program.
The way I landed at BATB is quite interesting. During university, I was very active in club activities, though not formally part of any specific club. My batchmates and I were involved in every club. Whenever a club needed help, we were there. This involvement led to extensive networking, without us consciously trying.
Around my 10th semester, I received a call from a senior who was working at BATB. He invited me to the BATB office for a meeting. I hadn't finished my graduation yet, with one or two semesters remaining. At that time, I wasn't actively job hunting, let alone considering BATB. I didn't even know where the BATB office was, despite it being near my campus in Mohakhali. I asked for directions and went to meet him, wearing a red T-shirt and sandals. I had no idea I was walking into an interview.
When I arrived, he explained Battle of Minds and asked if I'd be interested in organizing it across various colleges and universities. He said, "You're going to be the key person for the team."
I was quite surprised and asked a few questions. He responded, "I've seen how you manage things. I feel you're the right person to handle all these external partners and make it happen." That's how my professional journey began, without me even realizing it.
Ruhul Kader: What happened after that?
Umayer Islam: I worked at BATB for a while, completing my graduation during this time. They offered me a territory manager position, which is a typical entry role for marketing majors. But I didn’t want to do it. By then, I'd attended training sessions for these roles and spent time with people in similar positions. That exposure made me realize it wasn't my cup of tea. I didn't want to travel around selling cigarettes. So I decided to leave.
Then, feeling drawn to advertising, I joined an agency. After some time in advertising, I switched gears and took an operations role at DirectFresh. I was one of their first hires, tasked with building their operations from scratch. Despite having no prior operations experience, I dove in, hired a team, and built the operation from the ground up.
My time at DirectFresh taught me about operations and how startups work. I think that's where I caught the startup bug.
Post DirectFresh, I did consultancy work for a while, helping companies shape their businesses. Then I joined another startup, again as their first hire. I worked there until COVID hit.
The pandemic gave me a rare opportunity for introspection. I realized that throughout my career, I'd helped many people earn substantial money. I've always been extremely dedicated, giving my all to every job I took on. I realized that if I continued on this path, I'd help more people get rich, but very few would truly benefit from my knowledge and work. After much contemplation, I decided I'd had enough of just making money for others. It was time to do something that empowers people.
Ruhul Kader: Entrepreneurs are high-agency people. They make decisions and do things. Before founding Homefectionery, you've had experience working at multiple companies, including two startups. What key lessons about running organizations did you take away from these experiences before launching Homefectionery?
Umayer Islam: Throughout my career, whether working for myself or others, one thing has remained key: problem-solving. This skill has been instrumental in allowing me to adapt to diverse roles across various organizations. Regardless of the position, the core requirement is always to solve problems. I believe this applies not just to individuals, but to companies as well. Every moment presents a new challenge. The key is knowing how to navigate each situation and overcome the obstacles that arise. It's about developing the ability to tackle challenges head-on, no matter their nature or when they appear.
Ruhul Kader: What is your approach to problem-solving? Do you have a framework?
Umayer Islam: I always strive to stay planted on the ground. Before launching Homefectionery, neither I nor my core team members had direct experience in this industry. While everyone brings expertise in their respective domains, none of us come from this specific background. What unites us is our passion for problem-solving.
Over the years, I have developed my problem-solving approach. When presented with a challenge, my mind immediately starts working, generating various approaches. Instead of jumping into action, I first solve the problem in my head, considering at least ten different strategies. This process leads me to ask crucial questions and anticipate potential outcomes and obstacles. For instance, I might realize that Plan A could lead to problems X and Y, while Plan D might only involve challenge Y. I run through these combinations in my head, aiming to identify the optimal solution.
Once I feel confident about a particular approach, I bring it to the real world for testing. However, I never present it as the definitive solution. Instead, I share it with the team, explaining my thought process and the logic behind it. I actively seek input from various team members, remaining open to new ideas and approaches. I'm always ready to incorporate critical feedback. This method allows me to refine and optimize a solution before we implement it.
Umayer Islam: To add to this, I consider myself fortunate to know a lot of experts across various fields. Whenever I'm planning something new, I make it a point to cross-check my ideas with these knowledgeable individuals. It's a privilege to have access to such expertise. I can reach out to them for their professional opinions on my thoughts and strategies. Often, they listen to my ideas and offer valuable feedback for improvement. In many cases, they also suggest alternative approaches that I might have overlooked and recommend further reading or resources to deepen my understanding. I'm aware that not everyone has this advantage, and I'm truly grateful for it.
Ruhul Kader: Let's return to the Homefectionery story. Can you tell us more about the early days? After coming up with the idea, how did you put together initial resources and launch the platform? How has the idea evolved?
Umayer Islam: So I was exploring and trying to validate a few ideas. I had some idea about the kind of problem I wanted to solve—a big and everyday problem for a lot of people. The business has to solve an everyday problem for a large number of people. I had other parameters, but these were the two key parameters. That’s how we decided to work with the women population.
During COVID-19, if you recall, a lot of people started trying different dishes at home. Consequently, a lot of home chefs emerged, doing different dishes at home.
I came across a Facebook group of homemakers around this time. In that group, a lot of women were into baking various food products. We found out that many of them struggled to get raw materials on time. They couldn’t get their baking essentials. We started by solving this problem for homemakers, supplying them with baking essentials. This was the first iteration of Homefectionery, a website selling all kinds of baking essentials.
We did that for about six months with a small team of three people—me, one person running all logistics, and another person managing procurement. I used to handle all the phone calls, social media, and everything else. We were managing it from a small one-room office. Initially, it was more like an f-commerce business. We later turned it into an e-commerce site. The business was going well. We became opex positive quite soon because we were just a three-member team.
Then COVID-19 died out. A lot of people started going back to work and normal shopping habits. The demand for these homemade products quickly evaporated. A lot of home cooks had to stop baking because of a lack of demand. Many of them started reaching out to us saying that they no longer have a business.
We started having conversations about what we could do. Many of them said that they could cook and were ready to do it commercially. But we didn’t know who would buy it. I knew about Cookups. I asked some of these people why they don’t cook for Cookups. They told me that Cookups was not doing well. I figured out that Cookups is expensive. I might order from Cookups when I'm hosting a party. But Cookups doesn't offer something for daily consumption.
After much thought, we realized that millions of people go to the office every day and they eat poor-quality lunches. What if we give them something that they open up every day during lunch hour, and they're like, Oh, I love it. If you had a frustrating meeting or you're not happy with the work, we cannot solve that problem. But these women can cook delicious meals in their home kitchens and we can give you a fulfilling lunch box every day.
I'm not saying we're doing it right now or we are there yet. But that is the ambition we started with—what if you get a home-cooked meal every day in your office? The only thing I need to know as a service provider is your allergen and one item you want to avoid. If I know that, pass that message to the kitchen, and you get a box and you will like it. That was the whole idea. From there, we realized that all these people who go to the office need lunchboxes, why don't we start a lunchbox business? We have been doing it ever since.
Even when we were a small team of a few people, we were careful about helping our stakeholders in every way possible.
Ruhul Kader: How big was your team when you became a lunch delivery platform?
Umayer Islam: I guess we grew from a team of three to a team of five/six people. I was still chatting with most of the customers. Even these days, I chat a lot with customers because I enjoy talking with people. I try to get feedback on what they enjoy and what they want us to improve.
Ruhul Kader: How many home cooks were you working with in the early days?
Umayer Islam: When we first launched, we didn't have a platform. We used WhatsApp and social media. While we built our platform about five months ago, it runs more like an e-commerce site than a subscription platform. We wanted to keep it simple. Moreover, we didn’t want to invest in tech at this stage since our existing platform does the job. Customers come once a week, select all the meals they need and checkout.
We launched the business with a group of 300,000-400,000 people. All of them were looking for opportunities to earn money. To onboard home cooks, we initially called for sign-ups using Google Form. We received such a huge number of responses that we didn't know who to start with. We also didn’t know who would buy food from us or how we would tackle logistics. Imagine you know 10 home chefs in Bagerhat but no one who needs office lunch or can handle logistics. I had all these people ready to cook, but no clue where to sell all this food or even what to sell because different people were cooking different things.
Today, it is well structured. We have standard recipes. Everybody gets the same recipes and uses the same ingredients. We supply the key recipes and ingredients to maintain uniform quality. This was not the case in the early days.
When a large number of people signed up to become home chefs, initially we struggled to screen and select. After much thought, we decided to start with people with previous experience. We had a question in the form about prior experience of selling cooked food either through social media or other platforms. We picked a small number of experienced people from this list and got started.
Today, we have many more experienced people. We have also developed a community driven process to onboard new home chefs and ensure quality. To join our platform, every new cook has to get vetting from one of our existing chefs/cooks. The approach has streamlined finding and onboarding home chefs for us. New cooks get trained by our existing chefs, who then vet them and determine if they're ready to go live.
Ruhul Kader: You had WhatsApp groups and Facebook groups, and these were the platforms for both the chefs and the customers.
Umayer Islam: Yes.
Ruhul Kader: As you mentioned, you had to figure out where to find your customers. How did you solve that problem initially?
Umayer Islam: We say that we solve a triangle. Imagine all these people going to the office; they're looking for quality lunch at an affordable price. This is a common problem that I don't need to establish with you. Then we have all these home chefs who live in nearby residential buildings around these commercial zones. They can cook, and their kitchens are within a 10 to 15-minute ride.
Now all these lunches need to be delivered.
If you notice, many on-demand bike riders sit idle during lunch hours because people don’t usually move during these hours. It means they can’t earn or earn less during these hours. But they need to buy lunch. Many of these people skip lunch if they haven't earned enough for the day. So we thought what if we could create a cash and kind model to work with these people? They would drop food in exchange for food and some cash.
That’s how we connected three different groups to create a solution. So we have a triangle. Home chefs living nearby cook food for people waiting for lunch in the office. Riders sitting idle during lunch hours deliver this food in exchange for a free lunch and some cash. It connects three groups of people: points A, B, and C, forming a perfect triangle. Home chefs cook homemade food nearby, riders pick up lunch from a 10-minute distance and drop it off at an office, and office people get food from nearby home kitchens.
Ruhul Kader: How did you connect all these three points in the early days?
Umayer Islam: We started talking with riders, asking if they'd be interested in dropping lunch boxes for us in exchange for lunch and maybe some cash. Usually, most of our deliveries go half a kilometer distance. Initially, many people didn’t take us seriously. So we pitched to even more people. Some of them asked what the food would be. We told them our menu, and many of them said they usually don’t get that decent lunch. We explained that it’ll mostly be a 10-minute drop for them. Our chefs know exactly when the food should be ready because they have run kitchens in their homes before and are trained not to keep the rider waiting.
We started with some freelancers—10-15 riders. We created a WhatsApp group to coordinate pickups and drops. Since we were doing about 50-60 drops every day, it was manageable. From there, we have built a model where we can have 1,000 riders tomorrow if needed. All we have to do is ask our current riders we need more riders and they will bring more riders.
We have built a community-centric approach. We have home chefs who bring in more kitchens, riders who bring in more riders, and customers who refer us and bring in more customers.
Our growth has mostly been organic. We're growing a business solely on the shoulders of the community.
Ruhul Kader: Can you talk about some of the things that have triggered this virtuous cycle of growth?
Umayer Islam: It was never easy. Our operations remain organic and rather manual to this day.
Except for taking orders, we don't run on a comprehensive tech platform. Everything is done manually. Orders are dispatched manually, rider management is done manually. One thing we have done is always putting our stakeholders ahead of everything else.
Even when we were a small team of a few people, we were careful about helping our stakeholders in every way possible. We were in constant touch with our chefs, asking about their problems. For riders, we were constantly asking how we could genuinely help them. We have tried to build real relationships with our community partners.
Let me tell you something, which I don't know whether anybody in the country does except us. For instance, we keep free perfumes in our hubs so that our riders can use them when they come to our hubs to pick up food to deliver. No one likes to ride and drop sweaty. We give them T-shirts and we also clean their T-shirts for them. We tell them you don't have to clean your T-shirt. When you're coming for the next pickup, drop it in a box, we'll clean it and you'll get a completely ironed one within 48 hours. These are small things but they go a long way in building genuine connections. And we are not doing these things out of the blue. We regularly speak with our partners to learn about their problems and we then use their feedback to provide support.
We have done the same with our home chef partners. We provide groceries and cooking materials to our home chefs and often do that at a very good price compared to the market. We can offer good prices because we get preferential rates from companies when we buy these products in bulk. Imagine, a home chef buying groceries and cooking materials from their nearby shops for one cook versus we're buying from companies for thousands. We are preparing food essentials for over 5000 people, which gives us a certain buying power to bargain favorable prices. We know this buying power that we have helps release pressure from our home chefs. They no longer need to worry about fluctuating market prices. We're giving them a steady supply of essentials at a good price.
These are some of the things that have helped us grow quickly with a community-centric approach. Our partners believe they're part of the business. And that's true.
If riders don't show up tomorrow, we don't have a business. If my home chefs don't deliver quality food tomorrow, we don't have a business tomorrow. The business needs all of us.
Ruhul Kader: One of the challenges many on-demand platforms face is the thin margin. Consequently, as these platforms mature, they can't pay attention to the stakeholders' interests. In many instances, they put pressure on the stakeholders for commission and other concessions. How did you solve that problem? Tell us about how you figured out that if we want to run a healthy business that is good for all our partners, we have to innovate on the business model side of things.
Umayer Islam: We have always approached it as cash and kind. Instead of giving people only cash, we have tried to find a model in between.
Think about riders. They get a 120-taka lunch box and some money for delivering food at a time when they usually sit idle. They save money on food and earn some money during the day when they usually don’t have rides. I'm using this example to give you an impression of how it works. For us, we are perhaps still making a small gain in this entire transaction, but it allows us to work better with our partners. Similarly, we're cleaning all these T-shirts for our riders. This costs us money but since we are doing it in bulk, we can do it at a cheaper rate. Now every morning our riders get a fresh T-shirt. We are constantly looking to give more of these in-kind support to our partners and sometimes it is easier to provide these benefits than giving more cash. The moment you think about giving more cash, you have to earn more cash, which is hard because it's a thin-margin business.
Same with the home chefs. We provide them with groceries and cooking materials. We buy the products at factory doorstep price. Imagine the gap between factory price and wholesale or MRP, which is usually the price you have to purchase things if you do it only for yourself. The money we save in these purchases, we can transfer to our home chefs in the form of better prices. They don’t need to worry about anything and can focus on cooking. We tell our home chefs that you don't need to leave your home, and you don't need to stress over your cooking essentials. They get dropped at your doorstep, you cook for us and we deliver it. We have created a model where our partners earn more in the form of price benefits and cost savings.
Let me give you the secret. Our home chefs, not only cook for the customers, but they also cook for their families. The price we give them for the essentials is lower than the retail market price. Imagine, if you're cooking for 15-20 people and you have four members at home, you're not spending anything for their food. Immediately, your food problem is solved. That's also kind versus cash for home chefs.
Ruhul Kader: But to make that model work, you had to do a lot of calculations, figure out a lot of nitty-gritty and the details of it.
Umayer Islam: Our life is never easy. We know we will always face most of the challenges versus our stakeholders. We want our stakeholders to have no challenges at all. They have expertise, we empower them to monetize that expertise. As a service provider, it is our job to go into the details, micromanaging every aspect to make their lives easier.
Ruhul Kader: Initially, you did not raise external investment. So far I know, you were not planning to raise external capital.
Umayer Islam: We only raised one round so far. We are planning to raise a large round at the end of this year. If the traction we are planning to hit goes according to plan, we should be able to do that towards the end of the year.
From day one, the idea has been to build a cash-positive business. I learned early in my career that it is always risky to depend on external cash to survive.
We have always been judicious when it comes to raising external capital. When we finally raised our first external capital, we were picky about who we were going to take money from.
Ruhul Kader: You had that freedom of being picky because you have built a good business. Talk about your experience of being a solo founder. Is that challenging?
Umayer Islam: While it's challenging, it's equally rewarding. When you are making progress towards your vision, your experiments are working albeit imperfectly, it feels excellent. As a solo founder, it's never easy. Building a business is lonely. You are constantly firefighting. It can be exhausting.
I have tried to create a support system. I have a coach who helps me. I have amazing team members who understand my style of work, my way of thinking, and my way of execution which eases things a lot. I speak with many founders who are not as lucky. Many of them don't have the right people in the right place. I have been blessed with people. All I do is tell my team this is something we have to solve, it starts getting solved. That makes my life easier.
Ruhul Kader: One recurring question that comes up when you're dealing with home chefs is quality. How do you ensure uniform quality? Similarly, how do you ensure uniform pricing?
Umayer Islam: Before I answer your question, let me ask you who cooks food for you at home? When you're cooking for yourself, can you achieve the same quality every day? Is it possible?
The first thing that we tell our clients is that your lunch is not going to be 100% perfect every day. We are normal human beings. Someone with their full heart is trying to give you a fulfilling lunch every day. The intention is there. The outcome might not be 100% perfect every day. You have to accept that before subscribing to our lunch. If you don't accept that fact, please, don't engage with us. This is one of the first conversations all our customer representatives have with new customers.
We make it clear that if you're expecting commercially cooked food—same taste and quality every day, Homefectionery is not your go-to place. We guarantee you healthy food and high-quality food but the taste might not be the same every day.
The second thing is we work hard to give you the best possible food. We've learned over the last six months that quality meals are all about quality ingredients. A lot of lunch subscription platforms cut corners on ingredients because of various reasons. We have learned that this is a terrible way to do this business. We make sure that all our ingredients are industrial-grade. We quality test every ingredient. Quality ingredients go in and wholeheartedly someone processes it to cook something nice. Most of the days you will get something good.
Thirdly, we work with home chefs who have prior experience. They understand people are picky and expect a fulfilling lunch. We have created a system where new chefs come through a process that ensures we always have the best home chefs.
Every new chef who joins the Homefectionery platform has to come through one of our existing home chefs. Our chefs don’t make any additional money for this vetting work. However, it is prestigious for them. This approach is working. We don't get a lot of complaints about quality issues.
The second part of your question is about the pricing. Before we introduce any new menu, it goes through extensive research and testing. We have an R&D kitchen run by professional chefs. We run everything by the book. We experiment with menus and ideas to figure out details. We know how much we spend for a certain dish for a batch of 25 people. We know what the cost of cooking a certain recipe is and we usually include price fluctuations in the pricing. Once that comes into our tolerance level, only then we give that recipe to all the kitchens and that goes into the offering.
Ruhul Kader: How did you come up with the idea that we have to test these menus and come to a price point before offering them to customers?
Umayer Islam: If you are selling something, you have to figure out a profitable price for you. I have always wanted to build a sustainable business. We have always been cautious about how we do things. I never hire anybody until their salary and roles are justified. My philosophy is that I'm not going to hire 50 people if I can’t ensure long-term security of their jobs.
We don't offer any menu that is going to dent us on retention for home chefs, retention for us, retention for delivery people. I have been preparing financial models for different businesses all my career. I spend a lot of time on Excel. I'm good at figuring out numbers.
Ruhul Kader: Give an overview of the company today. How big is the operation, how big is the team, how many home chefs do you have on the platform and how many customers or meals do you serve daily?
Umayer Islam: We're currently serving from around 300 kitchens. Additionally, we have built a central kitchen with certain plans. We regularly get requests from a lot of corporate clients who need lunch for 300-500 people, which is difficult to serve from a small home kitchen. In our case, it is more challenging because our food goes in ziploc bags rather than in a paper box instead of commonly used plastic packs. Packing every single item into Ziplocs takes time.
We have built this kitchen to see how many meals we can serve from a 1000-square-foot kitchen. If this model works, we plan to collaborate with other kitchens in Dhaka with similar setups. Many kitchens of similar size don't have business. Imagine turning them into franchise kitchens where they do our recipes, and our menus; immediately, we can serve 50,000 people in just three to six months.
However, before we put that idea to work, we wanted to experiment to understand the model. So we have this 1000 sq ft kitchen, from where we are doing close to 1000 meals daily. If this model works, we plan to replicate it to serve a different segment of the consumer base. Home kitchens will always be there. We will serve these larger corporations that need lots of food from these kitchens.
We currently serve close to 5,000 boxes daily, including all types of boxes, standard, corporate, etc. We are working with 300 to 350 kitchens every day.
In terms of team, we haven't hit 40.
We have turned the model upside down. We are a subscription service. You have to pay first to place an order.
Ruhul Kader: Tell us about the evolution of the thesis and the business model. How much has your initial thesis and business model evolved?
Umayer Islam: If you look at our timeline, nothing has changed much. More people have been added but the model has not changed much.
Home chefs are still there and will always be there. Otherwise, it is difficult to operate the way we want to operate.
Imagine the capital requirement of the cloud kitchen model. We might be able to build some narrative and get great valuation but the investment needs will be equally crazy. Whereas we already have at least 500 kitchens ready at our disposal that can deliver.
Many small kitchens and lunch delivery businesses operate in this space. And the entire landscape has always been in a cash crisis. Corporates usually pay after 30 days of delivery. These kitchens invest money out of their pocket, feed people, and at the end of the month, submit a bill that takes 7 to 10 days to process. The payment cycle is lengthy. Whereas we have turned the model upside down. We are a subscription service. You have to pay first to place an order.
Our business model hasn’t changed. We have been in the essentials supply business from the beginning. We started by supplying baking essentials to home cooks. In that sense, our grocery and cooking essentials supply business is not that different. Our idea of growth has always been different. We wanted to offer a good product and let people come for it—build a great product, give it to people, and let them talk about it if they find it useful.
This strategy has so far worked. We started by serving individual customers. When they found our food of high quality, they shared it with their colleagues. It has helped us to deepen our penetration in each place. From one colleague, it became 5, then 10, then 50, and then the entire team, etc. In many instances, management eventually comes to learn that most of their people buy lunch from this company. One day they decided to test our lunch, and randomly order, which eventually led to more opportunities for us.
Ruhul Kader: Focus on the quality to gain positive word of mouth and use the word of mouth to drive growth.
Umayer Islam: It is never easy. While it might appear straightforward, we solve a hundred different things daily. While it appears to be a simple business—you go to a platform, you place an order and you get a lunchbox. In practice, it is a complex business where hundreds of different things go behind the scenes to make it work.
Ruhul Kader: How does your relationship with the chefs work?
Umayer Islam: I don’t think anybody would be able to replicate our model in terms of our relationship with our partners. We have a strong relationship with our chefs. You cannot scratch my home chefs even if you give them whatever commission you want to give, because they know they own Homefectionery. Our partners run the business. If riders don't show up tomorrow, we don't have a business. If my home chefs don't deliver quality food tomorrow, we won't have a business tomorrow. The business needs all of us. If one of us is not here, it will not work.
We don’t operate like a platform where you connect buyers and sellers and you merely take a commission for doing that. There is no platform. We don’t connect buyers and sellers. We work with both partners and enable the entire interaction.
You asked how our monetary transactions with chefs work. We always make sure cash is there and you get paid on time. Imagine you're a home chef. You make lunch for us seven days a week. You will get supplies for seven days. We know the menu for the next seven days. We have historical data of how much you cook and know your essential needs. We drop essentials to your doorstep, you cook, we pick and deliver the ready food to customers. By that time we already have the money for the food we picked up from you.
We give an invoice for the supplies we provide like any third party. So you know how much we'll deduct for essentials from your total bill and how much you get. For every box, we give our home chefs a certain amount of money. The beauty of the model is that our home chefs don't need to invest any money upfront. We provide them with all the essentials, they just cook and give us the boxes. No capital is involved. Then every Thursday, we pay our home chefs for the week via bKash or bank account.
Ruhul Kader: Do you have any standard commission? How do you pay these home chefs?
Umayer Islam: Our home chefs get a particular fixed amount for each box. They know the recipe, the pricing, the cost per box, and how much they make per box. We give them an upfront idea about how much they will earn per box. We have a transparent process. I don't think anybody does it this way with home chefs.
Ruhul Kader: This is an interesting model. It means home chefs are not investing any money upfront.
Umayer Islam: They just invest their time and skills. We work closely with all of our partners. For home chefs, we supply them with everything they need. For instance, if someone needs a bigger pan, we send them a bigger pan. We tell them the actual price of the pan and the price they are paying. We mostly add logistics costs and rarely make money in these transactions.
Ruhul Kader: Can you expand on the operational pillars of the business? How is the organization structured?
Umayer Islam: We have two sets of people who run the business. One group works the night shift because a major part of the operation runs in the middle of the night such as procuring essentials and dropping them to our chefs. Another group walks into the office in the morning and handles customers, logistics, and the rest of the operations.
Kitchens mainly start working after fajr prayer. A large portion of the operation is still done manually, including logistics. A two/three-person night team sorts the orders, pinpoints the delivery locations, and sends the details to the kitchens. By the time home chefs go to the kitchen, they know their cooking requirements for the day. It reduces the chance of wastage to almost zero. We don't have a process for last-minute changes. Foods are pre-ordered. Customers cannot make changes to their order after 9 pm.
So the first group set all the instructions from cooking to logistics. The second group comes in the morning, follows the instructions, and makes sure that execution is done properly. However, as we grow, the operation is becoming increasingly complex. The amount of data and coordination requirements is growing exponentially. To address these challenges, we are now working to build a platform to automate part of the operations.
We have built a community-centric approach. We have home chefs who bring in more kitchens, riders who bring in more riders, and customers refer us and bring in more customers.
Ruhul Kader: Tell us about your company culture.
Umayer Islam: Nobody works at Homefectionery. Our people own Homefectionery. That's the major difference in how we operate as a company.
Ruhul Kader: Do you mean they legally own the company?
Umayer Islam: See, the day I sell this business, because I have my exit strategy, a lot of people at Homefectionery will be rich. The people who work with me, know me by heart. They know the kind of person I am. If I make a certain amount of money, a certain portion of it will go to them. We are on this journey together. We are building this together. We are building this momentum to go into a moment and then take an exit.
We have a culture where people barely feel like they're working for someone else unless they're at the very lower tier of the operation. Most of the people who run the business feel that they own the business.
Ruhul Kader: It must be a different kind of culture where people come in and take responsibility and ownership of the company. How do you build that sense of ownership in your people?
Umayer Islam: The last four or five teams I ran or was part of, I was the first hire and then I had to build the rest of the team. I learned that if I don't hire the right people and empower them, things will never move. Contrarily, if I hire the right people, put them in the right place, and give them the right set of tools, I don’t need to micromanage. They know their expertise and what they have to do. They take charge of it. When you can do this across the company, you have an operation on autopilot.
Ruhul Kader: That makes hiring super important. How do you hire?
Umayer Islam: All my main hires either worked with me before or are vetted by people we know.
However, we sometimes do hire people I don't know from before. It happens mostly in positions where I don't have prior exposure. In those cases, we take references from people we know. I am lucky that I know a lot of people in different places who help me.
Our recruitment process is extremely transparent. We are direct and candid with potential candidates. We tell them what we are looking for, and the problems we are facing that they will have to solve if they join and we communicate how we operate as a company. Everyone at Homefectionery operates independently and has their approach, but when it comes to teamwork, we operate as a team and community. We tell them that we provide limited monitoring and guidance, and they will have to do it on their own. If they can pull it off on their own, they can come in. Moreover, we also say that if they can't pull it off after a certain time, we don’t keep non-performers. We explain reality, expectations, and everything in the first interview. It is like the rest of our business, transparent and direct.
We have always been judicious when it comes to raising external capital
Ruhul Kader: When you decided to raise money, what were you thinking?
Umayer Islam: We never wanted to raise money. I still don't want to raise money. I told you we have an exit strategy in mind. We understand that we need some push at certain times of our journey to reach there. We have identified those points of time. However, while we are doing it, we make sure that we remain cash-positive.
Although Rizk comes from Allah, we don't want to put our business and thus the livelihood of our people at risk by mismanaging the business. I know from my previous experience how perilous and unhealthy it is for people when you suddenly lose your job. Part of the reason we raised and we might raise in the future is also because of this.
We have mostly funded our growth with our own money. Now we have figured out these inflection points for our business and we want to invest in those points. When we see we can accelerate our growth if we invest in the business, but we should not do it with our funds because it would put the business at risk, we raise money.
For instance, when we decided to go from a WhatsApp group to a public platform, we decided to raise a small pre-seed investment. The same is the case when we are now looking to build a platform and expand to serve more corporate clients.
Ruhul Kader: What do you think about the industry? Tell us about the competitive landscape in the industry and your take on the future of the industry.
Umayer Islam: I don't have a number for how big the industry is because data is hard to come by. Millions of people go to the office every day and it is a huge market. We are talking only about offices. There are universities, colleges, and hospitals. And there is a growing number of households where husband and wife both go to work and don't have time to cook at home. There are many emerging markets in this vertical where there are not any meaningful quality solutions. The more we progress, more opportunities open up to us. It is a big market that nobody alone can solve.
Second, if you look into the lunch business market, we have created a subscription model in this space where we have paid customers throughout the month. Whereas the traditional model is you look for customers every day, supply the food, and wait to be paid after supplying the food. Our average basket size is bigger than our competitors. We have committed customers who pay upfront. That makes a major difference. This is the difference between how we work and how the rest of the industry works.
This is a big industry and most other players have problems with cash flow where either they don't have enough orders or don't have money to support those orders. Since I speak with a lot of these kitchens, I know they have these challenges and I never had a clue about this because we never had this problem.
Ruhul Kader: In a sense many of your competitors may eventually become your collaborators or partners.
Umayer Islam: You just nailed it. That's how we are moving. All these people want to deliver good food and service but sometimes they face challenges they can't solve. Imagine you have one kitchen, you have to deliver 300 orders of five different menus, and that too within a two-hour delivery time. Imagine the complexity.
Compared to that, if you give them fixed menus, ingredients, predictable orders, and pay on time, their life becomes easy. They know how to cook good food and can cook quality meals. If we can work with these kitchens the way we work with the home chefs, immediately the landscape changes.
Ruhul Kader: Tell us about your short and long-term plans for Homefectionery.
Umayer Islam: We plan to take an exit in five years. By this time, we want to get to a place where if you think about outside lunch, you think of Homefectionery. That's where we want to go in five years. We are going to work with all these different players in this space. We are going to change the dimension of our current customers, and suppliers, and are going to work with other players in the industry. That's how we look at it.
Ruhul Kader: What are some lessons you have learned in entrepreneurship and building organization and life?
Umayer Islam: Oftentimes I feel like whatever I learned till yesterday doesn't solve my problem of today. With all these years of experience, I feel inadequate daily. Every morning I feel like I have these challenges and I don’t know how to solve them.
Ruhul Kader: This is a beautiful lesson in that I have to grow daily to meet the challenge of the day and having that realization should be an invaluable asset. That is a useful habit. How do you embody this?
Umayer Islam: I see myself as a problem solver. When there is a problem and nobody is able to solve it, I jump into it along with others. We attack the problem and find a solution to it. That's how we deal with challenges at the company.
Usually, these problems come to me when others in the company fail to find a complete solution. The meaning is by the time a problem comes to me I know that my team has failed to solve it. Since I also don't have any clue how to solve it, I tell the team let's go together and solve it. It is our approach to solving a problem.
Ruhul Kader: That’s fascinating. I think this is a good place to end this conversation. This has been an education for me. Thank you so much for being generous with your time and insights.
Umayer Islam: I never shared this much with anyone else. This was a pleasure. Thank you.
