Counterfeit is a growing problem globally for many industries including highly sensitive industry like pharmaceuticals. The counterfeit medicine market currently worth BDT 600 crore in Bangladesh, according to several market sources.
According to a report from the Organisation for Economic Cooperation and Development published last year, the trade in phony products is a fast growing problem and now worth as much as $461 billion. OECD cites: “fake products crop up in everything from handbags and perfumes to machine parts and chemicals. Footwear is the most-copied item though trademarks are infringed even on strawberries and bananas. Counterfeiting also produces knockoffs that endanger lives – auto parts that fail, pharmaceuticals that make people sick, toys that harm children, baby formula that provides no nourishment and medical instruments that deliver false readings.”
Things are getting even more complex due to the emergence of digital mediums of commerce. In Bangladesh, ecommerce marketplaces are littered with phony products and many of the marketplaces are now introducing measures against these products. Globally, online fake product business is a huge market. Companies like Alibaba and Amazon routinely face criticism for allowing copy products on their platforms. That said, platforms can only do so much for tackling this problem.
This is where Panacea, a Dhaka-based company comes in. Through its mobile platform based solution, mobile app and an SMS service, the company empowers users to verify a product before buying it. The company, currently working with Renata Pharmaceuticals, one of the biggest pharmaceutical companies in Dhaka, imprints a unique verification code onto each medicine strip that users can use to verify the medicine either by sending a SMS or FB message.
For Panacea this is just the beginning, the company aims to do more. “The vision is to make the authentication system as indispensable to a product as expiry date or something similar without which you would not buy a product” says Soumik Aswad, Co-founder and CEO of the company, “you would not buy a product unless it has a code that allows you to verify the product whether it is original or fake.”
Panacea started its formal journey in 2015. Today, the company is a team of five people, is cash flow positive and works with one of the four biggest pharmaceutical companies in the country. Recently we sat down with Soumik Aswad, co-founder and CEO of the company to know more about the progress of the company, state of its business, challenges and growth and the future plans.
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Briefly tell us about yourself.
Soumik Aswad
I spent my childhood in different parts of the country due to the nature of the jobs of my parents, my father was in Navy and my Mother is a Joint Secretary of the Government of Bangladesh. I have been to a lot of places throughout my childhood including Chittagong, Comilla, Bogra and Rangpur. While it is often hard to start over every other year, it has also taught me the importance of a sense of detachment and adaptation.
My university life influenced me a lot and was the biggest reason behind starting Panacea. I went to Bangladesh University of Professionals, a place very close to my heart, and going to business school was instrumental in my decision to starting a business.
Future Startup
We know a lot about Panacea, but then and again, we want to know more. How did Panacea come to exist? What was (and is) the idea?
Soumik Aswad
The idea originally came when we, I and my brother, came to know that there is huge a counterfeit problem, particularly in the Pharmaceutical industry which we thought an incredibly important industry to suffer such a problem.
It is true that you can sufficiently check a product before buying, we have law enforcement agencies to look after the similar problems or you may complain online if someone sells you a fake product. These are good options but to our understanding, human senses are not enough to understand counterfeit product all the time because sometimes counterfeiters also use good technology and make sure that everything looks almost similar. And it is impossible for the law enforcement force to fix the problem entirely.
We realized that we need a system, probably an electronic mechanism, that would automatically allow users to check with the manufacturer or the company whether the product is original or fake. We also understood that this could not be dependent on human sense or something that goes along with a product like a hologram or the likes, and also a company alone can’t do it. Instead, it has to be electronic and distinguishable. That led us to the idea that every product would have a unique code and could be verified for only once. We did not figure this out back then but now when we look back we could connect the dots and see how we progressed.
Once we had the idea, we started to attend competitions, which is a quite common trend in business schools. These competitions don’t amount to anything. Most of the time people attend these competitions for the sake of competition. Most people who attend competition seldom think about starting a business later. We took the opportunity nonetheless.
We applied for a competition and got rejected. We applied for another competition, got selected and got through some stages. But we received some very good feedback and reiterated our pitch and went to another competition and did really well. Then we did quite well in a couple of competitions. We had BDT 2-3 lakh worth of competition winning money and we decided to try the idea out. We used that money to support the initial days of the company. This was back in 2014-2015.
In terms of model, we are a SaaS company, software as a service. We have a base price for the value our product generate. If you need anything on top of that it may increase the price.
Talent-wise we have evolved a lot. That is one area I focus a lot. I think talent is something that makes or breaks a company. Currently, we are a team of 5 people and a few volunteers. We are working with a company and we are cashflow positive.
Future Startup
A lot of business school people win competitions and seldom try to execute their ideas and start a business. What was your motivation behind starting a company?
Soumik Aswad
Since we had some competition winning money, we thought we could spend this money doing nothing or put this into use by trying to build the business in real life. That was the motivation.
In turn, competition money allowed us to make mistakes. We hired a software firm to build our initial backend system and our product. We knew almost nothing about coding or technical thing and in fact, we’re not clearly aware of what we wanted. They did a very bad job. We hated that.
We lost half of our money over a period of two-three months, but that also taught us many important lessons. We applied ourselves and learned a little bit of coding so that we could understand minimally about our product.
Then we hired a proper engineer to help us build the product. You know Sumon Selim bhai, he worked with us for 7-8 months and helped us to build the solution. We started building the product in 2015 and finally launched it in the market in 2016.
Future Startup
How did you get your first client?
Soumik Aswad
Often, the cycle works something like this: you get your product ready and then go on to find clients. However, this played out a little differently for us. Among many upsides of attending competitions, one is that you meet a lot of important people and you get to network and build lasting connections with them. In our case, a mentor of us, Mr. Nazim Farhan Choudhury, liked us very much and wanted to help us out. He introduced us with the CEO of Renata which gave us an opportunity to pitch him.
Before that, we used to make cold calls, used to ask our university seniors and others for introductions to pharmaceutical companies.
University elders are also very helpful when it comes to finding important connections. In the early stage, network and references are the most effective ways to go.
Then and again, you have to find out a way where it seems there is none. I personally emailed CEOs of different companies and many of them in fact replied and we had meetings. They were very nice and welcoming. My theory is simple: if you email to 10 people, at least two of them are going to reply. If you email 20, you should get four replies. Most people are decent and want to help you out but you have to try.
Renata verbally agreed to work with us and asked for the price. Once we got that we became really serious and got our product ready within the next couple of months. Then there were a lot of moving parts. We had to set up a printer, had to match printer speed and had to hack the printer into their manufacturing system. It was a process of almost 4 months with Renata. It took a lot of work in between. We had to put together our partnerships with SMS providers and other stakeholders as well. However, we managed to get it done. Now things are relatively easier for us, after Renata, many companies are coming to us.
Competition money allowed us to make mistakes. We hired a software firm to build our initial backend system and our product. We knew almost nothing about coding or technical thing and in fact, we’re not clearly aware of what we wanted. They did a very bad job. We hated that. We lost half of our money over a period of two-three months, but that also taught us many important lessons. We applied ourselves and learned a little bit of coding so that we could understand minimally about our product.
Future Startup
How much has Panacea evolved over the past years?
Soumik Aswad
We have learned tremendous amount over the last one year. We have figured out that we are good at few things but not at other things. One of the areas is sales. We realized that despite the fact that people show a lot of interest in our product, but sales were not happening.
We were having meetings, people were interested in our product and we used to have very good meetings and follow-ups but we could not close the deal. So we decided to find out the problem and found out that we don’t know much about sales.
We now have a senior person from GP who is looking after our sales. We are already seeing a lot of optimism and changes and we are very hopeful that next couple of months will be very good for us.
Talent-wise we have evolved a lot. That is one area I focus a lot. I think talent is something that makes or breaks a company. Currently, we are a team of 5 people and a few volunteers. We are working with a company and we are cashflow positive.
Future Startup
You can help many other companies, not only pharmaceutical companies to deal with fake products and copy products. What is the vision with the product?
Soumik Aswad
The vision is to make the authentication system as indispensable to a product as expiry date or something similar without which you would not buy a product. You would not buy a product unless it has a code that allows you to verify the product whether it is original or fake. Our goal is to make it a standard for the pharmaceutical industry and all other industries that have the counterfeit problem.
There is a huge demand for our product on the consumer end. People often ask us on our social media channels when are we going to implement the mechanism for other products. They definitely want to have peace of mind that the product they are buying is genuine. This is a genuine demand and we want to make this demand a habit where people won’t buy a product without verifying.
Future Startup
That is a brilliant idea. How to do you plan to make it into a standard?
Soumik Aswad
The first thing for us is to onboard as many companies as possible to use our system and get people used to this and then create a sort of push demand from the users.
Currently, we are working with one company, which is Renata Pharmaceutical Limited, and we are in talk with a couple of other companies.
Future Startup
Did you raise any Investment? Or are you planning to raise any investment?
Soumik Aswad
We are not thinking about raising investment yet. We need to onboard more companies to take our service and then only we will be able to think about what we could do with the investment money.
Once we have more companies on board, we would be able to see the big picture better.
Future Startup
How do you think about the competition? Do you have any IP protection for your product?
Soumik Aswad
We don’t have competition yet in the market. We don’t have any IP protection because the product we are offering is quite basic but the AI component of the service, that we are working on now, will be patented.
We don’t think much about competition rather think about our product and service that we are offering. Instead of worrying about competition, we want to out-execute competition.
Future Startup
What are the major challenges for you now?
Soumik Aswad
For now, our SMS platform is managed by a third party vendor which sometimes does not deliver at the level we expect it to. We want to control the platform and manage it by ourselves which is, of course, a challenge for now. We are in the process of getting our own shortcode. if we get that we would be able to lower the cost of verification. In fact, we can even make it for free if the companies are willing to bear the cost.
The other challenge is rather obvious: having more companies onboard and closing more deals.
Being said that, I look at things not as challenges but as an opportunity or probably as experiments. If this does not work this way, we will have to find another way to do it.
Future Startup
How do you reach out to your customers?
Soumik Aswad
We use personal network, references, cold calls, emails, phone calls and other similar b2b marketing approaches to reach out to more people. We are not focusing on b2c marketing at this point. That’s something we are leaving to companies to do.
The vision is to make the authentication system as indispensable to a product as expiry date or something similar without which you would not buy a product. You would not buy a product unless it has a code that allows you to verify the product whether it is original or fake. Our goal is to make it a standard for the pharmaceutical industry and all other industries that have the counterfeit problem.
Future Startup
What are the plans going forward?
Soumik Aswad
The end goal is to become a standard that there should be an authentication system in place for no other reason but for the peace of mind of users. If we want to get there we better get more companies on board.
We plan to invest more into our technology and we plan to introduce more sophisticated security system.
Future Startup
How do you pull yourself up when you feel down or come across a challenge?
Soumik Aswad
I try not to think much about the challenge or problem that I’m facing at the moment rather I try to discipline myself and focus and be consistent. I workout often in order to keep my mind and body fit.
I find working out immensely helpful when it comes to relieving stress and clearing my mind. I would suggest to all entrepreneurs to workout and exercise. It has an incredible power to clear your mind and help you to focus. Fitness has a huge impact in our work and productivity and the quality of work and life we live.
Future Startup
A couple of lessons you have learned from your journey so far.
Soumik Aswad
Talent often makes or breaks a company. You should always hire people who are better than yourself. When I was looking for the sales guy, I was looking for someone better than me.
Discipline and consistency beat everything. It is important to be fit, this was the most important lesson for me, it influences almost every part of our life. Physical fitness is very important. Sleep is also very important.
Sales are all about the relationship than anything else and when it comes to sales, a story is way powerful than the numbers.
People are often very scared of doing things simply because of fear and discomfort. For instance, if you need to email someone or ask for something from someone, go ask for it. If the person declines what do have you to lose, almost nothing.
I think one should do things that one wants to do and should never back off because it sounds risky for no obvious reason. If you want something you did not have before, you have to do something you did not do before.
People are often very scared of doing things simply because of fear and discomfort. For instance, if you need to email someone or ask for something from someone, go ask for it. If the person declines what do have you to lose, almost nothing.
Image by Panacea and CRDF
