Shazeeb M Khairul Islam, Founder and CEO of Dhaka-based social business incubator YY Goshti, shares his journey to what he is doing today, explains why he started and how he built YY Goshti to help social businesses in Bangladesh, grew it over the past years and his plans for the incubator in the coming years.
Future Startup
Please tell us about your background and what you are working on now.
Shazeeb M Khairul Islam
I was born and brought up in Chandpur where I lived till I was 10 years old. My father was a businessman living abroad and I used to live with my mother. Growing up, I was passionate about two things: playing cricket and spending time with my mother. I was not much into studies.
After coming to Dhaka, I attended Monipur High School and Dhaka Commerce College and then Dhaka University. During my university days, I was heavily into volunteering, youth clubs, and extracurricular activities.
I remember doing a particular cleaning project where we had done a cleanup campaign on our campus. It was a good experience but the next day when we returned to campus we saw that the area we cleaned was dirty as it was in the day before. Our clean up work made a difference but it did not last long.
Similarly, we did other projects such as Project - Happy Birthday where our objective was to celebrate the birthdays of the slum children to give them a better experience about life and the world. Despite our best efforts, many of these projects failed due to several challenges.
After failing at several projects, we took time and realized that both of our projects were unsustainable in nature and had limited scope for others to join in and contribute.
Around this time, I had attended an event named Social Business Day where Professor Dr. Muhammad Yunus was the speaker and the host. I could still remember his speech that really inspired me at that time. He basically shared three points in his talk: young generation today are privileged to have the connectivity. Secondly, we have abundant access to digital platforms, devices, and technology that we should take advantage of. Thirdly, if every human being utilizes their entrepreneurial potential and blends it with technology, we can bring a lot of meaningful changes to the world.
Your initiative does not have to be big. Social Business can be very small. You can start by changing one life. If you are successful at changing one life, you can scale it, replicate it. That’s how I first came to know about social business and I immediately became a devotee.
Later, I wanted to build a social business platform for young people which would be sustainable over the time and would have a lot of scopes for other people to join together. That eventually led to the founding of Social Business Youth Alliance Global (SBYA Global) in 2013. It started in a humble way - just by posting an idea on Facebook.
We started with running two activities from that platform: inspiring people by organizing educational programs at campuses. Between 2013 to 2014, we arranged events in almost 20-25 university campuses all over the country with a view to inspire students about social business and innovation for a better society. Secondly, we launched an international competition for idea stage social businesses called Social Business Champ. This year we had participants from 18 different countries.
From the competition, we came to learn that we did not lack ideas, we were winning prizes and getting acknowledgment but very few of those ideas were coming to life. Young people could not implement their projects or ideas for many reasons. That’s when we decided to identify the challenges young people face when it comes to building a social business in Bangladesh.
We identified some challenges in the ecosystem. Some big ones and others relatively not that big.
We also came to identify that early stage founders need support with mentorship, office space, knowledge and research about the market and some creative services that could make their journey a lot easier and significantly improve their chance of success. Moreover, we found that raising investment is a challenge in Bangladesh.
We realized that if we want to make a meaningful difference and really help early-stage founders, we have to put together something solid and sustainable that would be able to support them in a more structured and meaningful way.
We had many discussions, brainstorming sessions to come up with ideas that would make a meaningful difference. That’s how basically YY Goshti came into being.
We launched YY Goshti in early 2016 with an ambition to help social entrepreneurs grow by providing them access to resources and necessary supports.
Our intention is to build a homegrown incubator for social businesses that understand our local problems and local opportunities and that could provide early-stage founders contextual knowledge instead of bringing in an international model of incubation and impose it here with few contextualization.
We want to build an organization that genuinely cared for entrepreneurs and helped them all the time. An ultimate entrepreneur's friendly organization.
Future Startup
What is YY Goshti? Please tell us about what you do, your services, size and how does YY Goshti help startups?
Shazeeb M Khairul Islam
YY Goshti is the first independent social business incubator in Bangladesh. YY Goshti helps social entrepreneurs and businesses through a period of incubation as a partner and provide them with tools and resources to grow their business as well as impact.
To be specific, we provide 4 types of supports: mentorship through our network of mentors, free workspace, business development services and lastly, seed funding.
We have collaboration with some of the largest social business funds and social organizations such Grameen Telecom Trust, Frontier Innovators, Blue Gold Program, Agribusiness Booster and some angel investors which allow us to make meaningful connections for the social business startups.
Since our inception, we have worked with 32 social entrepreneurs in Bangladesh working in the field of agriculture, water, craftsmanship, and commodities.
We are a team of 7. Apart from that, we have a strong network of mentors, consultants, and volunteers. We exist to create the most robust social entrepreneurial ecosystem in Bangladesh.
We allow early and idea stage social businesses to participate in our incubation program to streamline their business, grow and scale.
Anyone with a social business can enter our incubator program by participating in our boot camp where we explore human-centered design, strategy, social business model canvas and fundraising techniques and other relevant topics.
Following the boot camp, each entrepreneur goes back to his or her locality and work for over a month on their ideas. During this month, they try to see whether there is a market for their products and service or not. After that, we arrange a pitch camp and provide training on pitching for investment. After this boot camp, the startups become an active member of our incubation process.
The core process is like incubatees come and work out of our office. However, many of our startups are from outside Dhaka and for them coming to our office is not a feasible option. In that case, we allow them to work from their locations and they still get the same benefits and services like other incubatees.
We provide around one-year long incubation support to the startups, a combination of mentorship, training, and networking. Our goal is to make the startups self-sufficient during this period of incubation. We continue our support beyond one year where necessary. Even after that, we continue to support our alumni through connections, introductions, and other pertinent supports.
We don’t take equity in all startups that we incubate. We only take equity when we make an investment in a startup and also become a partner at that startup. That said since we are a social business and we only take our basic investment back from the investee companies over a period of time and we do not take any profits or dividends from the startups.
For example, we have funded a clean drinking water startup through our incubator in Mymensingh. We are working with a local entrepreneur as a partner where we have brought in technology, funding, and other services and the entrepreneur has also brought his own resources and ideas. Together, we are building the project now with funding from Grameen Telecom Trust. The entrepreneur will give us back the investment money over a period of time and once he returns our investment fully, he becomes the sole proprietor of the business.
About 32 projects have gone through our program so far and we are partner with only 9 of them.
We provide around one-year long incubation support to the startups, a combination of mentorship, training, and networking. Our goal is to make the startups self-sufficient during this period of incubation. We continue our support beyond one year where necessary.
Future Startup
What went into building the initial platform? How did you put together initial investment, team and other logistics to get started? Please walk us through what the first few months of your journey were like and biggest challenges you faced.
Shazeeb M Khairul Islam
The idea first came when I was in Berlin attending a conference on social business in late 2015. I was having lunch with Mr. Hans Reitz, co-founder of Grameen Creative Lab and Kate Robertson, co-founder of One Young World and they were appreciating our work at SBYA Global. SBYA was doing great but I knew that we could do more for the ecosystem. Moreover, in the existing setting, it was not possible for us to provide rigorous support to the startups. That’s when for the first time I thought of starting something to provide more structured support to the startups. I shared the idea with them that we plan to start a platform where we would support young social businesses.
I was 24 years old at that time. I had my self-doubt about whether I should take on this huge responsibility or not. Ms. Robertson had asked me when I was planning to start this platform, I answered that probably in 5 years time. I also added that I would have around 7 years of experience and would be able to gather enough experience and network to properly support entrepreneurs by the time. In reply, she said something profound to me that changed my perspective towards life. She told me that “if you start it tonight then you would have around 7 years of experience with this platform along with a full-fledged incubator in your country in 7 years.” I thought, well, that’s a fascinating perspective.
After returning from Berlin, I decided to give it a try. I reached out to two of my old colleagues - Shah Waseef Azam and Namista Tabassum. Namista had just graduated and was working at a research firm as a consultant and Waseef was about to graduate and already had some experience in working with social businesses.
I shared the idea with them and they agreed to try it out right away. We prepared a two-page document and started our journey.
At first, we went to my mentor, Professor Dr. Muhammad Yunus, who asked me a couple of questions about what we wanted to do. After that, he told me that if your heart wants this just go ahead. Now I had two of my colleagues who believed in the two-page document and I had my mentor with me. This was enough encouragement for me to move forward.
After that, we reached out to Mr. M.K Aaref of EMK Center. He appreciated the idea of creating a platform for social businesses because he, himself, has been a tremendous support for the entire ecosystem of entrepreneurs and startups. EMK Center has helped us with a grant which was a huge amount for us at that time to set up the platform up and running. They also helped us with their network of media and PR. They allowed us to use their space for free.
We also reached out to Ms. Lamia Morshed, the Executive Director of Yunus Center and Mr. M.F.M Amir Khashru, the GM of Yunus Center who have been a tremendous support throughout our journey.
Apart from that, we reached out to all our friends and networks in corporate and development sectors. It was inspiring for us to see that almost all of the people we reached out to agreed to help us out.
Initially, we struggled with arranging fund for the incubatees which we eventually resolved.
We have also found out the money is not always the only thing that you need in order to build a sustainable business. In fact, it is even not the most important thing always. There are more important things that an early stage founders need than money such as connections, business strategy, mentorship and so on.
The other thing that we make mistake with when we think about funding is that we think that we need all the money at once which is not the case. You can always start small.
To start with we made a budgeting which helped us to figure out about funding and we decided to start small.
Building a startup takes a long time. You can’t build one overnight. Then and again, the key point is starting. As Ms. Kate told me in Berlin that you can start working now and decide when do you need the money rather than wait till you have the money.
Slowly, we have made it upward. When investors and stakeholders have come to see that we have a logical plan of actions and we are not asking for a billion dollars in the day one, they started to show interest in our work which helped us to build a network of investors who are interested in our startups.
Future Startup
How have you attracted startups and grown YY Goshti over the years?
Shazeeb M Khairul Islam
We have been very lucky from the beginning. We run one of the largest community of social businesses in the world, SBYA. In the early days, it had helped us to get our message across. We could reach out to every university and adjacent local areas through volunteers and university team of SBYA.
Secondly, we started with incubating 5 startups. Out of five, one has survived and continued to impact lives which have helped us to show our impact.
Thirdly, we maintain a close relationship with the impact investment fund managers from across the world. We try to support our entrepreneurs in every possible way which has helped us to attract international stakeholders in the space who are interested in social business sector.
Over the past years, we have worked with a host of development and impact investment related organizations including Agribusiness Booster Bangladesh which invests in the agricultural sector, The Blue Gold Program - a result of a collaboration between the Government of Netherlands and Bangladesh that works in the South West of Bangladesh and Frontier Innovators among others.
Our growth metrics are simple. The number of entrepreneurs we support and help grow. The bigger they get, the bigger our impact will be.
In order to streamline our growth, we have taken three initiatives: taking feedback from entrepreneurs and investors we work with to refine and improve our process and activities, making more meaningful connections and lastly, focusing more on the impact part as opposed to chasing mere growth.
We take a systematic approach to doing things. Instead of trying to do everything at once, we actively try to follow the method. We ask our entrepreneurs to go step by step.
First, make a prototype, test your product, take feedback from your users and then build the final product based on the feedback. It is more important to sustain something than starting something. We always think about the long-term sustainability of things.
Our goal is not big number. We don’t want to support a large number of businesses. Instead, our goal is to support a small number of entrepreneurs, make sure that we provide them sufficient support to grow and help them to create meaningful impact in the society. The idea is to find people who are passionate about social change and help them achieve their goals.
The number one thing is: commitment of the entrepreneur - whether he/she committed or not.
Future Startup
What do you look for in a startup during the selection process?
Shazeeb M Khairul Islam
We look for four things in a startup during the selection process. The number one thing is commitment of the entrepreneur - whether he/she committed or not. The number two: some progress - whether he/she has made some progress without anyone’s help to make the startup real.
For instance, you want to make a new line of pen, then we check whether you have at least invested some time to know the entire thing properly or whether you have a prototype ready. The third thing we look for is the social impact of the business. And finally, industry and the target community.
We operate on limited resources. It is critical for us that we spend our resources mindfully. Like many other incubators and accelerators, we also look for innovation. That said, social impact of a business gets more priority because that’s what we are here for.
Over the past years, we have learned a lot. The very first year we started, 5 of our incubatees became inactive right after the program because the entrepreneurs had another venture or full-time job. Now we try to find people who are really into building their social business, have entrepreneurial mindset and doing it not only for making money and also for impact.
Future Startup
You finetune other startup’s business model. What is your business model? Like other incubator/accelerator, do you take equity in the startups that you support?
Shazeeb M Khairul Islam
We have three different revenue sources. As I mentioned earlier, we usually do not take equity from all the incubatees. We take equity when we invest in a business. Our current ticket size is quite small, it ranges from BDT 100,000 to BDT 1,500,000, for which we take a small equity at the company. The idea is essential to provide a small seed money to the startups to help them with initial take off.
Our second stream of revenue comes from advisory services that we provide to ecosystem players such as governments, corporates and development organizations.
For instance, if an organization comes to us and shares their plan to work with some social business working on SDG goals, we provide the advisory services to implement their project. This is quite a common revenue source for many incubators and accelerators. We basically work as a bridge between entrepreneurs and the interested organization.
Finally, we have a creative services team who design and sell services to social businesses at a reduced cost. We offer web development services, office space and creative services to the businesses. That said, revenue from this source is quite small. As I said, we also charge people less than what market charges. For instance, if it costs you BDT 50,000 to build a decent website from an expert, we can do almost similar work for just about BDT 25,000. We provide this services only to social businesses.
Our target is to help 100 social businesses by 2019. In our first year, we worked with only 6 businesses, out of which one survived. This year the number of entrepreneurs we are working with is significantly higher.
Future Startup
What are some of the biggest challenges that you have faced throughout your journey?
Shazeeb M Khairul Islam
The first challenge was dealing with social perception and convincing my family that I was making the right decision. Before joining YY Goshti full-time, I was the CEO of Spark* International, Bangladesh where we used to run an accelerator program for the startups.
According to our societal standard, job is a safe bet and our parents always encourage us to opt in for one. While at Spark* I used to get a handsome salary every month, no matter what happens. Leaving behind that fixed income and diving into an uncertain journey was a really challenging decision for me.
It was and is a very difficult job to raising investment for startups in Bangladesh. There were and there are challenges around policy and regulation when it comes to foreign investment. This applies to both the commercial enterprises and social businesses.
The process is too cumbersome and at the same time, it is costly to invest in Bangladesh. When we try to bring any foreign impact investment fund to invest in social businesses, it gets all very difficult because of bureaucracy and higher cost of investment. That’s one of the reasons why we could not bring some of the funds into the country even though we had eligible social businesses. Although we are now working around these challenges, it slows you down and reduces your productivity.
Moreover, the cost of doing business is very high in Dhaka. We help early-stage companies almost free of cost. When the cost of investment gets higher, it becomes very difficult for us to continue the business.
We are an early stage organization and we work in a pro-bono arrangement with some of our partners which sometimes causes us to compromise our delivery and schedule of work and sometimes the importance of the work also gets belittled.
There is some misconception about social businesses in the market. At times, it is hard to convince people that they can start with whatever little resources they have. That it is not always necessary that you have to raise investment in order to start a business. This mindset that you need venture capital funding in order to build a business is increasingly becoming a challenge.
Instead, I think mindset should be that you start with whatever little resources that you have and build slowly through generating revenue. We believe that sales is more important than raising investment for any business because it is sustainable and it is what makes you a business. But this idea is going out of fashion very fast and hard to sell it to people these days. This is not the fault of entrepreneurs alone. This is a cultural challenge. We are constantly bombarded with the news of funding and all and it has now become a metric of success for many founders.
Finally, everything takes too long when you are trying to build something from scratch. But when you are building a business you can’t lose a day. Every day is important. When things get delayed due to bureaucracy or other reasons it makes you slow. This is another challenge that we have to constantly deal with. And there is very little that we could do about it.
Future Startup
What are the goals for the future?
Shazeeb M Khairul Islam
Our target is to help 100 social businesses by 2019. In our first year, we worked with only 6 businesses, out of which one survived. This year the number of entrepreneurs we are working with is significantly higher.
Although we are based in Dhaka, we are working with social businesses from Mymensingh, Khulna and even from Patuakhali. Our goal is to be a major ecosystem player in the South East Asian region on social business. We have already started to collaborate with existing initiatives in Nepal and Bhutan.
I would have started a lot earlier. I did not start earlier because I thought I was too young to start an incubator at that age and with little experience in building business. But I later realized that those were not productive thoughts.
Future Startup
What would you do differently if you are given a chance to start over?
Shazeeb M Khairul Islam
I think I wasted at least a year over thinking when to start. I would have started a lot earlier. I did not start earlier because I thought I was too young to start an incubator at that age and with little experience in building business. But I later realized that those were not productive thoughts. If I could start over, I would have started YY Goshti right when I had the thought for the first time. That way, I could have saved 2 to 3 years of my life.
I would not have given so much importance to what would other people think concern and societal stigma, and would rather do my work.
Future Startup
What do you think about the overall startup ecosystem of the country? What are the biggest challenges and opportunities?
Shazeeb M Khairul Islam
A lot of things are happening in the space. We are seeing a surge in the number of startups as well as programs that support startups. Some of the startups are doing very well. There are startups that are also getting international attention. These are good things. We need more of these things happening more frequently.
While things are happening at a pretty rapid pace, there is room for doing more in meaningful and effective way. One thing that I feel we lack is focus. We need to identify key bottlenecks in the ecosystem and focus and invest our energy into addressing those challenges.
For instance, we need more co-working spaces that are cost-effective for the startups so that startups can afford office space at an affordable rate as well as find a community of founders with whom they can exchange ideas and collaborate.
More local collaborations need to happen in order to drive lasting change. A lot of initiatives that we are seeing are international in nature. While it helps, at the same time when you have more local collaborations and more local companies participating, it gets easier for the startups to get market access and important connections.
Over the past few years, we have seen great positive activities from the government around digital entrepreneurship. The government has been investing both money and effort in this space. However, I would say there are a lot more to be done around policies and legal issues that would make life easier for early-stage social business founders.
The government should also pay attention to the social business and entrepreneurs that are growing. These people are not just building businesses for themselves, they are selfless. They need more social business-friendly policies.
We have a huge young population who think differently and are interested in social business and social good. We believe regulators should think about them. For instance, many countries offer tax advantages to the social businesses along with other advantages so that they can make difference in the society. I think time has come to think about social business separately and design policy framework conducive to social business and entrepreneurs.
Seek help. The ability to asking for help is one of most important qualities you need to cultivate as an early stage entrepreneur.
Future Startup
What advice would you be giving to the startups who are just starting out?
Shazeeb M Khairul Islam
Start - that’s the answer to everything. There is no formula how to start a startup, starting is the formula. Once you start something, then it will lead you to the next step. Go out of your classroom or office space or house. Meet customers. Until and unless you go out in the market and give your product to the customers, you can never know what works and what does not.
If you think that you will change your society sitting in your room, you are wrong. No great business is built in isolation. You have to go to your customers, understand them and offer something that they find valuable.
It is okay to be afraid of failure, regardless start. Start moving forward. Start trying things. When you embark on a journey, there will be obstacles, momentary setbacks, but that’s true for everyone else. Failure is not essentially a bad idea. In fact, when you genuinely try and fail, you become an even better entrepreneur
Seek help. The ability to asking for help is one of the most important qualities you need to cultivate as an early stage entrepreneur. Reach out to your friends, mentors, parents, and people who you think would be able to help. Every person is good at something and can offer you something, don’t judge or overthink, ask.
Have a mentor. It is impossible to overstate the importance of having a mentor in this complex world. A mentor is someone who can give you ideas, advice and suggestions on work and life and who you feel a lot safer around.
We often see thing from our perspective which is limited by our knowledge and experience, the advantage of having a mentor is that he/she can offer an interesting and different perspective to the same situation which can potentially help you to see a thing entirely differently.
Future Startup
You are one of the grantees of EMK center. How have their support helped you to grow YY Goshti?
Shazeeb M Khairul Islam
We received EMK Small grant in 2015. Since then, EMK Center has been an invaluable support partner to us. As I mentioned earlier, it would have been very difficult for us to come this far without the support from EMK.
We are grateful to EMK Center for their support throughout our journey. They helped us with strategy, grant, office space and major introduction to the industry insiders in our early days when in fact almost no one believed in our ideas.
We often see thing from our perspective which is limited by our knowledge and experience, the advantage of having a mentor is that he/she can offer an interesting and different perspective to the same situation which can potentially help you to see a thing entirely differently.
(Interview by Md. Tashnim, edited by Ruhul Kader)
