Read the part one here.
Shohoz Founder and Managing Director, Maliha M Quadir, has a fascinating story. She was born and brought up in Dhaka. Studied in the US: Smith College and Harvard University. Worked at some of the top institutions, Morgan Stanley, Standard Chartered, Nokia, and Vistaprint, spanning multiple countries, US, Singapore, India, and Indonesia.
Toward the end of 2013, she decided that she is finally ready to pursue her lifelong dream. Starting her own tech company in Bangladesh. She left her job, raised a few million in seed investment and moved back to Bangladesh. Shohoz was born in 2014. A platform where you could buy tickets – bus, events, movie, and launch.
For the first three years, it focused solely on tickets and has built a widely recognizable brand for online ticketing in Bangladesh.
In March 2018, Shohoz formally entered the ride-hailing market in Dhaka. A few months into it, it raised US$15M in funding from a host of investors including Golden Gate Ventures of Singapore, which is, interestingly, also an investor in Go-Jek of Indonesia. The largest funding round in any Bangladeshi early stage company so far.
Shohoz claims it has over 50,000 drivers on its platform and served over 1.5 million rides in October this year (this interview was done on 29th October 2018). It has entered into food delivery, car and aims to add more services in the future. The startup has aspiration get into the truck and launch fintech products in the coming years. It aims to build a platform. “Shohoz is anything necessary,” says Maliha.
Meanwhile, competition has been intensifying in Dhaka’s ride-hailing space. All the major players in the space are trying to do everything to stay ahead and fend off competition. One app for all your needs, a platform strategy – these are the common strategic dialects we hear. Shohoz says it has a better team and a better long-term strategy in place. Can it pull this off?
In the second and final installment of this excellent interview, Shohoz Founder and Managing Direct Maliha M Quadir tells us about Shohoz’s growing ride business, Shohoz’s decision to get into food delivery and logistics, shares insight into how Shohoz has grown its business over the past years, culture and how Shohoz operates as a company, the challenges ahead for Shohoz now, competition in the ride-hailing space, discusses why achieving customer loyalty is the biggest challenge in ride business and how Shohoz using a combination data and analytics to better understands its users, Shohoz’s platform strategy and its ambition going forwards and reflects on her management philosophy, what it takes to raise money, and what makes a great founder and much more. I hope you enjoy the interview as much as we did!
This was a much longer interview, so we had to break it up into two parts. This is the second and final part of the interview. You can read the first installment of the interview here.
Ruhul Kader
How big is your ride business? How does your different business work?
Maliha M Quadir
We have over 50,000 registered drivers on our platform. We have served over 1.5 million rides this month (October). It has been growing pretty fast. We have a lot more to do in terms of branding and marketing. But the TG that needs to know us, know us and are using our services.
We are strict when it comes to onboarding drivers. We don't allow anyone without proper papers and documents and security checks. As a result, we have some supply gaps in certain areas in Dhaka where we could not onboard a lot of drivers because of our strict and more customer-focused approach to onboarding drivers.
We have been very careful and meticulous about security all along. This is not a common practice in the market. As a result, we are behind in terms of drivers supply in some places in Dhaka. But in terms of rides, we are the same as our competitors. We are currently operating only in Dhaka. We have launched the car and working on going outside Dhaka. If we could pull out these few things, the number will grow further.
Shohoz is not anything transportation, Shohoz is anything and everything necessary. Of course, transportation is a big one but we will have more services on top of it in the future. On purpose, I had picked the name “Shohoz” - a very generic name that fits with everything.
Ruhul
You are getting into food delivery as well. How many restaurants do you have on your platform now?
Maliha
I would like not to share the number of restaurants at this moment because we are going to launch in one area first, stabilize operation and then cover all of Dhaka very rapidly. It is essentially going to be a hyperlocal model.
What we can say is that we are really targeting the masses. Shohoz is for everyone. I spoke about it everywhere since our early days. We want to serve the masses. That's why we started with the bus ticket. It is not something exclusive, it is for everyone.
Founders are often conflicted between two choices, process versus speed. If you want speed, developing process it hard. Sometimes we just have to plunge and figure it out and go.
Ruhul
You have grown pretty quickly in ride business? How have you grown the business? What are the small things you have done to grow the business?
Maliha
We launched our beta product in January and our stable version was launched in March, you could say that we formally launched in March. We have grown pretty quickly within a very short period of time. The major challenge in ride business at this moment is low customer loyalty. This is a challenge for everyone.
We spent on promotions that certainly helped. At the same time, people were also looking for an alternative where they would get the expected service. It helped us to find a foothold in the market pretty quickly.
We worked hard to ensure great service quality. Ensuring that drivers are getting proper training and that drivers have the proper documents that they are real drivers to start with. There are incidents in the industry where very new drivers started to offer rides in some networks. Everyone knows about these issues in the market. I myself read in the news but hopefully, these things would never happen at Shohoz. We are serious about our user safety and we are taking the steps that are needed to keep them safe. We have worked hard to address those issues but you know perfection needs time and we are working on that almost every day. We are sincere and are always on our toes when it comes to ensuring a better experience for our users.
We have got really great people in our team. Our customer care head has many years of experience and is an expert at customer care management. In every function, Shohoz has very experienced management starting with myself. I have had many years of experience in diverse roles. I really value that. Young people do bring value. They bring a lot of enthusiasm to the organization and yes, we have a lot of young people but the heads of the team have a lot of experience in their field. That I think will help us to do better in every aspect. That being said, there are a lot more to do and there is a lot of scope for improvements. There are always scopes for improvements. We are trying very hard to do that.
Ruhul
What are the major challenges you’ve faced?
Maliha
Finding great people with the proper understanding and right attitude is a challenge in our market. If you take digital business, this is a nascent sector and we need a lot more things to do before we get to a place where we would have a lot of ready people. If you are a startup, it is even more challenging to attract people because people are not interested in startups. This is also because people have not seen a big exit in startups or startups going big yet. Some people are showing interest these days but most people are afraid of taking a risk. People also don't understand the fun of working for a startup. I think finding the right people is a challenge for everybody.
Then comes streamlining the operation. Setting up the operational metrics and putting together structure and systems. This is something every organization goes through but startups face an extra challenge when it comes to building the systems and processes because you are an early stage organization and most of the cases you operate without any formal processes. Because often the process is a challenge if you want to move fast. Then and again, in order to continue growing sustainably, you need to develop processes and systems. Finding this balance is a challenge.
Founders are often conflicted between two choices, process versus speed. If you want speed, developing process it hard. Sometimes we just have to plunge and figure it out and go. Then and again, you have to think about customer satisfaction here. Finding a balance here is difficult.
We encourage transparency throughout the organization. We are in it together. There is nothing to hide and give prominence to. Let's be transparent, help each other and do a good job.
Ruhul
Could you please give us insight into your culture? How people work and collaborate at Shohoz?
Maliha
There were two layers below me. We will never do more than three layers. I interact with a lot of junior level people, which is a refreshing experience working with them. Anyone can take leadership and do something great. Sometimes we have seen that people struggle to take that leap of responsibility, which has been a challenge for us. But we are trying to build a culture where people take initiative.
Culturally we are a horizontal organization and have a flat structure. Absolutely zero politics allowed no matter how big we grow. I am very strict about office politics.
We encourage transparency throughout the organization. We are in it together. There is nothing to hide and give prominence to. Let's be transparent, help each other and do a good job.
The other most important component is that the customer always comes first. This is a challenge, inculcating the sense that customer comes first because this is not a predominant culture in Bangladesh. It is hard to build this cultural orientation of service in people. I have seen this everywhere in Bangladesh that there is a lack of service orientation. Luckily we have been able to do that.
Ruhul
Do you have anything like internal training and development program for your people?
Maliha
We have some informal development initiatives for everyone. We have solid training programs for the customer care people.
Startups are small and fragile entities. You bring together some tenacious people and let them figure out things. They make mistakes but they eventually figure it out as well. That was my experience when I worked at companies like Vistaprint. This is something where our local young people struggle, which I have seen at Shohoz but figuring it out is basically your job. You ask for help, study your domain, put more effort and think on your feet and figure it out. But that's something many people struggle with here. We have informal development programs and mentoring program for people and we are working on streamlining these programs so that it helps.
Ruhul
How do you think about the competition? There are a few aspects such as every major ride players are getting into food, everyone is focusing on bike sharing and building aggregators.
Maliha
The market is big and few players will always be there. So that's one aspect to it.
We are not thinking about competition. We are focusing more on the service quality and what we could do to serve our customers better. We are also thinking about platform strategy which I believe will allow us to build better moats and help customers in a greater way. Then there is localization. Localization is not just about app features but also understanding the local culture. It is a lot about intuition and understanding what makes a market tick at its core.
Competition is definitely there and it will always be there. It is a fiercely competitive market.
We don't think it is a healthy approach to relentlessly follow the competition. We will continue doing what we are doing. We will continue focusing on customer service, product innovation and developing better strategies. We believe if we do our job well, competition will never be an issue.
Startups are small and fragile entities. You bring together some tenacious people and let them figure out things. They make mistakes but they eventually figure it out as well. That was my experience when I worked at companies like Vistaprint. This is something where our local young people struggle, which I have seen at Shohoz but figuring it out is basically your job. You ask for help, study your domain, put more effort and think on your feet and figure it out.
Ruhul
As you mentioned earlier, which is basically the crux of this industry, that this is still a very promo-code driven business and loyalty is challenging to achieve. How do you get out of that trap and build a loyal customer base?
Maliha
In order to build loyalty, you need multiple services. And strong analytics that will allow you to better understand your users and serve them accordingly. Personalized offers and discounts and services based on data and understanding would be indispensable. Whoever does this well, making precise data-driven decisions in interacting with customers, would do well.
You will have to understand your customers at the core and then offer appropriate discount or service or promo-code to that customer. This is going to be a hugely important differentiator.
Ruhul
Do you have a data team?
Maliha
We have an analytics team of 6-7 people and it is growing. We are hiring more there. Analytics and data are critical for us.
Ruhul
You mentioned that you want to be a platform, do you plan to open up your platform and instead of you yourself building all the services, allow other people to build services and products on your platform and allow them to serve your customers?
Maliha
We have some plans. We will build some services on our own and we will work with partners for other services. We give you the platform and users and you build things. It also depends on the partners and their mindset and how they think about it.
Ruhul
How does your collaboration with restaurants work now? Do you have a backend for restaurants?
Maliha
We have contracts with restaurants. We are giving a basic backend also.
Ruhul
You get commissions?
Maliha
Yes, we get a commission on sales. In some cases, we don't get into contracts. But we prefer to have contracts wherever we go to ensure service quality.
Ruhul
How does your marketing work for rides?
Maliha
We are doing 360-degree campaigns. When we launched it was the rainy season, so there was no point in marketing. Last month, we did TV and radio ads during cricket.
Digital remains the biggest channel. We are also doing ATL activities. We are doing activation and other forms of communication as well.
Ruhul
How big is the ride market at this moment in Dhaka?
Maliha
About 200,000 rides per day including Dhaka, Chittagong and Sylhet market. That's the estimate we have.
Ruhul
Do you plan to launch outside Dhaka?
Maliha
Yes, we are going to launch in Chittagong very soon.
Ruhul
Do you plan to launch outside Bangladesh?
Maliha
There is so much to do in Bangladesh that I want to focus on winning Bangladesh market first (laugh). Distractions and doing too many things at once could be life-threatening at times.
This is a challenging industry. Ensuring service quality is a challenge. We want to build it in Bangladesh first before we venture out to other markets.
Ruhul
You want to get into truck and Shohoz has been into the bus for a while now and is a leader there. Many ride-hailing companies are trying to become the Amazon for transportation, mostly in advanced markets. It makes sense because it is easier to communicate and build because it is the same line of business. What is your long-term strategy?
Maliha
Shohoz is not anything transportation, Shohoz is anything and everything necessary. Of course, transportation is a big one but we will have more services on top of it in the future. On purpose, I had picked the name “Shohoz” - a very generic name that fits with everything.
Food delivery is more of a transportation service than food service.
I don’t want to talk much about that at this moment but we are looking into a few areas.
Ruhul
You have raised $15 million recently, what are the areas you are going to focus and invest in?
Maliha
We want to build an excellent team, so, people are a priority. Growth is another major priority. These are the two areas we are paying attention to. Some of it will go into the building and improving our technology.
Ruhul
What are the challenges for Shohoz now?
Maliha
This is a cash-hungry business. Hence, continuous fundraising is a challenge. Our operation has stabilized. The challenge now would be improving the service quality on a regular basis.
Ruhul
How do you make decisions? Do you have a model for making big decisions like raising $15 million and getting into ride business and so on, these are big and consequential decisions?
Maliha
I'm an analytical person. I look at data and fact. That's one of the reasons why it took us a little longer to start the ride-hailing business. I have been watching ride-hailing for three years now. We waited for the regulator to open up the market. There is a lesson there. Sometimes you should listen to your gut feeling and follow your hearts.
Data is good but intuition is also important when it comes to making big decisions. I analyze a lot when it comes to making decisions. But I think that listening to your gut is equally important. I would say 50% data and 50% gut is a good mix for making a sound decision. That’s my model now.
Ruhul
What is your management philosophy?
Maliha
I like to give people freedom and empower them to do their things. I also don't mind getting my hands dirty when I see there is a need for me getting involved. This does not happen at the senior level.
When I hire good people, I give them full freedom to do their things. I only collect an understanding of what's happening at a high level and try not to get into granular details.
Ruhul
What are the goals for 2019?
Maliha
Growing the ride business is the number one priority. And then we want to launch a few new services.
Ruhul
Raising money is tough and for Bangladesh market, it is even more so. Do you have any tips for founders who are trying to raise investment?
Maliha
Ruhul
What advice would you give to people who are starting out?
Maliha
Data is good but intuition is also important when it comes to making big decisions. I analyze a lot when it comes to making decisions. But I think that listening to your gut is equally important. I would say 50% data and 50% gut is a good mix for making a sound decision. That’s my model now.
